Are we near a peak clean energy moment?

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On Friday, the Globe and Mail ran a story highlighting a move to renewable-energy sources, saying that renewable-power prices "are now competitive with traditional sources of power in many jurisdictions". Bob Hoye from ChartsandMarkets.com in his April 12th Friday night broadcast takes aim at the article by questioning the practicality of relying solar and wind power.

Hoye suggests we might be near peak clean energy

It takes huge amounts of land. This is the vacant land myth. They think there is always going to be enough land, but I have read elsewhere that if you did go to something like 90% renewables with these two main ideas, you would cover the U.S. and Canada from one end to the other.

He notes that there are reports of resistance emerging with respect to building more solar and wind installations in some states and counties. He believes this development is healthy and combined with the vacant land myth theory could lead to a type of peak clean energy moment. He suggests:

The promotion of wind mills and solar cells and righteousness is about to collapse. I think the public is going to say, ah, this is nonsense.

We have not verified the claims in either the Globe and Mail article, or in Mr. Hoye's suggestion that it would not be physically possible to become reliant on wind and solar power. Instead, we will let investors adjudicate the debate.

In settling the matter of clean versus traditional energy, investors can vote with their wallets. Last week we highlighted insider buying in both an alternative energy producer, TransAlta (TA) and a traditional oil & gas service company, STEP Energy Services (STEP). To read these reports, join the Canadian Insider Club which you can do during our Easter promotion for the equivalent of C$9.99 per month. Click here to find out more.

In terms of the near-term bullish or bearish case for crude oil, back on March 15th, he reported that his firm had issued a sequential sell reading for crude. Oil subsequently traded sideways for the next few weeks before moving higher this month. He now sees a possible scenario for stronger crude prices for a little while longer:

For the last 3 weeks we have been writing that our target has been met: Crude up until March. But we think it can go a little further yet.

Now, he believes crude is now registering some technical alerts, and could roll-over in the next few weeks. At this point, he would characterize such a move as a correction. However, if that turns out to be the case, he hints it could also impact the stock market. 

The positive things can perhaps run into May, and then somewhere after mid-year you could have a seasonal change to weaker industrial commodity prices and change in the yield curve and a change in credit spreads to adversity. It's the same old story, sell in May and go away.

Generally, he believes it is amazing to see how seasonal forces playout, year-after-year, particularly in a speculative stock market.

Later in the broadcast he tackles the issue of stock buybacks and relates it to the Japanese experience. The final segment addresses the issue of business taxes and the growth of government.

This post also appears on INKResearch.com.

 

 

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