BP, Red Team vs Blue Team. I’ve read through BP’s Energy Outlook and have a few thoughts before digging into two particular details. First, I am surprised they even put this out since they know that people and markets will disagree. Some startups will jump for joy at the stats and plug it into their decks while others will laugh at the aging dinosaur going its own way. Second, this is their own investor deck. They are telling their investors what their version of the future looks like and why they are making certain investments outside of oil. Lastly, this is a poorly disguised analysis. If they had wanted the report to be viewed as other than corporate playbook they should have had an internal debate on each view. For greater transparency let the dissenting team publish their view alongside.
BP, Electric Cars. Cars staying on oil based fuels is good for BP which would make you think that they will take a conservative view on how many EVs hit the road. BUT, BP has an estimate of 15% of the cars in 2040 being EVs. I know there are fringe cases about cars in developing countries and island economies where estimates don’t see a large use case for EVs and we live in a bubble here in the US. That being said, as an EV driver for the past 6 years, there is zero chance that 15% is within a 10% margin of error and that is just based on common sense. On the other hand, what would BP investors say if BP came out and said 75% of cars will be EV in 20 years.
BP, Cost of Solar. BP sees cost of solar at $0.06 per kWh in 2020 leveling down to $0.05/kWh by 2040. I feel like that there is no explanation needed here. Consider this however, 9 months ago BP issued 11 year bonds at a 1.637% interest rate, which is lower than the US Government 10 year today.
Australia’s RPS Coming? The Labor party in Australia is hoping to get a 75% renewable energy target by 2025 with a clean peak standard of 25% equating to about 750MW of energy storage.
It’s All Fake News. Interesting to see the online platforms that allow for grassroots activism to come out in favor of an issue are now essentially tools that don’t really require any people. Much like voting going back to paper ballots, it will become common for grassroots to urge hand written notes once again. These emails, online comments like we see during the SCANA debate, are likely being ignored.
Have a great day!
It’s Sponsor Time. San Francisco is getting its first SolarWakeup Live! in a little less than 2 months. Like you, I’ve been at close to 100 conferences in solar, spoken on panels and sponsored various versions. Here’s the thing, I always went for the people and never the content. Why couldn’t an event allow me to do both while also letting me get business done in the city? That’s why SolarWakeup Live! was created and why sponsors get into the newsletter, website, podcast in addition to the event signage. Sponsorships should drive a return on your dollar and that’s exactly what you get here. Get in touch if your company is interested.
Houston, What Mandates. As I read this Wall Street Journal editorial, I had to ask myself why this article gets written. So I found the funny in the context, the reporter is based in Houston according to her Twitter account. So here’s a WSJ reporter in Houston blaming the growth of solar mostly on mandates. Of course, she was quick to retort that it’s not just mandates and didn’t respond to my question about subsidies for other fuel sources or the fact that monopolies are regulated requiring mandates to allow new sources to enter. Anyways, you know this but by now so should the WSJ.
No Coal For You. Coal plants are closing faster than ever before and natural gas is largely to thank for that. Monopolies around the Country saw an opportunity in the low gas costs to make a case for new rate base. It will be cheaper and cleaner they said. It will be good for consumers they said. The problem with this is that the benefit stays with power companies while the fuel risk stays with consumers. I’ve said it before but the greatest, costliest subsidy that monopolies get is the free fuel cost hedge. Imagine if the utility had to either stand behind the fuel curve for the life of the plant at shareholder expense or secure a hedge from a 3rd party. Neither of those things would happen and therefore natural gas plants are not financially competitive in the marketplace.
NY Green Bank. Some of you asked about the benefits of a green bank. I asked Alfred Griffin exactly that and the answer is seemingly obvious when you hear it. Sometimes, in a new market that is not well transacted, other sources of capital with a mission need to step up and provide the patience needed for private capital. Check out the interview here
Reserve Your Seat. April 10th in San Francisco. We’ll talk about the future of capital in solar and how California policy can shape the future of our market. 25% of the seats are already gone, get yours.
Have a great day!
San Francisco Live! Time to head to the West Coast, SolarWakeup Live! is coming to San Francisco on April 10th. Like the events before this, it will be an afternoon with great content and more networking. After each event, I’ve been getting great feedback on how to improve the events but the core remains with a focus on the timely, valuable content. Reserve your seat quickly, the venue will be smaller than New York and there are way more readers in San Francisco than in New York. Link here.
New Solar Pod. Alfred Griffin is the President of the New York Green Bank and he joined me in New York City to talk about the work the NY Green Bank is doing. Several years ago the Green Bank was a vision of a future where a billion dollars of NY tax dollars could push private capital into a growing solar market. Now the bank has over $500 million in active pipeline and is on the verge of paying for itself. Alfred also tells us about the future of how the NYGB can help other States follow in their paths. Let me know what you think of the interview and leave a rating on iTunes.
Another Trump Tax? This time it’s steel and aluminum. At the same time as the 201 case was started, Trump initiated a trade rule that hasn’t been used since 1981. This is insane disruption in a commodity that touches every sector of the economy including solar. Racking used to cost 50 cents per watt and today we are WELL below that. Increasing the raw commodity costs of the intake product means that the segment of solar that actually has US manufacturing is going to suffer. Racking and mounts are the number 1, 2 and 3 reasons why a customer gets upset with their solar installation. Is solar involved in this trade case too because this definitely isn’t in the budget…
Let’s Deal. It’s time for all this trade noise to get dealt away. The dealmaker has to stop creating chaos and make a deal. This can’t be something that anyone in either party thinks is going to create positive growth for the US economy. The republican party is the party of free trade and while Trump ran on no trade deals, I don’t think he ran on protectionism. Congress needs to get involved and stop the chaos.
Hoarding Modules. It’s no secret that the supply chain moved modules ahead of the tariff decision. That being said, not many people moved modules without a project to put them on. If they did, this was in defense for a decision that was far worse than the 30%. Like I said in New York, if the solar industry was given a choice the day after the 201 tariff was filed to accept 30% and stop the process, the solar industry would have accepted because the uncertainty is the major killer. Moving modules ahead of the decision was the same thing, a hedge to save projects.
Have a great day!
By Yann Brandt What: President of NY Green Bank, Alfred Griffin, Talks Solar Capital and Green Bank Success Summary: During an interview at SolarWakeup Live! New York, Alfred Griffin, the President of the New York Green Bank, gave an overview of the type of work that the Green Bank has been undertaking. The active pipeline is in excess of $500 million and is meant to create a level of comfort with the types of transactions for private capital. Griffin goes into detail on how the bank operates and how solar developers, investors and market participants can take advantage of NY Green Bank’s offerings.
By Yann Brandt What: President of NY Green Bank, Alfred Griffin, Talks Solar Capital and Green Bank Success Summary: During an interview at SolarWakeup Live! New York, Alfred Griffin, the President of the New York Green Bank, gave an overview of the type of work that the Green Bank has been undertaking. The active pipeline is in excess of $500 million and is meant to create a level of comfort with the types of transactions for private capital. Griffin goes into detail on how the bank operates and how solar developers, investors and market participants can take advantage of NY Green Bank’s offerings.SolarWakeup View: The NY Green Bank is one of the highest profile attempts by a Governor to bring capital to the solar market. In 2018, the NY Green Bank is on track to be cumulatively cash positive, meaning the tax payers are off the hook on the overhead expense to running the bank. Griffin makes some news at SolarWakeup Live! when I asked him whether other States should do this as well. The NY Green Bank is on track to offer its services to other States and leverage the experience and overhead expense across State lines. Yann Brandt is the CEO of Wakeup Media and Managing Editor of SolarWakeup