How Battery Tech Is Changing The Renewable Energy Market

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How Battery Tech Is Changing The Renewable Energy Market

In 2019, renewable energy powered the equivalent of 43.5 million homes in America. The biggest renewable sources, wind and solar, generated hundreds of thousands of jobs and over $10 billion in investments each. By 2025, renewable energy worldwide is predicted to become a $1.5 trillion dollar industry, incredible growth in such a short period of time.

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Q4 2020 hedge fund letters, conferences and more

Incentives For Sustainable Energy

Governments are providing incentives for sustainable energy to grow, but a lot of growth is demand driven as well. 71% of Americans think clean energy needs to be a priority, and nearly half of consumers would be willing to pay more per month if their electricity came from a renewable source. Nearly 6 in 10 believe renewable energy will be good for the economy going forward. When wind and solar companies expand operations, they are meeting the demands of consumers, not just catering to the whims of government.

This Is What Hedge Funds Will Need To Do To Succeed In The Long Term

InvestLast year was a banner year for hedge funds in general, as the industry attracted $31 billion worth of net inflows, according to data from HFM. That total included a challenging fourth quarter, in which investors pulled more than $23 billion from hedge funds. HFM reported $12 billion in inflows for the first quarter following Read More

Despite all the enthusiasm, one major hurdle stands in the way of wind and solar companies expanding faster: their battery. Both wind and solar are intermittent: neither generates much power on dark, still nights. Since consumers still use electricity at all hours, wind and solar power generated at one time needs to be stored for use at another time. In 2019, only 5% of behind-the-meter solar systems included a battery.

The Advantage Of Vanadium Flow Batteries Over Lithium-Ion Batteries

Right now, the battery used by solar and wind companies is the same type everyone uses: lithium ion. First created in 1912, the lithium-ion battery has not changed much over the past century. Its use in the Green Energy Revolution is a bit ironic; lithium-ion batteries have several shortcomings that prevent them from being sustainable. They degrade quickly, their extraction, production, and (improper) disposal causes water contamination, and their recycling process is difficult and costly. While lithium-ion batteries may still suit the purposes of mobile applications, they are a poor fit for long-lasting, stationary, energy-intensive operations like power storage for renewables.

What could be used instead? One possibility is vanadium flow batteries. Vanadium flow batteries have several advantages over their lithium-ion peers: with annual maintenance, they have a useful life of over 25 years, they can fully charge and discharge throughout their lifetime, and their recycling process is far simpler. Recycled vanadium is just as functional as freshly mined vanadium, limiting the need to constantly mine for more. With renewable energy taking off, vanadium flow batteries are a complementary investment in a clean future.

Vanadium Flow Batteries

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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