Some companies are developing powerful batteries that can store renewable energy and reduce dependence on fossil fuels.
With climate change a serious threat, many innovative companies are looking at how to store the intermittent energy produced by wind and solar farms as the answer to finally weaning us off fossil fuels, at least for electricity use.
Most people are familiar with battery storage via hybrid and battery-electric vehicles like the Toyota (TM) Prius, Nissan’s Leaf, and Tesla (TSLA). These are low-emissions cars, but even if they don’t burn any crude oil—like the Tesla—as long as the electricity comes from a coal or natural gas utility, they’re still indirectly burning fossil fuels.
Progress is being made on the battery storage front. In its Technology Outlook publication, BP forecast in late 2015 that combined hybrid and battery electric vehicle sales will grow from approximately 2% of global vehicle sales in 2014 to approximately 10% in 2025.
Additionally, “batteries for vehicles and electricity-grid applications, such as energy storage technologies, have significant potential to influence future fossil-fuel demand in the transport sector and enable greater penetration of intermittent renewable energy,” BP said.
From 2014 to 2015, according to Advanced Energy Economy, the energy storage market in the U.S. increased tenfold, from $58 million to $734 million, said Peter Ledford, regulatory counsel at the North Carolina Sustainable Energy Association.
Several reasons are behind the growth in energy storage. Renewable energy costs are falling, which has led to more market penetration of intermittent resources. Energy storage is starting to meet additional grid challenges such as frequency regulation, fast response services, and load shifting.
“As production and supply of energy storage systems increases to meet the new energy storage demand, prices fall, further increasing the use in new applications in a positive feedback loop,” Ledford said.
Because of the battery array it’s building, some investors think of Tesla as a battery maker, not an electric car company.
A lot of the battery stocks are still small-cap, highly volatile names like China BAK Battery (CBAK). Better-known names aren’t pure-plays, like Johnson Controls (JCI), which makes batteries along with other technologies, and EnerSys (ENS), which makes batteries for motive power, reserve power, aerospace, and defense applications. There’s also the Global X Lithium exchange-traded fund (LIT), which comprises lithium miners, battery companies, and other related firms.
Ledford said U.S. manufacturers have some catching up to do on the lithium-ion battery (LIB) front.
“Despite the progress being made in the U.S., Asian countries continue to dominate the global production of LIBs, with Japan, Korea, and China accounting for 85% of all manufacturing capacity. … Because the U.S. LIB supply chain only accounts for 7% of the global market, and it is relatively new to the industry, the U.S. does not have the same advantages as their global competitors. While it is possible for U.S. LIB manufacturers to succeed, they will face challenges competing with more established producers,” he said.
Use Stock Screener to narrow selections based on sectors like technology. Log in at tdameritrade.com > Research & Ideas > Screeners > Stocks.
for thinkMoney ®
Financial Communications Society 2016
for Ticker Tape
Content Marketing Awards 2016
Securities listed are for illustrative purposes only and are not a recommendation.
Market volatility, volume, and system availability may delay account access and trade executions.
Past performance of a security or strategy does not guarantee future results or success.
Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.
Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.
The information is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy, and is for illustrative purposes only. Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.
This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.
TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2019 TD Ameritrade.