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2013/09/25

This Socialist President Can Make You Rich!

There's going to be a nice pickup  for renewables. And we plan to invest accordingly.
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This Socialist President Can Make You Rich!
By Jeff Siegel | Wednesday, September 25th, 2013
Jeff Siegel

modern energy report

Throughout his election campaign, he promised to reduce reliance on nuclear and increase reliance on renewable energy.

It was a promise that annoyed conservatives and emboldened liberals.

And it was a promise that French president Francois Hollande is now looking to make good on.

Just a few days ago, we got word that France is going to introduce a new tax on nuclear energy and carbon emissions. That money will then be used to fund new renewable energy developments and energy efficiency measures.

Although I'm no fan of increased taxes on anything, this is France, not the United States. So these taxes have no effect on my utility bills. However, they could have an effect on my portfolio — and on yours, too.

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Today, France relies on 58 nuclear reactors to supply about 75% of its power. But President Hollande wants to cut that number in half by 2025, while introducing more in the way of renewables.

To accomplish this goal, the good people of France will have to pony up about $27 billion a year.

That's a sizable chunk of change, but one that is unlikely to be opposed by the majority of French citizens who, according to recent polls, show a willingness to take on additional fees in an effort to integrate more solar and wind into the nation's energy mix.

As well, most in France seem to be in support of a carbon tax, which will be attached to gasoline, diesel, natural gas, and coal.

All in all, conventional forms of power generation and conventional transportation fuels are about to become much more expensive in France.

But there's also going to be a nice pickup for renewables. And we plan to invest accordingly.

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Bargains and More

It's hard to say with absolute certainty right now which renewable energy companies are going to benefit the most...

But based on what France is trying to accomplish, I can't imagine they'll be ignoring any bargains.

In the solar space, those are likely to be found from installers using cheap Chinese product. Though it should be noted that back in 2011, Total SA (NYSE: TOT), a French company — and one of the largest energy companies in the world — acquired 66% of U.S.-based SunPower Corporation (NASDAQ: SPWR). So I wouldn't count SPWR out of this race at all.

On the wind side, Vestas (PINK SHEETS: VWDRY) has always been very active in France, as well as Siemens (NYSE: SI). In fact, just last month, Siemens landed an order for 24 direct drive turbines from a French wind farm developer.

frwindfarmSiemens, being the premier offshore wind turbine supplier, is heavily involved in France's offshore wind farm plans (which, by the way, are pretty aggressive).

This is what it's looking like right now...

Alstom (PINK SHEETS: AOMFF) and Areva (PINK SHEETS: ARVCF) are likely to get a piece of this action, too.

Yes, It's That Big!

Another way to play Hollande's socialist ultimatums on energy is through tech companies that are enabling lower-cost renewable energy production and integration.

Although the Chinese still pump out more cheap solar product than anyone else, cutting-edge solar technology continues to flow through American tech firms.

In fact, the entire rush on “black solar” technology is coming out of a small lab in New York.

If you're unfamiliar with black solar, this is essentially a solar panel coating technology that allows for an increase in power output, and — get this — a 50% reduction in production costs.

Basically, it's this technology that could finally make solar cheap enough for average, middle-class Americans.

My friends, this the very definition of disruptive technology...

Think of this as what the smartphone has done to modern communications technology, or what high-speed connections have done for the Internet.

Yes, it's that big.

You can actually read more about “black solar” — as well as some of the companies pumping this stuff out — here.

To a new way of life and a new generation of wealth...

Jeff Siegel Signature

Jeff Siegel

follow basic@JeffSiegel on Twitter

Jeff is the managing editor of Energy and Capital and contributing analyst for the Energy Investor, an independent investment research service focusing primarily on stocks in the oil & gas, modern energy and infrastructure markets.  He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor's page.

 

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