I have another offtopic (O/T) rambling that might be interesting to some of you guys, so please bear with me here, just a bit. I watch a lot of stocks, companies and industries. I love to buy into a company that is undervalued, undiscovered, out of favor, has investor fatigue, or is misunderstood, and unlike Buffet or Lynch, I will play the cyclicals, and even the ones without a ‘moat’ if I feel the timing on a risk/reward basis is favorable. Anyway, my favorite sector is the Energy sector, as I know this sector very well. I am always on the lookout for either beaten down value plays, out of favor commodity cyclical rotation plays, industry ‘game changers’, and watch the political and technology landscape as well, for trends and influential factors that can result in favorable conditions.
I have given a good deal of thought to the area of Electrical demand, both on a World scale, and also locally, here just in the USA. As is logical, humans continue to increasingly rely on more and more Electrical generation, for their comfort, safety, and needs, and basicly just because we are lazy. You may look around you and see two computers where there was once one, an Electric can opener where there once was the manual one, an Electric Dishwasher, when it was done by hand, Comforts of HVAC instead of opening up the windows, burning wood or any other such thing, just for example. Car manufactures are thinking of making Hybrid-Electric cars running on a Battery that you can charge in your garage. Electric is just plain convenient. This is not going to stop, decrease or go away anytime soon. In the third world and developing nations, there is a super rapid pace of advancement, as the infrastructure grid is developed.
Currently most of the Electricity in the World, and the US is produced from heat engines commonly called steam turbines, from the combustion of fossil fuels, mainly burning Coal, with the remaining from Nuclear, Hydro from Dams, Oil/NG generation, usually ‘peaker plants’, and the smallest amount is from “Renewables” at about 2.4%, which could be solar, wind turbine, geothermal, biomass,and then “other” which is less than 1%. Its this ‘Other” that I want to discuss, as I feel there is a very large and undiscovered market for Utility investment going forward due to two different occurring scenarios 1) Increasing pollution controls on ‘dirty’ sources, mainly Coal fired plants, Carbon Capture Cap and Trade legislation that will penalize or make these type plants more expensive to use going forward, with pressure coming from the increased effect of greenhouse gases on our environment, worldwide. Ok, you say why the “Other” and not the Solar, Wind or Geo that is currently in the ‘renewables’ sector? Here’s why. Electricity for the Utility generators has to be economically cost effective, reliable and have the ability to be installed and maintained on a cost effective basis. Solar gen only makes sense in just a few locations, and only generates during the day, when the sun is shining, and is currently cost prohibitive. Wind is not always blowing, and there is opposition to the large size and landscape impact, with again only a few places these are feasible, and the transmission grid is not in place, as its development usually would be far away from where the power is needed. Geo is too expensive, not reliable either, for long term use on large scale. So I come full circle back to the “other” The “other” in this case is Wave Energy from the Ocean. Earth is covered with over 75% water, mainly Oceans. There are a lot of advantages. As long as our planet has a Moon, providing gravitational pull on the planets Oceans, and the Sun doesn’t supernova to get so hot as to evaporate the Ocean waters (we would have other problems then, lol), then Ocean Waves will be there. Most of Human Civilization and Urban cities/centers are located on the Coasts, right next to the