Natural gas may be clean for a fossil fuel, but there are alternatives for energy generation with even fewer operating emissions.
South Africa based Renergen (ASX:RLT, JSE:REN) is well known in its home country for producing both natural gas and helium. Helium is an important gas for all sorts of purposes ranging from MRI machines to party balloons. From an energy generation perspective, natural gas is touted as a cleaner alternative fuel to oil and coal. Still, the reality is that burning natural gas does still result in emissions.
For those looking to invest in even lower-emitting energy sources than Renergen offers, solar and wind look promising on the surface, but they come with key challenges. In particular, for any given location on Earth, the sun isn’t always shining, and the wind isn’t always blowing. That combination means that to truly adopt those types of renewable power as core to the energy mix requires energy storage as well as generation and distribution.
While it is a technological and engineering challenge to make all the pieces work, it is not an impossible one. These two companies are among those leading the charge when it comes to that total renewable energy infrastructure picture.
No. 1: This is more than just an electric car company
Tesla (NASDAQ: TSLA) may be best known for making electric cars, but ever since it acquired SolarCity, Tesla has been one of the pioneers of renewable energy infrastructure. For people’s homes, it offers solar roofs and more traditional solar panels as well as powerwall batteries to store that solar energy for cloudy days.
On the storage side of the business, Tesla has over 10 Gigawatt Hours of energy storage deployed globally. For comparison, that’s roughly enough power to light 10 million LED lightbulbs for 100 hours straight. Remember — that’s the storage side of the business — the part that’s designed to send power to the grid when production isn’t otherwise sufficient.
From a solar generation perspective, it has installed over 4 Gigawatts of production capacity. That’s enough to charge that 10 Gigawatt hours of energy storage in just under three hours, which is less than the typical daily peak window for solar generation across much of the world. Or in other words, Tesla’s combination of energy generation and storage offers a great start on what renewable energy infrastructure could look like.
Tesla Inc
No. 2: A long-time energy titan that will soon be an independent business
Industrial titan General Electric (NYSE: GE) has long been a player in the energy infrastructure business. Its portfolio includes nuclear power, gas turbines, and solutions across wind, hydropower, and hydrogen.
The General Electric corporate name isn’t as strong as it used to be. That’s part of the reason why General Electric is spinning off its energy business into a separate entity known as GE Vernova. That spinoff is expected in early 2024. As a result, investors interested in just the energy side of the business will either need to buy the parent company now or wait until the spinoff completes.
Between the renewable energy and the other power businesses, General Electric generated over $29 billion of revenue in 2022 from the segment that will eventually become GE Vernova. That’s a great head start on creating a more renewable energy future.
General Electric Co
These companies are worth a look for the future of renewable energy
Tesla and General Electric are two of the big players in the renewable energy business. As the world embarks on a path to what looks like a more carbon-neutral energy generation future, their know-how in generation and storage give them a substantial leg up on that journey.
If you believe that the future of energy generation will continue to be renewables, then all of them are worth looking at. They all operate in slightly different parts of the market, so it’s worth considering each of them independently and as a collection, and decide for yourself if any of them deserves a spot in your portfolio.
At the time of publication, Chuck Saletta owned shares of General Electric.
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Sources – EasyResearch, Renergen, BLM, Enbridge, Clean Wisconsin, HBS, Tesla, Energy.gov, Electrek, HBS.edu, Hitachi, General Electric
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