Last weekend, I sifted through Bloomberg’s latest “New Energy Outlook” report for the U.S.
It’s fairly involved, but there’s one key point made in the report that I want to discuss with you.
Check it out…
The fastest decarbonization trend is underway in the power sector, as coal generation steadily declines, replaced with a mixture of natural gas, wind and solar. In this economics-only scenario, coal becomes uneconomic to run, and it is cheaper to build new wind and solar capacity rather than run existing coal capacity.
I’ve long maintained that the future of coal-fired power generation in the U.S. is bleak. Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the daily newsletter below.
Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the daily newsletter below.
While we have seen an increase in coal usage on a global scale as a result of the Russian invasion of Ukraine, the U.S. is blessed with enough natural gas and renewable energy resources that it’s unlikely coal will ever be able to muster a return to its glory days.
In fact, the Energy Information Administration (EIA) predicts that by 2050, coal will supply between 1% and 8% of total electricity production in the U.S. Today, it’s just under 20%.
But here’s where it gets interesting…
While it will be natural gas and renewables that provide what coal used to, only renewables show the most opportunity for growth.
While natural gas consumption grew nearly 30% from 2010–2020, EIA data show that this growth will plateau in 2030 as a result of natural gas in the electric power sector becoming “increasingly complex due to economic and policy trends that favor renewable energy.”
This doesn’t mean natural gas disappears from the U.S. energy economy. In fact, in the EIA’s 2050 projections, natural gas use slightly declines from about 39% to 34%. That’s not a particularly significant decline compared with that of coal. What is significant, however, is that renewable energy increases from about 20% to 44% by 2050.
So to clarify, by 2050, coal will become nearly nonexistent, natural gas use will decrease by about 5%, and renewable energy use will more than double.
From a long-term investment perspective, we’re focused on that which offers the most growth. Thus our continued bullish stance on the renewable energy sector, particularly solar and storage.
On the solar front, you’re definitely going to get the biggest bang for your buck with solar power royalties.
If you’re unfamiliar, these are essentially monthly royalty checks you can earn from operational solar power projects all over the world.
And in terms of storage, there’s no better play than the "Newton Battery," which is cheaper to build and operate than any other type of storage in use today, and it's far more powerful. In fact, one Newton Battery is now being used alongside a solar farm that will ultimately power 4.5 million homes.
The company behind the Newton Battery currently has deals in place with General Electric (NYSE: GE), Dominion Energy (NYSE: D), and Canadian Solar (NASDAQ: CSIQ).
It’s also inked contracts worth more than $32 billion over the next five years. You can learn more about this one here.
Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.
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