Welcome to the New Energy Economy
Welcome to the New Energy Economy: What Investors Need to Know
No matter how you feel about it, the new energy economy is coming.
There will be a massive change to the energy landscape. We will see high-skilled workers at new zero-emissions power plants. Miners of copper, lithium, and uranium are going to see new demand. And as investment researchers, we know that certain companies will make massive profits along the way.
The good news is that we’re going to see many different opportunities in the years ahead.
Today, I’m going to break down those big trends and show you which industries stand to profit.
Wind & Solar Power
The most visible changes coming are the windmills and solar panel farms. These are already dotting the landscape across the U.S. But as they get more support, they are going to get even more common.
And the businesses making the materials that go into those structures are going to go into overdrive. Just as an example, glass pure enough to go onto solar panels is rare. The businesses that make this glass today are growing quickly.
And as we’ve written about before, the oil fields of Texas are already getting a boost from wind power. The boom-and-bust nature of the oil business has brought some dyed-in-the-wool oilmen around to wind.
But as anyone will tell you, the sun doesn’t shine and the wind doesn’t blow all the time. The energy landscape of the next few decades will need some kind of low-carbon power to fill in the gaps.
Low-Carbon Power Plants
That’s where uranium power comes in. Believe it or not, nuclear power has almost zero carbon emissions. Compare that to today’s carbon-belching natural gas and coal-fired power plants, and you can see where the opportunity is. The Bipartisan Infrastructure Deal passed in 2021 promised $65 million to upgrade America’s power grid. Specifically, it aims to “accelerate our transition to a zero-emission economy.”
That means that natural gas and coal power plants will need to be phased out across America. And in their place will have to be nuclear energy plants.
Businesses that work with uranium are already seeing a boost – the price of the metal has doubled since 2020.
Homes & Electric Vehicles (EVs)
Getting that power to homes will also be a priority in the new energy economy. New and upgraded power lines will use copper, aluminum, and steel to transmit this cleaner energy. And that means companies mining and refining these metals are in a great position.
Even better, those metals are going to get a boost from the trend toward EVs. Today, it’s not just cars going electric, you can get a lawn mower, a boat, and a grill that all run on electricity. And they all need batteries.
Lithium and copper are the main materials in those batteries. And they’re becoming more and more widespread as more products go electric. The businesses making these batteries and providing the materials are going to see massive growth in the years ahead.
Companies Doing It Right
This isn’t a specific industry, but it’s a part of the new economy and it’s something that we as investment researchers pay attention to: Regulators.
Above all these developments are the regulators deciding which projects get priority. The companies that have relationships with their communities and work to get locals involved are the ones that are going to succeed. We don’t just mean developing relationships with regulators. Giving priority jobs to local workers and giving back to local projects establishes a lot of goodwill for businesses. And when we see that happening, we immediately bump those companies up a notch in our rankings.
The new energy landscape is still in its infancy. And there are several sectors we haven’t covered here. But we at Mangrove will be zeroing in to find the best opportunities in these industries.
And as this trend develops, we’ll be bringing you even more insights in The Grove.
Numbers to Know
The expected value of the rare earth metals market by 2030, growing at 9.1% rate in 2021-2030 (Research and Markets)
The estimated total value of all non-fuel mineral production in the U.S. (U.S. Geological Survey)
Number of EV-critical minerals potentially at risk for disruption: lithium, cobalt, nickel, manganese, and graphite. “The time required to locate economically suitable mineral deposit, acquiring capital, land, mineral rights, and permits can take years.” (Congressional Research Service)
What’s New in Sustainable Investing
Clean Energy’s Dirty Secret
Energy evolution is driving the need for more and more rare earth metals. There is a right way and a wrong way to mine these metals. Here is a wrong way! (SkyNews)
The rising need for clean energy will drive demand for metals
From wind turbines and solar panels to electric vehicles and battery storage, all require a wide range of metals. These clean energy technologies are set to emerge as a major force in demand for critical minerals. (International Energy Agency)
Video Of The Week
Why A Copper Shortage Is Looming
Harvard Professor Oliver Hart says that profit maximization is important to shareholders, but it’s not the only thing they care about.