Update: The Next Energy Revolution

© Can Stock Photo / kessudap

Our work involves looking at trends and striving to figure out if there is a way to make appropriate investments that may have a good chance to work out well. More than two years ago, we put together a pair of trends and made a forecast. It’s time to check in and see how the forecast is working out.

The cost of electricity from solar sources was said to be declining 10% per year, while the cost of electricity storage by battery was also declining. We felt then that this would lead to a revolution in energy production.

Installed solar generating capacity in the US grew 19% last year. The Solar Energy Industries Association projects that capacity will double in the next five years. In terms of new generating capacity by source, solar has ranked first or second each year for the past six years.1

Groundbreaking projects are going up around the world, too. The World Economic Forum reports that Abu Dhabi switched on the world’s largest virtual battery plant, able to store 648 megawatt hours. That’s enough to keep the city supplied for up to six hours in the event of a generating outage. This is feasible because the price of lithium-ion battery storage has dropped by more than 75% since 2012.2

As this combination of solar power generation plus battery storage commands a bigger share of global energy production, it seems to us that a lot of copper will be used. At the recent Global Copper Conference, a keynote speaker talked of record demand in the years ahead.

With prices on some mining companies that produce copper off by 75% or more from peaks of a few years ago, we see opportunity. This idea has not made large piles of money for anyone over the past few years, but the trend looks favorable. We believe we know how this turns out, so we are sticking with our convictions.

Clients, if you would like to talk about this or anything else, please email us or call.

Notes and References

1. Solar Energy Industries Association, U.S. Solar Market Insight. https://www.seia.org/us-solar-market-insight. Accessed May 7th, 2019.
2. World Economic Forum, “The Cost of Generating Renewable Energy Has Fallen – A Lot.” https://www.weforum.org/agenda/2019/05/this-is-how-much-renewable-energy-prices-have-fallen/. Accessed May 7th, 2019.