Renewable energy will be an investment theme for the foreseeable future, and we are very attuned to some recent developments that have the potential to revolutionise energy production. The two areas we would highlight, both represented in the portfolio, are underground coal gasification and wide band photovoltaic cells. The former is not a new concept, but the first attempts over the last 50 years or so in Russia and the U.S. were dogged by (avoidable) environmental issues, and many people now ignore the possibilities. Yet it is now possible to safely burn coal deposits underground that are too thin and/or deep to mine conventionally with a minimum of capital expenditure or environmental risk but with a far greater overall efficiency than by any form of conventional mining. Like coal bed methane this is a sector which vested interests tend to denigrate, not because it doesn’t work but because it threatens their business model. Buy before the sector gets proper coverage.
The second technology is less commercially advanced, but has the potential to triple the efficiency of conventional silicon cells by accessing the ultra-violet and infra-red sectors of the electromagnetic spectrum as well as the visible portion. Again, existing players in the industry with no intellectual property downplay the possibilities. We regard it as a cheap and potentially very profitable option.
