Growing up in India, something that we consistently experienced was power-cuts. Every day for a couple of hours, there was no electricity, causing us to look for solutions to keep us entertained at those times, like kill mosquitos to pass the time. A common English phrase used in the Indian vernacular is “time-pass.” I do not know or claim to know the exact origin of the words “time-pass” but would like to postulate that it was coined during a conversation between two Indians, where one questioned the other, “what are you doing.” The reply, “time-pass.” Only when we don’t have something close that we feel its need or desire the most. Electricity is one of those worldly possessions that, when not accessible, can have devastating consequences. Back in India suffered its biggest blackout recorded in human history, “depriving as many as 600 million people – half of the country’s population – of electricity and disrupting transportation networks for hours” . The biggest blackout in the United States for comparison was in 2003 where 50 million people were affected by an outage in “a wide swath of territory in the U.S. and Canada – including New York City, Albany, Hartford, Toronto, Ottawa, Detroit, Cleveland, and Ontario” .
According to The United States Energy Information Administration, the United States comprises three primary interconnections: Eastern Connection, Western Connection, and the Electric Reliability Council of Texas (ERCOT) . Generating electricity starts at the power plant, with a series of transformers and transmission lines carrying the current through a roller coaster of poles before it enters a home. While not every individual family has a unique connection to the power plant, the transformer located at the intersection down from where you live is connected directly to the transmission line, generating power for 20-30 homes on the street. Multiple private and cooperatives operate the interconnections, as mentioned earlier, supplying electricity to millions of Americans. Power outages occur for various reasons such as storms, trees, vehicles, earthquakes, animals, lightning, excavation digging, and high power demand . Power outages can occur when there is a lapse in the connection between the participants that comprise the electrical grid: power plant, transformers, and transmission lines. A 21st-century solution presented to solve the issue of power cuts is microgrids.
The United States Department of Energy classifies a microgrid as “a local energy grid with control capability, which means it can disconnect from the traditional grid and operate automatically” . Microgrids exist to create a mutually beneficial relationship instead of a mutually dependent arrangement between the user and the producer. When parts of the primary grid get affected during natural disasters or maintenance, the effects trickle down to its various endpoints. The installation of a microgrid allows for the continuous generation of electricity without the fear of power cuts. Microgrid systems often include renewable sources of energy to help offset significant dependence on the primary grid. Electricity is only becoming a more ubiquitous part of our day-to-day lives since an ever-changing world that is intertwined with the internet will only need more electricity regardless of the level of efficiency and carbon neutrality.
Upon searching the market for stock to play this trend of microgrids, I ran into CleanSpark, Inc. (CLSK). “CleanSpark is a software and services company that offers software and intelligent controls for microgrid and distributed energy resource management systems as well as innovative strategy and design services” . To create a stream of understanding for the company’s market position, I encountered the Microgrid Analysis and Case Studies Report, published in August 2018 by the California Energy Commission, where CleanSpark and its work at the US Marine Corps Base Camp Pendleton were mentioned. Furthermore, the company, “number 10 in the top 15, trailing such industry-leading companies as Schweitzer Engineering Laboratories and Schneider Electric, but leading powerhouses General Electric, Lockheed Martin, ABB and Eaton . These and other references served as a basis for my purchase of the stock. Additionally, the stock was trading at a range of $1.50 to $2.00 at the time of purchase in April 2020. So far, the stock has performed incredibly well, and one can only hope will continue to achieve, given the urgency to build smart electrical grids.