Our current power system is flawed. Aging infrastructure, efficiency lacking production, and a fundamental inability to meet growing demand are just a few reasons why the only thing that’s certain about the current power grid is the fact that, at some point, it will fail. That’s where CleanSpark Inc (OTCMKTS: CLSK) comes in.
What Is CleanSpark?
CleanSpark is a company that may prove to be a disruptive force in how we access our energy. The company’s microgrid technology ultimately ensures that when power is lost on the grid, its customers don’t experience outages.
CLSK takes full control from set up to service. It provides the hardware needed (including proprietary switchgear technology) for an efficient mini-grid, and earns revenue through the process. However, for me, what makes the company most interesting is its software segment.
The company offers two innovative pieces of software, mVSO™ and mPULSE™. Here’s a quick overview of what these programs do:
- mVSO™ (Microgrid Value Stream Optimizer) – The mVSO™ program developed by CleanSpark is a tool used by enterprise customers that helps with strategic decision making when considering an energy-related change. The software pinpoints opportunities through a wide range of energy markets, tests business models and performance under regulatory constraints, and delivers the answers needed when it’s time to make energy investment decisions.
- mPULSE™ (Microgrid Enterprise Control And Monitoring Software) – mPULSE™ uses machine learning technology to optimize energy assets and maximize benefits. The program orchestrates the operation of energy assets, coordinating with electric loads and the utility to maximize energy savings and revenue while reducing CO2 and securing critical loads. Essentially, the program finds the lowest-cost sources of energy at any given time, often purchasing energy when costs are low and using it when cost is at its peak.
While there are many benefits that these programs offer to customers, they also offer up an interesting benefit to the company and its investors. CLSK makes large, 80% to 95% margins in its software and controls arm, making this a highly profitable business model.
The Market Potential Is Hard To Ignore
Looking into the size of the market in which CleanSpark is operating suggest strong potential for growth ahead. At the moment, it is estimated that the global market for Distributed Energy Resources (DER)-related products and services will generate $1.3 billion in new revenue opportunities around the world according to Navigant.
60% of the company’s equipment is deployed within distributed energy projects. Moreover, due to the company’s ability to optimize the performance of any power generation technology, it is insulated from technology adoption risk.
Moreover, the microgrid-controlled technology market is expected to climb to be worth more than $2 billion annually by the year 2026. Moreover, the global microgrid market is expected to climb to be worth more than $40 billion by next year.
The switchgear market is another massive one. In fact, it is expected that $1.5 billion will be invested into parallel switchgear annually by the year 2023.
Considering the sub-$100 million market cap on CLSK, these markets represent a significant opportunity for the company and its investors.
Navigant Provides The Company With A Key Source Of Validation
The market-leading work that CleanSpark is doing has been recognized by industry experts at Navigant. In fact, CleanSpark earned a position on Navigants top 10 vendors. This put the company on the list with companies like Siemens, Emerson, and others with multi-billion dollar valuations.
The company has also earned its position as a government contractor since 2014. In fact, in a statement regarding the work that CLSK has done for the United States Marine Corps, the Marines had the following to offer:
“Your individual technologies are far ahead of the known market, and together have the potential to change the face of the current microgrid and energy industry.”
An Entrance In Cannabis May Be Explosive
With the global regulatory environment surrounding cannabis, hemp and CBD changing rapidly, new opportunities are being created in the emerging sector every day. In a recent shareholder letter, CLSK informed investors that it intends on capitalizing on this high value, rapidly growing opportunity.
In the release, the company said that it has “executed partner referral agreements with two strategic cannabis partners in Canada and the State of Colorado.” These partners intend on educating cannabis companies with regard to the energy cost savings that come along with the company’s microgrid technology.
Considering that production costs need to be around $300 a pound or less for cannabis companies, smart use of energy resources is crucial. Moreover, CleanSpark’s microgrid solution can assist growers in reaching this cost v. production goal.
In a recent statement, Jacob Policzer, director of science and strategy at The Cannabis Conservancy, explained just how important this target is. Here’s what he had to say:
“In almost every established market that’s been around for more than a couple of years, right now we recommend getting production costs down to $300/pound or below to stay competitive. That’s a steep curve from where it was a year or two ago. Getting costs down will be the biggest factor moving the cannabis industry towards energy efficiency and sustainable growing practice.”
In The Right Place At The Right Time
The truth of the matter is that CleanSpark is in the right place at the right time. The company’s microgrid technology reduces the cost of energy while providing reliability, and the company is also focused on helping its customers reduce their carbon footprint.
At the moment, the world is looking for clean energy solutions. In fact, experts say that this shift is taking place at an astonishing pace. As the world’s population continues to grow, a reliance on fossil fuels is becoming more and more unreasonable. Not only will global deposits fail to continue to support demand in the decades to come, but the carbon footprint left by the use of fossil fuels for energy has horrible environmental implications.
As the world shifts to clean, renewable energy options, CLSK is well positioned to benefit. Let’s not forget that while the company’s microgrids do allow its customers to tap into the traditional grid, these microgrids also leverage solar, wind, and other sources of clean energy making it a way for enterprises to go green while saving green, so to speak.
Considering that the company is also making big moves early on in the emerging cannabis sector, and has the tools that can allow growers to achieve the $300 per pound production goal, the company could become a major player in this space.
The Bottom Line
The bottom line here is that with innovative technologies designed to reduce the cost of energy, provide a more efficient energy consumption process, and reduce the carbon footprint left by its customers, CLSK is catching the attention of enterprises, military customers, and industry experts alike. Operating in a market that is rapidly growing, CleanSpark offers a compelling opportunity for investors.
Disclosure – CNA Finance, parent company to Alpha Stock News, has a monetary relationship with CleanSpark. For full details, click here.