Lazard report on energy

[Cardboard]

"I think it's a pretty good bet that politicians get their shit together."

 

"It's also a good case study of where government subsidies have worked to spur demand/investment, to the point where the technology is cost competitive."

 

LOL!

 

So you are continuing to wait for your government? PowerWalls and solar panels are available for your house right now. What is the issue?

 

Cardboard

[John Hjorth]

Are you gents looking at this as investors?, - or what?

[Liberty]

Are you gents looking at this as investors?, - or what?

 

John, personally I'm just interested by the tech and by the field, which I've been following for almost 20 years. I haven't seen anything that makes me want to invest in energy, clean or otherwise. Seems like a hard business to invest in.

[LC]

"It's also a good case study of where government subsidies have worked to spur demand/investment, to the point where the technology is cost competitive."

 

LOL!

 

So you are continuing to wait for your government? PowerWalls and solar panels are available for your house right now. What is the issue?

 

Cardboard

 

I don't own a house.

[John Hjorth]

Are you gents looking at this as investors?, - or what?

 

John, personally I'm just interested by the tech and by the field, which I've been following for almost 20 years. I haven't seen anything that makes me want to invest in energy, clean or otherwise. Seems like a hard business to invest in.

 

Thanks for sharing your view here, Liberty. Yes, it's from a tech angle so fascinating what's going on. Making money on it as an investor is - at least to me - another matter.

[Liberty]

Are you gents looking at this as investors?, - or what?

 

John, personally I'm just interested by the tech and by the field, which I've been following for almost 20 years. I haven't seen anything that makes me want to invest in energy, clean or otherwise. Seems like a hard business to invest in.

 

Thanks for sharing your view here, Liberty. Yes, it's from a tech angle so fascinating what's going on. Making money on it as an investor is - at least to me - another matter.

 

I think the Berkshire approach of just buying utilities and having them reinvest a lot in things like wind and solar projects rather than pay dividends is smart. But that works if you have more money to put to work (including no-cost float) than opportunities and don't mind regulated-type returns. For an individual investor, this approach doesn't make as much sense, IMO.

[kab60]

Are you gents looking at this as investors?, - or what?

I'm not allowed to invest in Vestas, but I think it's a pretty fat pitch here around 5-5,5xEV/Ebitda. Capital allocation is subpar but decent for a Danish Company (dividend, buybacks but nothing opportunistic - and most important I don't think they'll do a major deal).

 

Market seems to overlook that these guys are transitioning from a model of making money mostly on the turbines to a model more ala Finnish Kone (escalator manufacturer) where the bulk of the earnings come from high margin, long term service contracts. And they're smoking their competitors.

 

It might be volatile and bumpy, but long term I think it's a winner.

[John Hjorth]

Are you gents looking at this as investors?, - or what?

I'm not allowed to invest in Vestas, but I think it's a pretty fat pitch here around 5-5,5xEV/Ebitda. Capital allocation is subpar but decent for a Danish Company (dividend, buybacks but nothing opportunistic - and most important I don't think they'll do a major deal).

 

Market seems to overlook that these guys are transitioning from a model of making money mostly on the turbines to a model more ala Finnish Kone (escalator manufacturer) where the bulk of the earnings come from high margin, long term service contracts. And they're smoking their competitors.

 

It might be volatile and bumpy, but long term I think it's a winner.

 

Thanks for sharing, kab60,

 

I will try to read up on VWS.CPH a bit the days to come. I haven't done so for a long time, and have so far never dived in to the stock.

[jeffmori7]

"I think it's a pretty good bet that politicians get their shit together."

 

"It's also a good case study of where government subsidies have worked to spur demand/investment, to the point where the technology is cost competitive."

 

LOL!

 

So you are continuing to wait for your government? PowerWalls and solar panels are available for your house right now. What is the issue?

 

Cardboard

 

I think it is not that evident to say a precise technology is now affordable because the incentives played their role or not to accelerate its development. Defenders of the free market will say that if it is good, it would have arrived at the good price at the good time. Others will say that to kick start some technologies or to accelerate their development, government help is necessary. I think that if there are some externalities like benefit for the society as a whole, govrnement is right to give a push. Of course, some won't agree and pretend that a total free market will work. I don't!

[jeffmori7]

Are you gents looking at this as investors?, - or what?

 

John, personally I'm just interested by the tech and by the field, which I've been following for almost 20 years. I haven't seen anything that makes me want to invest in energy, clean or otherwise. Seems like a hard business to invest in.

 

 

Thanks for sharing your view here, Liberty. Yes, it's from a tech angle so fascinating what's going on. Making money on it as an investor is - at least to me - another matter.

 

Historically, it is not the technology providers that have make money with energy, but the utilities. Hence, invested in BAM or BRK is a good way to play this. But with the energetic transition happening, decentralized production increasing at a fast pace, dramatic cost reduction, etc. the whole game is changing and utilities will have to adapt their business models. Nobody knows how all of this will evolve. As an investor, betting on the technology is dangerous, maybe choosing some players that could win with most of the possible futures like some component providers in many scenarios could be wise, or to bet again on utilities, but still, you don't know which ones or when they will be disrupted. But all of this is fascinating, for sure.

[Liberty]

"I think it's a pretty good bet that politicians get their shit together."

 

"It's also a good case study of where government subsidies have worked to spur demand/investment, to the point where the technology is cost competitive."

 

LOL!

 

So you are continuing to wait for your government? PowerWalls and solar panels are available for your house right now. What is the issue?

 

Cardboard

 

I think it is not that evident to say a precise technology is now affordable because the incentives played their role or not to accelerate its development. Defenders of the free market will say that if it is good, it would have arrived at the good price at the good time. Others will say that to kick start some technologies or to accelerate their development, government help is necessary. I think that if there are some externalities like benefit for the society as a whole, govrnement is right to give a push. Of course, some won't agree and pretend that a total free market will work. I don't!

 

It's also hypocritical to heavily subsidize (directly and indirectly) and favor certain techs for decades (fossil fuels) and then when a real competitor is starting to emerge, to say "subsidies are bad, we shouldn't support clean energy sources and just let the market figure it out". The least we could do it remove current subsidies for fossil fuels, which would make alternatives more competitive, but without being retroactive, it's hard to talk about a free market...

 

"A 2016 study estimated that global fossil fuel subsidies were $5.3 trillion in 2015, which represents 6.5% of global GDP.[3] The study found that "China was the biggest subsidizer in 2013 ($1.8 trillion), followed by the United States ($0.6 trillion), and Russia, the European Union, and India (each with about $0.3 trillion)."

 

https://en.wikipedia.org/wiki/Energy_subsidies#Impact_of_fossil_fuel_subsidies

[rohitc99]

Are you gents looking at this as investors?, - or what?

 

John, personally I'm just interested by the tech and by the field, which I've been following for almost 20 years. I haven't seen anything that makes me want to invest in energy, clean or otherwise. Seems like a hard business to invest in.

+1 ...the field is interesting to follow. also if it works out, then there are some non energy businesses which will get disrupted big time.

[Guest Cameron]

"I think it's a pretty good bet that politicians get their shit together."

 

"It's also a good case study of where government subsidies have worked to spur demand/investment, to the point where the technology is cost competitive."

 

LOL!

 

So you are continuing to wait for your government? PowerWalls and solar panels are available for your house right now. What is the issue?

 

Cardboard

 

I think it is not that evident to say a precise technology is now affordable because the incentives played their role or not to accelerate its development. Defenders of the free market will say that if it is good, it would have arrived at the good price at the good time. Others will say that to kick start some technologies or to accelerate their development, government help is necessary. I think that if there are some externalities like benefit for the society as a whole, govrnement is right to give a push. Of course, some won't agree and pretend that a total free market will work. I don't!

 

It's also hypocritical to heavily subsidize (directly and indirectly) and favor certain techs for decades (fossil fuels) and then when a real competitor is starting to emerge, to say "subsidies are bad, we shouldn't support clean energy sources and just let the market figure it out". The least we could do it remove current subsidies for fossil fuels, which would make alternatives more competitive, but without being retroactive, it's hard to talk about a free market...

 

"A 2016 study estimated that global fossil fuel subsidies were $5.3 trillion in 2015, which represents 6.5% of global GDP.[3] The study found that "China was the biggest subsidizer in 2013 ($1.8 trillion), followed by the United States ($0.6 trillion), and Russia, the European Union, and India (each with about $0.3 trillion)."

 

https://en.wikipedia.org/wiki/Energy_subsidies#Impact_of_fossil_fuel_subsidies

 

Don't derail arguments with facts.

[Uccmal]

"I think it's a pretty good bet that politicians get their shit together."

 

"It's also a good case study of where government subsidies have worked to spur demand/investment, to the point where the technology is cost competitive."

 

LOL!

 

So you are continuing to wait for your government? PowerWalls and solar panels are available for your house right now. What is the issue?

 

Cardboard

 

I think it is not that evident to say a precise technology is now affordable because the incentives played their role or not to accelerate its development. Defenders of the free market will say that if it is good, it would have arrived at the good price at the good time. Others will say that to kick start some technologies or to accelerate their development, government help is necessary. I think that if there are some externalities like benefit for the society as a whole, govrnement is right to give a push. Of course, some won't agree and pretend that a total free market will work. I don't!

 

It's also hypocritical to heavily subsidize (directly and indirectly) and favor certain techs for decades (fossil fuels) and then when a real competitor is starting to emerge, to say "subsidies are bad, we shouldn't support clean energy sources and just let the market figure it out". The least we could do it remove current subsidies for fossil fuels, which would make alternatives more competitive, but without being retroactive, it's hard to talk about a free market...

 

"A 2016 study estimated that global fossil fuel subsidies were $5.3 trillion in 2015, which represents 6.5% of global GDP.[3] The study found that "China was the biggest subsidizer in 2013 ($1.8 trillion), followed by the United States ($0.6 trillion), and Russia, the European Union, and India (each with about $0.3 trillion)."

 

https://en.wikipedia.org/wiki/Energy_subsidies#Impact_of_fossil_fuel_subsidies

 

Don't derail arguments with facts.

 

lol, The argument over not subsidizing renewables is non starter BS.  We have subsidized all fossil fuels since their inception both directly and indirectly.

 

Directly through tax breaks, provision of roads, transmission...... The whole infrastructure of society has been built around fossil fuel use.  Its a symbiosis. 

 

Indirectly through millions of deaths (coal), virtual slave labour, heath damage, and environmental damage. 

 

Everything has its externalities, there just happen to be fewer with wind and solar.  When the coal and oil lobbyists whine about subsidies they seem to conveniently forget all the externalities required for their industries to operate.  By getting rid of fossil fuels you could even shrink agencies like the EPA, and OSHA. 

 

I personally could care less about subsidizing renewables.  We will get there one way or another anyways out of necessity, and survival of the human race. 

 

And like everyone else I am a hypocrite.  I hold oil stocks, drive a gas powered car, burn natual gas, and own a gas transmission company.  I also hold a larger number of shares in rrenewable energy companies than oil.  But I still a hypocrite. 

[Liberty]

Don't forget the trillions  spent on the military to protect oil routes and prop up terrible regimes that keep the oil flowing... And often crumble into costly civil wars and fund terrorist groups that then cost money, suffering and liberties to everyone..

[jeffmori7]

"I think it's a pretty good bet that politicians get their shit together."

 

"It's also a good case study of where government subsidies have worked to spur demand/investment, to the point where the technology is cost competitive."

 

LOL!

 

So you are continuing to wait for your government? PowerWalls and solar panels are available for your house right now. What is the issue?

 

Cardboard

 

I think it is not that evident to say a precise technology is now affordable because the incentives played their role or not to accelerate its development. Defenders of the free market will say that if it is good, it would have arrived at the good price at the good time. Others will say that to kick start some technologies or to accelerate their development, government help is necessary. I think that if there are some externalities like benefit for the society as a whole, govrnement is right to give a push. Of course, some won't agree and pretend that a total free market will work. I don't!

 

It's also hypocritical to heavily subsidize (directly and indirectly) and favor certain techs for decades (fossil fuels) and then when a real competitor is starting to emerge, to say "subsidies are bad, we shouldn't support clean energy sources and just let the market figure it out". The least we could do it remove current subsidies for fossil fuels, which would make alternatives more competitive, but without being retroactive, it's hard to talk about a free market...

 

"A 2016 study estimated that global fossil fuel subsidies were $5.3 trillion in 2015, which represents 6.5% of global GDP.[3] The study found that "China was the biggest subsidizer in 2013 ($1.8 trillion), followed by the United States ($0.6 trillion), and Russia, the European Union, and India (each with about $0.3 trillion)."

 

https://en.wikipedia.org/wiki/Energy_subsidies#Impact_of_fossil_fuel_subsidies

 

Don't derail arguments with facts.

 

lol, The argument over not subsidizing renewables is non starter BS.  We have subsidized all fossil fuels since their inception both directly and indirectly.

 

Directly through tax breaks, provision of roads, transmission...... The whole infrastructure of society has been built around fossil fuel use.  Its a symbiosis. 

 

Indirectly through millions of deaths (coal), virtual slave labour, heath damage, and environmental damage. 

 

Everything has its externalities, there just happen to be fewer with wind and solar.  When the coal and oil lobbyists whine about subsidies they seem to conveniently forget all the externalities required for their industries to operate.  By getting rid of fossil fuels you could even shrink agencies like the EPA, and OSHA. 

 

I personally could care less about subsidizing renewables.  We will get there one way or another anyways out of necessity, and survival of the human race. 

 

And like everyone else I am a hypocrite.  I hold oil stocks, drive a gas powered car, burn natual gas, and own a gas transmission company.  I also hold a larger number of shares in rrenewable energy companies than oil.  But I still a hypocrite.

 

Of course you are a hypocrit Al, as we all are, more or less. It is difficult to get rid of oil, no matter the problematic externalities that it provides, because oil has been and is still an incredible thing that has got us where we are today and that we rely so heavily on in everything that is part of our modern society. But you don't deny that we have to do the transition, and to do that we should support the renewables among other things.

[Cardboard]

"Don't forget the trillions  spent on the military to protect oil routes and prop up terrible regimes that keep the oil flowing... And often crumble into costly civil wars and fund terrorist groups that then cost money, suffering and liberties to everyone.."

 

Sure...

 

http://www.visualcapitalist.com/cobalt-precarious-supply-chain/

 

Cardboard

[jeffmori7]

Thanks for the link on cobalt. It was well presented. We must admit it is a new problem , not at all at the same scale as the massive problems from exploitation of oil over more than a century. And they are looking to diversify the cobalt supply chain.

[Cardboard]

The oil sands or any nuclear facility looks miles better than this:

 

http://www.bbc.com/future/story/20150402-the-worst-place-on-earth

 

A lot of people on this website need re-education after a massive amount of brainwashing. Hopefully that after reading some of what I post they will be more critical of what they hear?

 

Some of them now even hate hydro... How far did the brainwashing go?

 

Cardboard

[Uccmal]

Thanks for the link on cobalt. It was well presented. We must admit it is a new problem , not at all at the same scale as the massive problems from exploitation of oil over more than a century. And they are looking to diversify the cobalt supply chain.

 

Caught an article the other day Jeff.  I dont know if you have ever travelled to Cobalt ontario, about 10 miles from Quebec.  There are experiencing something of a resurgence lately due to cobalt demand.  Needless to say, Canadian mine practices are eons better than those in most African locations.

[jeffmori7]

Thanks for the link on cobalt. It was well presented. We must admit it is a new problem , not at all at the same scale as the massive problems from exploitation of oil over more than a century. And they are looking to diversify the cobalt supply chain.

 

Caught an article the other day Jeff.  I dont know if you have ever travelled to Cobalt ontario, about 10 miles from Quebec.  There are experiencing something of a resurgence lately due to cobalt demand.  Needless to say, Canadian mine practices are eons better than those in most African locations.

 

Nope, I wasn't aware that Cobalt city existed before Cardboard posted his link!

[Liberty]

Cobalt isn't destroyed by use, unlike fossil fuels, so over time a large part of the supply will come from recycling. And if demand for things like cobalt goes up a lot, then a lot of mines that weren't viable previously might become viable, and a lot of those are probably in places where conditions are a lot better (hence the higher costs of production).

 

Of course bad cobalt mines should be fixed (environmentally, socially, etc), but the problems are not usually specifically with one mine, it's usually about a whole country that is failing, so blaming the mineral is kind of silly. And even that is still a relatively tiny problem compared to all the coal mines and oil wells in the world, including some operations in similar African and ME countries where fossil fuel extraction props up horrible regimes (they get all the wealth they need from resource extraction, so don't have to build up a normal functioning society that creates wealth).

 

Nobody said there isn't problems with the new, better ways to do things. Nothing's perfect in this world. But they're still smaller problems than what we're dealing with now, and they are fixable.

[Liberty]

What's most impressive to me is if you go back and look at forecasts of installed capacity and forecasts for price/watt done at various times over the past 20-30 years, they all undershoot by quite a bit. Makes me think there's a good chance we'll keep seeing these tech surprise us to the upside and that the transition will take place faster than most expect.

 

Here's an example of what I was saying here:

 

"The U.S. Energy Information Administration (EIA), in 2006, predicted that 0.8 gigawatts (GW) of solar power would be installed in the USA by the end of 2016. The actual number was closer to 40GW – 4,813% greater."

 

And that's just for a 10 year forecast...

 

https://electrek.co/2017/11/14/solar-power-underestimated-4813-percent/

[Liberty]

https://electrek.co/2017/11/16/cheapest-electricity-on-the-planet-mexican-solar-power/

[Cardboard]

Once more a piece conveniently ignoring storage costs.

 

Cardboard