Kontrol Energy’s growing foothold in the fast growing market of blockchain applications
Kontrol Energy Corp. (CSE: KNR ) (“Kontrol”) is at the forefront of developing new ways to deploy energy efficiency technology, as well as spearheading the effort to use the blockchain to streamline record keeping and payment.
The company has just entered into a Letter of Intent (LOI) to acquire an established and leading provider of emission monitoring solutions that has been servicing North American markets for more than twenty years. This is a strong strategic fit with the company’s existing subsidiary ORTECH Consulting Inc. and gives Kontrol a growing foothold over this fast growing market.
The last few weeks, however, have seen Kontrol Energy back off from a planned acquisition of blockchain assets. This comes as the global markets are showing increased volatility, and due to their small size, it shouldn’t come as a surprise that few investors are willing to throw money into the micro cap sector for the time being.
Nevertheless, Kontrol has issued statements that affirm its long term plan to integrate blockchain into the business, and given the success they have had so far they should be more than able to pick up productive assets at lower prices than are on offer currently.
Broad Based Development Model
For a micro-cap company, Kontrol has a diverse business model that is expanding into areas that yield substantial cost savings for their clients.
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They have already had successful commercial interactions with mega-cap Canadian heavyweights like Suncor, with their operations falling into four distinct groups.
ONE: Energy Retrofits
A willing company can do a lot to make existing plant and infrastructure more energy efficient. Kontrol offers non-invasive modifications of a building’s lighting, water and energy management systems, which will pump up their green credibility, while slashing energy spending.
This is a situation of ‘spend a little today to save a bunch tomorrow’, which is making more sense all the time. They report an annual revenue of around $2 million from this division, but with the push towards more efficient infrastructure, this could be a big growth area in the years to come.
TWO: Energy Analytics
Data gathering and analysis plays a major role in boosting energy efficiency today, as it does in pretty much everything.
Kontrol uses its expertise to create and implement data gathering systems for its clients buildings, which give the company a holistic view of how energy is used and where it could be saved. This is a great way for clients to be able to quantify the value of what Kontrol offers, and lets the company demonstrate how much its changes save clients over time.
Currently, this part of their business contributes $1 million towards the company’s revenue, and will more than likely grow as Internet of Things (IoT) technologies advance.
THREE: Distributed Generation
The centralized power generation model that dominated the 20th century is giving way to the idea that industrial parks and larger buildings can make some of their own power.
The NOMA development in Manchester, UK, for instance, features one of the most advanced energy generation systems around and is able to produce the vast majority of its own energy supply via the collection of rainwater and sunlight.
Most people are familiar with Tesla’s groundbreaking solar roof design for their Gigafactory, but there are many other technologies that can help companies to offset the power they draw from state utilities.
Kontrol creates bespoke systems for their clients, that can seamlessly interface with energy saving solutions they provide. This part of their business earns around $2 million dollars annually at the moment, and will probably become more popular as the opportunity cost of small scale power storage and generation falls.
FOUR: GHG Measurement and Reduction
Green House Gases (GHG’s) have become a dirty subject, but Kontrol is helping industry to curb the production of these noxious fumes that fuel global warming.
The company offers its customers the ability to install real time GHG monitoring equipment, which allows businesses to leverage their emissions reductions for both government subsidy programs, as well as providing some solid PR.
This sector of Kontrol’s business has been extremely popular in Ontario, Canada, wherefrom comes the lion’s share of its $5 million dollars of yearly revenue. The company is planning to expand this aspect of its business into Alberta, which could mean a much stronger revenue base for the company going forward.
All things considered, Kontrol is in a great position since its assets and activities are not intrinsically linked to the potential success of blockchain technology and so the company has an opportunity to progress with good cash flow until the heat dies down sufficiently in the blockchain space. Expect a finishing blow when it does.