Tag Archives: Wind

Cheap Energy Works its Magic

Cheap Energy Works its Magic, the October issue of TerraJoule.us, suggests that after a dismal year for global growth, Non-OECD economies are finally ready to pick up speed and that cheap energy, from all sources, stands ready to fund better global growth:

Largely due to aging populations, future growth in developed markets (DM) will be mostly constrained well into the future. Japan of course is the central factor in this constraint, and Europe is close behind. The main uncertainty in the future of any DM growth outlook centers exclusively, therefore, on the US. If the US undertakes a long overdue infrastructure buildout program, and innovation spreads to second tier US cities, then the US economy could effectively counter the structural weakness in Japan and the EU, and lift DM growth higher overall.

However, we don’t need to fret quite so much about the near term-direction of DM growth, because EM growth is already picking up. The IMF now expects EM growth in 2016 to average 4.2%, up from 4.1% in their prior forecast. The IMF also sees EM growth rising to 4.6% in 2017. Despite a concurrent downgrade of DM growth, the higher EM growth forecast bodes well for global growth. In fact, it bodes very well. The next unit of energy consumption, infrastructure expansion, and technology deployment is far likelier to take place in EM, regardless. Moreover, the 5 billion people in the developing economies contain tremendous, pent-up development potential. It is why, as one example, TerraJoule.us has paid particular attention to India as that country undertakes a revolutionary effort to bring 350 million citizens into the electricity system.

In the continuously updating TerraJoule.us Global Grid Decarb Monitor, the forecast for power generation growth from wind and solar is revised upward this month. We now expect that in 2017, a full 35% of the marginal growth in global power generation will come exclusively from these two sources..

Finally, The TerraJoule.us Transition Index, composed of 70% ETFs and 30% individual equities, rose to 103.51 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.

Renewables at the Zero Bound: February 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 restricted to purchasers and subscribers.

From this month’s issue:

Depending on your position in the market, the recent and rapid growth of California wind+solar power generation is either joyous, or havoc-inducing. As you can see in the chart below, using the most recent data, combined wind+solar are increasing their share in California quite steadily, in a market that is mostly flat, and without growth. | see: Annual CA Power Generation in Thousand MWh: Ex-Wind+Solar (black) | Wind+Solar(checked) 2010-2014. 

As recently as 2010, combined wind+solar were providing just 6,848 thousand MWh (megawatt hours) in an annual market that generated  nearly 205,000 thousand MWh. But now in 2014, (annualized through the first three quarters), combined wind+solar generation has reached 25,650 thousand MWh in a market that really hasn’t grown—still slightly above 200,000 thousand MWh per year. The implications are clear. Combined wind+solar now provide 12.82% of California’s power generation from all sources. (Note: Although the 2014 data is annualized through the first 3 quarters the full year data will show additional growth and thus additional market share from combined+wind and solar generation). 

Moreover, as has begun to happen in Europe, combined wind+solar even from low penetration levels have started to eat the lunch of the utility sector. The two renewable energy sources are increasingly doing the heavy lifting powergrids require during peak loads: providing the electricity needed as the world turns to power for cooling, and as a greater portion of global GDP runs on the back not of oil, but MWh. Exciting, but also intimidating!

“TerraJoule.us eBook – Renewables at the Zero Bound – February 2015” by Gregor Macdonald – Editor on Ganxy

Investing for Energy Transition: November 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: Please enjoy this month’s podcast for free, at SoundCloud: TerraJoule.us November podcast.

From this month’s issue:

No country better illustrates the three phases of energy transition than the United States, which was damaged initially by the energy shock, then struggled and stagnated for five years, and is now starting recover. An excellent way to measure this story has been to follow energy expenditures, which rose sharply on oil’s initial repricing, crashed during the crisis, rose again during the early part of the recovery, and are now falling.  | see: US Annual Energy Expenditures as a Percent of GDP 2004-2014. The United States has been busily constructing new wind and solar capacity, and taking advantage of its very cheap and plentiful supply of natural gas. All the while, Americans have been dumping their demand for oil—which remains expensive despite the recent seasonal decline from $100 to $80. Accordingly, energy expenditures as a percent of GDP are in a four year downtrend, and at 8% are back to levels last seen in 2005. A reminder: upfront costs for the deployment of wind and solar can be high, but the ROI starts immediately and actually increases as time moves forward. The US is now vying with China to be the biggest world mover in the buildout of wind+solar. This pathway will pay increasing dividends as time progresses. We should expect the downtrend in energy expenditures to continue, with gains distributed to the US economy in the form of wealth and GDP.

US Annual Energy Expenditures as a Percent of GDP 2004-2014

Also in this month’s issue:

The model portfolio as of 31 October 2014 is down – 4.26% since the inception date,  April 1, 2013. The portfolio remains fully invested. There are no changes this month to the portfolio’s composition. 

“TerraJoule.us eBook – Investing for Energy Transition – November 2014” by Gregor Macdonald – Editor on Ganxy

Combined Global Wind+Solar

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Dear Reader,


Thankyou for your interest in TerraJoule.us. If you’ve not had a chance to read the latest issue, Big Trends in Global Energyit’s available now.

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Model Portfolio: Up +9.48% Since Inception

The TerraJoule.us model portfolio, at mid month, is currently up +9.48% since inception (April 1, 2013). The portfolio’s cash level is currently at 14.37%. We will continue to deploy this cash in August, and September.

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Mid-Month Data Update

As discussed in this month’s issue, Big Trends in Global Energy, combined Wind+Solar composed over 12% of the total growth of global energy consumption last year. This is unquestionably impressive.

However, we must remember that combined Wind+Solar still form a very small part of the ongoing global power mix. In 2013, total global electricity generation stood at 23,127 TWh (terawatt hours). Of this, total generation from combined Wind+Solar stood at 753 TWh, or just 3.25% of the total

That said, TerraJoule.us is forecasting that by 2025 combined Wind+Solar will provide at least 10% of total global power generation. To see which countries are in a leadership position already, see the below chart of Global Wind+Solar Consumption in TWh 2013. The US consumed 178.7 TWh of combined Wind+Solar in 2013, with China just following at 143.8 TWh. The US and China are unquestionably on the verge of supersizing their Wind+Solar resources further, with enormous project pipelines building quickly. As discussed in last month’s issue, India Unleashed, the third main country to watch now is India. (click on image for larger chart hosted at Tableau.)



Next Issue of TerraJoule.us

The next issue of TerraJoule.us will be published Friday August 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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