Specific Requirements:

1. Analyse whether battery storage technology will advance sufficiently over the next five years to substantially reduce demand for traditional carbon-emitting energy sources. (40 marks)
2. You are required to identify explain and justify an investment strategy to exploit trends in the battery storage market over the next 12 months. You should be specific with respect to instrument(s) you would invest in. Importantly, your answer should not be one sided. Your investment strategy should be discussed among other potential investments and the risks faced by these strategies. (60 marks)

Guidance:

Part (a): The price of any asset reflects the forces of supply and demand. Forecasting the value of a particular asset, therefore, requires one to judge whether supply will outpace, lag or equal demand over the period leading to the date for which one is forecasting value.

Part (b): Your task is to identify an investment strategy to exploit trends in the battery storage market over the next 12 months. You should analyse both macro and idiosyncratic factors to justify your investment in one area over another. This will require you to consider alternatives and provide well research explanations as to why your chosen strategy is preferable over others.

You are welcome to use either a qualitative or a quantitative approach. If you choose a qualitative- response, your answer should be supported by thorough and well-cited research of the industries, companies, and global environment. While a quantitative approach also requires extensive research, your focus will be on the justification on the numerical assumptions you make. You may want to use discounted cash flows or comparable company analysis to justify your choice. Regardless of your approach, you will need to draw on content covered in the course.

Please note: A quantitative approach requires extensive qualitative reasoning to justify the assumptions you make in your model.