Greenpower Energy sees potential in $600 million hydroponic market

Greenpower Energy (ASX: GPP) has advised that crop trials currently underway across the various commercial plant targets are progressing well.

As a backdrop, GPP is involved in the development of an economically and environmentally appealing direct liquefaction technology (Oxidative Hydrothermal Dissolution) for the conversion of low-cost raw materials, including coal, to high-value liquid products such as chemical feedstocks and fuels.

Thermaquatica Inc holds exclusive worldwide rights to the OHD technology, and Greenpower has the rights to the technology for Australia and New Zealand.

OHD works by reaction of the starting material, in this case coal with dissolved oxygen in hydrothermal water which is characterised by high temperatures and high pressure.

Applications of OHD in hydroponic industry

With a view to targeting the hydroponic/commercial glasshouse market in addition to crop cereal/horticultural markets, GPP in conjunction with Monash University, has undertaken hydroponic trials on bok choy and rocket. The plants have been harvested and analysis of the yield data is in progress, the results of which will be available shortly.

With regard to the company’s Stage 2 tomato trials, previous studies had indicated positive yield effects and decreases in blossom end rot with foliar application of the OHD liquid. The current study is to investigate application frequency.

This study is in its early stages so investors should seek professional financial advice if considering this stock for their portfolio.

The tomatoes are currently growing, but have yet to enter the flowering stage. During the growing period and following harvest, measurements will include flower numbers, flower to fruit conversion, fruit yield, observation of nutrient deficiencies and nutrient content analysis of the plant tissue.

GPP said Brix would also be measured, as this along with yield are the parameters that growers are paid on. Brix is a measure of the Total Soluble Solid (TSS) content in the tomato or tomato product. The TSS in tomatoes is mainly sugars (fructose).

The tomato seeds that have been sown are of a cultivar widely used by in-field growers and results from this study will provide management information for the proposed field trial in the Shepparton region.

Stage 2 wheat trials are also being conducted, and as was the case with tomatoes, yield increases have previously been measured and application frequency is currently being investigated. The outcome of the trials will not be known until harvest, when yield and nitrogen content of the grain will be measured. These are the parameters that growers are paid on.

A number of trials to commence in the second half of 2017

The proposed crop trials to commence shortly include hydroponic tomatoes. Tomatoes for the fresh fruit market will be grown in hydroponic conditions with the OHD liquid applied as a foliar spray and added into the nutrient solution. This study is scheduled to commence in July 2017.

Also being undertaken are trials of Broadacre Tomatoes, grown for the processing industry with the OHD liquid applied as a foliar spray. Pending approval from the Australian Processing Tomato Research Council, this study will commence with tomato growers in the Shepparton region in November 2017.

Potential to partner with industry participants

Discussing these recent developments, GPP Chairman Gerard King said, “Greenpower is pleased with the progress currently underway and whilst the company has not previously flagged the potential for the use of OHD bio-stimulant fertilisers in the hydroponic market segment to its shareholders (nor that the trial was underway) it views this as a targetable market segment in its PFS studies where fertilisers represent one of the largest input costs into this $600 million per year market segment”.

King said that the results of Phase 1 hydroponic trials will be helpful in gaining an understanding of the market segments OHD can target as part of the current PFS. Imminent Phase 2 results and broadacre trials will be helpful in attracting additional industry interest.

Commenting on GPP’s broader strategy, King said, “Management takes a conservative view on the trials and would prefer to focus on good science practices to deliver early results and then proactively follow these up in conjunction with industry partners on field trials”.

While noting this approach may add an additional year or so to our testing program, King said it allows the company to appropriately protect its shareholders and working capital reserves”.