Blog
Energy Transition in Focus: Recent Literature on Rooftop Solar, Green Hydrogen
The Lawrence Berkley National Laboratory released several studies this summer that explore what comes next in the evolving power market landscape of the United States. The application of academic literature can often be limited in the world of investing; however, I find Berkley's analytic rigor combined with thoughtful
Blackouts
California's electrical grid operator (CAISO) declared a stage 3 emergency last Friday, initiating a series of rolling blackouts across the state. Stage 3 emergencies are not trivial events; the last stage 3 emergency was in 2001 during the California energy crisis, which forced a halt to the state&
Concerning Frequency in Underperforming Solar Assets
There is systemic underproduction of electricity by solar assets in the US. This is largely driven by unreliable energy estimates and an industry wide bias towards aggressive assumptions. As the solar industry matures, investors are becoming increasingly focused on emergent risks for the asset class such as merchant tail risk[
Climate Uncertainty Leads to Divergent Corporate Strategies
There is growing interest in analyzing the environmental footprint of corporations. Banks and insurance companies are beginning to examine this risk when assessing borrowing costs and insurance premiums. Large corporate buyers have raised the bar considerably on suppliers. Policymakers in Europe seem to be in rare unison, almost without exception,
Cost of Decarbonization (ArcelorMittal)
Last Thursday, the Financial Times ran a story entitled: “ArcelorMittal (MT) warns that the EU’s carbon goal will cost steelmaker up to €40bn”. MT is looking to cut emissions by 30% over the next decade and to be carbon neutral by 2050, two goals they established last year. Their
Back of the Envelope Math on Green Hydrogen
Green hydrogen has piqued the interest of public companies in 2020. While expressions of interest may be legitimate, the surge suggests that there is a lot of window dressing occurring. I applaud companies that feel an urgency to commit to decarbonization targets. Whether companies can execute a green hydrogen strategy
Bold Climate Stimulus by the E.U.
On May 27th, the European Commission proposed the most significant fiscal stimulus in Europe's history with climate investment at the heart of the bloc's recovery effort. The proposal will likely have a considerable impact on both the architecture of the European Union and climate initiatives globally.
Growing Headwinds for Utilities
In late 2018 I published a piece examining potential changes in the hundred-year-old business model of electric utilities. I argued that while new energy technologies posed challenges to the legacy business, the long-term outlook for the industry was strong given trends in electrification. I also highlighted a growing divergence between
Risks and Opportunities in the Battery Supply Chain
Key Findings * The battery supply chain is misunderstood and undercapitalized. This will be the primary constraint to the rollout of electric vehicles. * While there are enough mineral reserves, the mining industries ability to ramp up production and chemical refining capacity is a significant concern. * Unlike lithium, there appear to be
Counter-Narrative to the Decline of the Electric Utility
Overview The US electric utility industry is in a period of fundamental transformation. Weak sales growth coupled with the rise of renewables [1] and distributed generation [2] has led many to believe that the traditional utility business model is untenable. Over the past decade, energy utilities globally have returned a