Photo by Wance Paleri on Unsplash

Since Putin invaded Ukraine, energy has been a top concern among global markets. In the U.S., consumers are experiencing higher fuel prices on top of higher fuel prices and increased inflation on top of increased inflation.

And in Europe, things are even more complicated.

Since many countries in the European Union were so reliant on Russia for natural gas resources, their power grids are now in peril after Putin revoked the supply. This is especially concerning given that winter is on its way, believe it or not.

Moreover, in many parts of the continent, winter comes with a capital W.

In the last week or so, Russia has throttled its main pipeline to Europe, cutting energy supplies by about half. This is a very bad time for that – as Putin, no doubt knows – since summer is known as the “filing season” when underground storage is stocked up on.

This abrupt embargo has severely threatened the E.U.’s energy security. Though, thankfully for its residents, there may be hope ahead.

The Wall Street Journal reports:

“Europe has turned to an unlikely source for help in its race to keep the lights on this winter: war-torn Ukraine.

“With Russia choking off natural gas supplies that feed furnaces and electricity generating plants, European Union members and Kyiv have accelerated plans to fully link up Ukraine’s electricity grid. The project represents a remarkable turnaround from the early days of the war when Ukraine braced for widespread blackouts as Russia attacked the country’s infrastructure.

“Ukraine now has electricity to spare after millions of people fled, and officials say the country could earn billions of dollars from selling it, helping fund the fight on the battlefield.”

In the coming months, small increments of energy could begin flowing to countries like Romania, Slovakia, and/or Hungary. This would be a huge breakthrough since these countries are now harboring so many refugees and consuming so much power.

Of course, it isn’t so easy as plugging in a power cord and flipping a switch. And I suspect this will have many implications across the full spectrum of international energy markets.

With the amount of infrastructure needed to pull this off effectively, this could be a decades-long undertaking all told.

It will also be interesting to see how this affects our economy here in the U.S. While we aren’t connected to these countries in the same direct capacity, much of our exports are tied to energy markets in the E.U.

Let’s all hope for the best.
 

More Non-REIT News to Know About 

In other energy-related news, the electric vehicle market has now joined all other categories in this inflationary economy. In other words, it’s collectively raising prices. 

Surprise. Surprise.

In the past few months, Tesla (TSLA), Ford Motor (F), General Motors (GM), Rivian Automotive (RIVN), and Lucid Group (LCID) have hiked price points on select models.

A few days ago, GM, for instance, added $6,250 to the sticker price of GMC Hummer EV pickup truck models. They now cost between $85,000 and $105,000. The company attributed this to an increase in supply and shipping costs.

And Tesla, for its part, increased prices for the third time this year on a sports version of its popular Model Y SUV – up by almost 10%.

Overall, the average EV cost in America in May was up 22% year-over-year to about $54,000. Compare that to the average 14% price increase for traditional combustion engine vehicles.

It seems there’s no escaping higher costs no matter what your power preference is.
 

The World According to REITs 

In examining the energy world this week, I couldn’t help but think about the benefits of diversifying your portfolio with energy real estate investment trusts.

You heard that right. The REIT world even extends to the energy sector.

There are several energy-based REITs that could really power your portfolio. But one, in particular, has my attention today.

Hannon Armstrong (HASI) is the first U.S. public company exclusively devoted to investments in climate solutions. It provides capital to leading companies in energy efficiency, renewable energy, and other sustainable infrastructure markets.

With more than $8 billion in managed assets, its goal is to make smart, climate-conscious investments with superior risk-adjusted returns.

I really like this company. It’s not only investing in energy solutions but in future-forward sustainable infrastructure too. HASI provides broad exposure to markets like solar developers, government buildings, and wind energy.

Take its new partnership with ForeFront Power. Together, they will create an equity investment platform for a 131-million-watt portfolio of distributed solar and solar-plus-storage projects.

As innovative energy solutions become more and more prevalent, HASI is setting itself up to reap the rewards. And with the future of traditional fuel becoming more uncertain, this REIT could be a great way to power your portfolio for tomorrow.