Investment Professionals

Clean energy in your clients’ portfolios

Battery technology investments could be the answer for clients with an interest in the environment and a desire to incorporate this within their portfolios. Renewable energy and electric cars are set to take over fossil fuels as a source of energy in coming decades, but to do so, battery technology and storage will be critical.

Renewables and battery technology

Renewable energy, namely solar and wind power, are intermittent power sources. To rely on these is to require reliable energy storage in the form of batteries. Likewise, electric cars are completely dependent on battery storage to operate. The South Australian Hornsdale Power Reserve is the largest example in the world of battery storage for renewable energy, making Australia one of the leaders (surprisingly, given our coal industry) in transformation.

Wind and solar energy are forecast to supply around 48% of world electricity needs by 2050, with battery technology, gas peakers (turbines or engines that burn natural gas) and dynamic demand anticipated to drive market penetration of solar and wind by more than 80% according to BloombergNEF[1] . To accommodate this growth, utility scale battery energy storage capacity is expected to more than double by 2022, while the market for battery technology is anticipated to reach $90bn by 2025, growing more than 12%[2][3] .

How to invest in battery technology?

The value chain for battery technology ranges from mining companies, mining for metals like lithium, to manufacturers of battery storage and storage technology providers. All are potential beneficiaries of the anticipated growth in this industry.

There are a range of ways to access battery technology in your clients’ portfolios.

  1. Direct shares in value chain component companies with the bulk of their revenue related to this area, such as mining companies like Pilbara Minerals or battery manufacturers.

  2. Direct shares in broader companies which still include exposure to battery technology, such as Panasonic.

  3. Managed funds, either active options or ETFs such as ETFS Battery Tech & Lithium ETF (ASX code: ACDC) which offer exposure across the industry.

For more information about ETFS Battery Tech & Lithium ETF (ASX code: ACDC) or investing in battery technology for your clients, please contact us.

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This document is communicated by ETFS Management (AUS) Limited (Australian Financial Services Licence Number 466778) (“ETFS”). This document may not be reproduced, distributed or published

[1] https://about.bnef.com/new-energy-outlook/

[2] www.forbes.com/sites/mergermarket/2020/02/18/the-future-of-battery-energy-storage-is-upon-us/#d5b173d4a185/

[3] www.mordorintelligence.com/industry-reports/global-battery-market-industry/