Solar Wind Energy Tower
(OTCQB:SWET)
CEO: Ronald Pickett
Podcast: Play in new window
INTERVIEW TRANSCRIPTS:
WSA: Good day from Wall Street. This is Juan Costello, Senior Analyst with the Wall Street Analyzer. Joining us today is Ronald Pickett, the CEO of Solar Winds Energy Tower. The company trades on the OTCQB; ticker symbol SWET. Thanks for joining us today, Ronald.
Ronald Pickett: Thanks for having me back Juan.
WSA:Yeah, great. It would be great to have an update from our last interview back in May. And can you give us a history and overview of the company for some of our listeners who didn’t catch the last interview?
Ronald Pickett: Sure. Solar Wind Energy has developed a sort of a hybrid alternative energy solution which is a combination of solar and wind. And essentially, what we do is, we take the hot air created by the solar rays, and we add water to it, and we create a natural downdraft thereby creating wind. Then we extract the energy from that wind using pretty much conventional turbines. And then our patented extraction technology we have for maximizing the energy that you can get from those turbines. And the way we do that is we build a tall hollow cylinder tower structure and locate it in a hot dry area where the sun is always shining and creating this hot dry air. And at the top of the tower, we introduce is a measured amount of droplets – water droplets per cubic meter depending upon the relative humidity and temperature of the air entering the tower. And then that air obviously absorbs the water, it has to, it’s very thirsty, it begins to sink, it’s more dense, and then evaporates and cools, and it sinks faster.
And we create what is just a natural downdraft just like what you have in a thunderstorm, a natural downdraft that’s contained inside the walls of this tower. Then at the bottom of the tower, the wind is diverted into tunnels that surround the tower. And in, the tunnels are turbines that spin. The wind velocities are very fast, we get a lot of energy. We have patented technology on the turbines to extract multiple turbines to get multiple high percentage of the energy available out of that wind. And then we power through hydraulic pumps generators beside the tunnels, and these generators then produce massive amounts of electricity 24/7/365.
So, unlike any other alternative energy source, either wind or solar, we make predictable amount of energy 24/7/365. It works day and night through the winter, all the summer, although our peak outputs are summer afternoon and our low outputs are winter evenings.
WSA: Great. And so, can you talk about your most recent news? I know you got an update on a project there in Arizona and you also had a development with the licensing partner in Chile?
Ronald Pickett: Yes. So, while our – as we discussed before, our core business model is ultimately to just license the technology. We have a number of patents on this and we filed place keepers worldwide for this. And we’re going to take this technology that we have, and license it to developers, sovereign nations, utilities around the world, private development companies that are around the world to bring this solution where, you know, geographically and meteorologically there are ideal conditions. So, it’s not our intent to build towers all over the world. We wanted to just enable them, and receive development fees, and then royalty fees from the ultimate sale of electricity that is produced, but along the way here in the United States, the company has also been pursuing a specific project in Arizona which we announced. I think it was like around last May. And also we announced a project in Mexico later this summer that we’re pursuing.
So, that’s little outside the business, the core business model but, you know, we wanted to make sure that we got the first tower underway come hell or high waters, so to speak. And it’s–the Arizona project has come along very nicely. We have the land under contract, fully secured. We have ways to extend that contract for up to three years. We just completed our first extension yesterday, as a matter of fact. And so, we intend to keep this extensions going until we get our final permits and can close. The tower is fully entitled in terms of permitting. We don’t have all the permits in hand yet but we’ve entered into a development agreement with the local city, and they guaranteed us the permits as long as we apply according to, you know, the appropriate rules and regulations.
Likewise, same for the zoning, we’ve been through a zoning process after we got that development agreement in place and, of course, that was all done and approved unanimously. So, we’re working through the permitting cycle to get that project where it’s, able to put a shovel in the ground. We have, this summer, obtained a certification from the California Energy Commission that we are qualified as renewal energy source for California. That was very important to us. And we’re working right now with various contractors and consultants for the grid connect, and working with companies to discussing power purchase agreements with us to buy our power in the long term contracts that will enable the financing of the tower. And we have a conditional financing commemorative for 100% financing for the project from an international finance group. All that we have to do now is satisfy those conditions by primarily getting the power purchase agreements that are appropriate to carry the financing service for the 20 years.
So, that project is well underway. We’re very excited about it. It’s a lot of work, lot of people involved, and we’re really pressing forward as quickly as we can to get that so we can go–so we’re ready by, hopefully, 12 months from now.
WSA: Good. And what are some of the factors that you feel makes the company unique from some of the other players in the sector and able to capitalize on some of the key trends that you are seeing now?
Ronald Pickett: There is one key factor. And I like to say, not kind of a cliché, I don’t want to be flip about it but it’s true. Most people, the vast majority of the people would like to be green. The problem with being green is it’s very expensive. The differential –.
WSA: It’s not easy being green.
Ronald Pickett: Well, everybody. Yeah, green – everybody likes to do things that conserve the environment but it’s very expensive; it’s costly. You know, it costs more to buy a typical solar production. It might cost 18 cents a kilowatt hour where you’re paying 11 cents at your doorstep. So it’s nice to want to start conserve the environment, not use a fossil fuel, and not buy electricity from the fossil fuel fired plant, but when you got to pay 18 cents or 20 cents instead of 11 cents, that’s kind of the – puts a damper on being green. But what if you have a solution where your cost of energy from a green source like us is the same as if it came out on a fossil fuel – fossil fired plant. That’s what is so exciting about Solar Wind Energy. We can make power at the same rate as if you built an oil fired, or a gas fired, or coal fired plant down the street. So this is a green solution that is green. It makes green. It’s a profitable green solution. That’s what is exciting about it.
WSA: And what are some of the key goals and milestones that you and the team are hoping to accomplish over the course of the next six or 12 months?
Ronald Pickett: Well, we’ve got several things going. We got a licensor –excuse me– licensee down in Chile who is working on a tower project there. We’re not in control of that. It just has the license to, you know, again our business model, license our technology for Chile. It is very close. They report to us on this first deal. So we’re supporting them and encouraging that. Obviously that becomes a model for other countries to step in, and pick this up, and start their development process to get towers in place.
The key milestones for us are, right now, getting power purchase agreements for the Arizona project to enable the financing. So, I think in the next six months, we’ll see substantial progress towards getting them… I don’t anticipate any big issues getting them but it’s just a process you have to go through when you got a 400-megawatt facility and a 10-megawatt contract for 20 years is worth $200 million. We begin to see how big these numbers are and, you know, it takes a while to through a process and get in the queue lines to, you know, line up the power purchase agreements to where they fit into everyone’s schedule. So, we’re working on Arizona to get that done.
And then, we have a project down in Mexico that we announced a couple of months ago that is under our control. We’ve got the land secured. We’ve got–the local jurisdiction has given us, offered us exactly the same thing as in Arizona, and development rights agreement guaranteeing us all that we need including the water supply agreement for 50 years. And all of this is subject to us getting a power purchase agreement for that plant, and we are working on that power purchase agreement right now.
So, our finance company has a finance program for Mexico. It’s a bit different from the one in Arizona. It requires a 15% equity component where Arizona can be a 100% financed, but nonetheless we’ve had discussions with some potential partners there and we think that the Mexico project could–you know, could step up, and become a high priority very quickly if power purchase agreements materialize anytime soon.
So, we’ve got, you know, Chile, Mexico, Arizona, and then a few other around the world. We’ve got some other potential licensees talking to us right now. Some situations in Africa, in the Middle East and we’re following that right now. We are ready to announce anything more specific. We’re being very selective on who we move forward with on those new territories.
WSA: Do you believe that your company story and upside are completely understood and appreciated by the investment community?
Ronald Pickett: I don’t think the company is very well understood at all. Well, you know, we’re a small public company. Our assets are our patents, and that’s our key asset. The Arizona project, once it materializes, it will become a key asset based on the value of that project. So, that will be determined by a partner that’s brought in or, you know, the percentage of what the partner pays. That will establish a value there.
So, the market has no way, I think right now, to put any kind of evaluation on the Arizona project, any kind of evaluation on Mexico, probably it has no way to evaluate the probability of Chile or another license coming through. And so, they’re looking at a small public company that basically owns patents or technology that, you know, takes a lot of money to develop one of these projects. So, there is not a good understanding of how these kinds of funds are very readily available in the world today. Alternative energy is sought after by–actually outside this country, it’s more popular and more aggressive pursuit than inside this country.
So, I think it’s just a matter of time and confirmation as we knock these milestones down. One morning, everybody is going to wake up and say “Holy Cow, those guys really have found something, and are really are on to something, and this valuation is crazy,” but until that happens we have just got to stay at the course and execute the business plan.
WSA: Great. And once again joining us today is Ronald Pickett, CEO of Solar Wind Energy Tower which trades on the OTCQB, ticker symbol SWET, currently trading in the market capital about 3.7 million. And before we conclude here, Ronald, to recap some of your key points, why do you believe investors should consider the company as a good investment opportunity today?
Ronald Pickett: Juan, we have been around for four years now. We have raised and invested about $14 million creating this technology, and getting these patents filed, and these aren’t pending; these patents are issued by the way. Pursuing the Arizona Project and Mexico project, and lining that up. And like you just said, for our market cap to be maybe one-fourth of the dollars we’ve spent, we think we’ve been very frugal and spent these dollars very wisely and accomplished a lot. So the market cap in my mind – is nowhere near appropriate for the development stage that this company is in. I would think it should be multiples of the money we spent, not a fraction of the money we spent.
WSA: Well, we certainly look forward to continuing to track the company’s growth and report on your upcoming progress. And we like to thank you for taking the time to join us today, Ronald, and update our investor audience on SWET. It’s always great to have you on.
Ronald Pickett: Well, thanks for the follow up, Juan. I appreciate that.
WSA: Anytime.
