A weekly five-point roundup of critical events in the energy transition and the implications of climate change for business and finance.
K-Pop Vs. Coal
What happened: South Korean supergroup BTS has some of the most rabid fans in the world. Now those fans have turned their attention to climate protests, fighting against plans to build a coal plant near a beach made famous by their favorite band.
Why it matters: Radicalization and awareness can come from some unlikely places. Now that includes K-Pop. What happens in Korea, which for all its technical prowess has been a laggard on renewables, is maybe less important than the awakening of millions of global, budding Gen Z activists who while aware of climate issues had never felt a personal reason to get involved.
What’s next: The demonstration is unlikely to halt construction of the plant, which would be the country’s seventh largest by output. But it has already started conversations about Korea’s failed energy transition promises that are likely to pay policy dividends in the near future. (By Heesu Lee, Bloomberg)
The EV Motorbike Might Be Way More Important Than the EV Car
What happened: “Startups providing electric motorcycles and batteries are setting up new plants, raising capital and competing for government partnerships in a bid to lead Africa’s drive into a $21 billion electric vehicle future.”
Why it matters: Transportation emissions in continents like Africa, countries like India, and even EV leaders like China often come as much from gas-powered motorbikes, that are cheaper and more prevalent, than they do from cars. For all the focus on Tesla or BYD’s next major plant in a new continent, more attention should be paid to those companies looking to replace the dominant form of transportation.
What’s next: It’s tempting to say exponential growth. But the promise of an electrified future is harder to pay off in countries where electricity service isn’t always reliable. It’s more boring than a fast-accelerating motorbike, but the real story here may be equally large investments in infrastructure. (By Alexander Onukwue, Semafor)
Musk Says We’re Unprepared for the Electric Revolution. Musk May be Right.
What happened: Elon Musk said electricity demand in the U.S. would triple by 2045, a projection that is far above anything predicted by utilities or consultancies that have looked into the matter.
Why it matters: If capacity can’t keep up with demand we have a whole host of new problems. And even though some are mocking Musk’s prediction, we are currently living through a period where investment in domestic manufacturing is increasing as investment in electric power construction is headed in the other direction.
What’s next: Further investigation of the political and regulatory hurdles that are holding up an entire country’s worth of electrical grid connections. It’s not that we lack the tools, but we seem to lack the ability to cut through red tape. (By Nathaniel Taplin, Wall Street Journal)
What Comes After the IRA?
What happened: The Inflation Reduction Act “represents a major Western power turning firmly in the direction of a federally incentivized industrial policy.” Its allies pivoted with it, to varying degrees of success.
Why it matters: “These developments suggest the world is at a crossroads, between a race to the top favoring widespread clean energy deployment and sustainable new businesses, and a race to the bottom for subsidization of nascent, untested decarbonization pathways. It is therefore critical to find ways to maximize the potential of the IRA and other emerging industrial strategies to achieve the fast-fading prospect of reaching net-zero by midcentury.”
What’s next: An attempt to extend the runway of IRA incentives by more than a decade, further de-risking private investment. (By David Goldwyn, Atlantic Council)
How to Buy 10,000 Stoves
What happened: A very unlikely source is creating something like an X Prize. The New York Public Housing Authority is asking a manufacturer to come up with a way to install 10,000 induction stoves without electrical upgrades.
Why it matters: The largest provider of public housing in the United States has done something like this before, once spurring manufacturers to create a more efficient, smaller refrigerator. The cost to upgrade electrical systems is often a barrier to consumer adoption of induction. If a public housing authority can create demand where previously there was none, perhaps a new product can be born.
What’s next: Some appliance company is going to blink, and possibly reap the rewards of briefly owning a market unto themselves. (By Emily Pontecorvo, Heatmap)