Fisher Investments on Energy

6

ALTERNATIVE ENERGY

Rapidly rising energy prices. Carbon emissions. Pollution. These are just a few hot-button issues surrounding the drive toward sustainable energy sources. Interest in alternative energies has soared in recent years, and this rapidly growing category received investments of more than $100 billion globally in 2007, as the world invested in renewable energy capacity, manufacturing plants, and research and development.¹

While this book is centered on investing in the traditional oil and gas sector, we feel compelled to provide a brief overview of the alternative energy landscape, as it will no doubt grow over time. It’s important to note most alternative energy company stocks do not even fall in the Energy sector. General Electric, for instance, has one of the largest alternative energy divisions in the world, but it doesn’t show up in any Energy index. Neither does Toyota’s technological advancements of hybrid auto manufacturing.

In this chapter, basic definitions are discussed, along with concepts behind most common types of alternative energy and how they fit into the world’s energy consumption mix. Also discussed are limitations and potentials of alternative energy now and in the future.

Like other parts of Energy, there are basic drivers and themes of alternative energy firms from an investment standpoint worth considering. Finally, we’ll provide a glimpse into the investment universe of alternative energy firms, including a list of pure-play firms (those ...