I'm reading headlines all the time talking up lack of electricity infrastructure for our growing use needs. Whats the best way to play this ? Anyone very knowledgeable about this?
Not sure about how best to profit, but I can tell you from experience writing and implementing software in the industry - don't fall for any hype about investing in companies (especially independent software companies) that want to help "modernize and improve" the infrastructure. The power market has got to be the most entrenched good-old-boy network out there, and there is a massive vested interest in keeping things the way they have always been - with key data hidden, lagging technology, and with huge barriers to entry to anyone wanting to help "fix it". Any time a company emerges that makes noises about wanting to improve things, the big utilities just talk a game for a while, drag their feet, and wait for the company to die from lack of progress. The government agencies are not even really that interested in fixing it, at least not in any kind of technologically intelligent manner. And without the right kind of focused (ie mandated) push, the power companies are extremely unwilling to cooperate or participate in any kind of outside effort to coordinate and improve the visibility and quality of data needed to really improve things. The NIMBY thing is preventing any real new capacity from getting added, and without that and some reorganization of transmission networks, the problem is basically intractable. Expect higher prices - probably the best bet is to invest in the utilities for the near term.
yea this is what I thought. My idea is that besides making investments into natural gas parternships (ie where you actually own the wells) or buying utilities, its hard to find a direct and leveragable play. Its too slow moving to leverage up with a worthwhile return for the risk taken, it seems to me. For example, buying utilities might fail miserably even in the light of this increased demand if the long bond falls off a cliff and drives yield up.
I used to work in the power industry... You can make easier money I guarantee you. No one knows who is going to be profitting in the next 10 years... the US could make a big move towards nuclear power or breakthroughs efficiency and price in solar could make it realistic to put it on lots of houses especially with tax benefits. Or we could keep burning coal . If you want to try to make some money then you could likely play China... I was reading an article somewhere that said China will have to open 4 coal fired plants a week to keep up with growth soon. That's just insane. They are going to need a lot of infrastructure to build clean coal plants... from companies like Hitachi and GE... But honestly... there's no point to try and jump over 8 foot hurdles to make money in energy transmission and distribution when you could find a lot easier ways.