The Charging Station - Issue No. 14
Keeping it brief: 2 minutes 58 seconds, 740 words
|KEVIN STEVENS||Jan 12|
Before we get to the most important news and opinions in energy last week, I want to share a link to ways in which you can help the victims of the Australian wildfires. The New York Times has a great list of organizations you can donate to if you choose.
Let’s dive in.
$4,713 - The average installation cost for a commercial Level 2 electric vehicle charge port according to a new study by the Rocky Mountain Institute. (Greentech Media)
TCS: The range of components was between $2,500 for Level 2 commercial chargers and $35,800 for 50KW DC fast chargers. From utilities to retail energy to solar, energy has a price transparency problem and this trend, while B2B-centric, continues that trend. To drive widespread adoption and create the infrastructure necessary, our industry needs to deliver more price certainty to deliver financial ROI’s that compel larger market segments.
4.3% - The energy sector is only 4.3% of the S&P 500, down from 25% in the 1980s when oil and gas companies represented seven of the top 10 companies. (IEEFA.org)
Side note, it’s a pet peeve of mine that the oil and gas sector has taken “energy” for itself. Energy is so much bigger than just oil.
TCS: O&G placed dead last among S&P 500 indices despite a 30% rise in the price of oil. Outside of a black swan event, I don’t see it a rebound on the horizon- demand is falling and capital is rushing to alternatives like cleantech and utilities. I suspect if the companies bounce back it will be after spending heavily on massive efficiencies and shedding underperforming assets at losses both of which would cause near-term pain.
Our Latest Post
Harnessing Our Values to Accelerate the Energy Transition - Energy tends to bore people until it touches on their values. But, those values are very different and prioritized in completely different ways depending on the participant.
We must step back and evaluate how those values get incorporated into the future policies that will shape the greatest institutional change of our lifetimes.
FERC's ROE conundrum: Finding the right number is harder than it looks - Age may just be a number, to quote a popular saying, but the same can't be said for returns on equity. (Utility Dive)
TCS: ROE has come under scrutiny after the wildfires in CA, utilities are seen as riskier by capital markets and some require higher ROE’s to keep attracting adequate investor interest. As a result, the number plays a larger role in determining if capital will flow into the largest utilities responsible for maintaining our infrastructure. This is vital given the new investments that will be required to integrate new technology into the grid to meet modern standards. Set the ROE too low and capital becomes too scarce to make those investments; set it too high and customers overpay.
We Can’t Slow Climate Change Without the Energy Companies - Ted Halstead, the chairman and chief executive of the Climate Leadership Council, writes that can achieve far greater and faster emissions reductions if environmentalists and energy companies work together.
TCS: Rather we like it or not, oil and gas majors have a role to play in the energy transition if they decide to do so. They have ample capital to invest in, acquire, and deploy new technologies - all positives for an energy transition and the entrepreneurs catalyzing it. They also have the most to lose as transportation and power generation shift away from their core product so the incentives are there. The real argument is about the speed - O&G majors can’t risk their core business and the demand for their product is still high enough to incentivize new investments, but environmentalists would like to see the rate of change and investment rapidly increase.
This week’s non-energy related read.
The College Wealth Premium Has Collapsed - Is college worth it? As the cost of American higher education soars, inequality widens, and wages stagnate, millions of Millennials and Gen Zers have asked themselves that question. The answer, at least from economists, has remained a resounding yes. College still boosts graduates’ earnings, but it does little for their wealth. (The Atlantic)
This newsletter is our side-hustle. We hope it equips you with data and insights on the energy sector to inform your decision-making process in the best way possible. If you have feedback, let us know!
Enjoy the rest of your weekend!
The Charging Station
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