Energy Constructors

The energy landscape in 2016 opens up on a pair of notably mismatching trends. One, is that global energy supply from all sources is once again poised to advance, past current levels of demand. While last year’s oversupply plagued the oil market, this year’s expansion will concentrate on the power sector, as a more globalized natural gas market gets underway, and as new wind and solar capacity soars–from a higher base.

Second, is that a new wall of capital is now forming to invest in low carbon assets, in the wake of COP21, and spurred on by the nascent divestment movement. But despite strong growth rates in renewables, the volume of capital both today and in the future looks to overwhelm available projects.

The newly expanded TerraJoule.us probes deeply into both trends.

Energy Constructors, the January issue, explains that energy transition is increasingly an infrastructure and technology event, in which both fossil fuel extraction but especially solar power are touched by the effects of innovation. A new feature, The TerraJoule.us Global Grid Decarb Monitor, indicates that once again, combined wind+solar will greatly impact global power markets, accounting for a full third of total new generation this year. Meanwhile, new writer Justin Ritchie explores the looming migration of capital, seeking to shed fossil fuel exposure, as prices fall and the policy complex whirs into action. Ritchie shows that just in the past year, the number of portfolios looking to adopt new climate-friendly criteria has jumped substantially.

Finally, in light of the TerraJoule.us view that the engineering and technology phase of energy transition is now ready to fly, we are launching a new TerraJoule.us Transition Index, composed of 70% ETFs and 30% individual equities. The Index will be rebalanced quarterly, after its start on January 1, 2016. Overall, the Index intends to play a favored super-theme of TerraJoule.us: that the global economy is transitioning away from liquid fossil fuels, to the powergrid. And, that the costs of fossil fuel extraction and combustion increasingly place the energy-capture technologies of wind and solar power in a favorable position.

–Gregor Macdonald, Editor of TerraJoule.us – A Journal of Energy Transition.