Energy Transmission: An Overlooked Green Investment Opportunity

August 11, 2021

We believe an impactful but overlooked green investment opportunity lies in energy transmission — moving low cost wind and solar energy across the country. But for all its potential, transmission has been fraught with roadblocks and complications.

During a call in May of this year, hosted by Havener Capital Partners for the benefit of investors, our own John Bartlett explained the investment opportunity, and why companies may finally be able to swing transmission strategies into action. The following is a synopsis of his comments:

One of the things that I'm most excited about is energy transmission. If we're going to bring more of this cheap, renewable power into the system, we're going to need a longer extension cord. And that's coming. There are well positioned companies, both geographically and from a strategy standpoint that are going to have an opportunity at some point for at least 10 to 12 years, potentially starting from here. It's a great business opportunity because it's a capacity business. There's no volumetric risk. Once you've got (the transmission system) in the ground and up and running, the revenues could look like an annuity …

The Biden administration is committed to getting transmission built and the problem isn't money. The challenge is to get local regulators on board, and this is where the federal government can play a great role. I mean, picture yourself in the Midwest in the middle of wind country and trying to convince your constituents that it's a good thing for you to spend money on transmission for the privilege of sending your really cheap power elsewhere. That has to get unlocked by the federal government, and I think that at very high levels, the heart is in the right place. They haven't quite figured out how to get it, but I think they're going to be able to do it.

To hear more about why we believe a transition to renewable energy may be a good for utility investing, listen to our full call. Please click graphic below to gain access to the call replay.

A New Era for Infrastructure? What Investors Need to Know

Reaves Asset Management is an investment adviser registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. Registration does not imply any skill or training. Reaves is a privately held, independently owned “S” corporation organized under the laws of the State of Delaware.

The information provided in this blog does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities and sectors listed. Investors should consider the investment objective, risks, charges and expenses of all investments carefully before investing. Any projections, outlooks or estimates contained herein are forward looking statements based upon specific assumptions and should not be construed as indicative of any actual events that have occurred or may occur.

Volume risk (volumetric risk) is a commodity risk which refers to the fact that the player in the commodity market has uncertain quantities of consumption or sourcing, i.e. production of the respective commodity.

Past results do not guarantee future performance. Further, the investment return and principal value of an investment will fluctuate; thus, investor’s equity, when liquidated, may be worth more or less than the original cost. This document provides only impersonal advice and/or statistical data and is not intended to meet objectives or suitability requirements of any specific individual or account.

All investments involve risk, including loss of principal.
All data is presented in U.S. dollars.
Cash is cash and cash equivalents.
An investor cannot invest directly in an index. 
Important Tax Information: Reaves Asset Management and its employees are not in the business of providing tax or legal advice to taxpayers. Any such taxpayer should seek advice based on the taxpayer’s own individual circumstances from an independent tax adviser.
Fees: Net performance reflects the deduction of advisory fees which are described in detail in our Form ADV Part 2A.
Please contact your financial professional, or click the following links, for a copy of Reaves’ Form ADV Part 2A and Form CRS.
Additional information about Reaves may be found on our website:
2021 © Reaves Asset Management (W. H. Reaves & Co., Inc.)


Receive insights about essential service infrastructure