The transition to renewable energy is creating exciting investment opportunities and opening up profitable new markets across the world. Major corporations are embracing new technologies to create circular economies across their own operations and benefit from the renewable energy boom.
We’ll take a closer look at different renewable energy types and feature three well-known companies that are making their own transition to sustainable green energy use. The energy revolution is already underway and smart investors are paying close attention!
Top 5 Types of Renewable Energy
Renewable energy (sometimes called green energy or sustainable energy) is an umbrella term that covers a variety of natural energy sources. Some types of green energy are already in widespread use and are well-known. Energy sources like biofuels still have relatively low public recognition, while clean hydrogen energy is in the experimental stage. It’s convenient to think of renewable energy in terms of the “Big 5”.
- Hydro energy
- Solar energy,
- Tidal energy,
- Wind energy,
- Geothermal energy
Solar, wind and tidal energy also have huge potential as a source of green electricity. The drawback is an obvious one – none of them can guarantee an uninterrupted 24 hour supply of power. Solar energy is diurnal and yields optimal supplies of electricity during summer months. Wind turbines will only turn when the wind is blowing, and are often unpopular with local people who resent unsightly structures. Tidal energy is far less intrusive, but experiences peaks and troughs as the tides flow in and out.
Making Renewable Energy Work
One of the big leaps forward in renewable energy technology is the development of effective energy storage solutions. Lithium iron phosphate (LFP) batteries are a game changer. Smart, high capacity batteries can safely store green energy as it is generated. The energy can be accessed as needed, either by the national grid, a corporate microgrid that supplies a plant or factory, or even neighborhood and domestic microgrids.
Advanced blockchain technologies and predictive AI are increasingly making it possible to transfer energy between grids on a commercial or reciprocal basis. Green energy is expected to become a valuable commodity that powers smart cities and smart homes – as well as industry and agriculture. At its simplest, the solar panels on your roof will be able to generate power all day and store it in smart batteries.
You’ll be able to access that stored electricity to power domestic appliances in the evening, or possibly sell it to your neighbor who wants to recharge an electric vehicle overnight. You might even be able to transfer surplus energy to the national grid to help meet peak time demand. The basic principle is scalable on a neighborhood and citywide basis, and also applies to businesses and industry. Clean, automated decentralized energy has the potential to transform the planet.
Making Money from Renewable Energy
There’s no doubt that sustainable energy is a wonderful thing. Most people realize intuitively that it makes sense to live harmoniously with nature and to protect the environment. High polluting coal-fired power stations, and potentially hazardous nuclear power stations are increasingly unacceptable to voters. Politicians are creating new government policies to promote the transition to clean energy. Even with government backing, fundamental change is rarely smooth or easy and corporations have a huge role to play in making the green revolution a reality.
One single factor will drive the transition to sustainable energy more than any other. It’s the understanding that a switch to renewable energy can become highly profitable. As different renewable energy types become viable on a large scale, we’ll see a huge commercial boom. There is an entire energy supply spectrum that covers the manufacture of machinery and products, infrastructure maintenance, the installation of domestic clean energy appliances and future research and development.
A small number of pioneering companies, with a finger on the clean energy pulse, are already innovating to transform obsolete operations and procedures. One goal is to achieve energy independence through green microgrids and hybrid energy. There is an enormous potential to slash operating costs on a long term basis and even to anticipate future compliance requirements and meet increasingly exacting ESG targets.
Properly designed circular economies can increase profits and decrease reliance on external infrastructures and third party suppliers. We are living in challenging times and recent events like COVID-19 and regional wars have alerted many to the fragility of global supply chains.Companies that can recycle raw materials at a local level are far less vulnerable to rises in commodity prices.
3 Companies that are Profiting from the Energy Revolution
Many of the major energy companies are rapidly expanding their green energy operations and planning a strategic shift to renewable energy generation. There is also an exciting proliferation of new energy startups that are exploiting new technologies like AI, the internet of things, big data, blockchain and smart batteries to provide niche products and services to the wider energy sector and consumers.
The alternative energy sector is a fertile field for investors and there are opportunities to suit all risk levels. Three companies: Brookfield, Plug Power, and ICL Group, their company profiles offer a useful insight into how businesses are profiting from the green energy revolution and emerging trends in the energy sector.
1. Brookfield (NYSE, TSX: BN)
Brookfield is an alternative investment management company that is helping to enable green energy as an affordable solution for industrial and domestic consumers. Brookfield’s predecessor companies were involved in the development of hydroelectric energy over 100 years ago and the modern company remains deeply committed to financing renewable power.
Although Brookfield isn’t an energy company in itself, it’s a useful case study for anybody who wants an insight into how major financial entities invest in energy and the energy infrastructure. Brookfield is behind an estimated 31,000 megawatts of generating capacity with over 8,000 power generating facilities and assets totalling more than $78 billion under management.
It’s companies like Brookfield that are supercharging the clean energy revolution with vital cash investments. The company is active across the fields of solar, wind and hydro energy, as well as distributed generations and other sustainable energy solutions. Brookfield works in close partnership with national governments to help implement sustainable energy solutions and has unrivaled expertise and resources.
2. ICL Group (NYSE: ICL)
ICL is a leading global specialty minerals company and one of the largest fertilizer manufacturers in the world. The company is making a key contribution to the renewable energy revolution by supplying LFP battery materials to manufacturers. ICL is one of the world’s largest phosphate producers and has access to substantial global reserves.
ICL is now developing a new $400 million dollar plant in St Louis, Missouri. The purpose built smart plant is partly financed by the US government and establishes ICL as an integral part of the electric vehicle battery supply chain. The EV battery market in the US is huge, and anticipated global demand runs into billions of units. ICL is now superbly positioned to profit from this fast growing market.
The company is also committed to running its own operations on renewable energy and is creating a hybrid clean energy grid as part of the flagship Green Sdom Project. It’s also successfully recycling used and garbage phosphate materials at a plant near Amsterdam in the Netherlands. Although naturally occurring phosphates are abundant and easy to extract, recycling is an environmentally responsible – and profitable – venture.
3. Plug Power (Nasdaq: PLUG)
A lot of researchers and strategic planners in the world of alternative energy are very excited by the potential of clean hydrogen as a fuel source. Research and development into the production of clean and affordable hydrogen from water is intense. Plug Power is focusing on the development of hydrogen fuel cells and establishing a highly profitable market niche.
Perhaps more than any other renewable energy type, green hydrogen can utterly transform our transport systems. Hydrogen is ultra lightweight, burns cleanly and can be extracted from water. A hydrogen fuel cell for a vehicle can potentially be fully recharged in a matter of minutes. Plug Power has the technologies to supply the vehicle industry and is working with major car manufacturers like Renault and multinationals like the South Korean SK Group.
As clean hydrogen becomes more readily available and is utilized as a mainstream green fuel, Plug Power will be in a position to maximize its share of the market. Very few other companies have Plug Power’s technical resources and knowledge, major strategic partnerships and reputation. The business has already grown exponentially over the last three decades. Some analysts feel that Plug Power is a giant corporation in the making.
Investing in Renewable Energy Companies
The alternative energy industry offers some excellent opportunities for investors. The global transition away from fossil fuels is a generational shift, but the combined markets are immense. The renewable energy sector is characterized by some fairly intense and well-financed research and development and a bold approach to energy concepts. The sector also has the backing of national governments – at least across the developed world.
As with all investments, it pays to research individual companies in depth and to develop an understanding of market forces and technological progress in the sector. Energy stocks cover a wide spectrum of products and services and are subject to a variety of market forces. If you can identify the right companies, there are definite opportunities to add to your portfolio and profit from the green revolution.
