Tom Konrad, Ph.D., CFA
I’ve been writing about the smart grid and its potential since before I joined AltEnergyStocks, in 2007, although at the time, I wasn’t using the term: I mostly called it "Smart Metering." Now, Smart Grid is a central part of federal stimulus plans, and the term is firmly ensconced in the popular lexicon. GE even created a Super Bowl ad around the Smart Grid (video).
It was far past time to create a Smart Grid category in our Alternative Energy Stock List, but now we’ve done it. The companies in the Smart Grid Stock List were previously categorized as both Energy Efficiency Stocks and Electric Grid Stocks. Now, they are in the Smart Grid and Electric Grid categories, but only in the Energy Efficiency category if they also have a more conventional energy efficiency business. The broader Electric Grid category contains both Transmission and Distribution companies, like the ones in my Transmission Shopping List, as well as companies more narrowly focused on the smart grid. A few of the IT companies which have been moving into smart grid (such as IBM, Cisco, and Google) are in the Smart Grid category, but not in Electric Grid.
For readers who want something more than just a list of companies, I’m planning to pick my top five for a future Shopping list, but it will be a difficult choice to pick my five favorites… I like them all. Smart grid is one of my favorite categories because of the enormous potential to help decarbonize the economy. Successful adoption of smart grid technology will:
- Reduce total electricity usage
- Reduce peak demand
- Lower the cost of renewable energy integration
- Lower electricity bills
- Allow electric vehicles to charge without overwhelming the grid.
- Stimulate job growth
Sound too good to be true? It isn’t. It’s what happens when you start using your brain on a problem that you’d previously only attacked with brawn. Hence the "Smart" part of Smart Grid.
Here’s the link to our Smart Grid Stocks.
DISCLOSURE: Tom Konrad and/or his clients own GE. He has a short position in GOOG.
DISCLAIMER: The information and trades provided here and in the comments are for informational purposes only and are not a solicitation to buy or sell any of these securities. Investing involves substantial risk and you should evaluate your own risk levels before you make any investment. Past results are not an indication of future performance. Please take the time to read the full disclaimer here.
Should Beacon Power or Ambient be included in this list?
Thanks for noticing Ambient’s absence, it was one I’d missed.
As for Beacon, the definition I’m using for smart grid companies is “Publicly traded companies working to enhance the effectiveness of the electric grid through the more effective use of information and communication technology.”
Beacon does enhance the effectiveness of the grid, but it’s through flywheel energy storage rather than IT.
Hence Beacon is in our list of Electricity Storage stocks instead.