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Energy & Commodities

Renewable Energy Storage: The Next Big Power Play

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Posted by Morgan Stanley

on Wednesday, 02 May 2018 16:53

batteries

New renewable energy storage technology has the power to turn solar and wind energy into a reliable source of electricity generation for U.S. utilities.

Storage makes renewable energy available when it’s needed the most. Peak electricity usage happens in the early morning and evening, whereas peak production of solar energy is midday and at night for wind. Given the U.S. electric grid’s lack of storage capacity, conventional power plants, including gas-fired ones, are utilities’ most reliable source of electricity.

That could be about to change.  In a new collaborative report, “An Underappreciated Disruptor,” Morgan Stanley’s Utility and Clean Tech analyst, Stephen Byrd and Shared Mobility & Auto analyst, Adam Jonas, argue that the price of both solar and wind energy, as well as new storage units, have reached a point where renewable energy can finally become a dependable rather than an unpredictable source of energy.

 “Demand for energy storage from the utility sector will grow more than the market anticipates by 2019-20,” the report posits. The demand for storage is expected to grow from a less than $300 million a year market to as much as $4 billion in the next two to three years, says the Morgan Stanley report. Ultimately there’s about a $30 billion market for storage units, with capacity for around 85 gigawatt-hours of power storage. That’s enough electricity to light up most of the New York City metro area for a year.

There will be winners and losers. Companies with gas-fired plants might suffer margin compression as utilities increase their use of cheaper renewable sources on tap in battery storage units. Energy storage will also release stored power during periods of high demand in the early mornings and evenings, when power prices are at their highest — another negative to the bottom line of gas-fired plant owners. “Storage effectively provides a low-cost source of power, eliminating the need for the highest cost, least efficient conventional power plant,” says the report.

Companies creating the storage units are the likely winners, although new entrants will find it hard to compete with the two biggest market leaders, say the analysts.

Utilities will have good reason to want to buy the storage units. “We think utilities could deploy storage as a way to enable the growth of renewables and/or defer costly transmission and distribution projects,” says Byrd. Having renewable energy on tap to supplement peak electricity periods will also reduce the likelihood of blackouts.

More affordable battery storage units could also lead to significant utility bill savings for customers with solar panels, as well as those in states where utilities add a “demand charge” to utility bills to recover transmission and distribution grid costs.

As for the grid, the proliferation of electricity storage could eventually transform it into a “plug and play” for the units, used by utilities, solar customers and electric vehicles.

 “The grid of the future is becoming more complex, necessitating improved grid infrastructure to accommodate a proliferation of distributed energy resources,” the report says.



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Energy & Commodities

"Iran Lied" - Oil Markets Up

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Posted by Reuters

on Monday, 30 April 2018 15:33

iran lied

Oil prices rose on Monday, bouncing off early losses after Israeli Prime Minister Benjamin Netanyahu said Israel had proof that "Iran lied" about its nuclear capabilities, and that he was sure U.S. President Donald Trump would do "the right thing" in reviewing the country's nuclear deal with western powers... Click for complete article



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Energy & Commodities

Trump's revenge: U.S. oil floods Europe, hurting OPEC and Russia

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Posted by Olga Yagova and Libby George

on Monday, 23 April 2018 15:28

oilrigAs OPEC's efforts to balance the oil market bear fruit, U.S. producers are reaping the benefits - and flooding Europe with a record amount of crude.

Russia paired with the Organization of the Petroleum Exporting Countries last year in cutting oil output jointly by 1.8 million barrels per day (bpd), a deal they say has largely rebalanced the market and one that has helped elevate benchmark Brent prices close to four-year highs.

Now, the relatively high prices brought about by that pact, coupled with surging U.S. output, are making it harder to sell Russian, Nigerian and other oil grades in Europe, traders said.

"U.S. oil is on offer everywhere," said a trader with a Mediterranean refiner, who regularly buys Russian and Caspian Sea crude and has recently started purchasing U.S. oil. "It puts local grades under a lot of pressure."... Click Here for complete article



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Energy & Commodities

This Natural Resource Uptrend Is Unstoppable

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Posted by Matt Badiali - Real Wealth Strategist

on Friday, 20 April 2018 06:17

antas

There is a huge problem in the Copper Market. Despite strong demand growth from electric cars and battery production about 40% of the world’s current copper production will close over the next 10 to 20 years. In other words demand is going up while supply is scheduled to shrink. Check out The world’s top 10 highest-grade copper mines for investment opportunities after reading this analysis - R. Zurrer for Money Talks

The next big commodity story isn’t some exotic metal like cobalt or palladium…

It’s much more simple and important. The next boom in natural resources is copper.

Copper demand is soaring. You know the story. Electric carsmunicipal-scale batteries and millions of other electronics out there. They all need copper.

While we know the story, the numbers are incredible. The price of copper is up 44% in the last two years.

If you don’t have a position in copper mining, you should buy right now.

A Huge Problem for the Copper Market

Monthly demand for copper rose 82% since January 2000, as you can see from the chart below:

Natural Resource Bull Market

As you can see, the trend works out to about 3.4% annual growth in copper demand. That’s setting up a huge problem for the copper market in the next 10 years.

According to a mining analyst with CRU, around 220 mines — about 40% of the world’s current copper production — will close over the next 10 to 20 years. In addition, mines that continue to produce will do so with lower grades — less metal per ton of rock moved.



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Energy & Commodities

Late-Cycle Commodity Surge Under Way

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Posted by Frank Barbera - Financial Sense

on Thursday, 19 April 2018 07:08

According to the Game Plan for Late-Cycle Investing, as the economy moves towards its latter stages, commodities tend to outperform equities and other asset classes. Frank Barbera—market technician & portfolio manager believes we're likely in that process right now & if Gold pushes through $1,365 the first push up will take it to $1,480 to $1,525 - R. Zurrer for Money Talks

Listen to this podcast on our site by clicking here or subscribe on iTunes here.

Volatility Is a Return to Normal

Stock market volatility has picked up this year, though in percentage terms this really just a return to historical norms, Barbera explained.

The real anomaly occurred over the last 2 years where the market was moving straight up in parabolic fashion before culminating in a blow-off top late-January.

“Think of this more as a return to normal than anything else,” Barbera said. “Comparatively speaking, it is a rise in volatility, but at least so far we really haven't seen the stock market averages breakdown below major key levels.”

Possible Topping Process

One disquieting point is that after the big break we saw in early February, we swung from very high momentum to deep oversold conditions without anything in between, Barbera noted.

“We had this abrupt break in the market,” he said. “That's very historically unusual. Usually, when you have high momentum, you'll get a pullback, getting a push to new highs or maybe two pushes to new highs before you get a decent-sized break, and this just flipped on a dime.”

westpac-risk-aversion-index

Larger Chart - Source: Bloomberg, Financial Sense Wealth Management



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