Today, I’m continuing the energy theme I’ve been writing to you about all week.
The global energy crisis is front and center on our radars as the cold winter approaches and energy prices around the world look set to soar even higher.
But first, I want to just remind you about my urgent briefing tonight at 8 p.m. ET.
Unfortunately, the energy crisis isn’t the only crisis we’re facing right now.
There’s another crisis just around the corner… It will affect every man, woman, and child in America.
But millions of Americans will be blindsided…
That’s why tonight at 8 p.m. ET, I’m airing an urgent broadcast to prepare Americans for the worst…
Because if you know what’s coming and how to prepare, you could even turn crisis into the opportunity to make as much as 1,000% gains as this historic distortion unfolds.
I really hope to see you there.
Now, back to today’s essay…
What Happens When the Sun Doesn’t Shine?
The transition to New Energy – including the modernization of traditional energy sources – is one of my main distortion investment themes.
Renewables, including wind and solar, are playing their part in this global shift. In 2021, wind and solar generated 10% of electricity globally. And that looks set to rise in the coming years.
But as we know, the wind doesn’t always blow, and the sun doesn’t always shine. So solar and wind farms need to be able to store the energy they generate.
I’ve written to you before about lithium-ion (li-ion) batteries. These batteries are small and energy-dense. They’re lighter than other kinds of batteries. And they are rechargeable. That’s why they’re so popular for electric vehicles (EVs).
But they can only store up to four hours of energy. And they start to lose their charge capacity after a few years. So they’re not best suited to long-duration energy output.
Today, I want to talk to you about another kind of battery – flow batteries. These are ideally suited to wind and solar projects.
These innovative batteries bypass lithium altogether. In fact, they’re usually made with abundant, non-toxic elements such as iron (or vanadium), salt, and water. That makes them more environmentally friendly, as well.
The market for these batteries looks set to more than triple in the next four years.
So below, I’ll show you a way to get in early on this fast-developing trend.
Solving the Li-Ion Problem
Flow batteries are very different from li-ion batteries.
They store energy in tanks of liquid electrolytes. These electrolytes, or chemically active solutions, are then pumped through the battery’s electrochemical cell to extract electrons.
If you want to increase the energy storage capacity of the battery, all you have to do is increase the quantity of electrolyte stored in the tanks.
Here’s a simple graphic to show how it all works…
Flow batteries are larger than lithium-ion batteries, and not especially energy-dense. So they’re not great for transportation-related purposes, such as EVs.
But they enjoy many advantages over lithium-ion batteries and other traditional batteries that make them the ideal solution for the renewables’ energy storage problem.
Flow batteries can store up to 12 hours of energy. They’re easily rechargeable. And their performance doesn’t degrade over time, like a lithium-ion battery does. They’re also cheaper to produce.
This makes flow batteries an excellent choice for utilities and large-scale power projects. Especially as we incorporate more and more intermittent energy sources, such as wind and solar energy, into the electricity grid.
These batteries can absorb excess energy during times of low demand and release it into the power grid when customers need it.
Finally, flow batteries can last for up to 25 years. And they are substantially recyclable.
The bottom line is that flow batteries offer a cleaner, cheaper, and more efficient solution.
A Fast-Growing Market
And with governments around the world desperately looking for alternatives to traditional energy sources, the market for flow batteries looks set to grow.
The International Energy Agency (IEA) estimates that the global installation of utility-scale battery storage will increase 25 times between 2020 and 2040, reaching 10 terawatt-hours (TWh) by 2040. That’s roughly 50 times the size of the current market.
It’s clear that the energy storage industry is set to thrive, with a particular focus on long-duration power storage.
The global market for flow batteries is set to more than triple to almost $1 billion by 2026, as you can see in this next chart…
And there’s one big supporter driving that growth – the U.S. government.
Flow Batteries Have Government on Their Side
Last year, U.S. Energy Secretary, Jennifer Granholm, said that flow batteries are “good for grid storage.”
This was just after the Department of Defense announced it was building a national research and development (R&D) center focused on long-duration energy storage. This will be located at the Department of Energy’s Pacific Northwest National Laboratory (PNNL). It is expected to be operational by 2025.
And the Energy Act of 2020, passed during Donald Trump’s term in office, set aside $1 billion in funds for energy storage research, development, and demonstration (RD&D) programs.
This is clearly a matter of bipartisan importance – not politics as usual.
The recently passed Inflation Reduction Act (IRA) builds on this federal focus on flow batteries and their uses.
It provides major incentives for alternative long-term, large-storage batteries. This includes a tax credit of between 30% and 70% for standalone energy storage.
All this attention from the government makes total sense when you consider that the Biden administration is pushing for a carbon-free power grid in the U.S. by 2035.
And it makes even more sense now as the energy crisis rages and countries around the world look to different energy sources for geopolitical reasons.
A combination of wind, solar, geothermal, and nuclear power mixed with short-duration lithium-ion batteries can generate 80% of our electricity. The final 20% will require some sort of long-duration storage.
That’s where flow batteries come in.
And even if we don’t reach Biden’s goal – which, in my opinion, is more likely – the advances in energy storage represent a hugely profitable opportunity.
What This Means for Your Money
A good way to position yourself to benefit from the overall battery trend is by investing in Invesco WilderHill Clean Energy ETF (PBW).
The fund invests in the full battery cycle, from mining and refining metals to battery production. So it gives you broad exposure to this fast-growing industry, including flow batteries.
And with the energy crisis set to deepen, I’ve discovered an even better opportunity.
I’m holding an urgent briefing tonight at 8 p.m. ET all about it. I’m going to do a deep dive into the energy crisis… and what you can do to prepare your portfolio for the worst.
I’ll also share how to turn crisis into the opportunity to make as much as 1,000% as this historic distortion unfolds.
So be sure to reserve your spot right now… and join me tonight at 8 p.m. ET to learn all about it.
Editor, Inside Wall Street with Nomi Prins
P.S. As a thank you for tuning in tonight, I’m giving away the name of one of my favorite stocks, which I think could become a blue chip over time… along with a special report my team and I put together called The Dirty Dozen. In it, you’ll find 12 energy stocks to avoid at all costs.
Anyone who shows up to my event will get these for free – no strings attached. All I ask is that you join me tonight at 8 p.m. ET.
This is your final chance to register. Just go here to reserve your spot, and I’ll see you at 8 p.m.