Every crisis creates opportunities. And the current one is creating a huge opportunity in energy stocks.
But not in the way you think.
If you’re listening along with mainstream media, you’re probably thinking that now is a good time to buy oil and natural gas stocks because the economic sanctions on Russian fossil fuels will cause a price spike on those commodities.
But look at what happened the last time the U.S. and its allies imposed heavy sanctions against Russia, following its Crimean invasion in early 2014. Oil prices spiked for a few weeks – and then they crashed!
The point? In the big picture, sanctions on Russia’s fossil fuels are somewhat meaningless. The rest of the world has enough reserves to plug the supply gap left by Russian production.
So while there exists a huge opportunity in energy stocks amid the Russian invasion of Ukraine, that opportunity is not in oil and natural gas.
Rather, it is in clean energy stocks.
Clean Energy Is the Path Forward
Did you notice the price action of stocks yesterday?
The broader stock market struggled, as you would expect with the escalating geopolitical tensions in Eastern Europe. But clean energy stocks soared!
Shares of electric vehicle makers like Tesla (NASDAQ:TSLA) and Lucid Group (NASDAQ:LCID) popped. So did shares of solar companies like SolarEdge (NASDAQ:SEDG) and Enphase (NASDAQ:ENPH), as well as shares of hydrogen fuel cell producer Plug Power (NASDAQ:PLUG).
These stocks were rattling off 9%, 10%, 11% and even 12% gains yesterday, while the market was down 1%.
Why the huge outperformance in clean energy stocks? The Russian invasion of Ukraine underscores the world’s need for energy independence. And clean energy offers the only viable pathway to TRUE energy independence.
It’s inarguable that energy independence is the ultimate goal for every country. No government wants their energy supply to be reliant upon another country – especially if said country is Russia, which provides about 40% of Europe’s natural gas supply.
At the end of the day, every country wants to produce its own energy. It’s cheaper. It’s more reliable and creates more jobs. And, perhaps most importantly, it’s safer.
The question, though, is how do countries achieve energy independence?
Well, by the very nature of fossil fuels, it is impossible for every country to achieve energy independence through oil and natural gas. Those two energy sources are non-renewable and only exist in certain places on Earth. In some places, like Russia, fossil fuels are abundant. And in others, they are not.
Therefore, a global energy infrastructure built on top of fossil fuels is one that will forever be mired in energy dependence. A select group of countries – like Saudi Arabia and Russia – will always supply most of the world’s oil and natural gas.
As evidenced by the current situation in Ukraine – or the 2000s situation in Iraq – that is a recipe for disaster. More specifically, it’s a recipe for warfare.
However, the sun does shine nearly everywhere on Earth, and the wind blows most places, too. Therefore, a global energy infrastructure built on top of solar, wind and hydrogen power is one that allows for true energy independence.
Clean Energy Independence
In our belief, due to the emergence of the Distributed Energy Revolution, the world will achieve energy independence by 2050.
Some of you may have heard about the Distributed Energy Revolution before. The general idea is that in this revolution, all people are energy independent. No more relying on Russia or Qatar. No more grid or power outages.
We’ll generate power on our own through solar panels on our homes and commercial buildings, massive solar farms in the desert and wind turbines in high-altitude locations.
We’ll store that power on our own through battery storage solutions installed at our homes, office buildings and power generation hubs.
And we’ll deploy that power on our own through AI-powered algorithms that optimize energy usage throughout the day.
That’s the future. Forget this nonsensical global energy system built on unreliability. The future is energy independence, achieved through grid modernization and clean energies.
And for the first time, the U.S. is ready to embrace that future.
Originally published on InvestorPlace.com
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