Energy Recap

Disruption catalysts are at hand

 Solar energy is on the verge of becoming the cheapest source of power on a global basis, without any subsidies:

• Author Tony Seba in suggests that by 2030 all new energy generation will be solar.
• By 2025 all new vehicles will be electric and all new vehicles will have driverless capabilities. 
• Over time, the energy grid evolve into an "Internet of Energy".
• Customers will upload and download energy on the grid, with transactions likely tracked on applications running on blockchain architecture.
• The cost per KwH for new generation solar is becoming the cheapest source of energy in the world.
• In the US, new LNG generation plants can be built around $0.05-0.06 per KwH 
•  In 2017, over half of new power generation built in emerging countries was renewable. 
  
  

Wind energy blows cheaper

Solar costs mirror IT price declines

 It took 5 years for solar to reach 1% of total world electricity but only 2.5 years to reach 2%. 

Batteries power killer combinations

•  Batteries are the key to reaching 80-90% of energy generation from renewable sources.
• Lithium Ion battery prices have declined by nearly 80% since 2010

Coal is the canary in the industry

• India cancelled 14 Gigawatts of coal fired power generation in 2017 
•  Peabody Coal in 2012 was the largest publicly traded coal company and was bankrupt by 2016. 
• The Stowe Index of publicly traded coal companies declined 90% from its peak. 

EVs, sharing and autonomy create conditions for peak oil demand

• An electric autonomous vehicle will be 10X cheaper per mile than traditional automobiles
•  Ford estimates the cost of the final assembly area for EVs will be half the cost of traditional autos, factory capital cost will also be half, and labor hours will be 30% less
• Ark Invest predicts that EVs will account for 10% of total vehicles by 2025  but account for half of total miles driven

What are the implications of energy disruption?

What are the risks for producers?

• Companies in the extraction, refinancing and distribution business need to anticipate fundamental challenges to their viability
•  A decline in demand and commensurate crash in the price of oil could result in billions of dollars in stranded assets
•  Producers will need to maintain their existing businesses and infrastructure while balancing opportunities to expand into more sustainable ventures

 What are the risks for utilities?

 Utilities must navigate a thicket of regulatory constraints, along with:

•  Technology challenges in managing the demands of population growth,
• Disruptions from weather events,
• The maintenance of aging infrastructure, 
•  A growing threat comes from vulnerability to hackers, potentially state-sponsored.  

It's time for the groundwork for the Internet of Energy 

• The cleantech industry needs to face the impact of the removal of subsidies.
• For O&G, an economic slowdown could further dampen prices, creating additional pressures to leverage analytics and AI to optimize operations and preserve assets.
• Utilities will need to plan carefully for the transition to a next-generation grid
• The strong labor market presents challenges to incumbents who must compete for talent 

The pace of change will continue to be governed by regulatory structures, organizational inertia, incumbent competitive dynamics and the vast interdepencies between transportation, industry, energy and government. 

We look for winners to lead with vision and mastery of the technology, but above all to bring a new digital culture to the fore. 

Want to know more? Take a look at our Deep Dive for a more in-depth analysis.

Momenta Partners encompasses leading Strategic Advisory, Talent, and Investment practices. We’re the guiding hand behind leading industrials’ IoT strategies, over 100 IoT leadership placements, and 17+ young IoT disruptors. Schedule a free consultation to learn more about our Connected Industry practice.