Jan 3 Despite gloomy headlines from Europe over
the past year, a new technology mash-up is emerging that could
spark some exciting ideas for investors.
There is long-term growth in convergent technologies that
integrate the Internet, green transportation, building-based
micro-power plants and power distribution into a collaborative
worldwide grid, according to author and consultant Jeremy
Rifkin, founder of the Foundation on Economic Trends.
It is a development trend that stretches into the next
decade and is worth investing in right now, said Rifkin.
Rifkin calls this synergistic movement the "Third
Industrial Revolution," which is also the title of his latest
Under Rifkin's "five pillars" plan, energy would be widely
distributed in much the same way information is sent through
the Internet. This system would be intelligent, sending power
where it needs to go. If it's designed efficiently, it will
lower the cost of electricity for everyone, create jobs, reduce
our reliance upon fossil fuels and aid development.
"The Third Industrial Revolution is an economic game plan,"
Rifkin, who has advised the European Union and German
Chancellor Angela Merkel on this concept, told Reuters. "We
have the science and technology to do it, but it will mean
nothing unless there's a change in will."
In Rifkin's master plan, anyone can produce energy through
solar, wind, geothermal or biomass and it could be distributed
widely along a collaborative Internet -- like super-grid.
Commercial building owners could sell the power they
produce. Homeowners would do the same -- much as they do in
Europe and Japan today -- only on much larger scale.
To date, Rifkin says the European Union and several African
countries have committed to the plan. The EU has already
mandated that 20 percent of its energy come from renewable
sources by 2020. In the United States, which is still without a
comprehensive energy policy, the plan has not gained widespread
How does Rifkin suggest the power from the renewable
energies be stored? He proposes developing hydrogen-based
storage systems, which don't exist yet on any large scale. He
estimates that the European Union alone will need to spend
about $1 trillion euros to build this green grid.
No matter how this system comes together -- and it will
take decades if it happens at all -- it presents some
compelling growth and investment opportunities, particularly in
In Africa, for example, more than two-thirds of the people
do not have access to electricity, according to the World Bank.
Global investment in power production and transmission
alone is expected to total almost $9 trillion over the next
quarter century, estimates the International Energy Agency.
While it's difficult to pinpoint where the investment
dollars will come from -- especially as Europe and the United
States struggle under mammoth debt burdens -- the benefits
could be enormous. Certainly, providing power to more than 7
billion people needs to incorporate sustainability if we're to
survive on this planet.
You can invest long-term in these trends through some key
* iShares S&P Global Clean Energy Index , a
worldwide basket of stocks that specialize in renewable
* PowerShares WilderHillClean Energy Portfolio , an
established fund that targets green energy companies.
* iShares S&P Global Infrastructure Index Fund ,
although about 40 percent of the fund is in electricity stocks,
the managers also buy companies that provide water and other
* First Trust NASDAQ Clean Edge Smart Grid Infrastructure , the fund that's probably closest to Rifkin's concept,
targeting companies building smart grids.
None of these funds are suitable for day traders or
investors unwilling to hold them for years. It will take some
time for the investment capital to materialize to build the
Third Industrial Revolution. Like all epic transformations, it
won't happen overnight.
The author is a Reuters contributor. The opinions expressed
are his own.