Energy Sustainability S-Curve

The past few months have seen a flurry of announcements in the sustainability space. For years, companies have paid lip service but now things seem to be getting serious and real dollars are being committed.

Let’s look at 3 major pieces driving energy sustainability

Renewable Electricity Generation mainly Solar PV

Enormous amount of Solar PV manufacturing capacity is being added. Below is slide from Canadian Solar, one of the big 6 solar PV manufacturers. They are increasing their module capacity from 16.1GW to 25.7GW ! Similar story is playing out at other large manufacturers like Jinko Solar and Longi.

By the end of 2021, total cell and module capacity is forecast to add up to 366 GW and 377 GW, respectively. However, it would be more than double the forecast demand of 143.7 GW PV InfoLink analysts expect for next year. In essence, there is massive demand supply imbalance which will lead to prices falling and further increase in deployment.

Battery Storage Capacity

During Tesla Battery Day, Elon Musk announced they would be able to reduce cost per kWh by 56% in next 3–4 years. CATL and LG Chem are both working on increasing battery capacity.

Electric Vehicles

Tesla’s mission is to accelerate the advent of sustainable energy. That might finally be happening with GM announcing $27 billion capex on EVs and autonomous cars, Volkswagen announcing 73 billion euro investment into future technologies, Diamler announcing 70 billion euro investment mainly into electrification and digitization

There are a large number of startups also trying to get a piece of the pie like Rivian, Nio, Xpeng, Fisker, Li, Workhorse, etc.

Tesla’s market cap at the time of this post is 600 billion! Nio, a tiny EV startup in China is worth 65 billion — almost twice the market cap of Ford. It is likely that this is a bubble and may not last. However, the enormous rise of Tesla and the amount of spotlight all things green getting is sure to make all the traditional automakers look like idiots and force them to join the FOMO.

S-Curve

Each of these segments is in the early ramp stage of the S-Curve. Each has proven to not be a fad. Enormous amount of capex and R&D is focused on improving the technology. As technology improves, costs fall, regulation increases, we might finally be close to peak oil with oil usage peaking in the next decade and have sustainable energy take over !

Data + Markets