Chris Bowden’s Post

How much will the energy transition cost? Depends on who you ask. Barclays recently published a report about the annual required investments needed until 2050 for a succeful transition to green energy. Alpine Macro has now neatly compiled a list of the estimates. Maybe not surprisingly the Network for Greening the Financial System (NGFS) has the lowest estimate of $3.5trn while the number crunchers at McKinsey & Company thinks $9.2trn anually is a more realistic figure. For comparision world GDP is about $100trn. There is substantial room to reduce spening on brown energy, particularly coal, although brown energy spending have fallen a lot the last decade as evident from the oil price run. #energy #energytransition #oil #gas #oilgas #oott #shipping #maritime #coal #renewables #naturalgas #lng #lpg

💰 $5.6 Trillion 💰 - When I say that the energy transition presents one of the largest wealth creation opportunities of our lifetime, this is what I mean. Investors, looking for a big total addressable market? There you go. These eye popping investment numbers are coming from S&P Global who's reporting is driven by data from both the International Energy Agency (IEA) & U.S. Energy Information Administration's latest reporting. We're not even talking about between now and 2050, these dollar figures are for 2022-2030 and after that, they'll get even bigger - see Bloomberg's New Energy Finance for those figures: https://lnkd.in/gn5ntiRk. ➡ You can join Climatize's webinar on January 16th ⬅ where we dig into the data and discuss these trends and how you can start investing in renewable energy projects as well, here's the link to sign up: https://lnkd.in/gtqkq8WP #renewableenergy #solarenergy #solar #communitysolar #impactinvesting

The energy market is undergoing rapid changes particularly for legacy trading platforms. Bloomberg NEF data shows that the share of short-term power purchase agreements in the United States (2017-2021) rose from 32% to 45%.  Renewable energy technologies like wind, solar, hydro and geothermal power have gained considerable traction as sustainable alternatives to conventional fossil fuels. Renewables trading introduces diverse risks. Therefore, legacy platforms often need help to mitigate through these risks. They address the volatility and short-term vision in renewable energy contract production. Converting variable generating units into contracts providing stability in pricing for market participants, which can only be done by PPAs. Accordingly, traders rely on energy trading and risk management software to analyze real-time data from vast data volumes, including ESG market data.  To manage these high-frequency renewables trading, legacy platforms must enhance their data analytics capabilities and embrace automation in the fast-paced renewable energy market. Navcara has partnered with leading market solutions to address the new challenges. We offer expert advice to guide clients on the best path forward.  #renewableenergychallenges #esg #dataanalytics #advancedtechnologies

⚡♻ Visiting London for two days to meet with Global Energy leaders at #UBS, #BofA and #Jefferies conferences, here's what I learnt: 💡 Grid investment (transmission & distribution) is the new bottleneck/opportunity 💡 Renewables are under pressure on falling PPAs, gas and carbon prices, but a monetary pivot will be supportive 💡 Battery and pumping storage will be instrumental to ease energy price volatility from intermittent renewables 💡 Data centres, heat pumps and digitalisation are incremental energy demand drivers 👍 Follow me for more contents Disclaimer : not a financial advice

This chart from IRENA's report "Tripling Renewable Power by 2030" illustrates the impact of recent inflation on the financial cost of renewable energies, especially onshore wind. The sharp rise in prices prompted central banks to raise interest rates. Since renewable energy is capital-intensive, the cost of capital becomes the key variable affecting the final cost of electricity generation. The chart shows a roughly three percentage point increase in the capital cost across all regions. This is crucial because this financial variable impacts the present value of future income. Those familiar with leveraged cost of electricity calculations can easily understand the significant negative impact on the present value of future income. Simply put, this increase in financial cost makes renewable energy less attractive from a purely financial standpoint. #InflationShock #RenewableEnergy #LCOE 

Pretty significant financial leverage - @WoodMackenzie reporting that rising interest rates have hit renewable energy harder than fossil-fuel based sources of energy. A 2% point increase in interest rates hikes the levelized cost of electricity (LCOE) from renewables by as much as 20%, with highest impact hitting utility-scale solar. The LCOE for a combined-cycle natural gas plant increases just 11%, in part because fossil fuel generators already paid higher rates before central banks began to hike interest. #energy #power #renewables #LCOE #prospectresources

Pretty significant financial leverage - @WoodMackenzie reporting that rising interest rates have hit renewable energy harder than fossil-fuel based sources of energy. A 2% point increase in interest rates hikes the levelized cost of electricity (LCOE) from renewables by as much as 20%, with highest impact hitting utility-scale solar. The LCOE for a combined-cycle natural gas plant increases just 11%, in part because fossil fuel generators already paid higher rates before central banks began to hike interest. #energy #power #renewables #LCOE #prospectresources

Happy Monday! It’s our 200th edition — thanks for opening your inbox to us for so long. Here’s to 200 more. 🎉 Last week, Lazard released its annual levelized cost of energy (LCOE) report for 2024, highlighting a leveling out of renewables cost curves as higher interest rates continue to apply pressure. In other news 📰 - European renewables are cannibalizing power prices - UK traders are speculating on carbon credits ahead of its election - New York made a U-turn on congestion pricing. In deals 🤝 - $218m for Aira’s home energy efficiency - $210m for Aymium’s biocarbon and biohydrogen - $100m for Xcimer Energy Corporation’s laser compression fusion. Follow on for the details 👇 https://lnkd.in/eCqxT9JV

The US Renewables Supply Chain is under pressure. While the Inflation Reduction Act (IRA) drives domestic projects, it has led to supply-demand imbalances. To make informed planning decisions and ensure project success, developers and owners need to navigate and understand the complexity of factors. Explore more in our insight: https://okt.to/ZCbteL

The Solar renewable market is transitioning towards cash projects as a preferred investment approach, allowing homeowners to achieve independence from utility companies within 6 to 7 years with competitive payback periods. Power Purchase Agreements (PPAs) are also gaining popularity. By grasping these market dynamics and aligning with your client's needs and your business strategy, success can be achieved in 2024. #sales #solar #investment #2024