Alternative Energy Growth

Have you read the latest Monthly Energy Review, published by the U.S. Energy Information Administration?

If you have, you know something that most don’t and that some wish you had never learned.

If you haven’t, don’t worry. . . I’m about to fill you in.

Buried deep in the 197-page report is a fact that sends chills down the spines of proponents of the status quo, while simultaneously filling others with a sense of satisfaction.

For the second month in a row, renewable energy has provided more energy than all nuclear reactors in the country combined.

So much for the “it’ll never make a dent” argument.

And this is exactly the point that I’ve been trying to convey to you: When you start at the bottom. . . there’s nowhere to go but up.

Alternative Energy: The Lonely Grower

The Monthly Energy Review chronicles energy production and consumption data through May 2009.

From January to May, production from coal fell from 1.968 quadrillion Btu (QBTU) to 1.722 QBTU — a 13% decline.

The use of natural gas fell 0.6%, from 1.845 QBTU to 1.834 QBTU.

And nuclear went from .771 QBTU to .684 QBTU, falling 11.2%.

Can you guess what happened to renewables?

They grew from .650 QBTU to .707 QBTU — a rise of 8.7% — and clearly the only grower of the bunch.

Sorry for the numbers and figures, but there would be more than a handful of doubters if I simply claimed renewable energy production growth outpaced coal and natural gas, while its total production was greater than nuclear for the first five months of 2009.

Plus. . . I like to rub it in.

But, of course, this isn’t all about individual energy beliefs. . . the primary goal here is making money.

And you can bet there’s a fair share of money being made from the sector that now outpaces nuclear production. In a second, I’m going to tell you how you can profit two ways from renewable energy.

But first, let me drill down on the sectors that are providing most of the growth. . . and those that aren’t.

Put It in the Air

For this section, I’ll compare the first five months of 2008 to the first five months of 2009. Here’s a chart that shows production for that time period for four relevant fuels:

Geothermal and solar remained flat.

We see here that coal is the only fuel whose production slipped. We also see that wind is the far-and-away winner.

This confirms what I’ve been trying to tell you over the past few months. In July, I wrote to my readers:

. . . While we’ve been talking about a tipping point for some time, I’d have to say we’ve squarely passed it.

Yes, we still need coal. Yes, we still need oil. Yes, we still need natural gas.

But, it’s not mutually exclusive to profit from and support both traditional and clean energy technologies.

Accepting that fact is the only thing keeping us from a secure energy future.

And it’s because renewables started with such a small share of the mix that they can grow so quickly. Wind didn’t even provide one-third of a quad, yet it grew 32%. . . smack-dab in the middle of a recession.

By the time it reaches just two quads, it will have grown nearly 600%.

The stocks will deliver equal percentage growth. And it’s starting already. Back in February, I advised thousands of AES readers to buy the First Trust Global Wind Energy ETF (NYSE: FAN). Here’s a chart of its progress over the past six months:

We’re now up about 35%, but I expect to go much higher.

There’s plenty of time to get in on this play. Wind’s growth will be solid for the next decade. . .and this ETF gives you exposure to many of the companies making it happen.

I’d also suggest holding long-term plays in other sectors. A solar ETF like the Claymore Global Solar Energy (NYSE: TAN), and a diversified cleantech ETF, like Clean Edge Green Energy (NASDAQ: QCLN), can offer “set-it-and-forget-it” ways to play this imminent trend.

Cleantech’s here to stay, folks. It just passed nuclear. And it’s high time you started taking some of the easy profits it has to offer.

Call it like you see it,

Nick

P.S. I can say with confidence that the profits have been easy. . . and readers of the Alternative Energy Speculator couldn’t be happier. We’ve built it into a proverbial profit machine, closing 35 double-digit winners so far this year. Click here to see how we’ve done it and why it will continue indefinitely.