The massive amounts of electricity required to mine bitcoin could benefit these 5 stocks, Morgan Stanley says

germany solarREUTERS/Kai Pfaffenbach

  • Energy demand to mine cryptocurrencies "may represent a new business opportunity for renewable energy developers," Morgan Stanley said. 
  • Low-cost power regions, including the Southwest or Midwest US, and areas with the potential for wind and solar energy, stand to benefit the most from the rise in demand for energy.


Crypto mania could soon have an impact on the renewable energy business, according to Morgan Stanley.

In a note to clients, the US investment bank said that it costs between $3,000 and $7,000 to mine each bitcoin, making low-cost energy a key focus for bitcoin miners. That, in turn, may present an opportunity for renewable energy firms, according to Morgan Stanley. 

Morgan Stanley said:

"In theory there could be pockets of outsized mining profitability given our projection that renewable energy, and storage, costs are likely to fall substantially. For example, if firm renewable energy could be generated at an all-in cost of 6 cents per kWh in the US, the cost of generating one Bitcoin would fall by $600 relative to a power cost of 8 cents per kWh. In the Southwest US, NextEra Energy recently signed an agreement to provide a customer with a combination of solar power and energy storage at 4.5 cents/kWh. Recent wind power sales contracts in the Midwest US are in the range of 1.5-2.5 cents/kWh, and we project this will continue to drop as wind blade lengths continue to increase."

Here are the companies Morgan Stanley highlighted as the key utilities that could benefit from increased electricity demand due to bitcoin mining, along with some of the bank's comments on why they're well-positioned: 

American Electric Power

Markets Insider

Ticker: AEP

Market Cap: $34.4 billion

Comments: "The key utility beneficiaries we would highlight include: American Electric Power (AEP), Xcel Energy (XEL), and Entergy (ETR). These utilities serve the regions with the lowest cost of electricity, and AEP and XEL are taking advantage of low cost wind to drive rates even lower."

 



Xcel Energy

Markets Insider

Ticker: XEL

Market Cap: $23.3 billion

Comments: "The key utility beneficiaries we would highlight include: American Electric Power (AEP), Xcel Energy (XEL), and Entergy (ETR). These utilities serve the regions with the lowest cost of electricity, and AEP and XEL are taking advantage of low cost wind to drive rates even lower."



Entergy

Markets Insider

Ticker: ETR

Market Cap: $14.4 billion

Comments: "The key utility beneficiaries we would highlight include: American Electric Power (AEP), Xcel Energy (XEL), and Entergy (ETR). These utilities serve the regions with the lowest cost of electricity, and AEP and XEL are taking advantage of low cost wind to drive rates even lower."

 




See the rest of the story at Business Insider

Comments

Post a Comment

Popular posts from this blog

Why most scientists don't care about these incredible UFO videos

Image
If you've been online recently, you've probably seen this. This is one of two clips released by the Department of Defense. Both videos show a thermal image of an unidentified flying object. The videos have been widely shared and scrutinized. A lot of people think this is the first real evidence that extraterrestrials exist, and that they've visited us here on Earth. There's just one thing. Most people in the scientific community don't think these videos prove anything. People have been claiming to see UFOs for decades. Countless videos purporting to show alien aircraft have been popping up since the invention of film. But this video is unique. It was released by the Department of Defense who found the video noteworthy enough to study and release. Until 2012, the DOD says it ran a secret "Advanced Aerospace Threat Identification Program." The program was funded by $22 million dollars worth of "black money." These are funds the Pentagon sets asi...
Read more

Why China sees Myanmar's Rohingya crisis as an opportunity

Image
Thomson Reuters Myanmar's government has been embroiled in battle of rhetoric over its alleged ethnic cleansing of Rohingya Muslims, but unlike the west, China sees an opportunity amid the affair. For China, Myanmar's crisis is a gateway for it to pursue similar economic and infrastructure strategies it has undertaken in Africa in order to extend its geopolitical reach. Myanmar is part of a complex geopolitical maze in which China is but one player. As the Myanmar government's violent policy towards its Rohingya Muslims drew increasing international condemnation in 2016, the country's sometime icon of democracy, Aung San Suu Kyi,   declined to speak out   for the persecuted minority. And in her attempts to protect Myanmar from renewed isolation, she has continued to deepen its relationship with her most powerful authoritarian neighbour: China. It seems the common notion that newly democratic states have little time for autocratic partners is false. Before the W...
Read more

Losing my faith in philanthropy led me to rediscover its power to change the world for good

Image
On Christmas Eve 2012, I was seriously considering quitting my job at the Gates Foundation. As I confessed to my wife, Emily, while wrapping presents, “I no longer believe in philanthropy.” I’d been at the foundation since the early days, rising from an entry-level analyst to R&D Lead for Maternal and Child Health, where I led the launch of the Grand Challenges Explorations program and published a number of articles in top journals like Science and The Lancet. By all professional measures I was “outperforming,” as we would describe successful grants. After one annual review, Bill Gates remarked at the high-degree of “actionable information” in my portfolio. Yet, despite the praise, there I was disillusioned and disconsolate. My doubts went beyond the usual critiques of rich-country philanthropists imposing foreign values or scientists pursuing unrealistic pipe dreams. My questions were more fundamental and vexing. Am I changing the world for the better? Or am I deceiving myself...
Read more