5 Power And Pollution Disrupters

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Includes: ABB
by: James Hanshaw
Summary

The world faces an existential crisis.

Energy is both the cause and the potential cure.

The threats are opportunities.

We, the people, must take our lives into our own hands: People Power!

I feature five investment opportunities - four unlisted and one listed, ABB  - that will help us do that.

Foreword

This article is a bit lengthy but, if you bear with me to the end, I believe you will conclude that if we become the leaders we will enjoy yet another new age. If we do not green extremists will come into our caves and snuff out our polluting candles, assuming we have survived choking to death from breathing the filthy air outside.

Armageddon

The biblical story was about human governments refusing to bow to God. My story today is about political “leaders" who are wilfully refusing to accept that our present behaviour will ensure we die of pollution long before we freeze or boil to death as threatened by the armies of climate change “experts” paid by governments with our tax money and ignored by many of those governments anyway.

Today we face a moment in history when the very thing created by man and that changed man’s life in a positive way - controlled energy generation - now threatens to destroy that life unless we get two dangerous byproducts - pollution and head in the sand political leaders - disrupted.

This Financial Times article tells more about the environment many of us are being forced to live in and what we, the people, are doing about it.

Paradoxically that pollution and increasing energy demand also provides excellent opportunities for people, companies and investors to bypass those “leaders” who ignore the threat of pollution for short term political gain. We can do this by investing in Skypull, Twingtec, Insolight, Innolith and ABB (NYSE:ABB).

A recent report by the UN’s Intergovernmental Panel on Climate Change states the rise in global concentrations of carbon dioxide, CO2, has risen ten times faster in the past decade than for any sustained period in the past 800,000 years. They concluded that these increases must fall to zero by the 2040s. In 2019 greenhouse gas emissions are likely to rise again after hitting a record high in 2018!

2040 is not far away in the lives of many of the world’s younger people today but the only outcome of such reports is solely an excuse to hold yet more climate change conferences around the world. Accordingly another was held in Poland recently. There the filthiest of coal is used to generate electricity and, in the part where the conference was held, children’s lungs are in the same poor condition they would be after smoking several thousand cigarettes!

Not bothering themselves with minor facts like that around 10,000 delegates plus hundreds of media reporters arrived from around the world on pollution generating aircraft to stay in hotels and attend meetings in vast conference halls requiring huge amounts of electricity, for heating and lighting, from those filthy coal fired power stations.

The many aircraft used so unnecessarily for that event added to the near 30,000 polluting European skies - part of the near 200,000 flying globally - each and every day.

I live in Unterengstringen, near Zürich, in environmentally conscious Switzerland - The Land of Milk and Money - where we have clean hydro power in our house but outside the air can be anything but clean. Switzerland is one of Europe’s cross roads for truck, train and air traffic and I took this photo from our garden recently.

This is typical of any time of the day with four or five planes always overhead pouring filthy emissions down on us. On some days when the atmospheric conditions are not so good the stench is awful and sometimes falls on us like fine rain. The Rhodium Group just reported that carbon emissions rose 3.4% in the US in 2018, much of that due to jet-fuel use.

Those planes also fly over some of tomorrow’s power generating and pollution disruptors being nurtured by the European Space Agency Business Incubation Centre, ESA BIC, that is part of one of Europe’s top technical universities, ETH.

Three companies of the companies I mentioned above are in the ESA BIC fold; Skypull, Twingtec and Insolight. But first I will say more of that immediate threat to our lives:

Pollution

Today the biggest producer of one of the most dangerous emissions, CO2, is coal. Ironically coal was an important part of the positive transformation of human life that started around 200 years ago with the Industrial Revolution. It still produces 37% of our electricity according to the World Coal Association. China uses it for around 80% and many people living in some cities there are choking to death. The US has reduced its use to 30% thanks to cleaner, low cost shale gas and no thanks to Old King Coal Trump who would reverse that for short term political gain. Fortunately voters even in coal communities do not believe him and we are seeing signs of what I hope will become the norm; businesses coming clean and bypassing such “leaders”, as must we all.

Australia, with a mere 0.3% of the world’s population, produces 1% of global CO2 emissions due to overuse of lignite and contributes much more via massive exports of coal to China and India. India uses that for over 70% of their power generation. At home, in a country that has an abundance of natgas, the Australian Prime Minister is prioritising use of lignite instead of that much cleaner gas - a combination of corrupted political power and pollution that surely needs a disrupter!

I do no want to get into arguments with supporters of coal. I am well aware that Carbon Capture and Storage, CCS, technology exists and am equally aware it has not been used to any sufficient extent.

I have focused on coal here but other gases such as methane produced mainly by the oil and gas industry are dangerous too but that industry is showing signs of cleaning up, unlike coal producers. That means hope and there are signs too among tomorrow’s leaders:

We, the people - the political power and polluter disrupters

Australia may pollute above its weight but recently tomorrow's leaders - today’s school children - demonstrated for a cleaner environment. They were well mannered, intelligent and articulate. Instead of the country’s leader - the Prime Minister - meeting them and encouraging them he chose to tell them, in only slightly politer words, to "shut your mouths and get back into class”. Hopefully they will become the disrupters that country needs when they get to voting age.

They should also adopt an initiative signed recently by 13,000 students in France; the manifesto pour un reveil écologique - the manifesto for an ecological awakening. Their message is simple and will not be welcomed by the remote elites who have led their world into this mess; “We students in 2018 refuse to continue on a trajectory that is destroying our societies and we will refuse to work for companies that do not play the sustainable development role”. Let’s hope they one day do the same with their votes! There are strong signs their parents are beginning a revolution of their own with the gilets jaunes primary objective being the removal of their elite president.

Let’s also hope those Polish kids with coal damaged lungs, and their parents, do likewise.

Around 75% of Americans - excluding President Trump - believe future generations will be harmed. The combination of political power and pollution in the US obviously needs a disrupter too!

This 15 year old Swedish girl, Greta Thunberg, has received world recognition for her views

Some of France's top companies are getting it right, including Saint Gobain (OTCPK:CODGF) and Schneider Electric (OTCPK:SBGSF). Those future Australian leaders should do likewise and refuse to work for the world’s largest coal exporter and one of Australia’s largest companies, BHP (NYSE:BHP). And in the US refuse to work for Proctor and Gamble who had Indonesian rain forest - a natural carbon dioxide sink - torn down to grow palm oil to replace nasty stuff in their soaps! Their PR people loudly lauded the latter but kept silent about the rain forest destruction.

We, the people, are taking our lives into our own hands in important ways. Two very large Californian pension funds have joined hands with other large investors overseeing $11.5 trillion in assets, including Schroders, Fidelity,Legal and General - all run by we, the people - who have called on power companies to end coal use by 2030. They specifically named the main culprits in Britain, France and Germany. The power of money and the people behind it will win!

We, the people are the political power and polluter disrupters! People Power! That expression has often been used but it has yet to overcome the elites who have highjacked representational democracy so that it represents only them and big money. The media are the courtiers of the elites and constantly try to prove that referendums (votes) are a threat to democracy! They do not remind us that the word democracy came from ancient Athens where only the elites got to vote and we, their slaves, did not!!!

People's power in its truest form has been working here in the direct democracy of Switzerland since 1848. Here the people are the highest political authority. They make all major decisions via referendums at every level; federal, state and local. The politicians implement those decisions. No doubt there are imperfections but the people have managed better than the political “leaders” in most countries. I put more about that in Switzerland - Land of Milk and Money

I also described the mess the decaying power systems are in many countries in the Supply section of my Pass the Candle article. Such little hope opens doors to new clean and profitable hope and I shall cover that later. First a recap on today’s supply and demand status.

Supply

Belgium is facing potential blackouts amid prolonged outages at two of its ageing generators leaving a potential two gigawatt supply gap this winter. Belgium sometimes helps top up neighbouring France’s ageing system.

The French system relies on nuclear for about 70% of its needs and was described as in an existential crisis in 2016. Over two years on nothing has been done.

Britain is approaching Armageddon faster than most. The latest news is that Hitachi has pulled out of building a nuclear power station there that would have replaced 7% of worn-out old power stations. Note the word replace - it would provide no new supply! The world’s most expensive nuclear power station ever, under construction at Hinkley Point C, might never get finished. And the political system overseeing this under Prime Minister May is in a state of May-hem! Her state minister for business, energy and industrial strategy recently brushed criticism aside by blandly asserting, in a letter published in the Financial Times, that the supply problem for the 2030s is not one of shortages but “the much better challenge of abundance”. That minister would not even be able to buy candles from China without adding to Britain’s mountain of debt! According to official statistics that debt, including unfunded obligations such as pensions, exceeds 240% of national income!

Germany is the world’s fourth largest economy and Europe’s economic power house but remains largely dependent on ageing coal fired plants. In 2012 a political promise to phase out nuclear power by 2022 was made. Today, barely three years from then nothing has been started to replace that in a country where it takes decades for anything to even get started due to the madhouse of bureaucracies there. The political leaders spout about wind power in the north but say nothing about the missing link; the transmission lines to the main industrial centres in the south, the cost for which has been estimated at Euros 80 billion by Agora Energiewende, a Berlin based environmental think tank. And in the past few days a new political promise has been made to place out coal......by 2038......

I suppose it does not matter because recharging all those electric BMW, Mercedes Benz and Audi cars - that will not get built in their factories in the south that have no power - will not then overload the power generation system that is left. Only politicians could dream up that ingenious solution to the problem!!

Those same politicians have a similar ingenious solution called Energiewende - the change to clean energy - but, as with those north south transmission lines, there is a missing link for that too; money. The respected Frauenhofer research institute has estimated that implementing that solution would cost Germany Euros 30 billion every year up to 2050. Neither my calculator nor my tiny brain can calculate what E30 billion by 31 years totals!

The mighty US is no better. As in Europe some of its transmission and distribution lines (T&Ds) were put up in the 19th century! Capacity is so stretched that even a single line cannot be taken out of service for maintenance because that would severely overload decayed connected lines. The whole grid is vulnerable to cyber attacks, hurricanes, earthquakes, solar storms, terrorist strikes and electro-magnetic impulses.

We saw evidence of what can happen when Hurricane Maria destroyed the entire power infrastructure in the US territory of Puerto Rico and the whole island lost power. Many more people died after than were killed by the hurricane yet political “leaders” sat for years on the knowledge of what might happen and did nothing. The US system has other problems too such as power company bankruptcies

Too bad about human life and the demands we have to keep on improving it:

Demand

I covered this also in my Pass the Candle article. Today, less than 12 months later:

- New uses for blockchain are adding huge new loads on the system. Calastone, the London technology group, will bring mutual funds on to blockchain this year. Calastone connects more than 1,300 financial service companies across 34 global markets. BNP Paribas, Ostrum Asset Management, Standard Life Aberdeen and Columbia Threadneedle are among others developing plans to use blockchain. Energy trading via VAKT will be widely used within the next twelve months. Even sales of art are now being conducted on blockchain powered platforms. Maybe some of that will bring more business as well to Switzerland’s Crypto Valley

- Car makers, including the German ones, have continued to pour millions into electric vehicle, EV, development seemingly without answering the question of how they will be recharged by the already overloaded power generation system and much of that coal fired! Clean cars/polluting rechargers!!!

- Data centres that require enormous amounts of power for cooling continue to be built. Quantum computing needs even more. IBM never recovered after being disrupted by the Apple Mac but maybe it will make a comeback with the Q System One

- Recently came news of a Quantum Compass that may replace GPS

- A new technology is being developed in Israel called Computer Vision that will be used on everything from autonomous cars to farming

- Algorithms and AI use for stock market trading is adding further new demand.

Since we are nearly 20% of the way through the 21st century it is difficult for any person today - except politicians - to see where all that fits in a world where some of the transmission and distribution systems being relied upon were installed in the 19th century.

Enough of the threats. All threats bring opportunities and some of those are new age power and pollution disrupters from the Land of Milk and Money

The clean AND profitable New Age -

Switzerland has many innovators as well as chocolate makers. Some of those innovators are being nurtured by the European Space Agency Business Incubation Centre, ESA BIC. Wind power is familiar to all and although it produces clean energy it visually pollutes lovely coastlines and countrysides and creates noise pollution. And those ugly monsters often do not work when needed on the coldest days because there is no wind. NO WIND??

There is plenty of wind if you know where to find it.

Skypull and Twingtec do.

Above a certain altitude the wind is continuous and both these companies generate electricity continuously on the ground as a result. They can be installed locally close to where the power is needed and thus need no costly transmission line connections to power generating plants far away. India has around 32 million homes still without electrical power so Skypull, Twingtec and Insolight (more later) could serve local communities with clean energy, unlike much of the country which is supplied by filthy coal fired plants. And that would also solve local air pollution problems caused by using other dirty fuels for cooking.

There is more about what Skypull does and how it does it here and here

Twingtec demonstrates their way in this video

They will have to be installed away from aircraft flight paths in locations approved by local aviation authorities but many places they will serve are remote from those or the planes are flying at much higher altitudes. It could also be that some of those places exist in the Permian basin of Texas where there is no electrical power and thus no shale oil and gas drilling at present.

Another thing I like about both is they do not visually pollute beautiful coastlines and countryside as do the monster wind generators currently used. Those things are noisy too. Our “leaders” tout their green credentials by allowing those things and so aid one pollution problem but ignore the visual and noise pollution they create. Also ignored is the huge cost of removing the giant steel reinforced concretes bases at the end of the usable lives of these monsters. Of necessity those bases are built to be indestructible by nature’s forces!

The sun is the main other supplier of today’s clean energy. It produces more energy in a second that the entire world needs for a year. Not all of that comes in our direction but we are still only using a minuscule amount of that which does and today’s solar panels are showing signs of ageing - most still produce around the same amount of electricity per sq metre as those made in earlier years and are of very low efficiency, 17%-20%. That leads me to a third ESA BIC company for tomorrow's clean energy age:

Insolight

Insolight efficiency is far greater. It could replace all existing panels because it can fit on any PV mounting rack and provide 10% or more electricity at lower prices. What’s not to like?!

One thing it needs when there is no sun - and so do Skypull and Twingtec when producing at off peak times - is storage. Another Swiss company can provide that:

Innolith

This video paints a picture of many thousand words

Under Supply above I mentioned the decaying T&D systems. Many local communities - we, the people - are taking action and bypassing those with local grid structures. Apart from the environmental benefits they provide Twingtec, Skypull, Insolight and Innolith can also be valuable components of totally new power generating systems that are built to serve localised needs throughout the US and other developed countries before many become underdeveloped in the not too distant future. The capital cost of installing these localised systems will be massively lower and can be small or large to suit local needs. In many places we are heading towards an era of smart cities that will be totally disconnected from existing power generation systems. They will avoid the catastrophic risks that existing systems face and can be fixed local and rapidly if problems arise.

The central component of these will be microgrids.

A Swiss listed giant can supply those

ABB (ABB)

Around 130 years ago ABB too was a start-up by British engineer, Brown, and German engineer, Boveri. The A in the name came years later when their company merged with Swedish company ASEA. Today that two man start-up is a giant with around 147,000 employees working in over 100 countries.

It is a bit of a conglomerate but not in a mess like (NYSE:GE) and is becoming a bit more streamlined. I especially like ABB for its microgrids

ABB’s share price has gone nowhere in the last five years and there has been no sales growth. Sales growth might look slow in the future but that will be partly due to divesting some activities and hopefully profits will improve taking up the share price in the medium term. If you buy it on the Swiss exchange (symbol ABBN) you buy into the strong Swiss franc and get a safe 4% dividend.

There are many individual companies now getting on with new ways for a cleaner tomorrow. One of the world’s largest data centre operators, Digital Reality (NYSE:DLR), is getting into solar together with major customer, Facebook (NASDAQ:FB).

(Shell) and (NYSE:BP) - past naughty boys - are going into solar for EV charging in a big way. Exxon (NYSE:XOM) is fast following them pushed by shareholders to do so. French company, Air Liquide (OTCPK:AIQUF), is investing heavily in the US, building refuelling stations for hydrogen fuelled cars. The world's largest oil producer, Saudi Arabia is also getting into hydrogen refuelling.

That brings me to conclusion time. Will that conclusion be;

Armagedon or its opposite: Serenity, Miracle, Wonder?

The word choice is yours. It would be a miracle under today’s political leaders so I will choose wonder; the wonder of what we, the people, will achieve. And much of this will be achieved with private financing as well!

The wonder is happening fast and gaining an unstoppable momentum.

A few examples:

- Data centre giant Digital Reality (DLR) and green bonds

- Boston Properties (NYSE:BXP) and sustainability

- Swiss property company PSP (OTCPK:PSPSF) and CO2 reduction

- Parts of the US such as Iowa with its solar and storage project

- CPS Energy and clean power in San Antonio, Texas

- Apple (NASDAQ:AAPL) is now running 100% on renewable energy

- South Korea with solar and storage

- In agriculture too with the RIPE work in Illinois

All this, and more, by the people is putting coal into a death spiral. Hooray!!

For us, the people power...

Where next?

Insolight, Skypull, Twingtec and Innolith are not listed companies and early stage investors should contact them directly, also for product availability information. I am long all of them with Insolight perhaps offering the most immediate potential because it can easily replace ageing solar panels as well as being a leader with the other three companies in our clean new age.

I hinted earlier that I may start my own start-up. My research into the many opportunities ahead has found an unfilled niche that could use products from each of the above, from others and from ABB. A million dollars or so would help me get that off the ground but I doubt that will be thrown at me so if any reader is, or knows, a very experienced industrial electrical engineer in his/her thirties who I can swap ideas with, please say hello on my email address jbhanshaw@gmail.com. If I am right maybe we can get it off the ground together.

I may buy into ABB soon as its management is finally focusing its activities and cutting back on fat. If they get it right it has huge potential.

Bloomberg recently reported that corporations hunger for clean power has never been greater! Companies are made up of people - shareholders, executives and employees. If the execs refuse to change then, if you are a shareholder, use your vote to change those execs!

Readers will hopefully seek to invest in more of the many companies doing the right thing too and I hope you share those names with us in comments below including names of companies that have technology for removing CO2 from the air and maybe water vapour too because water vapour is a problem also. Let’s do our bit to strengthen people power.

One thing is for sure. A movement that was slow to start is fast turning into an avalanche - a very positive one! Now is the time to get on board these Swiss power and pollution disrupters and let them ski us on financially and physically healthy rides into the new age that we, the people, can create together with them.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in ABB over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.