Bloomberg Survey Tops Storage Batteries as Investment Destination Related to U.S. Inflation Control Law
(Bloomberg): At least $369 billion. This is the money spent on clean energy enhancements related to the U.S. Inflation Control Act.
Investment destinations are diverse. In addition to renewable energy, nuclear power, and electric vehicles (EVs), batteries, hydrogen, and the collection, use, and storage of carbon dioxide (CO2).
A Bloomberg News survey of handsets and Bloomberg.com readers named the battery storage market the most promising sector. About 27% of the 691 respondents selected storage batteries as the most promising investment destination. Solar and wind-related companies ranked second with 18%, followed by green hydrogen, CO2 recovery, and EV manufacturers.
Aion Yadigaloglu, co-founder of Capricorn Investment Group, which manages about $10 billion, chose batteries over mature industries like solar and wind.
Most renewable energy is stored in batteries before it is used, and it costs more to store it than to produce it, he said. As a result, he says, there is "a lot of room for improvement from a technology standpoint" and a much larger achievable market for batteries.
Katrina Cosmopoulou, a partner at investment firm J. Stern, said the firm is interested in the hydrogen sector. "It's clearly a nascent technology, but over a ten-year period we know it needs to play a role in decarbonizing the economy," he said.
Sean O'Sullivan, founder of venture capital firm SOSV, said the company is focused on battery recycling, cement and fiber production and power grid startups. “For these climate-related companies, the incentives of the Inflation Act will make their products easier to buy, allowing them to compete with incumbents and get to market faster,” he said.
David Giordano, global head of climate infrastructure at BlackRock, the world's largest asset manager, said hydrogen and CO2 capture are likely to be the biggest investments under the Inflation Act. “New subsidies and increases in existing subsidies should attract investment to advance these technologies,” he said.
A Bloomberg survey showed that storage batteries were seen as the most value proposition by respondents in three major regions of the world: the Americas, Europe/Middle East/Africa, and Asia Pacific. Green hydrogen ranked second, and solar and wind ranked third.
Not everyone is very bullish, however, given concerns about rising interest rates and high oil prices.
"When you think about areas like green hydrogen and carbon capture, there are 20-, 30-year investment opportunities in these technologies," said Martin Todd, portfolio manager at Federated Hermes, which manages about $625 billion. explained. “In the current interest rate environment, investors will be less aggressive in exploring opportunities than they were about a year ago,” he said.
