Flex Services Could Bring More Gains to the Energy ETFs Sector

Business collaborations are spurring opportunities for the energy sector. In this particular case, it’s a collaboration between Vodafone and Energy Web, which could provide evidence that emerging flexibility services could propel innovations in energy.

Per a Green Tech Media article, Vodafone “last month announced a partnership to use subscriber identification module (SIM) technology as a means to identify distributed electricity system assets on the grid.”

“This means that renewable and distributed assets like wind turbines, batteries, heat pumps, and solar panels can be integrated with energy grids safely and efficiently,” the companies stated in a press release.

The article noted that the “endgame is to give an even wider range of devices access to future flexibility services markets, according to Energy Web CEO Walter Kok.”

“Let’s say you have an electric vehicle and you are charging it at your home address,” Kok said. “You say to the car, ‘I need to go to the office tomorrow. Make sure I can do that. But in the meantime, when I go to bed, make as much money as possible by providing flexibility to the grid.’”

For example, Kok noted that a profitable opportunity could exist if an electric vehicle doubled as a mobile power plant.

“Tesla [has]a real opportunity to give away cars for free if you allow them to participate in the grid,” he said.

Bullishness in Energy After COVID-19?

For macro trades in the energy sector as a whole, funds to consider include the Direxion Daily Energy Bull 3X Shares (NYSEArca: ERX)  for bullish plays.

Fund features:

  • ERX seeks daily investment results equal to 300% of the daily performance of the Energy Select Sector Index. The index is provided by S&P Dow Jones Indices and includes domestic companies from the energy sector which includes the following industries: oil, gas and consumable fuels; and energy equipment and services.

COVID-19 is opening up opportunities in energy as less travel is lessening the amount of carbon in the air, paving the way for businesses to understand the importance of clean energy.

“Smart technologies entering the domestic market, including heat pumps, electric vehicles, and batteries, are creating a network of relatively high-load controllable assets suitable for the provision of [demand-side response],” said Oliver Archer, senior analyst at Cornwall Insight, a U.K. energy consultancy. “There is also growing interest in upgrading existing ‘dumb’ appliances to provide flexibility services. Electric space and water heaters are being replaced with smart versions or retrofitted with smart adapters to provide flexibility through real-time response to external signals.”

For more market trends, visit ETF Trends.