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Barron's: 5 Stocks That Will Benefit From Cheaper Renewable Energy

Barron's: 5 Stocks That Will Benefit From Cheaper Renewable Energy
(Joerg Habermeier/Dreamstime)

By    |   Thursday, 07 November 2019 08:57 AM

Barron’s recently told investors that “there could be a good deal of green to be made” by savvy stock picks in renewable energy.

A recent analysis on renewable energy published by investment bank UBS predicts rapid, radical change, Barron’s said. Solar and wind could make up some 47% of the world’s power capacity by 2030, up from 20% next year, the weekly financial newspaper quoted the UBS study as saying.

“In short, energy storage costs have fallen by nearly half in five years, and they could drop by another two-thirds or more in the coming decade. That will offset the main knock against solar and wind—that they provide cheap power only when nature cooperates,” Barron’s said.

“The result will be a rapid build-out of storage, and a quickening of gains for alternatives,” Barron’s said.

Beneficiaries could include:

  • solar-equipment companies like First Solar (FSLR);
  • battery makers like LG Chem and Samsung SDI;
  • chemical companies like Albemarle (ALB);
  • and utilities that already have plenty of wind and solar capacity, like NextEra Energy (NEE).

Meanwhile, Bloomberg Opinion's Peter Orszag claims that wind and solar costs are falling so fast, it can make more sense to build new renewable capacity than to run old coal plants.

"The overall news is encouraging: While we’ll need to rely on conventional energy technologies, the cost of solar and wind, and of energy storage, are also falling. This augurs well for the prospect of cutting carbon emissions without painful economic consequences," he recently wrote in a Newsmax Finance Insider article.

To be sure, Softbank Group’s Vision Fund recently made its first foray into energy storage technology with a $110 million investment in Switzerland-based Energy Vault.

While many countries are keen to use renewable energy as part of efforts to cut carbon emissions in the fight against climate change, the challenge has been to find a way to store it for later use, particularly overnight or when demand surges, Reuters explained.

Inspired by the physics and mechanical engineering used in hydro plants, Energy Vault says its technology enables renewable energy to be stored in 35-ton bricks and delivered as baseload power for less than the cost of fossil fuels at any hour of the day.

Most rival solutions focus on some form of battery storage, be it lithium ion, sodium-sulphur, lead-acid, among others. While costs have been falling - by nearly 40% since 2015 according to Wood Mackenzie - most degrade over time.

The potential rewards are large. The global energy storage market is expected to reach 22.2 GW in 2023, from nearly 5 GW at the end of 2018, according to a report in May by data and analytics company GlobalData.

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Barron’s recently told investors that “there could be a good deal of green to be made” by savvy stock picks in renewable energy.
renewable, energy, stocks, costs
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2019-57-07
Thursday, 07 November 2019 08:57 AM
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