Friday, November 22, 2013

Energy Storage Coming of Age

In the last post we looked at a developmental stage mining company, American Vanadium (AVCVF:  OTC), that has artfully integrated forward into its end markets through a marketing agreement with one of its customers.  American Vanadium controls the largest vanadium source in the U.S. and plans to begin mining operations in the near future.  One of its principal products will be vanadium electrolyte for use in large batteries like Gildemeister’s CellCube targeted at electric grid owners for power storage and demand management.  Some investors might be surprised that we bother with American Vanadium.  It has no revenue.  Its stock barely trades and is priced below a dollar. 

On the contrary, the time is nigh to give battery and materials suppliers their due.  The steady drum beat of press releases from the solar industry are sounding out sea change in the power industry.  Low solar module costs are making it possible for more and more consumers to throw a panel atop their houses and ignore the local power company.  Power utilities are not happy and some have lobbied against the government subsidies that have helped make economic the installation of solar panels.  Increasingly though electric generators are embracing renewable energy and the distributed nature of wind and solar power generation.

To be in the renewable energy game  -  at least as far as wind and solar power are concerned  -  a utility will need power storage capacity.  This is not news.  What is news is that in the last few months there has been a change in the tone of the market place.  It appears enough utility companies are embracing solar and wind to create real demand for storage solutions  -  the kind of demand that drives revenue and stock prices.

The Storage Group of our Mothers of Invention Index has been updated to include fourteen new battery technology developers.  Interesting among these are Cellenium Company Ltd., Cellstrom GmbH, and REDT, Ltd., all of which are working with vanadium in fuel cell and/or redox flow batteries.  In the next few posts we will look more closely and these and other energy storage names.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.


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