Close menu




May 17th, 2023 | 08:10 CEST

Heat pump madness and grid expansion: Vonovia, JinkoSolar, Grid Metals

  • Mining
  • Commodities
  • Lithium
  • Copper
  • Nickel
  • renewableenergies
  • Energy
Photo credits: pixabay.com

A few weeks ago, Federal Economy Minister Habeck and Saxony-Anhalt Prime Minister Haseloff broke ground for the "SuedOstLink" converter. From 2027, wind energy will flow over the route to Bavaria for the first time. But the north-south connection is only part of the solution. Experts are sounding the alarm and consider massive investments in "the last mile" to be necessary. We take a look at what lies ahead and which companies could benefit.

time to read: 3 minutes | Author: Nico Popp
ISIN: VONOVIA SE NA O.N. | DE000A1ML7J1 , JINKOSOLAR ADR/4 DL-00002 | US47759T1007 , GRID METALS CORP. | CA39814L1076

Table of contents:


    Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
    "[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG

    Full interview

     

    Vonovia: Heat pump strategy fails on the grid

    The fact that the large power lines from north to south can only be part of the solution was shown a few weeks ago in headlines made by the housing company Vonovia: numerous heat pumps for apartment buildings could not be connected because the grid capacity was insufficient. Yet the heat pump targets are ambitious: From 2024, 500,000 new heat pumps are to be connected to the grid every year. Put simply, heat pumps work according to the reverse principle of a refrigerator. A cooling liquid absorbs energy, is compressed accordingly and then rereleases this energy again. The required electrical energy is a worthwhile investment: With standard air-water heat pumps, generating three to five kW of thermal energy from one kW of electrical energy is possible, depending on the building insulation and existing surface heating systems.

    However, the network load increases significantly due to these devices. For example, if a family of four switches to a heat pump, the consumption often more than doubles. The Handelsblatt quotes Ingbert Liebing, CEO of the Association of Municipal Enterprises (VKU), predicting that investments in distribution networks - the "last mile" - will increase by 60% to 100% by 2045 compared to 2018/2019. "The debate has been too focused on the transmission networks so far," Liebing told Handelsblatt.

    Boom of JinkoSolar and Co. about to end?

    For the energy transition in housing companies like Vonovia to succeed, investments in grid infrastructure are crucial. While the increasing number of private photovoltaic systems reduces the electricity demand, it does not alleviate the strain on the grid - the more private PV systems are operated in a municipality, the better prepared the grid must be. Municipal utilities have a reason to approve these installations and initially conduct a so-called grid compatibility test. The sales of solar companies like JinkoSolar and manufacturers of inverters also depend - at least in Germany - on the quality of the grids.

    Grid Metals: The share for power and storage

    The Canadian company Grid Metals offers access to nickel, copper and platinum metals with its Makwa-Mayville project in Manitoba, Canada. Palladium has also been proven at the project. A new resource estimate for the project is planned for later this year. Nickel and copper are considered key components for electrical conductors, the former especially in temperature-sensitive areas. In addition to the Makwa-Mayville project, Grid Metals offers access to battery metal with its Donner Lake Lithium project. An agreement is already in place with a nearby producer to process lithium on a trial basis with the option of permanent cooperation. Grid Metals already expects the first cash flows from this cooperation.

    The shares of Grid Metals are currently trading at CAD 0.16 in Canadian trading, down from more than CAD 0.20 in February. The Company's resource projects are still in development, so the market is valuing them at significant discounts. Upcoming resource estimates could provide a clearer outlook and attract more investors. Nevertheless, Grid Metals' stock will likely remain a speculative investment - with all its pros and cons. However, as the major underlying trend of the energy and mobility turnaround remains intact, and investments in pipeline networks, in particular, are only gradually taking place, Grid Metals could be worth keeping in mind. A more expansive monetary policy, or the expectation of one, is also fundamentally suitable for helping growth companies back on their feet. With its mix of classic industrial metals such as nickel and copper as well as lithium, the Company has several irons in the fire.


    While real estate companies are suffering from the market environment and the demands of the energy transition, manufacturers of photovoltaic panels are booming. However, even here, network operators initially require a network compatibility assessment. It cannot be ruled out that the boom in Germany will reach its limits due to poorly equipped grids in some communities. In the long run, all companies that provide solutions for better grids could benefit. Although Grid Metals is at an early stage, it is precisely these values that usually benefit disproportionately from price jumps in industrial metals such as nickel, copper and the like.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    Nico Popp

    At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

    About the author



    Related comments:

    Commented by Stefan Feulner on June 2nd, 2023 | 08:00 CEST

    ThyssenKrupp, Orestone Mining, Nevada Copper - Optimistic about the future

    • Mining
    • Copper
    • Gold
    • Silver

    Overall, copper is an indispensable part of the green transformation due to its excellent electrical conductivity, corrosion resistance and reliability. It enables the efficient use of renewable energies, promotes electromobility and supports sustainable infrastructure development. Due to recession fears, the base price corrected strongly in recent months. In the long term, copper should make a renewed attempt to reach new highs due to high demand and too little supply.

    Read

    Commented by André Will-Laudien on June 1st, 2023 | 09:00 CEST

    Heating chaos in Berlin! Palantir, Defense Metals, Borussia Dortmund - Do governments use artificial intelligence like ChatGPT?

    • Mining
    • RareEarths
    • Digitization
    • Software
    • AI

    Artificial intelligence (AI) is a key driver for the digital transformation of our society. Some technologies have been around for over 50 years but advances in computing power and the availability of big data and new algorithms have led to breakthroughs in AI in recent years. Even if AI is only slowly becoming present in our everyday lives, new applications are likely to bring enormous changes in the future. Decision-making processes, for example, can be strongly supported digitally since today's computers can sift through hundreds of years of knowledge within a few seconds. But does this necessarily mean that the quality of results will also increase?

    Read

    Commented by Fabian Lorenz on June 1st, 2023 | 08:45 CEST

    JinkoSolar, BioNTech and First Phosphate with important updates: This is what moves the shares

    • Mining
    • phosphate
    • photovoltaics
    • Biotechnology

    The energy transition is moving forward. In Germany, the traffic light government seems to have agreed on a new heating law. In the US, the agreement between Democrats and Republicans on the debt ceiling is a good sign for the industry because the promotion of environmentally friendly technologies depends on it. JinkoSolar and First Phosphate, among others, should benefit from this. Both companies have published important updates. There is also important news at BioNTech. However, these are not so positive. When will there be new impulses for the share?

    Read