Over recent years, there has been no bigger opportunity for investors than technology.
The FAANG stocks alone have gained over $1 trillion in market capitalization since 2014 – and these stocks, along with other tech movers and shakers, have helped propel indices to constant new highs.
While tech shows no signs of letting up on its dominance over markets, investors should know about two other multi-billion dollar sectors nipping at its heels. In today’s infographic, done in conjunction with SmallCapPower, we’ve highlighted the macro investment cases behind tech as well as these other high-growth areas: battery metals and cannabis.
For those interested, they’ve also published a watch list of nine stocks with double or triple-digit growth in these sectors.
The infographic highlights three of the top performing stocks in these sectors YTD. Don’t forget to see the full list of nine stocks.
Like technology, the battery metals and cannabis sectors have upside attached to secular trends that are changing our world.
Technology: “Software is eating the world”
Battery Metals: The green energy revolution
Cannabis: Legalization and decriminalization of cannabis products
As a result, all of these sectors are poised to continue expanding at rapid rates:
|Market size (2016)||$880B||$57.0B||$6.7B|
|Market size (2021e)||$1.03T||$82.9B||$20.4B|
It’s worth mentioning that above projections are based on the overall IT sector, the rechargeable batteries market, and the legal cannabis market.
Further, it’s also important to recognize that individual subsectors within tech are growing much faster than the overall market as a whole, such as the blockchain, IoT, cybersecurity, SaaS, AI, and VR/AR.
Sustainable Growth Drivers?
While there’s no shortage of hype around tech, battery metals, or cannabis, it is also clear that all of these markets will only grow in importance over time.
In technology, for example, the slower-moving verticals like healthcare, government, finance, and education are only starting to get disrupted. The blockchain is in its early days and will touch many aspects of life, and AI alone is expected to have a $15.7 trillion impact by 2030.
Meanwhile, the green revolution is driving the future importance of battery metals like lithium, cobalt, nickel, and graphite. As EV penetration grows, so does lithium-ion battery use – and these metals are all needed to make them work.
Finally, the trajectory of legalized cannabis seems difficult to stop. In multiple states, cannabis is already available for recreational use – and in recently-legalized places like Canada and California, the recreational shops will open up very soon. However, the cannabis industry is still in its infancy, and many millions of people are still expected to gain access yet. This, like the other two industries, creates a fast-growing opportunity for both business and investors.
Charting the Flows of Energy Consumption by Source and Country (1969-2018)
For the last 50 years, fossil fuels have dominated energy consumption. This chart looks at how the energy mix is changing in over 60+ countries.
Charting Energy Consumption by Source and Country
View the interactive version of this post by clicking here.
Over the last 50 years, the world has seen a colossal increase in energy consumption—and with the ongoing transition to renewable energy, it’s interesting to look at how these sources of energy have been evolving over time.
While some countries continue to rely heavily on fossil fuels like oil, coal, and natural gas, others have integrated alternative energy sources into their mix.
This visualization comes to us from Brian Moore and it charts the evolution of energy consumption in the 64 countries that have data available for all of the last 50 years.
Tera-What? The Most Prominent Sources of Energy (2009-2018)
First, let’s take a look at which sources have produced the most energy over the last decade of data. Energy consumption is measured in terawatt-hours (TWh)—a unit of energy equal to outputting one trillion watts for an hour.
|Energy Source||% of Total Energy Consumption |
|Sum of Total Energy
Looking at this data, it’s clear that fossil fuels have been used much more than alternative sources. A deeper dive into the topic helps explain why.
Fossil Fuels: What the Data Shows
As the predominant source of energy, fossil fuels collectively accounted for a massive 86.2% of total energy consumption over 2009-2018, or roughly 1.2 million TWh. If you’re wondering, that’s enough to power the equivalent of 109 billion U.S. homes with electricity for a year.
Among fossil fuel sources, oil emerges as the clear leader, responsible for 34.3% or 509,800 TWh of energy consumption over 2009-2018. Apart from being the primary fuel for transportation throughout history, oil remains relatively affordable—making it an easy choice for producers and consumers alike.
Closely following oil is coal, which countries rely on for its abundance, low costs, and low infrastructure requirements. Over the last decade of data, 29.2% of total energy came from coal, amounting to a substantial 434,300 TWh.
As a cleaner alternative to coal, natural gas has increased in popularity. Gas accounted for 22.8% or 339,300 TWh of energy consumed between 2009-2018, mainly attributed to its ample supply and affordability.
What About Renewables?
Only 13.8% of energy consumption over 2009-2018 came from renewable or alternative sources of energy, and hydropower accounts for nearly half of it. Why has the use of environmentally-friendly energy sources been so low?
Setting up alternative power plants—especially wind, solar, and nuclear—requires significant capital investment, while facing competition from cheaper and more convenient fossil fuels. The barriers to adopting renewable energy have been weakening, but still remain quite high for low-income countries.
Wind and solar energy were responsible for a mere 1.7% of energy consumption. Compared to fossil fuels like oil and coal, this percentage seems even more minuscule than it does on its own—mainly attributable to the high costs traditionally associated with wind and solar energy.
The Top 10 Countries Relying on Fossil Fuels
Fossil fuels have been the predominant source of energy over the years. After all, 43 of these 64 countries sourced more than 80% of their energy from fossil fuels over 2009-2018.
Here are the ones that come out on top:
|Country||% of Energy Consumed From Fossil Fuels|
|Most Used Fossil Fuel
|Saudi Arabia 🇸🇦||100%||Oil|
|Trinidad and Tobago 🇹🇹||100%||Gas|
|United Arab Emirates 🇦🇪||99.9%||Gas|
|Hong Kong 🇭🇰||99.9%||Oil|
Although it is startling to see that several countries were 100% reliant on fossil fuels, it comes as no surprise that these are countries with abundant reserves of oil or natural gas. Not only are fossil fuels central to certain economies in Middle Eastern and North African (MENA), but they also remain highly affordable for consumers in these places.
On a broader scale, developing and low-income countries are heavily dependent on fossil fuels such as coal for access to cheap electricity and ease of installation.
The Top 10 Countries Using Alternative Energy Sources
The transition to alternative energy sources has been welcomed by many countries, but only a few have prioritized its adoption in the energy mix. Here’s a look at the top 10:
|Country||% of Energy From Alternative Sources|
|Most Used Alternative Energy Source
|New Zealand 🇳🇿||37.2%||Hydropower|
Iceland is the only country to have sourced over 80% of its energy from alternative sources over 2009-2018. In general, developed European countries are leading the charge—with Iceland, Norway, Sweden, Switzerland, and France making the top five.
The dominance of hydropower is notable, and so is the lack of wind and solar energy sources. Denmark had the highest percentage of wind energy in its mix, with 14.5%, whereas Italy had the highest percentage of solar, with just 2.4%.
It should be kept in mind that this percentage does not account for population differences. For example, although Italy boasted the highest percentage of solar in its energy mix with 2.4%, China consumed the most amount of energy from solar sources—despite it accounting for only 0.3% of total Chinese energy consumption.
Nevertheless, the costs of solar and wind energy have been falling continuously, and the potential for growth in the renewable energy sector is higher than ever.
The Transition to Renewables: Are We On Track?
Since the Industrial Revolution, fossil fuels have been the primary source of energy worldwide. More recently, the use of renewable energy sources has increased, but not substantially enough.
This predominant reliance on fossil fuels is not doing the transition to renewable energy any favors, but it shines a light on the massive untapped potential for alternative energies, especially in the developing world.
With the prices of renewable energy at record lows and increasing investment flows, the next decade will be a defining one for the global transition to clean energy.
Correction: A modified version of Brian Moore’s visualization was previous published here. We’ve since updated it to the original design.
Mapped: The World’s Nuclear Reactor Landscape
Which countries are turning to nuclear energy, and which are turning away? Mapping and breaking down the world’s nuclear reactor landscape.
The World’s Changing Nuclear Reactor Landscape
View a more detailed version of the above map by clicking here
Following the 2011 Fukushima nuclear disaster in Japan, the most severe nuclear accident since Chernobyl, many nations reiterated their intent to wean off the energy source.
However, this sentiment is anything but universal—in many other regions of the world, nuclear power is still ramping up, and it’s expected to be a key energy source for decades to come.
Using data from the Power Reactor Information System, maintained by the International Atomic Energy Agency, the map above gives a comprehensive look at where nuclear reactors are subsiding, and where future capacity will reside.
Increasing Global Nuclear Use
Despite a dip in total capacity and active reactors last year, nuclear power still generated around 10% of the world’s electricity in 2019.
Part of the increased capacity came as Japan restarted some plants and European countries looked to replace aging reactors. But most of the growth is driven by new reactors coming online in Asia and the Middle East.
China is soon to have more than 50 nuclear reactors, while India is set to become a top-ten producer once construction on new reactors is complete.
Decreasing Use in Western Europe and North America
The slight downtrend from 450 operating reactors in 2018 to 443 in 2019 was the result of continued shutdowns in Europe and North America. Home to the majority of the world’s reactors, the two continents also have the oldest reactors, with many being retired.
At the same time, European countries are leading the charge in reducing dependency on the energy source. Germany has pledged to close all nuclear plants by 2022, and Italy has already become the first country to completely shut down their plants.
Despite leading in shutdowns, Europe still emerges as the most nuclear-reliant region for a majority of electricity production and consumption.
In addition, some countries are starting to reassess nuclear energy as a means of fighting climate change. Reactors don’t produce greenhouse gases during operation, and are more efficient (and safer) than wind and solar per unit of electricity.
Facing steep emission reduction requirements, a variety of countries are looking to expand nuclear capacity or to begin planning for their first reactors.
A New Generation of Nuclear Reactors?
For those parties interested in the benefits of nuclear power, past accidents have also led towards a push for innovation in the field. That includes studies of miniature nuclear reactors that are easier to manage, as well as full-size reactors with robust redundancy measures that won’t physically melt down.
Additionally, some reactors are being designed with the intention of utilizing accumulated nuclear waste—a byproduct of nuclear energy and weapon production that often had to be stored indefinitely—as a fuel source.
With some regions aiming to reduce reliance on nuclear power, and others starting to embrace it, the landscape is certain to change.
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