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What’s Going on With the Infrastructure Bill?

If you’re ever frustrated with how slow your company seems at times, just be glad you don’t work for the U.S. government.
Because, as this week has…

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This article was originally published by Investor Place

If you’re ever frustrated with how slow your company seems at times, just be glad you don’t work for the U.S. government.

Because, as this week has shown in crystal-clear detail, the U.S. government moves at a snail’s pace, and almost never gets things done “on time.”

I’m sure you’ve followed or at least heard about all the drama in Washington D.C. this week surrounding the $1 trillion infrastructure bill and $3.5 trillion budget reconciliation package.

Source: mark reinstein / Shutterstock.com
Source: Mark Reinstein / Shutterstock.com

Long story short, the Senate has already passed the $1 trillion infrastructure bill. The House was supposed to hold a vote for (and pass) that bill on Thursday, sending it off to President Joe Biden’s office to be signed into law.

But, of course, that didn’t happen. Instead, progressive Democrats rebelled against their party, saying they would vote “no” for the infrastructure bill unless House Democrats first won unanimous approval for and passed the $3.5 trillion budget reconciliation package.

So, House Speaker Nancy Pelosi shelved the infrastructure bill vote on Thursday, and negotiations began Friday to try to work out a deal there. Net net, both the infrastructure and budget reconciliation packages remain in limbo as of this writing.

OK… but does any of this actually matter for your investments?

If you’re invested in any clean energy stocks — like Tesla (TSLA), or Lucid Group (LCID), or First Solar (FSLR) — it matters a ton!

That’s because the fate of the infrastructure bill and budget reconciliation package seems to be intertwined, and the latter contains a ton of clean energy spending that — if passed — could overhaul the U.S. electricity industry and create enormous tailwinds for clean energy stocks.

In short, the budget reconciliation package contains something called the Clean Electricity Payment Program, which is essentially the cornerstone of the Democratic party’s plan to tackle climate change.

This program proposes creating a federal clean electricity standard for utilities, rewarding those companies that exceed this standard, and penalizing companies that fail to meet it. In numbers, the U.S. government would pay a federal grant annually to utility companies that increase their clean energy output by 4% each year, and penalize those that don’t hit that increase.

If enacted, this would be the first-ever federal program that creates a meaningful financial incentive network for utility companies to go “all in” with the switch from fossil fuels to solar, wind, and hydrogen — and, because financial incentives are the most powerful type of incentive, we predict that this program alone would dramatically increase utility-scale deployment of clean energy.

Obviously, that would be a huge “win” for solar stocks, wind stocks, and hydrogen stocks.

But the budget reconciliation package also includes the extension of production and investment tax credits for wind, solar, and hydrogen. It also proposes to expand investment tax credits to include energy storage technology and linear generators.

In other words, the $3.5 trillion budget reconciliation package could fundamentally alter the U.S. electricity landscape — and turn all this “talk” of combatting climate change with clean energy deployments into actual “walk.”

We predict that, if the current clean energy initiatives in the budget reconciliation package pass, the clean energy industry will grow at unprecedentedly fast rates for the balance of the 2020s, and that by 2030, the U.S. will be powered by 80%-plus clean energy.

In investment terms, it’ll be green shoots for clean energy stocks.

So… will the budget reconciliation package pass?

In its current form, the answer is probably no. Over in Washington, they’re all negotiators — and that’s what they’re doing now. In those negotiations, moderate Democrats will ask progressive Democrats to cut back on the size of the spending package. We think both sides will compromise some, and that at the end of the day, the total package will look like $2 trillion — not $3.5 trillion. We suspect that package will win majority support and be enacted into law.

Our best guess is that some of the $1.5 trillion excess removed will be from the clean energy initiatives, but that most will come from social safety net spending. Thus, we do believe that the modified budget reconciliation package that eventually does pass will still be overwhelmingly positive for the clean energy industry.

The investment implication? Clean energy stocks have traded with significant volatility as the drama in D.C. surrounding these bills has unfolded over the past two weeks. We say ignore the volatility, buy the dip, and hold on for what may be the best decade yet for these stocks.

That’s why, in our flagship investment research product Innovation Investor, we’re doubling down on our clean energy investments. We believe we own the cream-of-the-crop in the clean energy sector, including the world’s leading hydrogen technology company, the world’s most technologically advanced solar firm, and the world’s smartest and fastest-growing energy storage supplier.

We think these stocks will be big long-term winners, and that their gains will be accelerated by the passage of the infrastructure bill and budget reconciliation packages.

In other words, there’s never been a better time to be invested in these stocks than right now.

Interested in the names? Click here to find out more.

On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.

The post What’s Going on With the Infrastructure Bill? appeared first on InvestorPlace.

Author: Luke Lango

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Energy & Critical Metals

Burundi’s first grid-connected solar farm reaches commercial operation

A pioneering 7.5MW solar PV plant has reached commercial operation in Burundi, increasing the country’s generation capacity by over 10%.
The post Burundi’s…

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A pioneering 7.5MW solar PV plant has reached commercial operation in Burundi, increasing the country’s generation capacity by over 10%.

It’s the country’s first substantial energy generation project to go online in over three decades, supplying clean power to tens of thousands of homes and businesses.

The plant near the village of Mubuga supports international efforts to increase renewables and climate finance, especially for the world’s most vulnerable communities.

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UK Minister for Energy, Clean Growth and Climate Change, Greg Hands, said: “Today’s launch of Burundi’s first grid-connected solar farm will light up the nation’s energy system. It will strengthen the national grid supply and propel forward a promising future for the country in clean, green energy.

“Set to increase Burundi’s power generation capacity by 10%, this pioneering project, backed by UK government funding, is a fantastic example of countries working together ahead of COP26. Investing in a green future benefits the economy and the planet.”

The six-year process of building the solar plant was led by energy developer and independent power producer Gigawatt Global.

Financing for the construction of the project was provided via a consortium including pan-African private equity investor Inspired Evolution, the UK government-funded Renewable Energy Performance Platform (REPP – managed by Camco Clean Energy), and Gigawatt Global.

The construction loans are being refinanced by the US International Development Finance Corporation (DFC).

Additional support for the project was provided directly and indirectly from the Energy and Environment Partnership (EEP – a fund set up by Finland, the UK and Austria), the Belgian Investment Company for Developing Countries (BIO), Trinity International has advised the Gigawatt Global and Inspired Evolution equity teams since 2017. Engineering, procurement and construction services were provided by French firm Voltalia, and political risk re-insurance is provided by DFC.

Gigawatt and Voltalia Teams. Image credit: Gigawatt Global

Gigawatt Global CEO Josef Abramowitz said: “We thank our impact investors and strategic partners, as well as the Burundi government, for joining forces to accomplish this historic milestone on the road to climate justice and fulfilling many of the UN’s Sustainable Development Goals.”

Abramowitz, who was nominated by 12 African countries for the 2021 Nobel Peace Prize for his pioneering commitment to green energy access, continued: “Green energy projects that serve the most vulnerable communities should be prioritized by the international community.”

The Burundi field recently received the award for “Project of the Year” from EEP.

Gigawatt Global is also building a community centre powered by solar energy that will offer local access to productive use of electricity.

The centre will focus on community development through women’s empowerment and youth and employment programs, along with various educational components being developed with local and international NGOs.

The post Burundi’s first grid-connected solar farm reaches commercial operation appeared first on Power Engineering International.

Author: Pamela Largue

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Energy & Critical Metals

Chart of the Day: Plenty of immediate upside targets for Ionic Rare Earths

Let’s get into it. Iconic Rare Earthss (ASX:IXR) is a bullish set up from a technical perspective. It’s in an … Read More
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Let’s get into it.

Iconic Rare Earthss (ASX:IXR) is a bullish set up from a technical perspective.

It’s in an uptrend. The moving averages are sloping up.

It’s shown us that when it wants to the market can get a hold of it – as evidenced by the fierce run from 1.5c to 6c at the start of this year.

 

Chart of the Day: Ionic Rare Earths (ASX:IXR)

There are no immediate gaps on the chart to worry about that need to be filled.

The company surpassed 4c resistance yesterday on increasing volume, which was a positive sign. However, after touching 4.5c in intra-day trade, it has now settled back to close at 4.2c, leaving a daily selling candle.

That infers that a test of 3.8 – 4c may be on the cards.

In our view that would make attractive buying.

Given the negative response to the scoping study in late April, there are plenty of immediate upside targets, the most immediate being 4.7c, with further potential to those March highs above 6c.

Back the other way, and we don’t need to hold this below 3.5c.

The company is well funded – reporting over $11m on balance sheet at their last quarterly – with an updated quarterly anticipated before the end of the month.

We are long as of yesterday, and will manage the trade to the above risk, looking for 4.7c first, with potential to above 6c if things go their way.

Steve Collette of Collette Capital Pty Ltd (ABN 56645766507) is a Corporate Authorised Representative (No. 1284431) of Sanlam Private Wealth (AFS License No. 337927), which only provides general advice.

Collette Capital only makes services available to professional and sophisticated investors as defined by the Corporations Act, Section (s)708(8)C and 761G(7)C.

The Collette Capital Wholesale IMA Strategy has returned +24.83% p.a. net of all fees as at the end of September 2021 since inception in January 2015 (using the Time Weighted Return method of calculating returns).

Learn more at www.collette.capital

The post Chart of the Day: Plenty of immediate upside targets for Ionic Rare Earths appeared first on Stockhead.


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Base Metals

Monsters of Rock: Lithium shares flush with positive sentiment to dominate the gains

Lithium miners were the kings, queens, jacks and aces of the bourse on an avalanche of positive news around the … Read More
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Lithium miners were the kings, queens, jacks and aces of the bourse on an avalanche of positive news around the sector.

The biggest trigger was probably the incredible rise in value for Tesla overnight, which soared beyond a US$1 trillion valuation on news Hertz would order US$4 billion worth of electric vehicles from the automaker.

As the leading electric vehicle maker in the western world, and with a big presence also in China and energy storage, Tesla is one of the biggest end users of lithium products globally.

Its boss Elon Musk, now the richest man ever, has a fair bit of sway on the market as well.

On top of that Pilbara Minerals (ASX:PLS), up 525% over the past 12 months since spodumene prices bottomed out at under US$400/t (it sold a batch for upwards of US$2000/t last month), gained 7.66% after formally announcing plans to develop a lithium chemical plant in a JV with South Korea’s POSCO.

Core Lithium (ASX:CXO) declared the start of construction on its Finniss Lithium Mine in the Northern Territory. That will be shipping concentrate from the end of 2022.

$550 million capped Neometals (ASX:NMT) was up 14% after announcing its battery recycling demonstration plant in Hilcenbach, Germany, had been fully commissioned.

The one time lithium miner is up 405% over the past year.

Vulcan Energy (ASX:VUL), Sayona (ASX:SYA), Liontown (ASX:LTR) and Orocobre (ASX:ORE) were among the lithium miners to dine out on the day’s news, while rare earths miner Lynas (ASX:LYC) was also up.

On the flippity flip, iron ore miners were weak with Fortescue (ASX:FMG) and Rio Tinto (ASX:RIO) cancelling out a gain from BHP (ASX:BHP), while Mineral Resources (ASX:MIN) cancelled out the gains it made with yesterday’s announcement the Wodgina lithium mine would be coming back online with news it ate a 48% price discount on iron ore sales in the September Quarter.

MinRes’ average realised prices fell from US$178/t to around US$78/t between the June and September Quarters.

The bright green is all lithium baby. Pic: Commsec

 

Base metals inventories falling, but can it be sustained?

Base metals were back up on Monday, with production cuts in energy starved China and Europe hitting primary supply.

Inventories held by the major exchanges are being chewed up.

While price moves among the miners was muted, nickel rose 3.2% to climb back over US$20,000/t overnight after hitting US$21,000/t briefly last week.

“Nickel rallied after Eramet disclosed a 19% drop in ferronickel production from its operations in New Caledonia,” ANZ analysts said in a note.

“The market is also showing signs of tightness, with cash contracts closing at their biggest premium to futures in two years. LME inventories are down nearly 50% since April.”

LME stockpiles for copper hit their lowest level since 1974 last week, but Commbank analyst Vivek Dhar says it is too early to say whether the market is as tight as it seems, or whether some traders are hoarding to capitalise on high prices.

The market is expected to be in a small deficit at the end of this year to a 328,000t surplus in 2022 on rising supply (about 1.3% of global demand).

Mined supply is expected to increase 2.1% this year and 3.9% in 2022, but Dhar warned copper miners had a history of underwhelming.

“The rising forecasts for copper mine production reflect 5 major copper projects due to arrive by the end of 2022,” Dhar said.

“That compares with just two major copper projects in the last 4 years.

“Given the track record of mine disruptions (i.e. labour strikes, power and water scarcity and geopolitics) and the decline in copper grades, elevated copper mine production growth forecasts don’t tend to last long.

“We think it’s worth considering that new mine supply may take longer than currently expected to hit the market.”

The post Monsters of Rock: Lithium shares flush with positive sentiment to dominate the gains appeared first on Stockhead.







Author: Josh Chiat

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