Dividends and OPG looks to AI for power storage

For a long time, utility companies loved big projects – their engineers believed big projects was the way of the future and sometimes they were correct and sometimes they were not. There were plenty of mishaps along the way with nuclear power and cost overruns but there seemed to be few alternatives. Now technology is working to solve electrical problems for everyone. As an investor if the grid is working, people are using electricity and paying their bills, then can be good with investing in the sector.

In an article in the Globe and Mail, Shawn McCarthy writes the provincial Ontario Power Generation company is teaming up with STEM Inc. an energy storage company to provide a battery based system to reduce electricity costs for industrial customers (and maybe some benefit to the residential customers).

STEM Inc on Millbrae, California is a market leader in using lithium-ion batteries with high end software powered by artificial intelligence in a system which stores electricity on site when power prices are lowest. It can then deploy the stored electricity to reduce the customer’s reliance on the grid during peak hours when prices are highest.

The advantage to Ontario Power Generation is new facilities are not needed to handle growth in the system. Those annual reports which suggests high demand and more power facilities needed, may not be needed as much. This saves the company money and allows them to ensure existing facilities continue to work well.

Linking to dividend paying stocks, one of the reasons why investors like utilities is the near monopoly they have in the generation of electricity which means the Utility Boards can raise prices to bear inflation and have a good return on investment. Utilities are large issues of bonds, if they do not need to build as many facilities, they issue less bonds and the stability of the dividends is almost guaranteed. The above example is one in which technology and AI are seemingly making life better.

There are more questions than answers, till the next time – to raising questions.

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