Tag Archives: Coal

Emissions Story

Emissions Story, the September issue of TerraJoule.us, queries whether future growth of global CO2 emissions may be lower than forecast, due to demographic changes in population and fertility rates; the completion of fossil fuel adoption cycles in a majority of the world’s economies; and the ferocious learning rate of global wind and solar power:

Recent data from China indicates that, in 2015, 100% of the growth in that country’s electricity system was more than amply covered by two sources: wind, and solar power. According to Greenpeace—which contrary to historical perceptions now possesses actual data gathering capabilities on the ground globally, including Beijing—China’s power generation in 2015 grew by only 22 TWh. But combined new wind and solar generation grew by 48 TWh. This is precisely the regime-change that TerraJoule.us has been warning about over the past year. While we remain with our forecast that wind and solar will more reliably come to dominate growth in global power generation by the year 2020, it is telling that in several important domains—the UK, China, the US—the ability of combined wind and solar to crowd out other energy sources in the market for electricity growth is telling. TerraJoule.us is increasingly concerned that energy transition itself is starting to land more forcefully, move more quickly, than many understand. If so, the implications for global emissions growth— a huge scientific and political challenge—could be altered meaningfully, if not dramatically…

…To emphasize this point further, it’s now clear that CO2 emissions in the OECD have peaked. If that conclusion seems uncertain to you, then attempt the following experiment: try to model a case where the OECD enters a new adoption cycle for fossil fuels. Try to make the case that Japan, Australia, Europe, and the United States will see a new push into coal, oil, and natural gas. Not easy, right? The OECD is also host to aging populations, and low fertility rates. And it’s also the epicenter of persistently low interest rates which are telling you that future growth is likely to either be low—or much lower than most would hope. So again, given all those factors, try to make the case for a net gain in combined oil, coal, and natural gas. Even in domains where you can make the case for consumption upticks in one of those sources, you will generally find that either one or two of the other sources are in decline.

In the continuously updating TerraJoule.us Global Grid Decarb Monitor, the forecast for power generation growth from solar is maintained this month, but the forecast for global  growth from wind power is revised up sharply, due to capacity factor gains and rapid 2016 deployment: again, mainly in the US and China.

Finally, The TerraJoule.us Transition Index, composed of 70% ETFs and 30% individual equities, rose to 102.51 to finish the month of August, having started the new year at a notional value of 100.

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

Cheap Energy to the Rescue: March Issue of TerraJoule.us

Slide1Each issue of TerraJoule.us contains: a Main Essay, the Model Portfolio, the Data Brief, and a link to a Downloadable Podcast. Gregor Macdonald, Editor.

Readers may purchase each issue individually, through Ganxy.com: Purchase.

Or, readers may also take a 12 month subscription through Gumroad.com: TerraJoule.us Monthly eBook  Annual Subscription.

Podcast: This month’s podcast is open to the public. To listen, head over to SoundCloud.

Model Portfolio: The TerraJoule.us model portfolio is down -9.95% since inception and is up +4.80% in 2015. There are no changes to the model portfolio this month.

From this month’s issue:

The magnitude of China’s slowdown has become rather pronounced, and is best observed in the progress of its electricity generation. For much of the last decade, China’s annual growth in electricity generation ran in the double digits—sometimes as high as 12% per annum. For the period 2004-2014, however, that average growth rate has now fallen to 9.44%, as slower years following 2010 have pulled the average downward. TerraJoule.us has been able to source China’s data through October of 2014, and annualizing those figures indicates that China’s power generation growth has fallen to just 4.2% in 2014, compared to the prior year. There are a couple of ways to think about this trend. First, the more general weakness in global demand is reflected in China’s weaker manufacturing sector. Second, this is precisely the slow growth that makes it possible for renewables to gain market share, as coal lags. And finally, the world economy simply awaits China’s next advance in energy consumption. While many think this is a secular slowdown, the example of the US after its heavy industrial phase is instructive. The US consumer economy actually drove energy demand for many decades, after 1960, which saw demand nearly double over the following 40 years. There remains significant upside risk, therefore, in China’s energy demand over the next next several decades.  |  see: China Electricity Generation in TWh 2004-2014.

“TerraJoule.us eBook – Cheap Energy to the Rescue – March 2015” by Gregor Macdonald – Editor on Ganxy

Big Trends in Global Energy: July Issue of TerraJoule.us

Each issue of TerraJoule.us contains: a Main Essay, the Model Portfolio, the Data Brief, and a link to a Downloadable Podcast. Gregor Macdonald, Editor.

Readers may purchase each issue individually, through Ganxy.com: Purchase.

Or, readers may also take a 12 month subscription through Gumroad.com: TerraJoule.us Monthly eBook  Annual Subscription.

Podcast: This month’s podcast is for subscribers and readers, only.

TerraJoule.us is pleased to announce we are now working with Blue Terminal of Vancouver, BC to bring you the highest quality data, and data visualization. The core theme discussed in this month’s issue, Big Trends in Global Energy, is of course the transition from oil to power. In this regard, the growth in global electricity generation has strongly outpaced global oil production for the ninth straight year. |  see: Global Growth Rates: Electricity Generation vs. Crude Oil Production 2003-2013. (click on image to enlarge)

Global Growth Rates - Electricity Generation vs Oil Production

Also in this month’s issue:

The TerraJoule.us Model Portfolio, as of the close on Monday, 30 June 2014, is up +13.62% since the inception date, April 1, 2013. The portfolio is currently enjoying its best performance so far, even with cash levels above 20%. We remain, however, in the typical accumulation phase of Summer. More cash will be deployed, therefore. As of the close of trading on Tuesday, 1 July, we will make further changes to the model portfolio, increasing exposure to two (2) separate ETFs.

“TerraJoule.us eBook – Big Trends in Global Energy – July 2014” by Gregor Macdonald – Editor on Ganxy

BP Statistical Review of Global Energy Use

A copy of this post is sent directly to all readers and subscribers of TerraJoule.us

Dear Reader,

Thankyou for your interest in TerraJoule.us. If you’ve not had a chance to read the latest issue, India Unleashedit’s available now. Single issue sales at Ganxy.com | Annual Subscription at Gumroad.com | And more detailed information at the TerraJoule.us website.

Model Portfolio: Up +10.98% Since Inception

The TerraJoule.us model portfolio, at mid month, is currently up +10.98% since inception (April 1, 2013). Since raising cash in April, we have increased positions in GRID and TAN, and also started a new position in FCG. We will continue to deploy cash in July, August, and September.

Annual Subscription

All annual subscribers to TerraJoule.us, using the Gumroad platform, receive their latest issue automatically on the first day of the calendar month. Subscribe today.

Free Issue

Because of sudden geo-political risk to the oil complex, due to the destabilization of Iraq, the May issue, Here Comes Oil, is being released at no charge. It’s very important that TerraJoule.us readers be informed as to the structural tightness that was already forming in the global oil market, before recent events transpired. Thankyou for your support and readership.

Mid-Month Data Update

The BP Statistical Review of World Energy has just been released overnight, June 16, 2014. As always, there’s a massive amount of new data to examine, and TerraJoule.us will select highlights over the next few issues.

The big picture of global energy use is a great place to start however, and below is a chart of Global Energy Use by Source, in 2013. The notable change is that coal has now reached over 30% share of total global energy use, and continues to challenge oil for the top position. The spread between use of the two fuels is slightly narrower than the chart suggests, however, because BP data combines oil use with other liquids. Against crude oil only, coal is now less than 2 percentage points from returning as the top energy source of the world.

Next Issue of TerraJoule.us

The next issue of TerraJoule.us will be published Tuesday July 1, 2014.

Thanks so much for reading TerraJoule.us, and we hope to see you again next month.

-Gregor Macdonald

Gregor Macdonald
Editor, of TerraJoule.us Monthly ebook
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India Unleashed: June Issue of TerraJoule.us

c3574680-946c-4c1b-860b-0e97942f421dEach issue of TerraJoule.us contains: a Main Essay, the Model Portfolio, the Data Brief, and a link to a Downloadable Podcast. Gregor Macdonald, Editor.

Readers may purchase each issue individually, through Ganxy.com: Purchase.

Or, readers may also take a 12 month subscription through Gumroad.com: TerraJoule.us Monthly eBook  Annual Subscription.

Free link to this month’s podcast: India Unleashed at SoundCloud.

For nearly twenty years the world has watched the command economy of China sprint through a massive industrial revolution while India, a fractious democracy, has largely stagnated. The landslide victory of the pro-growth BJP Party in last month’s elections, however, signals the most important new direction for India in over half a century. Consider that India has 90% of the population of China, but only 20% of the energy consumption, and the scope of the growth potential becomes more clear. This month, we consider two energy scenarios for a broadly growing India. One path leads to an All of the Above strategy, with India increasing energy inputs from all sources. The other emphasizes renewables, enough so to kick the trajectory of global wind and solar power to even higher levels of growth. Regardless of which path India takes, the potential new call on energy resources is roughly equal to the 400M Indians currently unserved by any energy at all: a veritable new country arriving on the world stage. The direction India takes will become, in effect, the energy path of the world.

A newly ascending India is going to have its greatest impact on coal, natural gas, wind and solar. The All of the Above scenario would rely heavily on coal; with natural gas, wind and solar filling in the gaps. Should India take this path the Second Age of Coal will last long after the year 2025. The other direction, the Strong Wind+Solar path, leads more forcefully towards natural gas, wind, and solar. Indeed, using natural gas as a growth anchor, (and yes, increased oil use as part of a broader economic expansion) India could restrain its own coal growth to just a 10% total increase to 2025. In such a scenario the new global call on coal is light, while the call on natural gas and renewables is enormous. Our task is to ultimately project how these two very different directions would impact the global energy mix.

Also in this month’s issue:

Model Portfolio Update: The TerraJoule.us Model Portfolio, which began April 1, 2013, is up +9.28% since inception. Cash levels remain elevated after selling down positions this Spring. We will continue to use the summer months to add back exposure.  Accordingly, we will make two changes to the model portfolio as of the New York close, on Monday June 2, 2014. 

Data Brief:

In 2008, the Non-OECD passed two historic milestones. As of that year, more than 50% of Non-OECD persons became city-dwellers. And in the same year, the five billion people in the Non-OECD for the first time consumed slightly more than 50% of total world energy. We have been anticipating therefore the next crossover point: when Non-OECD demand for oil would also outdistance OECD demand. While data on crude oil alone is hard to come by, according to the EIA, this crossover point occurred this April, when the Non-OECD consumed more oil, natural gas liquids, and other petroleum products, than the OECD. Alas, we cross another threshold.

“TerraJoule.us eBook – India Unleashed – June 2014” by Gregor Macdonald – Editor on Ganxy

Invasive Solar: December Issue of TerraJoule.us

TerraJoule Cover IMAGE - DecemberEach issue of TerraJoule.us contains: a Main Essay, a Model Portfolio, a Data Brief, and a link to a Downloadable Podcast. Gregor Macdonald, Editor.

Readers may purchase each issue individually, through Ganxy.com: Purchase.

Or, readers may also take a 12 month subscription through Gumroad.com: TerraJoule.us Monthly eBook – Annual Subscription.

Listen now to this month’s podcast for free, at SoundCloud: TerraJoule.us Podcast: December 2013.

The theme of this month’s publication, Invasive Solar, is that during the economy’s slow growth phase, when demand for fossil fuels remains well below trend, renewables and in particular solar are solutions that have come in to exploit a number of legacy shortcomings in the global energy system. In particular, along with natural gas, renewables and solar are becoming disruptive. How so? Well, in the case of solar, it’s growth rate is soaring at a time of broad economic stagnation in the OECD. Even at a time when demand for electricity is flat, to falling. That is quite unusual:

The TerraJoule.us database of solar growth indicates that global capacity this year will have moved from 100 GW to 142 GW. Next year, with China, Japan, and the US leading the way, the world will move to at least 175 GW of capacity. However, we think that the world could add as much as 52 GW of solar next year, with surprising contributions coming from the aggregated growth of smaller markets such as Malaysia, South Korea, and India. By the end of 2014 therefore, the world could see 190 GW of capacity. As a result of conversations this year with solar research analysts based in San Francisco, Boston, and London, we should see several years between 2015 and 2020 when the big three leaders of China, Japan, and the US, will be supported by new growth in many of these smaller markets. Finally, there will also be a return to higher growth rates in Europe.

The December issue also discusses the performance of the Model Portfolio, which is up +4.42% to date. There are also changes to the model portfolio, effective at the close of trading Monday December 2, 2013.

As of November 30, 2013 the TerraJoule.us Model Portfolio is little changed from last month, and is up +4.42% since inception. By comparison, in the same time period, the SP500 is up +15.6% and the ETF which follows Oil and Gas supermajors, IXC, is up 8.32%. As a reminder, the TerraJoule.us model portfolio is a lower-risk vehicle, which has its eye on playing the great transition from liquid fossil fuels to the powergrid. This is both a disruptive and a growth constrained landscape, in which the model portfolio intends to thrive—but importantly—must survive to take part in the global growth phase coming in the second half of this decade.

To purchase a single issue through Ganxy.com, please follow the link below:

“TerraJoule.us December 2013” by Gregor Macdonald – Editor on Ganxy

TerraJoule.us Launches, First Issue: Arbing Quads

TerraJoule Cover Image April 2013Welcome to TerraJoule.us, a monthly ebook/newsletter covering macro trends in global energy.

Each issue of TerraJoule.us contains: a Main Essay, a Model Portfolio, a Data Brief, and a link to a Downloadable Podcast. Gregor Macdonald, Editor.

Readers may purchase each issue individually, through Ganxy.com: Purchase.

Or, readers may also take a 12 month subscription through Gumroad.com: Annual Subscription.

This month’s issue, Arbing Quads, takes a look at the emerging trading relationships and the very large swings in global energy that have started to take shape outside of oil markets:

Five years into a rough, twenty year energy transition in which the global economy has been deprived of cheap oil, new trading relationships have emerged for the remaining BTU, as fossil fuels from coal to natural gas are consumed and traded with increasingly regularity. The United States for example has seen a massive decline in its own oil demand. In its place, the US has moved to take advantage of domestic natural gas, for which its pays some of the lowest prices in the world. This means the US has been free to export coal, which helps countries like Japan and even Europe to deal with their own rough exposure, to energy transition. Arbing Quads, the April, 2013 issue of TerraJoule.us, quantifies the unfolding story of this global energy transformation, as the next phase of energy transition unfolds. There are winners and losers in this story, some countries and economies will have to suffer through ongoing, structural disadvantages while others will reap windfalls. But most intriguing of all is that natural gas is starting to emerge as a partner of coal, as the oil age continues to recede. Indeed, despite recent story-telling, the oil age has been in steady retreat for over ten years now, and that trend shows no signs of slowing down. Arbing Quads explains who are the price takers, and the price makers, as the world looks set to burn the next tranche of BTU.

Questions and comments: info (at) terrajoule.us

“TerraJoule.us eBook – April 2013” by Gregor Macdonald – Editor on Ganxy