The advent of artificial intelligence (AI) is seen by many as one of the most incredible developments of modern times. And let’s be honest, it’s a game changer.
To say that AI is the only innovation currently changing the world on a massive scale is to ignore another revolution that is just as impressive… even if slightly less exciting. That is the arrival of renewable energy. For the first time in history, it seems at least possible that the planet can eventually rid itself of fossil fuels. While that moment is still decades away, Straits Research believes this continued progress will grow the renewable energy industry’s revenues by an average of 9.5% through 2033.
Here we look at three companies well positioned to benefit from this growth in the brewing industry.
However, for long-term risk takers, there is a compelling bullish argument to be made here.
Simply put, NuScale Power develops small modular (nuclear) reactors, or SMRs. As their name suggests, these are small-scale power plants intended to provide electricity in a specific location for a specific purpose, such as powering data centers, desalination plants, or facilities that split water into oxygen and hydrogen that can be used in a wide range to industrial applications. Thanks to advances in nuclear fission reactor design and waste management, the future of the nuclear power sector is more promising than its spotty past.
As noted, NuScale has no significant revenue, nor does it have any in the near term. It took years to design and prove the original reactor plans, and even longer for the United States Nuclear Regulatory Commission to approve them. The company then adjusted these plans to produce more power. The regulatory body is expected to make a new approval decision for this new design sometime mid-year. Even if it is approved – and it likely will be – it will still take years to build a small modular reactor site.
However, potential customers are still excited about the idea of ​​the affordability and reliability of localized nuclear power. Romania’s Nuclearelectrica and RoPower Nuclear are moving ahead with plans to order the construction of up to six modular NuScale reactors. Straits Research suggests that the global SMR market will grow at an average annual rate of just over 9% through 2032 before demand accelerates for what should then be a well-established technology.
Given that there are so few other teams working on small modular reactors (even fewer of which are NuScale’s pure work), this company will likely account for a good portion of this growth.
The main risk? This is an all-or-nothing trade in the long term, which may remain difficult to assess in the meantime.
You are probably familiar with combustion engines and battery-powered electric vehicles, such as the electric car (EV). Tesla. However, these options are not the only way to mechanically power a moving machine. Fuel cells can generate an electric current by splitting hydrogen into positively and negatively charged particles, essentially becoming a battery… at least until all the hydrogen is used up. Plug-in power supply (NASDAQ: PLUG) has been producing these hydrogen fuel cells for years and implementing them in forklift trucks, short-haul transport vehicles, robotics and, more recently, longer-haul vehicles such as vans.
However, mobility is not the only application of fuel cell technology. This solution is increasingly proving to be a viable, cost-effective alternative to providing electricity (or at least backup power) to entire buildings, data centers, EV charging stations and telecom providers, to name a few.
The problem? Making and processing pure hydrogen is neither cheap nor easy. That’s a big part of the reason Plug Power has been consistently unprofitable for years.
But there may be a turning point on the horizon.
NuScale’s previously mentioned small modular reactors are ideally suited to cost-effectively supply power to the electrolysis facilities that split water into hydrogen and oxygen. The prospect of accessible hydrogen for fuel cells has never been more promising than it is today. Common solar energy is an even more promising source of electricity for these electrolysis plants, which, as Motley Fool’s internal research shows, is the preferred source of renewable energy in most states.
The point is, fuel cells are about to go mainstream.
As with NuScale Power, Plug Power’s potential benefit comes with significant risks. The most important of these is difficult, unpredictable regulations. The final chapter in this legislative saga concerns the uncertainty over how much – if any – of the tax credit production of hydrogen from nuclear energy will be eligible for. The Ministry of Finance may even have published its decision by the time you read this.
Don’t worry too much about it, whatever the Ministry of Finance decides. Fuel cells are a proven technology. It’ll just take some time, along with more infrastructure, to get it (and Plug Power) over the proverbial hump. It’s coming anyway. Straits Research predicts that the global fuel cell market will grow at an average annual rate of more than 21% through 2033.
Last but not least, add Western petroleum (NYSE:OXY) to your list of renewable energy stocks to buy in 2025 and hold for a few decades.
Okay, it’s not a renewable energy share. Occidental is categorized as an oil and gas name, and for good reason. After all, it is one of the largest producers in the world, producing just over 1.4 million barrels of crude oil or its equivalent every day.
The fact is, however, that sustainable energy is the future, but it will take decades before this happens. In the meantime, the world will still need a lot of oil and gas. Goldman SachsResearchers believe that annual oil consumption will continue to grow before reaching a peak of 110 million barrels per day in 2034. And even after that, oil consumption will only decline gradually over the coming decades.
The kicker: demand for natural gas is expected to continue growing at least until 2050. Now Occidental Petroleum’s well-managed business suddenly looks and feels very investment-worthy.
Be that as it may, Occidental Petroleum is moving towards a renewable energy source thanks to a technology it is developing that could extend the world’s consumption of fossil fuels such as natural gas, crude oil and even coal. As the name suggests, the company’s direct carbon capture platform literally sucks CO2 molecules from the air and chemically combines them with filters that turn it into a form that can be safely and permanently stored underground.
It is still a relatively young technology that is more developmental than final. But it works. Demand for it is expected to grow at a strong double-digit pace in the coming years.
Consider the following before purchasing shares in Plug Power:
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James Brumley has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Goldman Sachs Group and Tesla. The Motley Fool recommends NuScale Power and Occidental Petroleum. The Motley Fool has a disclosure policy.
3 Renewable Energy Stocks to Buy in 2025 and Hold for Decades was originally published by The Motley Fool
