About Small Caps Article of the Week
Written by Allen Caron
Renewables Rise – Can Storage Keep Up? Renewable energy has been growing tremendously in the US over the past several years – with an average growth rate of over 25% a year for wind power and over 50% a year for solar PV, it’s hard not to consider solar and wind power as a viable option for energy generation. In fact, 80.9 percent of new installed US electrical generation in February came from wind and solar energy. With news that Siemens is planning to invest $264 million into wind turbines in the UK, it seems like renewable energy is finally hitting its stride.
Of course, just because we’re generating this capacity doesn’t mean we’re all set to use it properly. Energy generation from renewables without storage options isn’t efficient. Not only is energy storage useful for providing energy when needed later, it’s also a key component of energy conditioning and frequency regulation.
While states like California are making moves to implement far greater energy storage solutions than in the past, storage is still required to make the best use of renewable energy. Though it’s been called a “Cinderella story,” the energy storage field will likely continue to grow as new technologies are refined and adopted.
The last time we covered energy storage, we discussed three of the top small cap stocks operating in the storage sector. Each of these three companies takes a different approach to energy storage:
Dundee Corporation, (TSE:DC.A), based in Toronto, ON, had acquired interest in the American Vanadium Corp when we last covered them in October. Recently, American Vanadium closed the first tranche of the private placement. The company’s Vanadium Flow Batteries (VFB) help regulate energy flow from renewable sources. Currently, the company is working to get the CellCube grid-scale battery tested for use in the United States. DC.A closed March 31 at $15.78, up $0.15, with a market cap of $876.70 million. Its 52 week trading range is $15.41 – $37.88.
Meanwhile, New Castle, PA-based Axion Power International Inc.* (OTC:AXPW) manufactures a different type of grid-scale energy storage solution. Their PowerCube mobile energy storage unit is made up of their PbC batteries, each of which contains activated carbon (rather than traditional sponge lead) on one of the electrodes. The advanced lead acid batteries in the PowerCube provide frequency regulation and other “ancillary services,” according to a recent letter to shareholders. In the letter, CEO Tom Granville explains that incorporating energy storage into a renewables project can significantly reduce payback time due to these ancillary services. According to their case study, payback time was reduced from 14.4 years to 4.4 years. AXPW closed March 31 at $0.17 up $0.013, with a market cap of $27.06 million. Its 52 week trading range is $0.08 – $0.29.
San Diego, CA-based Maxwell Technologies Inc. (Nasdaq:MXWL) works with wind power, creating ultracapacitors to optimize energy from wind turbines. Ultracapacitors regulate voltage in renewables to help stabilize the grid while also charging and discharging very quickly. MXWL closed March 31 at $12.92 down $0.o6, with a market cap of $413.08 million. Its 52 week trading range is $4.90 – $16.15.
Energy storage is a key component of the renewable energy future. With an estimated growth rate of 9% for the next several years, the energy storage market may be a smart new technology investment. With a variety of technologies on the market, take your pick – there are plenty of energy storage options for the choosing.