The constant concern about climate change and the growing global demand for energy is forcing many governments worldwide to change their energy policy towards renewable energy sources. This article will consider basic things about the geothermal energy market and geothermal energy stock price.
The prospects of geothermal energy market development
The demand for renewable energy sources in the world market is constantly growing. It is due to limited resources and developed countries’ desire to reduce harmful emissions into the atmosphere from traditional energy sources (oil, coal, gas, etc.). Traditional energy sources are limited. It is necessary to discover new deposits continuously to maintain reserves. In the event of a fall, for example, in oil reserves, its price on the world market, other things being equal, grows. It leads to increased costs for consumers looking for a cheaper alternative.
Geothermal energy is a reliable and renewable source of heat. But while the technology has been around for decades, geothermal energy comes with higher costs than other energy sources, as well as drilling risks. The recent influx of new players into the geothermal market, many of them from the oil and gas industry, pushes companies to move ahead with pilot projects to address the industry’s challenges.
As automation and production costs decrease, the availability of renewable energy increases every year. The types of renewable energy are solar, wind, geothermal, hydraulic energy, the energy of water masses, etc. Many investors see geothermal energy stocks as an attractive long-term investment. With the right choice of issuing companies, such investments can bring solid profits in a few years.
6 Stocks to invest in geothermal energy
Renewable energy stocks are becoming increasingly popular among investors. The geothermal energy industry is growing and has several advantages over wind and solar. Last year’s industry data shows an overall growth of 594% in investment in the geothermal industry. There 6 market stocks to invest in geothermal energy:
- Ormat Technologies
Market analysts see the current drop in Ormat Technologies (ORA’s) share price as a good buying opportunity, given the company’s big growth plans for the next few years. Moreover, with a cash balance of $493 million, Ormat Technologies has the sufficient financial flexibility to continue growing over the next few years.
- Polaris Infrastructure
Shares of Polaris Infrastructure (RAMPF) have risen 37.42% over the past year on OTCMKTS and are attractive among geothermal stocks. In addition, Polaris shares generate an annual dividend yield of 3.9%.
- British Petroleum
The company in February 2021 announced a $40 million investment in Eavor Technologies, a Canadian geothermal energy company that aims to power 10 million homes by 2030. At the same time, BP is also investing in wind and solar energy and continues to benefit from rising energy prices.
- NextEra Energy
It is the largest energy company in terms of geothermal and wind energy generated. In 2019, NextEra owned 15.1 GW of wind and 2.5 GW of solar capacity, and 11 GW of new renewable energy projects.
- Clearway Energy
It is a holding that owns a portfolio of renewable and conventional assets in generation and thermal infrastructure. Since the beginning of the year, Clearway Energy shares have risen in price by 47.5%. As a result, the analyst expects a breakout of securities to a new record level of $33.65. Now the shares are trading near the $30 mark.
- TransAlta Renewables
It is a Canadian company engaged in developing and operating facilities for producing renewable energy, including geothermal energy.