Industry Analysis: A glimpse into the future of alternative energy

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A good post to read when you have a few minutes... it is not super long but it not a one paragraph post either... its appropriately a bit deeper and hence valuable...? I think so...

This is one of a number of posts I will be writing over time to analyze/examine specific industries, stocks, market conditions, or other segments. I will always head the post so that such blogs can be easily found and classified. Succeeding in the market I believe always involves researching, studying, thinking, and looking ahead. In a market such as this one often the best thing is to line oneself up for the future... this is a post that looks at this... as alternative energy is just a baby... baby... and will be here for a long time to come. How it progresses and who knows about it before it happens will determine who is in the right position at the right time.

This is a hopefully informative look at alternative energy. Some of this stuff is many years away. Some is not. As always the GI Joe line applies: "knowing is half the battle".

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I love the cartoon seen at the top. Many a person has gone through a lecture like this... Ever notice how when the professor suddenly says : "ok so this is going to be on the test" that everybody starts listening?

It's funny how the same thing happens when people are invested in the market...
Here's a little post about the future... and the energy that may power it...

This follows my brief post on the outrageous cost of gas... The prices are out of site. Gas and Coal are dirty sources of energy. They will play significant roles for sure despite this. However they are not the perfect solution. So the rest of the answer must be in nuclear power, solar, maybe a little wind and hydraulic...right???

Well, to a degree, but this is not the whole picture and there is much to learn here. People are pouring tons into solar primarily. But is this the answer...? let's look a little more...
All of these types of power have major limitations.

Solar: It is clean but unless it is placed on buildings it takes huge amounts of land. It takes a long time to produce. It doesn't work when the sun isn't shining (which it isn't for most of the year in large parts of the globe), it can NEVER generate power at night, and how practical is it in densely populated regions like NY city or countries like the Netherlands? The facilities are also exposed to the weather and therefore need constant upkeep. It has its pros for sure. At the same time there are real disadvantages here...
Updated (5/25) : Solar mirrors instead of solar voltaic cells... it just makes sense!
Really Cool solar mirror technology used in Spain... explained....
Solar Mirrors In the Mojave organized by CVX, GOOG, and GS.

Nuclear: This has the potential to generate the most energy of any source on earth. However...the waste products are toxic for years and years and years... and years. How many Yucca mountains can we create? It is also water intensive to cool. Above all... horribly... no matter what anyone says nuclear power can be dangerous. Not true you say? Then I ask... do you want to live next to a nuclear plant? If yes... perhaps you haven't read this article..
ipsnews.net/news.asp?idnews=40610

Wind: Like solar this is a very clean source of energy. It is currently the cheapest form of alternative energy next to nuclear and is cost competitive with coal. However, also like solar, it is dependent on the weather. It also is subject to weathering. It also takes up land. It damages birds.

*update-here are some links I just found on wind power- very exciting/interesting*
1.Micro-Wind Turbine Technology!
http://www.inhabitat.com/2007/03/21/micro-wind-turbines-small-size-big-impact/
2.Magnetic Wind Technology!
http://www.inhabitat.com/2007/11/26/super-powered-magnetic-wind-turbine-maglev/
3.Helix Wind
http://www.inhabitat.com/2007/11/08/helix-wind-turbine-small-wind-gets-smart/

Hydraulic: The water in major rivers and streams is already producing the energy so why not use it? Well, agreed, but there isn't water everywhere that is accessible in this way and there is enormous wear on the parts necessary for this. So far this has been very limited.

I think these will all play a role to some extent or another. Some may become the major player. Maybe it will be solar or nuclear or coal etc. and it may pay to invest in these technologies but as I mentioned on a post on Earth to Wallstreet's member's forum (which I would like to extend here) there is a whole other source of energy that almost Nobody is talking about and may very well emerge as the most important source of electricity the world over. Or at least it may become a major contributor. Is there an elephant in the room?
What is this... ?

Geothermal Energy...!

The energy and drilling industries are just frothing at the mouth over this one.
It may behoove you to read this article and the accompanying report...
This one is from MIT
http://web.mit.edu/newsoffice/2007/geothermal.html

Here is an interesting article in the Oregonian...

The second report below covers many forms of alternative energy and is from a company called CleanEdge... self-dubbed the "clean-tech energy authority". It's definitely worth it to check out their web too.
http://www.cleanedge.com/reports/pdf/Trends2008.pdf

The report names the top companies to watch for in the new geothermal space...
CVX (on my top ten list of best long-term stocks one can own). Not surprising. They are already the major producer of geothermal energy overseas.

GOOG (surprising... or maybe not... there is a reason Google is Google afterall... also on my top ten list coincidentally) They are interested in a technology than can drill deeper and harvest more energy from underground...
Read the article for more on this.

And then three pure play geothermal companies that probably very few people have heard of:
ORA RZ HTM

These are all now officially on my watch list!!! We are talking about companies of the future. It may take awhile before the last three are real players but I dunno maybe not. I will start to look at them from now on. Don't forget about drilling companies also here.

However the report is about much more than just geothermal. That is the fourth section of the report. The whole report is interesting...

The key topics:
1. The electric car may very well be the future
2. Energy sustainable cities in the future
3. Overseas players to power US wind power boom
4. Geothermal power Renaissance
5. Clean Ocean Shipping

Here is an interesting link re: Dubai
http://www.masdarctf.com/

This is also a good alternative energy site
Oil and Gas Confidential

These are all things to think about. In my post: how to become a champion in this market I mention looking for the next bubble, the next big thing so to speak, as a key to success. Well the topics on this post may help to get an early glimpse at the undisputed real demand driven bubble that is just in its infancy... alternative energy.

Feel free to comment and agree or disagree if you would like. Maybe you have your own take or have something to add or just want to say something on the topic. Please be respectful... that's all anyone can ask...

Best,
Jon

This blog is for informational purposes only. It does not give investment advice.