A few weeks ago, Barron’s carried a multi-page article on the top investments for coming smart grid technology. (For a free preview, click here). Several established companies are listed as primary players, along with a couple of leading utilities. Among them, FLP (Florida Light and Power) has been a leader in smart grid technology. Profiled last year on 2nd Green Revolution, FLP plans “to install a smart grid system across the greater Miami area . . . to be called Energy Smart Miami.”
Among the companies mentioned by Barron’s reporter Mike Hogan are technology stalwarts such as Google, Microsoft, and IBM. In addition, he writes that Cisco Systems is well positioned for a roll-out of smart grid technologies. According to his article, estimates by Barclays Capital suggest that “monitoring devices and communications technology [that] help utilities and consumers better manage energy flow, could reach $40 billion a year by 2015, compared to less than $10 billion today.” The bank goes on to claim that “outlays for the requisite hardware and software could grow to $100 billion a year” by 2030.
Hogan’s article goes on to posit that the smart money in a smart grid future is in infrastructure, not wind and solar power companies. He cites analyst Steven Milunovich at Bank of America Merrill Lynch. Milunovich “calls the smart grid Merrill’s ‘favorite’ green-energy sector, because smart-grid companies are less capital-intensive than solar and wind-power companies, and generally deliver higher returns.” Furthermore, “Canaccord Adams analyst John Quealy notes, smart-grid upgrades in the U.S. and elsewhere are prerequisites to using solar and wind power in the most cost-effective and efficient ways.”
A few of the smaller companies mentioned in the Barron’s piece include engineering, construction, and metering companies. Hogan specifically mentions ABB, EnerNOC, and Itron, as well as privately held companies Silver Spring Networks (involved in the Energy Smart Miami project) and Gridpoint, mentioned previously on 2nd Green Revolution.
For those looking for the next big thing, perhaps smart grid technology will offer the investment boom of tech stocks in the late 1990s. What this will also offer though, are improved efficiencies, greater clean energy, and lower utility bills as a result of reduced consumption.
- Eric Wilson
[image source: EnergyTechStocks.com]