When it comes to renewable energy plays, wind and solar power tend to draw the most attention (see: Investing in green energy: tap into China’s renewables market), but hydroelectric power is still the world’s largest source of renewable energy.
According to the International Energy Agency, it provides more than 90% of energy from renewable sources. The trouble is that traditional hydroelectric power, based around building huge dams, is not very environmentally friendly. For example, China’s Three Gorges Dam displaced 1.2 million people when it was built, and has been blamed for flooding leading to soil erosion and deforestation.
But there’s a far less disruptive way to generate hydroelectric power – it’s called “run-of-river” hydropower. This works by diverting river water into a pipeline or channel that funnels the water into waterwheels or turbines for generation. The water then flows back to the stream, resulting in less damage, flooding and waste. One of the most prominent developments is in British Columbia in Canada, says Sam Hopkins of Greenchipstocks.com.
Plutonic (TSX: PCC) is bidding in combination with General Electric to build a series of sites in the area, which would generate 1,000MW of power. It’s up against several players, but looks the best placed to win, says Hopkins. This is a highly speculative area and the stocks involved have soared already so it’s one to watch rather than buy for now.