November Cleantech Roundup: The Energy Transition in Red States | Building Decarbonization | Mainstream Electric Vehicles
Clean Energy Trust’s cleantech roundup highlights interesting cleantech news and perspectives across industry, technology, policy, and investing.
A coal-heavy utility in a red state has made plans to aggressively shift from fossil fuels to a low-carbon mix based exclusively on cost. The Northern Indiana Public Service Company (NIPSCO) currently generates 71% of its power from coal and just 4% from renewables. By 2023, it will be 53% renewable, 30% coal, and 17% gas; by 2028 it plans to be 65% renewables, 45% gas, and 0% coal. Of note, this transition is not because of imminent regulatory changes or end-of-life considerations — the coal plants work fine (other than the significant amounts of pollution they generate). Rather, the operating costs of these coal plants just can’t compete with the cost of just building new renewables (which have extremely low operating costs).
Over the next few years, the cheapest renewables to build will be new on-shore wind; however, 4 years from now (starting in 2023) the utility expects that building new solar and storage together will be cheaper than existing coal or new wind. This is a trend that will play out again and again across the country. Link
Bill Gates highlights the carbon intensity of buildings and discusses potential solutions his fund Breakthrough Energy Ventures is supporting. This includes longer-term technology innovation addressing challenges areas like steel and cement, but opportunities also exist in the near-term, such as by utilizing data more efficiently to create more comfortable buildings that also use less energy. Gates highlights CET portfolio company 75F in this space (Breakthrough Energy Ventures is also an investor in 75F). Link
In discussing these solutions, Gates references the need to decarbonize the grid and electrify everything we can — this is very much in line with the high-level emission-reductions strategy Shayle Kann has discussed as a heuristic: 1) decarbonize our power generation sector (more renewables, less fossil fuel use), 2) electrify as much as we can (like vehicles and building heating, and 3) work on everything else (like the hard-to-address emissions from steel and cement).
Speaking of Shayle Kann, he recently shared a blog post on how technological innovation will change our built infrastructure, across power grids, buildings, roads, and more — it’s an enjoyable and interesting read. Link
A study on consumer behavior regarding autonomous vehicles suggests that driverless vehicles will add to congestion, even if there are fewer total vehicles on the road. This is a case I’ve made previously for why driverless vehicles aren’t going to result in a utopia where everyone is whisked long distances while they sleep or relax. If the vehicles are affordable and easy to use, consumers will in general use more of them, which will increase the amount of congestion on the roads, especially as transit users shift to use more driverless vehicles. Link
Ford recently announced a new Mustang-branded electric SUV called the Mach E. While it is just one more vehicle announcement, it is arguably the first electric vehicle from a US automaker that is not a “compliance car.”
As the New York Times explains:
“Over the last 10 years, major automakers have introduced some two dozen electric cars in the United States, and almost all have flopped, mainly because they were aimed at helping manufacturers meet fuel-economy and emissions regulations as easily and inexpensively as possible — hence the term compliance cars.
In general, they were slower, less roomy and more expensive than comparable gasoline models, and often rather boring to look at. These cars tended to appeal only to small groups of die-hard environmentalists. Ford produced one model — a battery-powered version of its Focus compact. Last year, it sold only about 560.”
The Mach E is definitely not a compliance car — it will have the full muscle of Ford’s marketing department behind it, and is an important piece of Ford’s broader strategy on electric vehicles (which includes the recent announcement of Ford’s charging network we shared last month). Link
Speaking of just one more electric vehicle announcement, Tesla announced a new pickup truck, the Cybertruck. It looks…unique. “Polarizing” has been a frequently used term to describe the response. My initial reaction to this vehicle was “wow, how did that get approved?;” however, as I’ve spoken to others I’ve become more open to the idea that there is some consumer interest in a hulking beast of a vehicle like this. One colleague noted that the buyer for this vehicle may be more like someone who would be interested in buying a Hummer or a large SUV than someone who is replacing their Ford F-150. Another noted that with 500 miles of range for the high-end version of the Cybertruck, it is in a class of its own (electric vehicles on the market today tend to max out around 300 miles, although this will increase over time). And indeed, Tesla announced more than 250,000 pre-orders for the truck in the first week (deliveries will begin in 2021 and Tesla currently plans to make 50,000 Cybertrucks a year; for reference, Tesla sold about 65,000 Model 3 and 9,000 Model X vehicles in the first half of this year). While Tesla is first out of the gate in this segment, it will not be alone — there are at least 5 other electric pickups announced for 2021 from both traditional and upstart automakers (including an electric Hummer of some sort from GM).
As the PG&E wildfire crisis and bankruptcy has continued, elected officials have started to explore turning parts of the utility into publicly owned entities, as we suggested last month. In light of that, here’s an insightful analysis of the benefits and drawbacks of converting investor-owned utilities to public entities: the short answer is that there are no silver bullets. Link
Quartz reminds us that a carbon tax will not be enough to address climate in the near term, as governments still need to invest in technology innovation. Link
Many ESG funds still invest in Oil and Gas stocks. Confused? Bloomberg’s Matt Levine explains what the deal is.
