Powering down: Energy is a precious commodity – so how can we invest in using less of it?
What’s happening??In case you haven’t noticed, energy is rather expensive at the moment.
Russia is turning off the gas, and climate change has further been exacerbating supply issues. Low water levels have been hindering the transport of coal for European power stations. Nuclear power stations struggled this summer in the heat. Hydropower was also affected. Supply issues and the high cost of power resulted in factories shuttering in the EU and China.
A lot of debate is currently focused on how to shore up energy supplies. Investment is being channelled into new liquefied natural gas terminals. Governments are extending the life of coal power stations. Renewables rollouts are being brought forward.?
The latter is in keeping with climate targets, the former two actions less so.
The other side of the coin –?Less debate is focused on energy?demand, and the role energy efficiency can play.?The cheapest kWh is the one you don’t use.?
Indeed, the International Energy Agency (IEA), which has long shouted about the need to be more efficient with energy, has?recently criticised?the public and private sector’s recent lack of action.
According to the IEA, doubling the rate of annual energy efficiency improvements from 2% to 4% could save as much energy as China consumes each year. This marks a considerable opportunity to address the energy crisis and emissions.
27%. The amount of global CO2 emissions accounted for by buildings
We’ve been here before –?The oil price shocks of the 1970s?resulted?in a period of innovation for renewable energy and energy efficiency technologies.
We will no doubt see the same again.
Buildings are responsible for an incredible amount of energy use and emissions. Leaving aside addressing the construction and materials footprint, being smarter with use in buildings can save both emissions and the bottom line.
Addressing the?existing building stock will be key – 80% of the buildings that will be standing in 2050 have?already been built. If business and government net-zero targets are to be met, these need to be overhauled to be better with energy. Not acting could mean stranded building assets which don’t attract the interest of forward-looking businesses.
How do you take advantage of this??There are a number of technologies out there to help, from lo-fi?insulation and retrofitting, to heat pumps – which are inherently energy efficient – to smart building technologies designed to make offices fit for the future when it comes to energy.
The glass facades of many office buildings and skyscrapers are an energy efficiency nightmare. Smart shading solutions that respond automatically to light and occupancy levels can make a significant difference to building energy use.
Fat Gladiator Investment Club members will next week?hear?from Crown Electrokinetics, a firm with a unique solar-powered smart glass shading technology to help do this. What’s more, the technology can retrofit to existing windows, solving the challenge of how to make today’s buildings save energy and emissions.
Insights.
Here are a few other reasons it's worth paying close attention to energy efficiency...
In 2019, New York City’s then Mayor Bill De Blasio?said?he would pass a law to actually ban “incredibly inefficient” glass (and steel) skyscrapers in the city, due to their environmental impacts. “Putting up monuments to themselves that harm our Earth and threaten our future will no longer be allowed in New York City,” he said. The statement was later?backtracked?a little, but energy efficiency standards are being brought forward.
Elsewhere in the US, the recently passed Inflation Reduction Act will see the implementation of advanced building codes and incentives for retrofitting commercial buildings, and California has?moved?to ban gas in buildings from 2030. What’s more, a lack of action to improve building energy efficiency could come with?liabilities?for US firms that are looking to disclose emissions and meet net-zero goals – further increasing pressure to improve efficiency.
Stranded assets may be a phrase you associate with fossil fuel power stations. However, in Europe where building owners are also facing?increasingly stringent regulation?if they want to sell or rent out real estate, large numbers of existing and planned buildings could be at risk of becoming stranded due to both challenging decarbonisation targets. There are tools to get a handle on this, for example the?Climate Risk Real Estate Monitor?that aims to monitor this risk by identifying building decarbonisation pathways in line with the Paris Agreement on climate change.
Want to learn about the Fat Gladiator Investment Club???Find out more.
Upcoming events.
Water – the world's most mispriced asset?
The global cost of leaky pipes is $39bn annually.
With Biden’s Infrastructure bill directing $100bn towards water infrastructure, we discuss how much micro-cap Water Intelligence, and its US franchise, American Leak Detection, stands to benefit.
CEO Patrick DeSouza joins us for the discussion.
October 26, 2022 | 16.00 GMT
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Deep sea mining – a moral dilemma
In an ideal world, we’d harness all our energy from renewable resources and store it in batteries. But modern battery production – and clean tech in general – require metals that are currently mined and processed in ways that are environmentally and socially problematic.
Fortunately, the metals we need to power our way to net zero can be found in abundance on the ocean floor – but at the moment, there’s no way of knowing whether extracting them will do the planet more harm than good.
With the planet burning and time running out, do we safeguard the integrity of the ocean, or take a cautious step into the unknown?
It’s time to take a deep dive with Gerard Barron, CEO of The Metals Company.
October 18, 2022 | 15.00 BST
Recession proof your portfolio
Diego Parrilla is a renowned fund manager and expert in all things macro, inflation and energy.
He is also the best-selling author of “The Energy World is Flat” and “The Anti-Bubbles“.
After qualifying as a mining engineer, Diego spent 20 years in macro.?We look forward to hearing his global macro outlook, his contrarian framework of the “Anti-bubbles” and how to allocate assets in an inflationary environment.
November 1, 2022 | 16.00 GMT
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