What Do Biden’s Climate Policies Mean for Investment Opportunities in the Energy Storage System Space
On January 27, President Joseph R. Biden signed executive orders aimed to transform the US’s economy into a clean-burning one, defocusing away from fossil fuels and instead, aiming to double the nation’s offshore wind energy by 2030, and move to an all-electric federal vehicle fleet, among other changes. The end goal is for the US to be carbon neutral by 2050. While this move has been cheered by climate activists and the majority of American voters, investors are also in line for significant opportunities presented by new, innovative companies that are poised to lead the new green economy.
What does this mean for investors?
The clean energy and electric car industries will be seeing huge stimulus in the form of government contracts and grants that will speed up adoption of new technologies. Wall Street analysts are already claiming that solar power stocks are going to benefit from the Biden presidency in a huge way. For a lot of the companies in this sector, by February, the exuberance has already been priced into the stock.
One area that investors may profit from paying attention to is the nascent energy storage system industry. ESS provides household or even utility scale storage of electricity, and the industry is poised to grow exponentially as the will of the federal US government is laser focused on expanding the use of wind and solar power.
Small Cap ESS Companies are Disrupting the Industry
Blue chip Listed companies in this sector include Tesla (NASDAQ:TLSA), General Electric Company (NYSE: GE), and BYD Company (SHE: 002594) in China. While these companies are leading the way with large utility scale projects, investors should also pay attention to the smaller players who are providing solutions for smaller grids, industries and individual homes. One such company is Extreme Vehicle Battery Technologies Corporation (CSE:ACDC), who, in January 2021, publicly announced numerous products that will find a home in the new renewable energy paradigm.
EV Battery Tech, as ACDC is known, is trading at CAD$0.19 as of February 1, 2021, and has products lined up to directly compete with blue chip ESS companies. Covering small scale ESS products for home use, all the way to utility scale ESS equipment aimed at powering municipalities and industrial sites, ACDC is leveraging its advanced AI battery management technology to disrupt the ESS space.
The Need for Energy Storage Systems to Meet Carbon Neutrality 2050
Fossil fuel and nuclear electricity generation has one thing that makes it superior to wind and solar energy; the energy is created and used on-demand and can be ramped up or down based on immediate needs. Solar and wind power, however, cannot be controlled in this fashion; engineers cannot dictate when the sun is shining or when the wind is blowing.
Currently, 61% of the US’s electric power comes from natural gas and coal, 20% from nuclear and 17% from wind, solar and other renewable energy. The rapid deployment of low-carbon technologies such as wind and solar will make Energy Storage Systems a necessity for utilities companies, industries and even personal households in order to compensate for the increased difficulties in forecasting variable generation, grid stability, congestion and market volatility.
Total Addressable Market
The ESS market in the US has been estimated to be USD 400.2 million in 2020 and will grow at a compound annual growth rate of 23.9%. While much of the market is taken by utility scale applications, such as powering cities and towns, a significant portion of the market will be for industrial applications, such as telecommunications, data centers, and medical facilities, all of which are growing industries in the US and all of which require reliable and self sustained energy.
Individual homes are also a growing segment of the ESS market. Largely driven by Tesla’s Powerwall product, homeowners are beginning to see the necessity of having their own ESS batteries at home, especially in high energy priced jurisdictions like California and Hawaii. In these states, peak shaving, or the practice of storing energy during times of cheap electricity prices and using it when prices are high, can provide significant savings for homeowners.
What is EV Battery Tech’s Competitive Advantage
Smaller companies like EV Battery Tech (CSE:ACDC) face significant competition from the major companies but in new innovative sectors, sometimes it is the smaller, nimbler companies that are able to punch above their weight. Key to ACDC’s technology is its patented artificial intelligence based battery management systems that have been reported to be able to provide “more efficient power management and longer battery life, while offering real-time monitoring and remote maintenance.”
The company has issued a continuous stream of product releases since January, each covering a different aspect of the ESS market. The company’s Home ESS SmartWall, which is rated to provide greater power storage than Tesla’s Powerwall, is now available for pre-order. <https://nai500.com/blog/press_releases/ev-battery-tech-commences-pre-orders-on-the-home-ess-smartwalltm>. The company’s Titan series, which provides utility and industrial scale ESS, is also taking pre-orders. <https://nai500.com/blog/press_releases/ev-battery-tech-announces-launch-of-the-ionix-pro-titan-energycore/> Also in January, the company secured the rights to be the sole, exclusive provider of energy storage system (“ESS”) solutions for the EcoVille development in the town of Squamish, British Columbia. <https://nai500.com/blog/press_releases/ev-battery-tech-provides-updates-on-definitive-agreement-with-ecoville-and-loi-with-hillcrest>
For investors interested in small cap opportunities that are on trend with US energy policy, ACDC should be one to watch. With its diverse product line and active newsflow, perhaps this is one small company that will make a big difference for climate change.
“Disclaimer: The company described in this article is a customer of NAI Interactive Ltd. This material is for informational purposes only and is not intended as a recommendation or offer or solicitation for the purchase or sale of any securities or financial instruments, or for transactions involving any financial instrument or trading strategy.”