“It’s not easy being green,” sang Kermit the Frog many years ago on Sesame Street. At the time, Kermit was simply referring to the fact that he’s a frog, frogs are green and it’s tough out there for green frogs — especially if they can talk.

But today, “being green” has taken on a whole new meaning. It’s not just for talking frogs anymore. Being green has become synonymous with environmentalism and economic sustainability. The term has a close association with preserving nature, promoting healthy ecosystems and restoring some semblance of balance to the competition between mankind and nature.

In the world of energy, “being green” usually means that you favor energy conservation and efficiency. And “being green” might even mean that you favor burning less carbon. That is, you favor producing energy from renewable sources like solar, wind and geothermal.

I’m not trying to get political on you. I don’t want to throw labels around, either. OK, maybe you are “green,” but you’re no environmental wacko. Heck, a big company like General Electric has spent millions of dollars being green, through its Ecomagination branding program.

Still, I think that no matter your political leanings, you’re probably interested in making money off being green. Indeed, I’m always looking for new investment ideas in the world of energy and energy systems for the aptly named Energy & Scarcity Investor newsletter.

The Green Energy Future

Let’s discuss the “green” energy future and how we can get in on it. Within the next 10-20 years, we will live in a world where wind and solar power are likely to become major contributors to our daily energy supply. Within 20 years, the U.S. will probably get 20% of its electricity from windmills and another large percentage from solar.

Indeed, both major party political candidates support renewable power systems like windmills and solar, as well as geothermal. And in another segment of the economy, the automakers cannot work fast enough to get electric cars of one sort or another off the design tables and into the showrooms.

Yet for all their low-carbon environmental virtues, electric cars will depend on the electric grid. The grid, in turn, depends on power generation.  Wind and solar, however, are both unreliable for baseload electric power production. There’s no such thing as 24-7-365 wind and solar. Heck, you’re lucky to get 12 hours of energy production from wind or sunshine on the best of days.

So the electric system designers have to figure out how to keep power levels flowing in the grid even when the wind is quiet, or at night or during seasons when there just is not a lot of blazing sunshine falling to the Earth.

So we need solutions. And among the possibilities, one of the best ideas is to combine the wind and solar energy production with cost-efficient energy storage. That is, you capture the energy when the wind is blowing and the sun is shining. And then you store it for later. But store it where and how?

Until we meet again,
Byron King

October 21, 2008

Byron King

Byron King is the managing editor of Outstanding Investments and Energy & Scarcity Investor. These publications reach over 60,000 paid subscribers. He is also a contributor to the Daily Reckoning. King is a Harvard-trained geologist who has traveled to every U.S. state and territory and six of the seven continents. He has conducted site visits to mineral deposits in 26 countries and deep-water oil fields in five oceans. This provides him with a unique perspective on the myriad of investment opportunities in energy and mineral exploration. He has been interviewed by dozens of major print and broadcast media outlets including The Financial Times, The Guardian, The Washington Post, MSN Money, MarketWatch, Fox Business News, and PBS Newshour.

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