In a recent newsletter report, he notes lithium production has been growing for decades due to its use in small batteries, and that production is increasingly popular since oil prices remain high. He also notes that SQM plans to invest $350 million to bolster its lithium production, which is good news for Chile, where SQM is based.
Since lithium is mined all over the world (Chile being the largest lithium producer), there are inherent risks: political and country risk, for example. There is also the potential for safety issues-any small problem could turn public opinion against electric mobility and set back industry development for months or years. Finally, any sudden decrease in oil prices could threaten the demand for lithium ion batteries.
Key Points On Renewable Energy
Here are six general points from various research reports that may help advisors select renewable energy investments for clients:
1. The U.S. is aggressively developing a coherent national energy policy and renewable energy sources are the central theme.
2. Less than 5% of energy in the U.S. is generated from renewable resources, but that amount is expected to double by 2020 and grow to more than 30% by 2030.
3. Wind and solar power, currently about 2% of U.S. energy consumption, is projected to grow to 20% by 2030.
4. Oil generates less than 5% of electricity, but powers most motor vehicles and home heating systems.
5. Efficient energy storage and sophisticated distribution/collection systems are an important part of renewable energy systems and the computers that control them.
6. The current U.S. energy distribution grid was built nearly 100 years ago. It was designed for the industrial era, powering factories, homes and vehicles from large fossil fuel centralized power plants. The information era requires sophisticated, highly reliable, intelligent, decentralized generation and collection systems. Renewable resources will play a key role in these new systems, and reliable energy storage will be critical.