Nacel Energy Inc. (OTCBB: NCEN)

Dear Reader,

The demand for renewable energy - that is energy with a smaller carbon footprint has never been stronger.  And the U.S. has been called "the Saudi Arabia of wind" largely due to its windy and very flat midwest section.  As a result, the U.S. is a very strong wind market and it's booming!  Our featured company today, Nacel Energy Inc. (OTCBB: NCEN) is engaged in the business of generating clean, profitable, renewable energy from wind. 

Why wind energy?  Wind energy produces no emissions and does not pollute our air or water and, unlike nuclear power, requires no hazardous waste storage.  Both coal (a heavy polluter) and natural gas release greenhouse gases that also may affect our world’s climate.  An increasingly important economic and strategic benefit of wind energy is its contribution to reducing our dependence on imported energy from less secure regions across the globe.  So please take a moment to review the profile on NCEN below. 
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About Nacel Energy

Nacel Energy Inc. ("Nacel""NCEN") is engaged in the business of generating clean, profitable, renewable energy from wind.  Nacel offers shareholders the unique opportunity to participate in a fast-growing Company with a portfolio of North American utility and community scale wind power generation assets. Nacel holdings include passive interests in operating, utility-scale, wind energy facilities located in Wyoming and six other states. The Nacel portfolio also includes an impressive roster of new joint-venture wind energy projects currently under development. The total generating capacity of Nacel Energy’s new wind energy projects is 80 MW – enough energy to supply the daily needs of 25,000 American homes.

Nacel was founded as private company in the State of Wyoming in February, 2006. At the end of September 2007, the company successfully completed an IPO (initial public offering) with its stock trading as NCEN on the OTC Bulletin Board.

Nacel is one of the first wind energy companies in America developing COMMUNITY WIND – utility-scale power generation from wind turbines, but with a sustainable footprint of less than 20 MW and one or more members of the local community with a direct financial stake. Nacel builds profitable partnerships with local COMMUNITY WIND developers by offering a unique solution to two of their biggest obstacles – (1) the absence of a tax-efficient structure to utilize Federal and/or State incentives for wind energy development and (2) the scarcity of capital for early-stage projects. 

The solution is called WINDVEST™ -- a proprietary capital structure and process which enables Nacel Energy to successfully joint-venture with local wind energy developers, expedite timelines and improve project economics. Nacel is headquartered in Casper, Wyoming.

Wind is a clean, profitable, renewable, energy business. Recent advances in turbine technology developed right here in America have made energy generated from wind the only form of renewable energy now truly cost-competitive with fossil-fuels. And, wind’s role in our nation's energy policy is rapidly increasing – 22 States and the Federal Government have now implemented legislation to speed-up wind energy development. Today, wind is the fastest growing source of energy in America and the world and it is an important part of the solution in our nation’s quest for a better environment and energy independence.

Wind power is renewable energy. As portions of the earth are heated by the sun, air rushes to fill the low pressure areas, creating wind power. Wind can be slowed dramatically by friction as it brushes the ground and vegetation. Often, it may not feel very windy at ground level, but at the height of a 40-story building (the height of the blade tip on a large, modern wind turbine) wind-speeds can be 5 to 7 times greater. Wind is often accelerated by major land forms such as mountains with the result being entire areas of the country may be very windy while other areas are relatively calm. 

For unknown reasons, America’s founders tended to build our cities and towns where the wind doesn’t blow strongly and consequently the vast majority of Americans don’t live in windy areas. Today, wind power is predominantly a rural phenomenon, with electricity generated by wind turbines sent over the nation’s electrical grid to homes and businesses in urban centers.
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Nacel and the Market

Today, the United States harnesses more than 10,000 megawatts (mW) of electric energy from wind; enough to meet the needs of 2.5 million average American homes. And, the Department of Energy predicts, with additional research, wind energy could provide much more . . . as much 20% of America’s energy needs.

Did you know that the modern wind turbine was invented in Cleveland in 1887? The famous inventor of the arc light and co-founder of General Electric, Charles Brush, built a large wind turbine in the backyard of his Cleveland home which generated energy for more than 20 years. In addition, many of the amazing advances in wind turbine technology were developed at the National Renewable Energy Laboratory (NREL) and much of the wind energy industry's success worldwide can be attributed to the research conducted at the National Wind Technology Center (NWTC). The pioneering research of these two organizations in the Department of Energy has directly led to the development of today’s multi-megawatt wind turbines that produce electric energy at a cost that is now competitive with conventional energy sources like fossil-fuels and nuclear.

In fact, long-term forecasts from the early 1990’s by Pacific Gas & Electric (the California utility) concluded that wind would ultimately become America’s least expensive source of energy. The cost of energy produced from wind turbines is now competitive with mainstream power technologies, such as coal and hydro and is now less expensive than gas or nuclear. The American Wind Energy Association (AWEA) has estimated the cost of wind energy from today’s generation of turbines is 5 cents per kilowatt-hour (kWh), not including the Federal Production Tax Credit (PTC). The PTC (1.9 cents per kWh, adjusted for inflation) applies to the first 10 years of any eligible new wind energy turbine’s operation.

According to the Department of Energy, the mix of America’s energy production is as follows; coal (51 percent), natural gas (18 percent) and nuclear (20 percent). However, most new electric energy plants constructed in the last 15 years are natural gas fired. But, the cost of natural gas has increased steadily since 1996, when it averaged less than $2 per thousand cubic feet (to today’s cost of approximately $7 per thousand cubic feet) so that the cost of natural gas fired electric energy generation is unpredictable. As an example, in January 2003, when natural gas costs reached $15 per thousand cubic feet in some markets, the cost of natural gas generated power was as 20 cents per kWh in those same markets.

In contrast to natural gas, the cost of wind energy has continued to decline. In fact, the cost of wind energy has dropped by approximately 15% with each doubling of installed capacity worldwide, and capacity doubled three times during the 1990s. Wind energy today costs only about one-sixth as it did in the 1980’s and its cost is expected to further decline by another 25% by 2010.

It's not surprising that wind energy is the fastest growing source of electricity generation in America and the world given the direct economic benefits mentioned above. But, if indirect environmental costs were factored in, wind energy's competitiveness would increase even further because of its low environmental impact. 

Wind energy produces no emissions, but less obviously, wind energy is also free of the additional environmental costs resulting from mining or drilling, processing and shipping other “fuels”. Coal, which provides half of America’s electric energy as mentioned above, has been linked to illness, acid rain and mercury pollution, and releases greenhouse gases and therefore may contribute to global warming. Although natural gas is less polluting than coal, it also releases greenhouse gases that also may affect our world’s climate. 

The use of wind energy on the other hand does not pollute our air or water and, unlike nuclear power, requires no hazardous waste storage. An increasingly important economic and strategic benefit of wind energy is its contribution in reducing our dependence upon of imported energy from less secure regions across the globe.

Many States now mandate that a certain percentage of energy consumed is obtained from renewable sources like wind. As of June 2007, 24 States & the District of Columbia have renewable energy standards in place. Four additional States, Illinois, Missouri, Virginia, & Vermont, have nonbinding goals promoting renewable energy.

The Federal tax code provides a variety of permanent and temporary incentives for conventional forms of energy, also includes a production tax credit (PTC) for wind energy and a 5-year accelerated depreciation schedule for wind turbines. The 1.5 cent-per-kWh PTC is adjusted for inflation (currently it stands at 1.9 cents per kWh) and supports electricity generated from utility-scale wind turbines for the first ten years of their operation. The PTC, first adopted in 1992, was extended in 1999, again, through 2003 after its expiration in 2001, and most recently through December 31, 2008.

Wind Energy Developers have been bought by JP Morgan and Goldman Sachs and there are numerous utilities that have purchased wind energy companies and partnerships. Among those companies involved that are publicly traded: 

Nacel Products, Services and Strategies

Nacel Energy’s WINDVEST process begins with a thorough feasibility and financial review of the proposed COMMUNITY WIND project. Proponents must demonstrate control of the land, whether by lease or outright ownership, and a favorable professional assessment of the wind resource potential of the site must be in place. In addition, all necessary regulatory permits must be in place or in process to build the project. The permitting stage (sometimes difficult in the case of large-scale wind energy development) is one of the principal attractions of COMMUNITY WIND. With local proponents and investors (for example, a local electric co-operative) and community support, the permitting process can be often accomplished in a comparably short period of time. In contrast, a number of major utilities have encountered significant resistance to their wind energy developments – even though those developments have been located in rural or agricultural areas. Lastly, the necessary utility power purchase agreements (PPA) must also be in place or in process.

Following successful completion of the feasibility and financial review, Nacel Energy establishes our WINDVEST financial partnership structure which creates the ownership positions in the project and facilitates capital-raising. Nacel Energy assumes a minority non-working interest in all COMMUNITY WIND energy project development. A principal benefit of the Nacel Energy WINDVEST structure is that it creates a "securitization" of the Federal Production Tax Credit (PTC). The PTC is a significant source of revenue for any large-scale wind energy project, but almost always holds no financial benefit to COMMUNITY WIND developers. This inability to derive a financial benefit from the PTC is an obstacle to COMMUNITY WIND energy development – one that Nacel Energy via its WINDVEST partnership structure can resolve. In addition, the WINDVEST partnership structure facilitates the raising of early-stage capital – often on more attractive terms that otherwise available to local COMMUNITY WIND developers.

COMMUNITY WIND energy projects are smaller-scale (usually less than 20 MW), and locally initiated with local financial participation. Projects can be as diverse as single turbines erected by municipal utilities, school districts and tribal reservations to larger multi-turbine installations owned by one or more investors and landowners. Nacel Energy is the first national wind energy company with a “for-profit” focus on this under-served niche. Nacel Energy’s unique WINDVEST capital structuring process improves COMMUNITY WIND project economics and serves to expedite project timelines by creating efficient structures to raise capital.

Nacel Plans of Ownership and Operation Include:

• 1.   Site and Development Partner Identification and Agreement 
• 2.   Due Diligence Data Collection to Determine Site Suitability 
• 3.   Complete and Secure Approval of an Environmental Assessment 
• 4.   Enter into Power Purchase Agreements 
• 5.   Finalize Land Use or Acquisition Terms with Government or Private Land Owner 
• 6.   Develop Access Roads to Our Site 
• 7.   Complete Interconnection Studies Concerning Connection with Power Grid 
• 8.   Complete Construction 

The Nacel is the housing of a wind turbine that contains the key components of the turbine, including the gearbox, and the electrical generator. Service personnel may enter the nacelle from the tower of the turbine. To the left of the nacelle we have the wind turbine rotor, i.e. the rotor blades and the hub.

Kinetic wind energy is converted to electric energy by a wind turbine. In a typical, modern, utility scale wind turbine, the kinetic energy in the wind is converted to electricity by the rotational motion of a two or three-bladed rotor assembly. The rotor turns a shaft which transfers the motion into the nacelle (the large housing at the top of a wind turbine tower). Inside the Nacel, the slowly rotating shaft enters a gearbox that greatly increases the rotational shaft speed. The high-speed shaft is connected to a generator that converts the rotational movement into electricity at medium voltage (a few hundred volts). Electricity flows down heavy electric cables inside the wind turbine tower to a transformer, which increases the voltage of the electric power to the distribution voltage (a few thousand volts). The reason that voltage is “stepped-up” is that higher voltage electricity flows more easily through electric lines, generating less heat and power loss. The distribution-voltage power is then sent to an electrical grid substation where the voltage is again increased dramatically to transmission-voltage power (a few hundred thousand volts) and transported via long distance transmission lines to distant cities and factories.
 

Recent News from Nacel

Press Release 12/14/07
Source: Company

CASPER, WY -- (MARKET WIRE) -- 12/14/07 -- NACEL Energy Corporation (OTCBB: NCEN) ("NACEL Energy" or the "Company"), an emerging developer and aggregator of wind power infrastructure generating clean, renewable energy for America, today confirmed the successful formation of its WINDVEST(TM) business unit targeting the < 20 MW COMMUNITY WIND power generation market. 

In return for an equity stake, NACEL Energy's WINDVEST(TM) business unit works to structure innovative financial partnerships with ranchers, farmers and rural electric co-operatives to improve COMMUNITY WIND power generation project economics and timelines by injecting early stage capital on attractive terms and enhancing existing Federal incentives promoting wind energy development. MORE

CASPER, WY -- (MARKET WIRE) -- 12/11/07 -- NACEL Energy Corporation (OTCBB: NCEN) ("NACEL Energy" or the "Company"), an emerging developer and aggregator of wind power infrastructure generating profitable, clean, renewable energy for America, today announced the successful closing of its initial public offering and the formal issuance of its stock trading symbol "NCEN." 

NACEL Energy is one of the first companies in the nation developing COMMUNITY WIND -- utility-scale wind power generation -- but with a sustainable footprint and local partners. COMMUNITY WIND projects often enjoy a competitive advantage over other forms of wind energy development; including faster permitting times, local political support and additional government incentives. 

More than 90% of America's abundant wind resources occur in rural areas. In return for an equity stake, NACEL Energy structures innovative financial partnerships with ranchers, farmers and rural electric co-operatives, complementing the federal incentives promoting wind energy development including the Production Tax Credit (PTC) and Clean Renewable Energy Bonds (CREBs), and serving to improve wind energy project economics and expedite timelines. 

NACEL Energy's "direct public offering" was registered on Form SB-2 and declared effective June 7th, 2007. The offering closed September 30th, 2007 and NACEL Energy's shares opened for trading Monday, December 10th, 2007, "over the counter" with bid/ask prices published on the "bulletin-board" via the National Association of Securities Dealers Automatic Quotation (NASDAQ) system under the ticker symbol "NCEN." MORE

Management and Leadership at NCEN

TO CONTACT NACEL

Nacel Energy Corporation
301 Thelma Dr. #501 Casper, WY 82609

Phone: (Local & Fax) 307-461-4221 -Toll-Free: 1-888-242-5848
email: info@nacelenergy.com or visit the Nacel Corporate web site:
http://www.nacelenergy.com/

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