[Editor’s note: “Energy Storage Is Paramount to Solving the Global Energy Crisis” was previously published in August 2022. It has since been updated to include the most relevant information available.]
Let me level with you for a moment. You know why inflation is so high everywhere these days? It’s because we’re in the midst of a global energy crisis.
That’s the plain truth. Energy is an input cost for everything. Therefore, if the cost of energy increases, so does the cost of everything else.
Indeed, how does your food get to a grocery store, or your favorite restaurant? In the back of a gas-powered truck. If the cost of gas goes up, the cost of that trip goes up. And that higher cost gets passed on to you. Voila – burgers and pizzas are more expensive.
The same is true for apparel, cars, airline tickets, hotels, so on and so forth. Nearly every product or service in the world has “energy” as an input cost. As go energy costs, so goes the cost of everything else.
Right now, energy costs are soaring. For example, in Europe, natural gas prices have surged recently because Russia has stopped pumping natural gas into Germany. As a result, German benchmark electricity prices are now about $700 per megawatt-hour. For context, that’s about 14X the seasonal average over the past five years!
Inflation is hurting people all across the globe. And it’s happening because we’re amid a global energy crisis. Want to fix the inflation problem? Fix the energy problem.
Fortunately, one booming technology holds the key to solving the world’s energy crisis. And it could be Wall Street’s most profitable investment megatrend of the 2020s.
That technology is energy storage.
The Best Clean Energy Sector to Invest in Today
The nature of the current crisis is pretty simple: We don’t have enough energy. Therefore, the solution is pretty simple, too. We need to produce more energy.
Of course, that’s easier said than done. The world’s energy needs are growing rapidly. Every year, global energy consumption increases by about 2% due to population growth and urbanization. That may not seem like much. But adding 2% to the world’s energy consumption every year is a lot of incremental consumption over time.
Consider this: Global energy consumption will rise by about 50% by 2050. At current rates, that means over than next 30 years, energy consumption will grow more than the total amount of energy consumed in any year before 1990. We’re basically going to have power a another whole Earth by 2050.
We’re going to need a lot more energy production to do that.
That means we need more oil. We need more solar, more coal, more hydrogen, more natural gas, more wind. We need all of it – and then some.
This whole idea that the future “New Energy Economy” will be exclusive to non-renewable or renewable energies is misplaced. It’ll be a mix of all sorts of energy sources. That’s because we’ll need all of them to work together to power the Earth in 10, 20, and 30-plus years.
Oil and gas are ready to step up to the plate today. They’re proven, reliable, and (normally) cost-effective. On the other hand, renewables are doing all they can to help out. But they are still falling short in a few areas.
The biggest area is reliability.
That is, solar and wind are intermittent energy sources. The sun doesn’t shine every day, nor is the wind blowing constantly. By themselves, then, these clean energy sources cannot power the world at all times. It’s scientifically impossible. They need help.
The Benefits of Energy Storage
Energy storage technologies allow us to store excess solar and wind energy on really sunny or windy days. Then all that energy can be deployed on cloudy or windless days, enabling continuous power output at all times.
They are the key to unlocking the full potential of clean energies – and solving the global energy crisis.
That’s because energy storage solves clean energy sources’ intermittency problem, ultimately making them as reliable and consistent as fossil fuels.
So, let me state this clearly…
Clean energy can power the world but only with the enormous help of energy storage solutions.
Therefore, if the New Energy Economy is defined by tons of clean energy (and the recent climate bill ensures it will), then the New Energy Economy will also be one defined by tons of energy storage capacity.
We’re talking small-scale energy storage batteries at every house with solar panels… mid-scale energy storage technologies at every office and commercial building powered by clean energy… and large-scale energy storage systems at every solar and wind farm.
We’re talking energy storage solutions everywhere there is power — so, quite literally, everywhere.
That may sound outlandish today. But think about it. There are already dozens of batteries in your home. There’s one in your iPhone, in your computer, in your electric car. What’s another one in your garage to power your home?
It’s nothing – and that’s why energy storge technologies will become globally ubiquitous.
The Fastest Growing Industry in the 2020s
On its march toward global ubiquity, the energy storage industry will become the fastest-growing in the 2020s.
Let me repeat that. If energy storage technologies do become globally ubiquitous, the energy storage market will emerge as the fastest-growing industry in the world throughout the next decade.
Here are the numbers.
At the end of 2021, global installed energy storage capacity measured about 46 GWh. According to our analysis, that means less than 1.5% of the world’s renewable energy production is backed by storage today.
We think that by 2030, that number grows to 800 GWh of energy storage capacity. We’re not alone in that thinking. Bloomberg New Energy Finance is targeting at least 800 GWh of global energy storage capacity by 2030. So is every other major clean energy market research firm.
That means this market will grow from 46 GWh of capacity in 2021 to 800 GWh of capacity in 2030. That’s a 17X gain in 10 years.
To our knowledge, no other industry is due for 17X growth over the next decade.
And believe it or not, that’s just the tip of the iceberg…
Indeed, at 800 GWh, only about 10% of the world’s renewable energy will be backed by energy storage technologies. That’s not enough for a net-zero society. We need a number closer to and above 30%.
And that’s exactly where we believe our society is headed.
The Future of the New Energy Economy
By 2050, we believe global installed energy storage capacity will back up around 30% of renewable energy installed capacity. That will equate to around 6,000 GWh of energy storage capacity.
That’s more than 75X growth from 2020 levels.
That bears repeating: 75X growth into 2050.
Again, to our knowledge, no other industry in the world is positioned to grow this much, this quickly.
All that growth starts now, with the U.S. government formally introducing the first-ever tax credit for standalone energy storage projects. The catalyst for 75X growth has arrived. And the market’s best energy storage stocks are already off to the races on Wall Street!
The Final Word on Energy Storage
We are hyper-bullish on energy storage stocks for the 2020s. We think this will be the fastest-growing industry in the 2020s. And with the introduction of first-of-its-kind legislation to spur energy storage projects, all that growth will start today.
In our minds, energy storage represents the next great investment opportunity…
Like PCs in the ‘80s…
The internet in the ‘90s…
Cloud computing in the 2010s…
Energy storage in the 2020s will change the world as we know it. It’ll grow by thousands of percent. And it’ll mint a new generation of millionaires — likely just regular folks who believed in a big idea before the rest of the world caught on…
The question is: Will you be one of them?
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
