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Wind Energy

Wind Energy

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While wind energy as a reliable and standard resource may seem far off, the technology is being adopted at record speed. In fact, wind energy is one of the fastest-growing energy sources in the world, according to the U.S. Department of Energy.

That’s especially true for 2020, a banner year for the wind industry, according to a report by American Clean Power (ACP).

In the fourth quarter of 2020 alone, the U.S. wind industry installed 10,593 megawatts of new wind power capacity—the highest quarter on record. In fact, that’s more wind power capacity installed than in any given year except 2012.

Texas led with 2,197 megawatts installed, followed by Wyoming with 895 megawatts, Oklahoma with 866 megawatts, Iowa with 861 megawatts, and Missouri with 786 megawatts.

Who is investing in all of this wind? Developers commissioned 16,913 megawatts, representing an 85% increase over 2019. Project owners commissioned 54 new projects across 20 states in the fourth quarter.

This rapidly accelerating trend is being driven by a combination of increased policy initiatives, more scalable technologies, increased demand from corporate and residential customers alike, and more positive customer perception overall. The Biden Administration’s climate plan, for example, includes the ambitious goal of becoming carbon-neutral by 2035. To achieve that, renewables like wind energy will need to become increasingly less fringe as they move to permanently replace fossil fuel power. 

What is wind energy?

Wind is a form of solar energy caused by the sun’s uneven heating of the atmosphere, irregularities in the earth's surface, and rotation of the planet. The geography of a specific region—such as the presence of mountains, bodies of water, or vegetation—all influence wind flow patterns.

Wind is not distributed equally. In the U.S., the windiest states are Nebraska, Kansas, South Dakota, North Dakota, and Iowa in the Plains. The least windy states are in the Southeast and include Mississippi, Florida, Kentucky, Georgia, and Alabama. 

Wind turbines harness this resource to generate mechanical power or electricity. When wind causes the rotor to spin, a generator connected to it creates electricity. There are two basic types of wind turbines: horizontal axis turbines and vertical axis turbines. Horizontal axis turbines require that the blades be facing towards the wind, which requires an additional yaw control mechanism. Vertical axis turbines do not need to be pointed at the wind, and so are more appropriate in geographies that have highly variable wind generation or turbulent winds.

Wind energy is generally considered "onshore” or “offshore." Onshore wind farms tend to be easier to assemble and are thus less expensive. However, onshore wind speeds and directions tend to be less predictable, while offshore wind speeds tend to be greater, more reliable, and more efficient. Offshore wind installations, however, are significantly more expensive to build than onshore installations. 

In 2019, there was a 26% increase in cumulative installed capacity of offshore wind energy as compared to 2018, with Europe accounting for more than 70% of the global cumulative offshore capacity by the end of 2019, according to Mordor Intelligence. 

There are currently 122,468 megawatts of operating wind power capacity in the United States, including over 60,000 wind turbines operating across 41 states and two U.S. territories. And 20 states have over 1,000 megawatts of installed capacity, according to the ACP report.

Why invest in wind energy?

Wind energy is cost-effective, creates jobs, encourages U.S. industry growth and competitiveness, and offers a domestic, clean, and sustainable fuel source. Over the next five years, the U.S. has slated 180 onshore and 17 offshore wind projects, totaling $84 billion.

The U.S. Department of Energy has an entire office dedicated to growing the US wind energy market, called the Wind Energy Technologies Office. It focuses on supporting early-stage research on technologies that enhance energy affordability, reliability, and resilience. 

Moreover, wind and solar energies are experiencing major breakthroughs. An expansion of the battery industry is crucial for wind power in order “to store power and keep the grid humming,” according to a report by McKnights. 

In simple terms, “big battery” technology is essentially large-scale storage for renewable energy. Their purpose is to store power harvested by renewable sources like wind and solar, which can’t be relied upon consistently, in order to sustain the electricity they provide even while the sun isn’t shining or the wind isn’t blowing.

These storage systems can “hold enough renewable energy to power hundreds of thousands of homes,” according to the article published by YaleEnvironment360.

These “big battery” solutions could null the need for fossil fuel-powered plants that are used when renewable energy isn’t able to provide enough power. 

Renewable energy—particularly wind and solar—have become less expensive, more efficient, and more adoptable. 

The playing field isn’t so diverse, with top 10 owners of 2020 representing 62% of the wind power capacity brought online.

As the U.S. becomes increasingly renewable driven, wind energy will no doubt play a key role.

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This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not offer brokerage or custody services. [/vc_column_text]


Geothermal

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Geothermal energy is nothing new. It goes back as far as the first century A.D. in Pompei, where baths were heated by hot springs.

And it’s already powering major cities in the modern world. For example, Iceland’s capital city, Reykjavik, which has long been considered one of the cleanest cities in the world, heats 95 percent of its buildings using geothermal energy.

In Paris, the Dogger Aquifer has supplied geothermal heat and hot water since 1970. It currently supplies 210,000 housing units. In mid-2021, drilling is set to begin in Paris on another geothermal well. 

In Munich, officials of the utility company Stadtwerke München (SWM) want to expand the geothermal district to 560,000 households. 

In the US, Boise, Idaho is home to the largest geothermal heating system in the country. The system heats 6 million square feet for only about $1,000 a month, which pays for the electricity to pump it. Boise sits by a unique resource— a geological fault where 177-degree Fahrenheit water rises to the surface in the foothills just outside of town.

But geothermal energy doesn’t require a warm, babbling brook nearby. In fact, “the US already produces 3.7 gigawatts (GW) of geothermal electricity, or enough to power more than 1 million homes,” according to a report by Yale Environment 360.

These days, investors, government sectors, and oil and gas companies are getting on board the geothermal energy potential. Here’s what investors should know. 

What Is Geothermal Energy?

Heat exists in the earth’s mantle around the world, no matter where you are standing. 

That’s because geothermal heat comes from the Earth’s core, where temperatures may reach 4,000-7,000°C. For perspective, the surface of the sun is approximately 5600°C (but at its core can reach more than 15,000,000°C).

While geothermal heat can naturally rise to the earth’s surface water through fissures, cracks and permeable rock, those presentations aren’t necessary to access the energy. Even in locations that don’t have readily available resources that reach the surface, the heat from the earth’s core can still be made accessible. 

This is because deep drilling techniques allow hot water that sits two to three miles below the surface to be pumped and used to heat or to generate electricity.

The fact that geothermal heat is everywhere under our feet means that there is an “enormous untapped potential” for geothermal energy consumption.

Why Invest in Geothermal Energy?

While wind and solar energy might come to mind more quickly when talking about renewables, geothermal could far outpower these. In part that’s because unlike the sun or the wind, geothermal energy is “always on,” per the US Department of Energy. 

Chief Marketing Officer for Baseload Capital, an investment firm in Sweden focusing on geothermal projects, referred to the geothermal industry as “the sleeping giant.” This is because geothermal energy can provide significant energy resources at all hours of the day, combating climate change in a real way. 

According to the US Department of Energy report, GeoVision: Harnessing the Heat Beneath Our Feet, geothermal technology has enormous potential in the US. Instead of electric-powered air conditioners and natural gas-powered heaters, for example, geothermal powered heating and cooling solutions can power American homes.  

In order for geothermal energy to reach its potential in the US, three things have to happen according to the US Department of Energy report: (1) increased access to geothermal resources, (2) reduced costs and improved economics for geothermal projects, and (3) improved education and outreach about geothermal energy. According to the report, by overcoming these technical and financial barriers, electricity generation through geothermal methods could increase 26-fold by 2050, providing 8.5 percent of the United States’ electricity, as well as direct heat.

The US isn’t the only country looking underground to solve energy problems. In Europe, the output of geothermal energy supply could increase eight-fold by 2050, according to the International Renewable Energy Agency (IRENA)

The good news is that when it comes to drilling, oil and gas companies know a lot. They, too, are looking at geothermal energy these days. 

In 2021, oil and gas companies may finally start investing in geothermal.  This is true as geothermal economics begin to improve, and after oil and gas underperformed from 2014 - 2020. Both BP and Chevron, for example, backed a $40 million funding round for Eavor, a Canadian geothermal energy firm, in early 2021. Eavor’s technology offers a closed-loop system that can potentially scale geothermal production, producing “enough heat for the equivalent of 16,000 homes with a single installation.” 

Governments are also backing research around the world. 

In Utah, the Frontier Observatory for Research in Geothermal Energy (FORGE), funded by the US Department of Energy, is an underground research laboratory. It just completed drilling its first well at a 65° angle from vertical reaching true vertical depth of 8,559 feet. The laboratory offers a test environment for future Enhanced Geothermal Systems (EGS) projects around the world that enable access to geothermal in locations that don’t have babbling warm brooks nearby, but rather require complicated drilling to access geothermal energy. 

Breakthrough Energy Ventures, a fund backed by Bill Gates and other notable billionaires recently invested an additional $30 million in the startup Dandelion Energy, which heats homes with geothermal. 

When it comes to geothermal energy, it is less a matter of if and more a matter of when technology is able to fully harness the energy beneath the surface of the Earth. With the number of potential disruptive and scalable technologies, eager large-scale investors, increasing public knowledge, and climate change imperative, geothermal will be getting more attention in the decades to come. 

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Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today. 

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]


Wind Energy

Sustainable Energy (Alternative)

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Renewable energy has a presence on both the American and the global stages with lots of room for growth. Perhaps unexpectedly, the pandemic did not slow renewable energy down. Instead, the public health crisis that seemed to stop the world in many ways actually accelerated the transition to renewables and away from fossil fuels. 

Part of that growth might be credited to Corporate and Environmental, Social and Governance (ESG) investment funds, which have clearly demonstrated that adopting renewables is good business, according to Duke Energy

2020 was the year that renewable energy generation established itself as the cheapest, at-scale, proven energy option available, exceeding coal-fired energy production, also according to Duke Energy. 

And that was before the Biden administration announced its ambitious goals for renewables and alternative energy. 

Renewable energy is anticipated to keep growing in 2021, especially considering the Biden administration’s stated goals of (1) achieving a 100% clean energy economy and (2) reaching net-zero emissions no later than 2050. To achieve this, the Biden administration has resubmitted the US to the Paris climate agreement as well as implemented executive orders to move the country away from reliance on oil and gas and toward renewables.

These policies include lowering or eliminating existing subsidies on fossil fuels as well as funding renewable sector investments designed to help spur job growth in both the solar and wind industries.

Alternative energy is becoming the norm and, now more than ever, is clearly the future. Here are the alternative energy sources that all investors should consider. 

What Is Sustainable Energy?

Alternative and renewable energy is energy that is generated by natural resources that readily replenish: the warmth of the sun, the blow of the wind, the movement of water, and the heat inside the earth to name a few. These resources do not generate greenhouse emissions. 

During the first five months of 2020 alone, renewable energy provided 25.3% of electricity in the US. That is more than a sliver of the energy pie, and it’s growing. 

The 7 types of renewable energy include solar, wind energy, hydroelectric, ocean, geothermal, biomass, and hydrogen. According to Duke Energy, the leading commercial renewable energy sources (ranked by market share and growth) include: wind, hydropower, solar, geothermal, and other technologies bolstering the renewable transition.  

Wind 

Wind and solar are expected to supply 70% of new power plant capacity built in 2021. Wind energy, unlike some other renewable resources, is available nationwide. It has the potential to be a viable source of renewable electricity in every state by 2050, according to the Wind Vision Report published by the Office of Energy Efficiency and Renewable Energy. 

In the case of wind power, new (gigantic) turbines are providing more promise than ever. G.E.’s latest wind turbines have a rotor with a turning diameter longer than two football fields. Compared to the largest turbines currently in service, they generate about one third more power. Compared to the first machines of their kind installed offshore in Denmark in 1991, they generate 30 times as much power. As wind energy infrastructure improves and becomes more widespread, wind energy will no doubt grow its market share. 

Hydropower

Hydropower uses moving water to generate electricity. Hydropower accounts for 52% of the nation’s renewable electricity generation and 7% of total electricity generation, according to the National Hydropower Association. While hydropower infrastructure tends to be dated (think dams, etc.), its power generation capacity is still very relevant. Even more, hybrid hydropower/solar plants (where floating solar panels are installed on the water of reservoirs, etc. that power dams) are becoming increasingly popular. 

Solar 

Despite the pandemic-induced economic downturn, solar installations increased in 2020. Solar generation is expected to account for 48% of US renewable generation by 2050, which would make it the fastest growing renewable power source, according to the Center for Climate and Energy Solutions. 

No doubt, President Biden’s policies will further expand the industry. His initiatives to spur the industry include a review of Section 201 solar tariffs, countervailing duties, and anti-dumping laws by the International Trade Commission. If these tariffs are reduced or repealed, it could have an enormous impact on the development of solar energy. 

It is also expected that tax credits and low interest financing available in the down economy will make solar energy installation more accessible both commercially and residentially in the year to come. 

Geothermal

Geothermal energy, or heat from the earth, can be extracted by drilling deep wells to warm underground water sources. While geothermal energy lags behind wind and solar, it has enormous potential, with the U.S. leading in geothermal energy production. 

Although geothermal energy might not seem as “front page” as renewables like solar and wind, it is getting investment attention. Breakthrough Energy Ventures, an investment firm that funds technologies that seek to limit carbon emissions (with backers including Jeff Bezos and Bill Gates) notably back geothermal technologies. Companies that have received investment include Dandelion Energy, which installs geothermal-powered heating and cooling systems for residential homes. 

Other Technologies

There are a host of other industries that will support the transition to a more renewable-based economy. These include effective energy storage (capturing and storing energy to use it at another time), fuel cells (which generate power with fuel), increased energy efficiency that reduces the need for energy generation), and electrification. 

There was a time when commercializing renewable energy seemed as far off as a flying car. But, that’s no longer the case. As more industries adopt renewable infrastructure, more companies strive to be green, and more consumers and investors demand both, the alternative energy industry will become increasingly mainstream. 

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Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today. 

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]


Land

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For an open-minded investor, the idea of investing in land might bring to mind a range of dreams: a “sold” sign on a wide-open space near the mountains, an “under new ownership” notice for a busy apartment complex in an urban neighborhood, or a breaking ground on a commercial mixed-use space in an up-and-coming suburb. All are correct and more.

Land is a finite resource with many uses beyond real estate that range from farming to mining for natural resources and beyond. There is no doubt that investing in raw land gives investors options.

Although real estate markets ebb and flow, land tends to appreciate in value over time. This is no surprise given the dynamics of a limited supply, increasing demand, and a growing population. For example, according to the United States Department of Agriculture (USDA), “the United States farm real estate value, a measurement of the value of all land and buildings on farms, averaged $3,160 per acre for 2019, up $60 per acre (1.9 percent) from 2018.” That’s an increase of $1,610 per acre from 2005. 

While buying land offers a broad range of investments from real estate to agriculture, investing in land isn’t a quick-solution or an endeavor to take lightly. Here’s what investors should know and consider.  

What Are Land Investments?

Overall, there are three types of real estate investments: commercial, residential, and vacant or raw land. The uses for raw land can be further broken down into categories including row crop land, livestock-raising land, timberland, mineral production land, vegetable farmland, vineyards, orchards, and recreational land. Land can also be purchased and held until appreciation. 

When it comes to land investment, things aren’t always as they seem on the surface. There are a number of different rights to be aware of, which include:  

1)  Air rights: An investor might own the land, but do they own the airspace above it? Not necessarily. Owning air rights gives the investor the right to use, rent, or develop the space above the land without interference by others. This often comes into play in commercial real estate when zoning requirements determine how many stories tall a developer can build. 

2)  Mineral rights: Mineral rights are “legal rights or ownership to the minerals below the surface of real estate, which can include coal, oil, natural gas, metals, and more.”

3)  Water rights: Water rights “are the legal rights to use water from a local source such as a river, ditch, pond, or lake.” Water rights tend to be different in the East vs the West. In Eastern states, landowners who have a waterway that moves through their property may use water in a reasonable way, not unreasonably detaining or diverting it. In Western states, water rights must be established before using any source of water. In these areas, water rights are typically sold separately from land. 

4)  Zoning: Local governments and municipalities have established rules and regulations that determine how a property may or may not be used. Properties may be zoned as residential, commercial, industrial, agricultural, recreational, historical, or aesthetic. As a developer, it’s crucial to make sure that your plans align with the zoning requirements.  

5)  Ingress and Egress: If an investment property doesn’t have direct road access to the parcel of land on which it sits, formal easements may be required. 

Simply put: when it comes to investing, not all land is created equal and research is required. 

Why Invest in Land?

Land is a dynamic investment with lots of opportunity—it can yield high returns, passive income, and large profit margins. Investors can plan to develop raw land, buy and hold, buy and lease, buy and sell with owner financing, or flip the land as it is into something entirely new. 

It’s possible to generate future income by purchasing raw land and doing minimal maintenance, (especially if you are planning to keep it vacant and let it appreciate). Investing in raw land for purposes of development, however,  “requires more patience and a penchant for long-term strategies.” 

Before investing, investors should calculate your cap rates, or an investment’s yields and potential risks. Regardless of how you plan to utilize land for returns— for farming, real estate, leasing, or other— investors should consider the trends in those markets both locally and nationally. 

Investors should also consider taxes, especially when it comes to reselling land. If an investor owns a piece of land for less than one year before selling, tax rates can be as high as 37 percent, according to the Tax Policy Center.

Of course, for investors looking for a less direct, less expensive, and much less time intensive way to diversify into land investing, ETFs offer a range of opportunities. These include real estate ETFs or Real Estate Investment Trusts (REITS) and agricultural ETFs. 

REITs typically invest in “securities that are related to mortgage financing of real estate, including not only mortgage loans but also mortgage-backed securities and similar derivative investments.” REITs may focus on their property type, such as residential, retail, healthcare, self-storage, industrial, office, hotel, data center, or timber REITs. 

Moreover, REITs allow investors to get involved in real estate with smaller amounts of money than required to buy properties. If you consider that on average a home in the U.S. costs $200,000 and a commercial property can cost much more, it’s easy to understand that building a diverse real estate portfolio would be expensive. REITs, on the other hand, allow investors to buy shares of a grouping of a diverse range of properties with a share costing as low as $100.

Investing in land, particularly buying a plot of land for a specific purpose, is nothing to take lightly. While it can offer big returns, it also poses big challenges and requires extensive planning. ETFs offer another path that might be right for those interested in getting their feet wet. Either way, investing in this finite resource is likely to pay off in the long run.

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Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today. 

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]


Nuclear Power

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Nuclear power is a growing force “intrinsically tied to National Security” according to the U.S. Department of Energy, making it a force in global economics, politics and beyond.

In recent decades, the U.S. has ceded its competitive advantage in nuclear energy to China and Russia— something that politicians and industry leaders alike seem motivated to rectify. That’s a big deal considering that the global market for nuclear power could triple by 2050. Much of this growth is anticipated to come from increased demand from emerging markets.

The opportunity in engaging emerging markets with exported nuclear energy extends beyond financial. Nuclear agreements can translate to long-term strategic relationships, which is no surprise when you consider that the construction, operation and decommissioning of a nuclear facility can take years. 

If the U.S. can take a leading role in developing these markets, it could both help to ensure national security and a leading role in the global energy marketplace.

But, Russia and China are both vying for the same position, increasing their nuclear production and developing relationships around the world. China, for example, has added 21 reactors in the past 5 years, with 19 more in the works. China also recently revealed its first domestically developed nuclear reactor. According to the China National Nuclear Corporation, the reactor can generate 10 billion kilowatt-hours of electricity each year and cut carbon emissions by 8.16 million tons. 

Nuclear power is a highly competitive industry with long-lasting implications. Here’s what investors should know. 

What Is Nuclear Power?

To understand the importance of nuclear power, it’s important to understand the basics of how nuclear energy is generated. According to the U.S. Energy Information Administration:

“Nuclear energy is energy in the core of an atom. Atoms are the tiny particles in the molecules that make up gases, liquids, and solids… An atom has a nucleus (or core) containing protons and neutrons, which is surrounded by electrons. Protons carry a positive electrical charge, and electrons carry a negative electrical charge. Neutrons do not have an electrical charge. Enormous energy is present in the bonds that hold the nucleus together. This nuclear energy can be released when those bonds are broken. The bonds can be broken through nuclear fission, and this energy can be used to produce (generate) electricity.”

Nuclear power plants conduct nuclear fission, which splits atoms apart to release energy. (Uranium is commonly used for this process.) The energy that is released in this process presents itself in the form of heat and radiation. 

Nuclear energy is notably different from chemical burning, which produces carbon output. 

Why Invest in Nuclear Power?

Nuclear power has long found opposition from environmentalists specifically because of the challenges associated with disposing radioactive waste. Even so, it’s anticipated that nuclear energy may play an essential role in a no or low-carbon energy future. 

That’s right, nuclear energy is arguably more sustainable than natural gas and other fossil fuels. 

In recent years, moving energy sources from coal to natural gas has been a key step toward decarbonizing. Switching from coal to nuclear power, however, is more “radically decarbonizing.” In fact, the only greenhouse gases released in the production of nuclear power are those associated with the “construction, mining, fuel processing, maintenance, and decommissioning” of a plant. 

Another perk of nuclear power plants is that they offer a much higher capacity (that is, a greater percentage of time that the power plant spends producing energy) than both renewable energy sources and fossil fuels. 

Consider that in the United States in 2016, “nuclear power plants, which generated almost 20 percent of U.S. electricity, had an average capacity factor of 92.3 percent, meaning they operated at full power on 336 out of 365 days per year” (with many of the days not in operation used for maintenance). This is much different than other power sources including U.S. hydroelectric systems, which delivered power only 38.2 percent of the time (138 days per year); wind turbines, which delivered power only 34.5 percent of the time (127 days per year); and solar electricity, which delivered power only 25.1 percent of the time (92 days per year), according to information provided by the U.S. Energy Information Administration. Coal and natural gas plants generally only generate power about 50 percent of the time. 

In this sense, nuclear energy generation is more reliable and efficient. 

So, do fewer carbon emissions and greater capacity outweigh radioactive waste? It can. 

First it’s worth mentioning that non-nuclear energy, like coal, actually releases some radiation. Secondly, radioactivity decreases over time, unlike the waste products of other energy-production methods. Currently, interim storage facilities are used to manage nuclear waste until its radioactivity is decreased such that it can be disposed of. Storage containers, age, however, and when they do, they can leak toxic materials. 

But, new technology is offering better storage solutions. Specifically, storage of waste in deep geological repositories is more secure and environmentally friendly. In Finland, the world’s first ever deep geological repository for spent fuel is under construction. The repository, named Onkalo, “is a game changer for the long-term sustainability of nuclear energy,” according to Director General Rafael Mariano Grossi. 

The facility is roughly 450 meters below ground level and will collect all of the spent fuel from Finland’s nuclear power reactors for thousands of years. This is remarkable considering that sustainably developing nuclear power is anticipated to be an important step in preventing climate change. 

Investors should know that even in a politically divided America, both “congressional Republicans and Democrats have shown their support for a robust domestic reactor fleet and for a strong civil nuclear export program,” according to EnergySource. As the U.S. ramps up its efforts to meet climate change goals, investors have the assurances of a growing and evolving nuclear energy market. 

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Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today. 

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]


Aquaculture

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When you are shopping in the grocery store or picking out dinner in a restaurant, do you insist on wild-caught fish? Do you care if your fish is farm raised? Turns out, most people don’t. According to the United Nations, about 47 percent of the world's total fish supply comes from aquaculture. This translates to a global aquaculture market that is expected to grow to more than $52.4 billion by 2026.

According to the Food and Agriculture Organization of the United Nations (FAO’s) 2020 report, “The State of World Fisheries and Aquaculture 2020,” per capita fish consumption grew from 9 kilograms in 1961 to 20.5 kilograms in 2018, equating to around 1.5% growth each year. Per the report, in 2017, fish consumption accounted for 17% of the world population’s intake of animal proteins, and 7% of all proteins consumed. 

That’s a lot of fish, and a huge opportunity for the aquaculture industry.

The market is responding to huge demand growing fast, with annual fish production expected to expand from 179 million tons in 2018 to 204 million tons by 2030. According to the FAO, aquaculture production specifically is projected to reach 109 million tons in 2030, representing an increase of 32% compared to 2018.

Still, most people might be surprised to learn that the “the number of fish eaten from fish farms is roughly even with the number of wild fish consumed, especially as the demand for fish has grown,” according to UC Santa Cruz researcher Anne Kapuscinski.

Here’s what investors should know about the aquaculture industry. 

What Is Aquaculture?

Simply put, aquaculture is the breeding, rearing, and harvesting of fish, shellfish, algae, and other organisms in all types of water environments, according to the National Oceanic and Atmospheric Administration (NOAA). 

Aquaculture often takes place in coastal marine waters and the open ocean. Aquaculture in the US produces numerous species including oysters, clams, mussels, shrimp, seaweeds, and fish such as salmon, black sea bass, sablefish, yellowtail, and pompano. In addition to producing food, aquaculture restores habitat, replenishes wild stocks, and rebuilds populations of threatened and endangered species, according to NOAA.

According to the Agricultural Marketing Resource Center, the top five fish producing countries in 2019 were China (63.7 million metric tons), Indonesia (16.6 million metric tons), India (5.7 million metric tons),Vietnam (3.6 million metric tons) and Bangladesh (2.2 million tons). Asia accounted for 89 percent of world aquaculture production by volume, most of which was produced by China. 

Why Invest in Aquaculture?

The world’s appetite for fish isn’t anticipated to slow down anytime soon. By 2030, the FAO anticipates that the global human population will eat 30 million tons of fish. 

In part, that’s because the world is demanding more protein than ever. Two strong drivers of the growing aquaculture industry include an increasing population growth and protein consumption per capita. Where this growth can potentially leave oceans overfished and depleted, aquaculture offers a creative solution.

According to Forbes, the fish industry “is a decade or more behind all other production animals with respect to innovation — and thus is one of the more attractive opportunities…for agtech investors and startups alike.” 

The industry, however, is not without challenges. From bacterial and viral infections among densely populated fish to environmental impacts, aquaculture isn’t perfect. 

There is, however, ample opportunity for scientific solutions. For investors, this means investment opportunities in everything from improved vaccines to fish food to genetic engineering of fish that are more resilient and adaptable. According to Global Market Insights, the global aquaculture vaccines market alone will reach $290 million by the year 2025. Even more, supplying nutrients to the aquaculture industry is a $60 billion opportunity

Investment in fish farming is happening now, and happening here. In November 2020, the company Pure Salmon announced that it will build a large indoor fish-farming operation in Virginia. Pure Salmon will invest about $228 million in the equipment and facility, which according to the news release, would be the “world’s largest vertically integrated indoor aquaculture facility.”

While aquaculture is lauded as more sustainable by comparison to the practice of overfishing, for example, there are some doubts about the ethics of it. To name a few, wild fish are often caught to feed farmed fish, questioning the efficacy of the system. Additionally, fish waste in densely populated open ocean farms can deplete oxygen in the surrounding marine environment. That’s not to mention genetic engineering, the living conditions of farmed fish, or other considerations. 

For investors interested in environmental, social and governance (ESG) issues, the Coller FAIRR Protein Producer Index can help. The Coller FAIRR Protein Producer Index is the world’s only comprehensive assessment of the largest animal protein producers on critical ESG issues.

The market demand for fish isn’t expected to slow down. And as such, aquaculture is expected to grow as a crucial industry that helps to feed the world’s population. According to the FAO, “to ensure a food secure future for all, the fisheries and aquaculture sector is key.” This means that there is ample opportunity for investors as the fish farming market continues to grow and develop.

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This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]


Green Initiatives (ESG)

The sky over the Bay Area is covered with a smoke so thick that it is blocking the sun, leaving it orange and ominous. The image (even in a news article) is a wince-worthy reminder that we are in the year 2020, and the world is different.

With a record 900,000 acres of wildfires burning across Oregon, more than 10% of the state’s 4.2 million population have been evacuated, according to the Oregon Office of Emergency Management. That’s a lot of people, and evacuations aren’t anticipated to end there. In total, 12 western states are burning somewhere, with Oregon, California, and Washington most severely impacted. 

“There’s certainly been nothing in living memory on this scale,” describes Daniel Swain, a climate scientist at the Institute of the Environment and Sustainability at the University of California in an interview with the New York Times

Extreme weather is a new reality, and it matters a lot to the future of economies around the world. In January 2020, before the most recent fires, the Bank for International Settlements (an umbrella organization for the world’s central banks) predicted that the disruptive effects of climate change could usher in the next financial crisis. 

This report was not a one off. According to the January 2020 Global Risks Report by the World Economic Forum, the top five global risks are climate-change related. Extreme weather, which includes floods, storms, wildfires and warmer temperatures, is putting millions at risk for food and water insecurity, property and infrastructure damage, and displacement. 

Now, it’s September and we are looking from near or far at the hazy orange sky above the Bay Area wondering: what’s next?

Where climate change was once a theory that people accepted or not in the same way that they preferred cream or not in their coffee, things are changing fast. This is especially true among millennials, who are making no mistake about where their money is being invested, namely into sustainability-oriented funds.

In what might be considered a ray of hope in a strange world, their environmental investment dollars are starting to add up and smash investing records. 

Here’s what environmental investing is and why it has more momentum than ever before. 

What Is Green Investing?

In 2019, “estimated net flows into open-end and exchange-traded sustainable funds that are available to U.S. investors totaled $20.6 billion for the year,” according to Morningstar. “That’s nearly 4 times the previous annual record for net flows set in 2018.” This near exponential growth in investor interest is in part attributed to younger investors with a specific interest in the environment. 

Perhaps even more impressive, in the first quarter of 2020, sustainable investing totaled $10.5 billion, keeping momentum despite the economic downturn ushered in by the pandemic. 

So, where exactly are these dollars going?

It depends. When it comes to Environmental, Social, and Governance (ESG) investments can look much differently from one to the next. 

For one, some investors have a specific interest in “climate change innovators.” According to MSCI, these are companies working to innovate and scale new technologies in a way that solves climate problems in new ways. Beyond investing in the next big technology that might lead us to a net-zero carbon world, investors are looking more and more at the environmental policies of the companies that they invest with across the board. These policies include water management strategies that use water responsibly and the prioritization of protecting biodiversity in corporate operations.  

The relevance of biodiversity to our day-to-day lives is as close as the latest summer “Save the Bees” campaign. Honeybees are crucial for pollinating much of the global food supply, from apples to almonds. It’s estimated that bees are responsible for one of every three bites of food eaten in the United States. In addition to the use of insecticides used for many commercial crops, the destruction of habitat and decline in biodiversity have severely impacted this important species.  

In other words, in today’s world, how businesses do business matters greatly, not only to the environment at large, but also to the long-term value of a company. To address that, companies are putting more effort than ever into describing how they meet sustainability standards in their business operations. 

Why Invest in Sustainability? 

In a letter to CEOs, Blackrock CEO, Larry Fink describes climate change as “a defining factor in companies’ long-term prospects.” According to Fink, “awareness [of climate change] is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance.” 

Fink anticipates a “significant capital reallocation” into sustainable strategies as millennials, who are currently pushing for institutions to develop sustainable strategies and who will eventually become the policy makers and CEOs of the world. 

In other words, environmentally focused investing is the future. 

Not only is it becoming more popular among millennials, it is paying off for investors. According MSCI, “There is a direct, dollar-value payoff for companies to better manage their ESG risks or meet stated sustainability commitments.” 

Interestingly, since the arrival of COVID-19, awareness to and demand for ESG products is on the rise. Not only did the pandemic accelerate interest in these products, it gave them an opportunity to demonstrate their resilience, with ESG investments less impacted by the pandemic-driven market drop in the spring. 

If you are ready for a certain investment in an uncertain world, environmental investing is a natural choice.

How to Invest in Green Initiatives

The environment, of course, impacts every one of us and touches every industry. Investing in such a broad theme can be challenging for investors. Fortunately, a search on Magnifi suggests that there are a number of ETFs and mutual funds that can help investors access this growing and all-encompassing sector.

 

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Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today. 

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]