Business & Investment

Solar Sizzle as Oil Fizzle — Investment in Renewable Energy Technology

Dear reader,

Today’s essay begins with news from South Korea. One of their corporate stars, LG Chem, is highly regarded despite pandemics, blockades, and general darkness.

why? It’s in the right sector, what’s that! LG Chem manufactures batteries for use in electric vehicles such as Tesla.

The· Financial Times They report an order of US $ 125 billion. That’s enough to keep them busy for the next five years. They have also surged to become the world’s largest battery maker.

Apparently, they can appreciate the stricter environmental regulations from China and Europe (two regions that account for more than 70% of EV sales).

They may also be able to add the United States to the “high growth” category. That’s when Joe Biden wins the election. Senator Biden has announced a US $ 2 trillion “climate plan.”

There seems to be another story every day showing the procession of renewable technology and related themes.

Second, in South Australia, rooftop solar power is rising everywhere, which could reduce electricity bills during the day by 75%.

This is due to SMEs trying to steal market share from large companies. The CEO is said to say:

Customers who were able to shift their usage during the day, or who could add batteries during peak sun hours to absorb and save cheaper electricity, could save a lot of money.

Investing in renewable energy technology

How long does it take for every house to have its own battery pack, or for one to be installed on the driveway? I can’t talk about it now, but the day is getting closer and closer.

You can clearly see where the tailwind is. And again, headwinds. Woodside Petroleum has announced a $ 6.2 billion write-down and bill as part of its latest results. The main reason was the drop in crude oil prices.

Some might say that Woodside’s predictions still look generous. They still expect an oil price of $ 65 in 2025.

It’s a little far today to wonder if it’s correct. It’s hard enough to see it in 2020.

One of the reasons is that Libya resumed exports after being locked out of the market for six months.

The civil war seems to have settled there, but it is returning to the market at an inadequate time compared to the dynamics of supply and demand.

That’s not all when it comes to oil. A large number of exporters (Iraq, Iran, Venezuela, Libya, Nigeria) rely extraordinarily on energy exports for government revenues. Not selling oil is almost the same as having no money at all.

It can motivate them to pump as much oil as possible to get as much cash as possible. It will also help drive US energy companies to the ground.

Let’s take a look at it. Focusing on sectors with bright prospects will be much more enjoyable.

Copper is worth considering. For years I’ve read that the transition to renewable energy requires an extraordinary amount of copper. And for years, little investment has been made in new supplies.

Over the years, copper prices have fluctuated without entering the huge bull market predicted.

Probably now is the time. Copper prices are rising despite weak economic demand and bleak outlook. Large-scale infrastructure plans are also being considered.

It’s not a bad idea to make a list of related projects and start working on how to proceed with each project. You don’t have to do anything today.

Meanwhile, the gold is still twinkling.

The price remains around $ 2,500 in Australian dollars. This is good cash flow for producers and a good future margin to encourage exploration and trading.

I pray the best wishes,

Column Newman's signature

Column Newman,
Editor, Daily Reckoning Australia

PS: Market expert Shae Russell predicts five knock-on effects from the recent market crash. This can pose an even greater threat to the wealth of the average investor than the crash itself. learn more.

Solar Sizzle as Oil Fizzle — Investment in Renewable Energy Technology Solar Sizzle as Oil Fizzle — Investment in Renewable Energy Technology

Back to top button