As clean energy continues to expand, geothermal energy stocks could play a critical role in addressing global energy supplies. Renewables continue to stand out as one of the fastest-moving energy sectors. Also, the cost of solar, wind and battery storage are continuously improving. But where does geothermal energy factor into all of this?
geothermal energy stocks
Geothermal Energy Advancement
David Fessler is the Engineering Strategist of The Oxford Club. Dave has been trading stocks for more than 50 years. Over that time, his electrical engineering background has helped him identify many profitable clean energy investments. He recently wrote about geothermal energy stocks as a promising investment opportunity.
“If you drill deep enough anywhere on the planet, you get to hot rock. Earth does have a molten core, after all. And now companies are developing drilling techniques and technologies to access that deep heat. The extracted heat can be used to warm a home. And in a larger system, it can power a generator.” – David Fessler
Geldingadalur, Iceland has been garnering a good deal of attention recently. Specifically because of it’s flat-topped mountain called Fagradalsfjall. Since March, the ongoing eruption has attracted many tourists. But more importantly, it has displayed the awesome power of geothermal energy. The very same energy that has supplied most of Iceland’s energy needs for decades.
However Iceland is not the only country harnessing the heat of the earth. Dave went on to note the United States’ leading role in geothermal energy.
“The U.S. is the world’s leader when it comes to geothermal energy. At the end of last year, it had about 3.67 gigawatts of installed geothermal capacity. That’s almost 25% of the world’s total. About 90% of this capacity is in California and Nevada.
In fact, The Geysers, located in the Mayacamas Mountains in California, is the largest geothermal field in the world. This area contains 18 geothermal power plants and produces 20% of California’s renewable energy. Still, geothermal accounts for less than 1% of U.S. energy supplies. Though it has the potential to account for as much as 8% by 2050.”
Geothermal Energy Stocks That Could Heat Up
ARPA-E, a R&D government agency for advanced energy technologies recently put out an astounding estimate. The agency believes “just 0.1% of Earth’s total heat content could meet our energy needs for 2 million years!” If that’s true, these stocks could be some of the most profitable investments around for years to come.
1. Chevron Corporation (NYSE: CVX)
This past spring Canadian-based Eavor Technologies completed a USD-40-million funding round. This will assist in the continued development of its geothermal technology. Contributions came from Chevron Technology Ventures, Bp Ventures, Singapore’s Temasek, Canada’s BDC Capital, US utility Eversource Energy and Vickers Venture Partners.
Chevron Technology Ventures is one of the larger investors in the geothermal energy stock space. It’s extremely important to see this shift from big oil companies that are now investing in renewables. However, these large scale investments do make a lot of sense. Especially considering the correlation between drilling for oil and drilling to access deep heat. These companies already have many of the resources needed to assist in the transition.
2. Eversource Energy (NYSE:ES)
Eversource Energy stock has seen huge gains over the past decade. However, since 2020 this stock has been relatively flat. In last week’s earnings call, the topic of geothermal energy wasn’t even discussed. Instead the majority of the time was spend reviewing the company’s wind and solar investments. This may not come as a big surprise to many investors. It may take quite a few years before the geothermal market becomes top of mind.
That being said, Eversource Energy has many promising renewable advancements in the works. It is certainly a geothermal energy stock to watch.
3. Ormat Technologies (NYSE: ORA)
Fessler specifically mentioned Ormat Technologies in his latest article.
“Ormat Technologies has geothermal power plants in the U.S., Indonesia and Chile, among other countries. It develops, builds and owns photovoltaic solar power plants. The company also sells equipment related to geothermal and recovered energy-based power plants. Ormat has some impressive financials. It has a market cap of $3.9 billion and trades with a price-to-earnings ratio of 49.67. It also has a forward dividend yield of 0.69%. Geothermal is still a small part of global energy supplies, but it’s reliable baseload power.”
Sage Geoystems, Fervo Energy and GreenFire Energy are a few other companies to keep an eye on in this space. Each has a somewhat different technology approach. So, it will be interesting to see how this all plays out.
Geothermal Energy Stocks are the Future
As the renewables market expands, demand for geothermal energy stocks will grow. These are just some of the companies in this space to watch. There will be many more in the years to come. For those looking to profit from the clean energy revolution, Fessler is definitely someone to follow.