Should energy investors join the “graphene gold rush”?
In 2004, researchers Andre Geim and Konstantin Novoselov used sticky tape and pencil lead to spark a revolution. Peeling tape away from graphite, they learned, yielded a stable carbon crystal a single atom thick: graphene, a wonder material that’s transparent, conductive, and 100 times stronger than steel. In a now-classic 2007 paper, the pair touted the countless potential applications for their discovery, and bullishly announced that “the graphene ‘gold rush’ has begun”.
Nine years later, Geim and Novoselov have their Nobel prize, but the world is still waiting for the promised graphene revolution. The graphene sector is booming, and expected to grow from $20 million in 2014 to more than $390 million in 2024, but so far only a handful of relatively trivial products featuring the exotic crystal have reached the marketplace. Graphite, the joke goes, is the wonder material that can do anything — except leave the laboratory.
That’s especially frustrating for clean-energy advocates, since graphene has potentially game-changing applications in the energy sector. Graphene’s thinness, strength, low weight and high conductivity make it a natural fit for photovoltaic applications: one MIT research team is already working on graphene-based solar panels that would be 1,000 times more efficient, pound for pound, and hundreds of thousands of times thinner than existing silicon panels.
Energy storage is another area where graphene could shine. Graphene-silicon anodes could boost the charge-life of Li-ion batteries as much as tenfold, using simple and scalable production methods; used in other parts of batteries, graphene could reduce charge times to just a few minutes, even for EV-scale batteries. Graphene can also make super-capacitors a dozen times more energy dense, rendering them attractive energy-storage systems for everything from consumer gadgets to electric vehicles.
And graphene has plenty of other potential uses: it could help turbo-charge hydrogen catalysts, or be used to sieve hydrogen straight out of the atmosphere, transforming the economics of hydrogen fuel cells. More speculatively, energy-drink billionaire Manoj Bhargava is betting that graphene will revolutionize the geothermal energy sector: the material is so thermally conductive, he explains, that graphene cables could be used instead of steam to draw heat to the surface, and even route it horizontally to the places it’s most needed. Even mundane applications could have a big impact: barnacle-resistant graphene paint could help ocean freighters slice through the sea more easily, reducing fuel costs for the global shipping industry.
For now, though, most graphene technologies remain stuck in neutral. Experts are urging patience, arguing that a dozen years isn’t long when it comes to realizing the commercial potential of a new material. Governments and industrial groups are trying to hurry things along: in 2013, the European Commission announced a decade-long, €1 billion investment into graphene R&D, and dozens of companies have joined the effort to fast-track graphene research. Still, plenty of work remains. "The race to find value is more of a marathon than a sprint,” says Quentin Tannock, chairman of Cambridge Intellectual Property.
With most graphene applications remaining highly speculative, there’s relatively little for investors to sink their teeth into. A handful of publicly traded companies, such as Graphene 3D Lab (CVE: GGG) and Applied Graphene Materials (AGM: LSE), offer limited opportunities for pure graphene plays. Other outfits have offered commodity investment products based on the assumption that increased demand will drive up the price of graphene — a highly questionable strategy, given that graphene could readily be produced in larger quantities to meet surges in demand.
One less risky approach is to seek out companies with graphene-related patent portfolios. EnerSys (NYSE: ENS), Tesla Motors (NASDAQ: TSLA) and Johnson Controls (NYSE: JCI) are all researching graphene’s potential energy-storage applications, according to Garvin Jabusch, chief investment officer of Green Alpha Advisors. The top IP-holders are largely in the tech rather than energy sectors: Samsung (OTCMKTS: SSNLF) holds at least 210 graphene-related patents, while IBM (NYSE: IBM) and SanDisk (NASDAQ: SNDK) also hold dozens apiece. Still, Samsung, particularly, is viewing graphene as a potential game-changer in a wide range of applications, including battery technologies.
Another option is to focus on companies further up the food chain, such as those mining graphite or producing graphene for industrial and research purposes. Well-established graphite player Graftech International (NYSE: GTI), for instance, is increasingly focused on graphene production and IP. “One of the best ways for long-term investors to profit from global economic megabooms is with ‘pick and shovel’ providers of raw materials and services that fuel a major technological paradigm shift. Graphene represents just such a shift,” notes Motley Fool analyst Adam Galas.
Even using conservative investment strategies, graphene represents a risky bet — but the prospect of getting in on the ground floor of the next clean-energy revolution is one that will undoubtedly tempt many investors. “Careful investments in the best graphene producers and even more careful selection of companies making early efforts at application of the material have outstanding long term growth potential,” says Green Alpha’s Garvin Jabusch. Caution, and a heavy bias towards long-term bets, is advised.
Companies to watch
* Spain’s Graphenea has been producing graphene commercially since 2010, and currently exports the material to 40 countries. It received significant funding from oil and gas giant Repsol (BME: REP) in 2013, and additional EU funding last year to support construction of a new plant that will allow a 200-fold increase in production capacity.
* British solar-cell specialist G24 Power is branching out into graphene components manufacturing, with a focus on areas including lithium battery cathodes, super-capacitor electrodes, and fuel-cell parts. The company recently inked a deal with graphene producer Perpetuus Carbon for the necessary raw materials.
* Ohio-based Angstron MaterialsInc., the world’s largest graphene producer, recently announced that it would more than triple its production capacity to 1000 metric tons in 2016. “Increased production means we can bring market costs down … giving companies previously priced out of the graphene market access to the material’s unique performance advantages,” says CEO Bor Jang.
Ben Whitford is the US correspondent for The Ecologist. He has written for the Guardian, Newsweek, Mother Jones, Slate, and many other publications.