From using green energy to recycling, everyone has their own ideas about how to make the world a better place – it’s part of what makes us human.
Whether as an animal activist, homeless shelter volunteer, or small-business-only shopper, we all try to do something that “makes a difference.”
Many of us try to improve the world around us by “going green” – from replacing your straws with reusable metal models and hoarding fabric grocery bags in the trunk of your car to stitching handmade pants from old potato sacks, “going green” is a massive megatrend.
And wherever megatrends emerge, profits are sure to follow.
But in a world of $100+ (and climbing) oil, green energy seems to be the furthest thing from many investors’ minds.
The energy sector is gushing profits, with the S&P Energy Sector being the only one of the 11 sub-sectors to deliver a year-to-date gain.
But just because “old energy” is grabbing most of the headlines, the “new energy” story remains just as vibrant and relevant. The green energy megatrend may be taking a well-deserved rest, but it is still as powerful as ever.
Let’s explore…
$200 Oil Is Coming – Are You Ready?
Can you afford to pay $8 at the gas pump? 1Or 50% more for your utility bills? Or 25% more for food? If you’re not preparing for an energy crisis today, $200 oil will decimate your retirement savings and portfolio. In this special broadcast, 43-year Wall Street veteran Louis Navellier details three steps you can take to survive and thrive during an energy crisis.
Dirty, Clean, and Green Energy
Energy is a spectrum, which means that green energy and oil can still have their respective momentum even when one is “trouncing” the other.
At this point, I don’t really need to make the case for why oil is a good play. Smart Money Editor Dave Gilbert and I have covered it multiple times over the last six months, and you can check out any of those bullish musings in the following articles:
- The Lonely Bull Amid This Brutal Bear
- Last Call for the “Trade of the Decade”
- Here’s One Bull Market That’s Snorting Right Now
- The Growing Impact of New Tech in an Old Industry
Let’s discuss, instead, where I see the best opportunities in the green energy space.
Unfortunately, the transition to “green” technologies isn’t as green as we might like it to be. Many ”sustainable” ones aren’t as environmentally friendly as advertised.
This inconvenient truth hasn’t attracted widespread attention yet – but it will. And this truth will matter in ways that produce significant commercial impacts in the renewable energy marketplace… and significant opportunities for investors.
Now, when it comes to being green, most of us focus on the finished product without paying much attention to the nongreen processes that delivered that product to our door… or to the nongreen aspects of using that product day-to-day… or to the nongreen aspects of that product’s end-of-use disposal.
But any honest evaluation of environmental impacts must include every facet of a product’s life cycle – from the pre-production phase to the disposal phase.
For example, on any environmental scorecard, both solar and wind energy would rank higher than coal-fired power. But at the same time, neither of these renewable technologies can boast an unblemished environmental profile.
On the plus side, solar panels generate a lot more energy over their lifetimes than the amount of energy used to manufacture them. In general, solar panels achieve this environmental breakeven point (EPBT) in less than two years.
Wind turbines score even better on this metric – breaking even in less than one year.
Despite the positives, however, solar power can cause serious environmental negatives. Disposing of old panels is probably the biggest one.
In theory, 96% of solar photovoltaic (PV) materials could be recycled and reused in new solar panels. But in reality, 0% of solar PV materials can be recycled profitably.
By most estimates, every dollar spent recycling a PV solar panel yields about $0.10 worth of recovered metal and glass. These poor economics explain why most U.S. solar panels end up in landfills.
This poses serious environmental risks because of the toxic chemicals the panels contain. After a solar panel spends just a few months in a landfill, the toxic lead and cadmium it contains can leach into the soil and groundwater.
Obviously, that’s not an ideal outcome.
Wind turbines produce a similar environmental blight. Most of them end up in a landfill.
So, clearly, disposing of either wind turbines or solar panels is a significant problem. That said, neither one produces an ounce of carbon emissions while operating, which is reason enough to boost their efficiency by combining them with energy storage capability.
The more that wind and solar installations can store their power for later use, the more efficient they become… and the smaller their “whole life” environmental impact per unit of energy produced.
However, not all energy storage technologies are equally green.
Lithium-ion batteries, for example, produce a range of environmental negatives.
- They require metals that come from energy-intensive and sometimes dirty mining operations.
- Like an EV, a lithium-ion battery is only as green as the power grid that charges it. So wherever coal-fired power dominates the grid, these batteries are not particularly green.
- Lithium-ion batteries are not easy to recycle.
On average, every dollar spent to recycle a lithium-ion battery yields only about $0.33 worth of reclaimed metal. Because of this “bad math,” about 95% of all lithium-ion batteries end up in landfills.
By contrast, one competing energy storage technology does lend itself to economic recycling…
Is This Oil Crisis Worse Than 1973?
We could be on the cusp of an oil crisis… One far worse than what we saw in the 1970s. Over the last couple of months, global demand for oil has surged. And the U.S. can no longer meet this demand. And none of them are interested in turning on the tap. Which means that oil prices are going to continue to climb… But there is a silver lining.
Supercharged and Super-Profitable Green Energy
That technology is called a vanadium redox flow battery (VFRB).
Unlike solid-state lithium-ion batteries, VFRBs are basically water tanks that contain a vanadium electrolyte solution of differing oxidation states. A proton exchange membrane separates the two tanks.
Electrolytes from the tanks flow through a fuel-cell stack, where an ion exchange occurs across a membrane. When this exchange occurs, a reversible electrochemical reaction takes place, allowing electrical energy to be stored and subsequently returned.
For all you chemistry fans out there, chemical engineer Robert Rapier provides a helpful analysis of VFRBs in a recent issue of Forbes. (He calls them VFBs).
Here are a few excerpts from that analysis:
Vanadium is an element that can commonly exist in four different oxidation states. That just means that it can exist as an ion with different charges…
A VFB consists of two tanks of electrolyte dissolved in water and separated by a proton exchange membrane. Both electrolytes are vanadium-based. As the batteries are charged and discharged, vanadium ions are simply moved between oxidation states. This can be done tens of thousands of times over a time period measured in decades, with no degradation in the ability of the vanadium solutions to hold charge…
Lithium-ion batteries are great for storing 2-4 hours of energy 50 times a year, but VFBs shine in long-duration applications where energy is required every day; for example, when trying to make solar energy available on demand around the clock.
Because of their size and weight, VFRBs are not suitable for EVs. But for energy storage applications, they offer a compelling alternative to lithium-ion batteries… especially when one considers their environmental superiority.
The key takeaway: “old energy” and “new energy” both have profits to offer investors.
Sincerely,
Eric
On the date of publication, Eric Fry did not have (either directly or indirectly) any positions in the securities mentioned in this article.
