In order to save this planet, the entire global population will need to examine how we use energy and what ways we can reduce our emissions. My personal career in engineering has been entirely focused on energy conservation and implementation of those measures, so this is near and dear to my heart. I fully believe renewable energy, carbon capture and rethinking the way we use energy in general will determine the future of this world.
Many large cities across the globe have implemented carbon reduction goals. My hometown, New York City, has laid out a plan to achieve net-zero emissions by 2050. While ambitious, goals like this show the need to really think about how we use energy. Several companies are tackling this issue, but these companies stand out in rethinking our future. The 4 energy companies we are investing in are Brookfield Renewable Partners, Enbridge, Plug Power and start-up Cityzenith.
Brookfield Renewable Partners is one of the leaders in the renewable energy space. They own renewable power generating facilities around the world, focusing primarily on hydroelectric power operations. Hydro accounts for 64% of their portfolio, but Brookfield also owns and operates wind, solar, distributed generation and storage facilities. Recently, they announced that they "believe it is possible that in ten years from now the majority of the production capacity will be solar."
Brookfield has also announced strategic partnerships, including with two of the other energy names we are invested; Enbridge and Plug Power. Brookfield and Enbridge are working on a green hydrogen project that will use hydrogen to replace natural gas in one of Enbridge's distribution pipelines. Brookfield will also provide renewable energy to Plug Power to support its first green hydrogen plant in North America.
If you missed our dividend stocks blog from last month, we'll give you an insight - Enbridge was one of the five dividend companies we plan to hold forever. Enbridge is a Canadian oil pipeline giant. A majority of the company's earnings comes from its oil pipeline, which is estimated to account for 25% of all North American oil. Its natural gas pipeline accounts for another large portion of earnings, where 20% of all North American natural gas passes through. The rest of the earnings come from utilities and renewable energy.
Now, we know you're thinking oil is another industry on the way out. And as much as we want to agree, it is going to take a long time for that to be true. And as long as the world needs oil and gas, someone will need to move it. That's where owning the pipelines makes sense. So, if you were Enbridge, wouldn't use the current system to finance the new renewable system? Well, that's exactly what Enbridge is doing; using its revenue to rapidly grow its renewable energy sector.
Since 1996, Enbridge has been developing its renewable energy sector. It has offshore wind developments in Europe, is building solar plants and is investing in its natural gas business, a much cleaner fuel than oil. This is a company adapting to the changing times and providing a ton of value to its shareholders.
Plug Power makes hydrogen fuel cells, which can proceed electricity using hydrogen as the input fuel. The best part of producing electricity using hydrogen fuel cells is that they produce only water vapor as a by-product. There are no other emissions, so it is a completely clean way of producing electricity.
Currently, Plug Power's fuel cells are used in forklifts and stationary backup power systems. The company is now targeting fuel cell electric vehicles, and has partnerships with Renault and SK Group. In order for fuel cells to become practical in vehicles, critical infrastructure needs to be put in place and costs need to be reduced. Another headwind is that currently 95% of hydrogen is produced using natural gas, so it's not necessarily as clean as it could be. Hydrogen can be created using water and electrolysis, which would make it much cleaner. Plug Power has plenty of obstacles, but certainly an industry that intrigues us and we hope suceeds.
Our most recent investment is in the start-up Cityzenith. The company specializes in the Digital Twins market. A digital twin is a virtual representation of an object or system that spans its lifecycle, updated using real-time data, and uses machine learning/artificial intelligence to aid with decision making.
Imagine a commercial building that is energy intensive. A virtual twin is created on the platform and using extensive data points and AI, operational savings and efficiencies can be located. This will not only reduce energy consumption but also carbon emissions. We are extremely excited about this company and think it have huge affects on cities and their emissions. Here is their website that dives into the issues we face today and how they are solving them.
There you have it. That's why we are excited about renewable energy and the 4 energy companies we we are investing in. Our latest newsletter dives into four other areas that we are investing in for the future. Sign up here.
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Partnerships
These are the companies we have partnered with this year. They make this blog possible so go check them out!
Coinbase - cryptocurrency exchange - get $10 in free Bitcoin when you buy your first $100
BlockFi - cryptocurrency exchange - get up to 8.6% interest on your crypto
Personal Capital - personal finance platform that helps users take control of their finances by blending world-class technology with human advice. Pair industry-leading financial tools with licensed advisors and full-service planning experts across all 50 states
M1 Finance - the future of finance in a sleek, modern app. Rated #1 for Sophisticated Investors by Investopedia, users can enjoy: free investing, high yield checking, low rate borrowing, automation, and optimization
TrueBill - app that helps people gain awareness about their spending habits and better manage their money. Truebill makes it easier than ever to manage subscriptions, lower your bills, and stay on top of finances & budgeting
Honey - finds you the Internet’s best discount codes and makes sure you never overpay. Shop like normal and when you're ready to checkout, we'll instantly find and apply the Internet's best codes directly to your cart. It only takes two clicks and it’s 100% free.
Canva - design software that makes design simple, convenient, and reliable. Create what you need in no time! Jam-packed with time-saving tools that make anyone look like a professional designer
Credit Karma - your credit scores should be free. And now they are. Check your scores anytime, anywhere and never pay for it. Save smart with Credit Karma.
Disclosures
I am not a licensed financial advisor or financial professional. This is not investing advice. I am simply sharing my research and opinion based on that research. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.
This blog contains some affiliate links. If you purchase any service through one of these links, I may earn a small commission at no extra cost to you.