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Renewables Will Heat up in 2022

March 31, 2022 By admin Leave a Comment

In this Article:

  • Where will all these unicorns come from?
  • Renewables Will Heat up in 2022
  • Invest Like a Wall Street Titan on a Main Street Budget

Earlier this week, I told you the stock sell-off we’re seeing today is setting off a boom in private markets.

According to Fortune, more than 80% of venture capital and private equity firms say they plan to raise capital in 2022. That’s up from 75% in 2021.

And the amount of money they’re raising is increasing. In 2021, private equity funds raised at least $733 billion globally, surpassing every previous year on record.

This year, they’re forecast to raise $952 billion.

The rush from the public markets into the private markets makes sense for these Big Money players when you consider private companies also have lower volatility than publicly traded companies… and perform better during challenging times.

In 2021, the pace of new unicorns (a private company that reaches a $1 billion valuation) increased considerably, reaching an average of two new unicorns minted per day. And I expect that activity to increase this year.

That begs the question: Where will all these unicorns come from?

The answer is: Clean energy.

Now, I’m a capitalist. So I don’t look at investment ideas just because they make us feel good. But regardless of what you think about “clean energy,” it’s the hottest investment trend in the United States right now.

Renewables Will Heat up in 2022

Before any bias you might have about “clean energy” comes rushing out, let me be clear…

Today’s clean energy industry is different.

The smartest minds in technology are working in it… and the smartest minds in finance are investing in it.

Larry Fink is the CEO of Blackrock, the largest asset manager in the world with $10 trillion in assets under management.

Here’s an excerpt from his annual letter published in January 2022:

The next 1,000 unicorns won’t be search engines or social media companies, they’ll be sustainable, scalable innovators – startups that help the world decarbonize and make the energy transition affordable for all consumers.

Think about that.

Fink is one of the wealthiest, most well-connected men on the planet. He’s not some starry-eyed kid or a tree hugger who wants to “change the world.” This is one of the most influential money men on the planet.

He goes to bed thinking about money. And he wakes up thinking about money.

And he knows there is a stadium-sized stack of money to be made in clean energy technology.

According to Allied Market Research, the 2020 value of renewable energy was $881 billion… and projected to reach nearly $2 trillion by 2030.

Renewable stocks are outperforming the broader market, returning approximately 159% since the end of 2019 compared to the S&P 500’s 29% within the same span.

[Revealed: This Tech Expert Finally Found the Company that’s Behind Elon's New Project]

But it’s in the private market where you stand to make the biggest gains from the clean energy trend.

Take the electric vehicle (EV) battery tech company, QuantumScape, for example. Famed investor Jeremy Grantham invested $12.5 million in the company while it was private. QuantumScape went public in 2020 via a SPAC merger… and his stake swelled to $638 million before the year was up.

That’s a 5,005% return. That far outweighs the potential 719% gain the average investor could’ve hoped to make by buying into QuantumScape when it announced its SPAC merger.

Here’s another example. In 2017, Saudi businessman Abdul Latif Jameel stumbled upon on the EV startup named Rivian. He made several private investments in the company at an estimated valuation between $1–2 billion.

Rivian went public in November 2021 at an $83 billion valuation… netting potential returns between roughly 4,000–8,000%. Within weeks of the IPO, Abdul was sitting on a potential return of 14,900%… enough to turn every $1,000 invested into $150,000.

Meanwhile, regular investors that got in on IPO day saw peak gains of 80%… enough to turn $1,000 into $1,800.

As you can see, investing in clean energy companies before they become public is how you can potentially move the needle on your financial life without putting your current lifestyle at risk.

But if you didn’t know the wealthy insiders behind these deals like Grantham or Jameel did, you wouldn’t have been able to invest in them. So I’ve made it my mission to change that.

Invest Like a Wall Street Titan on a Main Street Budget

Ever since my early days on Wall Street, it’s driven me crazy. As a retail investor, you couldn’t access the private market. Legally, there wasn’t any way to get into these deals.

Finally, the SEC has cut through the red tape allowing the public to get in.

But cutting the red tape doesn’t mean Wall Street will say, “Come on in!”

They’re not going to welcome you like a long-lost brother… or roll out the red carpet and kiss you on both cheeks.

The best deals are still only found in one place. And that’s on the “inside” of the market.

To find these deals, you’ve got to move in the right circles of venture capitalists, billionaires, and influential deal makers. That’s where you find the best deals.

[Alert: Warren Buffett already invested $15 billion in this trend… said he’s ready to invest $15 billion more]

The good news is – and it’s going to sound like I’m bragging, but I promise you I’m not – I’m fortunate enough to be in that position.

I’ve gone to those events. I know many of the billionaires in the early investing space. I’ve been on their private jets, attended their private parties, and am on a first-name basis with many of the top dealmakers operating in the market today.

And recently, I’ve uncovered what I believe could be the next unicorn in the clean energy space.

This company in the American heartland says it’s found a way to produce environmentally friendly oil without drilling or fracking.

After vetting it, Wall Street powerhouse JPMorgan cut a check to be its largest shareholder… I’m talking about the biggest bank in the United States.

JPMorgan is behind some of the biggest private deals, including Facebook, Tesla, and EV maker Rivian. And some of its deals have returned 47x, 100x, and 159x.

That last one is enough to turn $1,000 into $160,000.

And remember… Regardless of what you think about clean energy, it’s the hottest investment trend in the U.S. right now.

Avoiding those investments because of personal bias only hurts your financial future.

JPMorgan will still be this company’s largest shareholder… and it’ll still cash out its shares for bigger gains than investors who bought too late… or didn’t buy at all.

Which side of that trade will you be on?

Let the Game Come to You!

Teeka Tiwari
Editor, Palm Beach Daily

[Exclusive: Louis Navellier – The #1 Electric Vehicle (EV) Battery Stock of 2022]

Read more from Teeka Tiwari at PalmBeachGroup.com

Filed Under: Analysis Tagged With: clean energy, Electric Vehicles, IPOs, JPMorgan, QuantumScape, rivian, Teeka Tiwari, tesla, Unicorns

Energy Experts Extremely Bullish on Battery Storage Stocks

January 6, 2022 By admin Leave a Comment

  • Battery storage has become one of the hottest renewable energy niches
  • A “must-own” in the space
  • Both start-ups and larger battery companies are pulling in billions of dollars to fund ambitious expansion plans
  • UBS estimates that the United States energy storage market could grow to as much as $426 billion over the next decade

One of the biggest electric-vehicle battery companies in the world is going public. 

After years of disappointment, the U.S. IPO market has been recording a strong comeback. Traditional initial public offerings raised more money than ever before in 2021, as early investors tried to cash in on sky-high valuations. This year, a record nearly 400 traditional IPOs and an additional 600 special-purpose acquisition companies (SPACs) listed on the markets. Total deal value for traditional IPOs clocked in at $153.5B while SPACs fetched $162.3B, both record highs. 

Unfortunately, the same cannot be said about the energy sector.

It appears that Wall Street is still souring on the U.S. oil and gas patch, if the first initial public offering of a U.S. shale driller in four years is any indication.

Despite all the chatter about natural gas being the perfect bridge fuel in the transition to clean energy, even a natural gas explorer backed by private-equity giant Blackstone Group Inc. was unable to raise the capital it expected. In its March IPO, Vine Energy Inc. (NYSE:VEI) sold 21.5 million shares for a total of $301 million, falling short of its target of $361 million. To get the deal done, Vine had to accept a lower price than its target price, while Blackstone and its affiliates had to step in with a $60 million purchase to push it through.

Things are not much different elsewhere, with the IPO of Australian shale gas explorer Tamboran Resources also underwhelming.

In sharp contrast, investors appear a lot more enthusiastic about funding clean energy startups. Whereas oil and gas IPOs might not be in play just yet, the renewable energy sector is a different beast altogether.

[The Forever Battery: Making Gas Guzzlers Obsolete]

IPO

Source: Wall Street Journal

Brazil's biofuel company Raizen went public in August, raising $1.3B and snagging a $14B valuation in one of Brazil's biggest-ever IPOs. Raizen is a joint venture between Cosan S.A. (NYSE:CZZ) and Royal Dutch Shell Plc (NYSE:RDS.A).

Meanwhile, Spanish renewable energy company Acciona Energia (ANE.MC) has enjoyed one of the most successful IPOs in Europe this year in an otherwise lackluster market.

Dutch e-bus manufacturer Ebusco also had a successful IPO in October that valued the company at $1.3B while shares of Swedish automotive manufacturer Volvo Cars (VOLCARb.ST) have soared 22% after its debut.

Meanwhile, battery storage has become one of the hottest renewable energy niches.

Energy storage technology and services provider, Fluence Energy (NASDAQ:FLNC), completed its IPO in November, raising just under a billion dollars. Fluence currently has a market cap of $5.7B.

Citing “undeniable fundamentals” and a sector ripe for disruption, Evercore ISI has launched coverage on the energy storage ecosystem, set to solve the problems of intermittent power generation as the energy industry pivots to renewables.

“The outlook for energy storage demand growth these next three decades is strong as the globe pivots towards decarbonization amid continued cost declines in battery prices,” the firm says.

Evercore has tapped Fluence Energy as a “must-own” in the space, noting the company provided the grid's first-ever Li-Ion battery energy storage system, and has worked through several generations of that technology since.

[New Battery Breakthrough: Could Revolutionize the $2 Trillion Automotive Industry]

According to a report by global communications, research, and consulting firm focusing on cleantech Mercom Capital Group, corporate funding and M&A for the battery storage, smart grid, and energy efficiency sectors more than doubled in 2020 to $8.1 billion compared to $3.8 billion in the previous year. A more recent report by the research outfit reveals that total corporate funding (including VC, Debt, and Public Market Financing) in battery energy storage came to $4.7 billion in 17 deals compared to $3.1 billion in 19 deals in Q4 2020. Funding was up significantly year-over-year (YoY) compared to $244 million in nine deals in Q1 2020.

A host of energy experts, including the U.S. Energy Information Administration (EIA), UBS, BloombergNEF, S&P Market Intelligence, Wood Mackenzie, and others are extremely bullish about the prospects of the battery storage industry– both over the near-and long-term–as the clean energy drive gains huge momentum.

At the center of our green energy drive are solar and wind power, both of which are expected to contribute nearly half of the global power mix by 2050 as per Bloomberg New Energy Finance. The intermittent nature of these renewable sources, however, means that large-scale storage is absolutely critical if the world is to successfully shift away from high dependence on fossil-fuels.

The surge in lithium-ion battery production since 2010 can be chalked up to huge improvements in the technology from a cost and performance standpoint. 

Over the past decade, an 85% decline in prices fueled a revolution in lithium-ion battery technology, making electric vehicles and large-scale commercial battery deployments a reality for the first time in history.

The next decade will be defined by a massive increase in utility-scale storage.

United States utilities are trying to cut down on emissions by implementing utility-scale battery storage units (one megawatt (MW) or greater power capacity).

In March 2019, NextEra Energy (NYSE:NEE) announced plans to build a 409-MW energy storage project in Florida that will be powered by utility-scale solar.

[Exclusive: Company Pioneering this New Battery could be the Investment of a Lifetime]

Xcel Energy (NASDAQ:XEL) plans to replace its Comanche coal units with a $2.5-billion investment in renewables and battery storage, including 707 MW of solar PV, 1,131 megawatts (MW) of wind, and 275 MW of battery storage in the State of Colorado.

In October, Duke Energy (NYSE:DUK) announced plans to build an energy storage project at the Anderson Civic Center, Carolina, including investments to the tune of $500 million in battery storage projects for electricity generation capacity of 300 MW. 

The outlook for the battery storage industry is as rosy as they get.

According to the EIA, operating utility-scale battery storage power capacity in the United States more than quadrupled from 2014 (214 MW) through March 2019 (899 MW). The organization projects that utility-scale battery storage power capacity could exceed 2,500 MW by 2023, or a 180% increase, assuming currently planned additions are completed with no current operating capacity being retired.

UBS estimates that the United States energy storage market could grow to as much as $426 billion over the next decade.

Storage

Source: EIA

Here are more energy storage IPOs to keep an eye on.

#1. LG Energy

Last year, LG Chem (OTCPK:LGCLF), South Korea's largest chemical company and a leading EV battery supplier, announced plans to spin off its battery division LG Energy Solution (LGES). LGES is one of the world's top electric vehicle (EV) battery makers, supplying the likes of Tesla (NASDAQ:TSLA) and General Motors Co (NYSE:GM).

[The Forever Battery: Making Gas Guzzlers Obsolete]

LG Energy Solution applied for preliminary approval of an IPO that publication IFR says could fetch $10 billion-$12 billion, easily South Korea's biggest-ever listing.

LGES and the Korea Exchange announced the application for approval of the previously flagged IPO on Tuesday, without mentioning its size. IFR reported the potential size earlier in June, citing people close to the deal.

LGES says the IPO was planned for 2021, although the company is yet to confirm or deny the IPO size.

A $10 billion IPO would be more than double the 2010 IPO of Samsung Life Insurance, which was valued at 4.9 trillion won ($4.39 billion). If successful, it would mark the third U.S. IPO of South Korean companies following the $2 billion domestic float of material solution provider SK IE Technology Co Ltd and $4.6 billion U.S. IPO of South Korean e-commerce company, Coupang.

The timing of the IPO could not have been better, with global sales of battery-powered electric cars exploding as automakers race towards electrification.

LGES has announced plans to invest more than $4.5 billion in its U.S. battery plant by 2025.

#2.  Harmony Energy

Battery energy storage company Harmony Energy Income Trust has announced its intention to go public in a bid to fund the development of 213.5MW of projects using Tesla's battery storage technology.

Harmony Energy will list on the Specialist Fund Segment of the London Stock Exchange through an institutional placing with up to 230 million new ordinary shares at an issue price of 100p per share. The company says it's targeting a dividend yield of 8% per annum, payable quarterly from 2023.

Harmony says it will use proceeds from the IPO to acquire five projects with a capacity of 213.5MW (427MWh) from Harmony Energy Limited. Harmony has contracted with Tesla for this initial portfolio, including agreed pricing and timing of delivery. 

The company will follow up on this initial portfolio with a 99MW (198MWh) advanced project acquisition, bumping up Harmony's initial portfolio to 312MW (625MWh).  

Paul Mason, managing director of the Investment Adviser, says battery storage offers exciting growth potential, with the country's installed capacity expected to reach 43GW by 2050 from just 1.2GW now.

“Investing in battery storage energy systems requires extensive sector expertise and knowledge, and our team has decades of investment and industry experience.  Battery storage energy systems are a vital cog in the renewable energy value chain. We believe there is enormous potential in the sector and the 2-hour duration battery will be best placed to take advantage of this.“

[New Battery Breakthrough: Could Revolutionize the $2 Trillion Automotive Industry]

#3. Pod Point

Pod Point, a company that provides charging points for electric vehicles in Britain, has announced plans to list on the London Stock Exchange.

Majority owned by France's EDF (EDF.PA), Pod Point has revealed that it plans a premium listing with a free float of at least 25%. Following the listing, EDF will maintain a stake of more than 50%.

Pod Point is Britain's largest provider of home charging points for EVs and the second largest provider of workplace charging infrastructure. The company booked revenue of 33.1 million pounds ($45.18 million) in the year ended Dec. 31, 2020, with an adjusted underlying loss of 12.3 million pounds.

Alex Kimani

Read more from Alex Kimani at OilPrice.com

Filed Under: Energy Storage Tagged With: Clean Energy Startups, Harmony, IPOs, LG, Pod Point, tesla

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