Your Christmas Gift for 2024
Fellow traders, I've been giving a lot of thought to the electric demands and how they're going to be met or not in the next few years. Some interesting things have come forth in my research and I thought to share them with you. Some are links to articles or videos;
Electric Demands; normal consumer & business demands on aging infrastructure. to this we add the huge power consumption of AI, EVs (this includes heavy trucks)
Here's the problem; In most of the world, there simply isn't enough supply. take a
look at this short YT video about HD EVs.
James Hickman, Schiff Soverign
The “green energy” revolution is one of the biggest fantasies of today.
For example, they tell us that fossil fuels are going away, that the gasoline powered internal combustion engine is a thing of the past, and that everyone wants to drive an electric vehicle (EV).
Clearly, that’s why over 90% of consumers still choose gas powered vehicles…
So the government instead has to step in to mandate electric vehicle use, attempting to force manufactures to sell 50% electric vehicles by 2030.
They conveniently ignore the fact that the American electric grid cannot handle that kind of power demand.
And if the $1 billion per EV charging station Secretary of Transportation Pete Buttigieg is spending from the trillion-dollar infrastructure bill is any indication, we’re not going to get there in six years.
A look at AI
AI power consumption is significant and growing rapidly, with estimates suggesting it could double by 2026, potentially matching the electricity usage of an entire country like Japan. For example, training a large AI model like GPT-3 consumes about 1,300 megawatt-hours of electricity, equivalent to the annual energy use of around 130 US homes.
The AI Boom Could Use a Shocking Amount of Electricity
Researchers have been raising general alarms about AI’s hefty energy requirements over the past few months. But a peer-reviewed analysis published this week in Joule is one of the first to quantify the demand that is quickly materializing. A continuation of the current trends in AI capacity and adoption are set to lead to NVIDIA shipping 1.5 million AI server units per year by 2027. These 1.5 million servers, running at full capacity, would consume at least 85.4 terawatt-hours of electricity annually—more than what many small countries use in a year, according to the new assessment.
Coal is still king for electric production
Bloomberg Green Daily 17 Dec 2024
Coal-black swans threaten the green transition
By Will Wade
Something strange is happening with utilities.
For decades, electricity usage in the US has been mostly flat. Even with more people starting to use more power for more things, much of that has been offset as buildings, factories and appliances become more efficient.
But suddenly that’s changing, and the industry isn’t ready. Big tech companies need lots of electricity, for data centers and especially for artificial intelligence. Homes are using more electricity for heating and cooling. Factories need more electricity to shift away from fossil fuels.
And when faced with this sudden increase of load on the power grid, utilities are going to rely heavily on natural gas, and even coal.
“It will be a struggle to meet load growth,” said Rob Gramlich, president of Grid Strategies, a Washington-based research company that’s been tracking this trend. He expects US demand to for electricity to climb almost 16% over the next five years, more than triple his estimate from a year ago. Utilities are expecting customers to need as much as 128 gigawatts of new capacity in 2029.
AI’s power demand was a black swan for the green transition.
That’s really going to disrupt the green transition. Power providers that have made pledges to cut back or eliminate carbon emissions are now starting to reverse course. Duke Energy Corp. is extending the life of its largest coal-fired power plant, abandoning its plan to exit coal by 2035. FirstEnergy also will operate a pair of coal plants, stepping back from an earlier pledge to stop using the fuel by 2030. And energy companies in the US are planning new gas plants at the fastest pace in years.
And all of that is before Donald Trump returns to the White House next month. The president-elect is well-known for his support of fossil fuels and his skepticism of climate policies.
While states have broad authority to regulate power plants, the president will still have plenty of tools to help steer energy policy. Power companies seeking to add fossil-fuel capacity may soon find more backing from Washington.
Utilities are starting to stress “reliability” in their strategic plans — making sure there’s enough power to go around, even at the expense of ambitious climate goals.
Carbon goals are “nice to have,” says Gramlich. But “when push comes to shove, states are going to make sure they have reliable and affordable power.”
Burning desire 35%
This is coal's share of the world's power generation in 2023, making it the biggest source of electricity, according to climate think tank Ember.
A long goodbye
"You look at Asia, the demand and the build out of coal-fired power plants, particularly in India — coal's not going anywhere anytime soon."
Rob Bishop Chief executive officer of Australian miner New Hope Corp.
James Hickman, Schiff Sovereign
The Dirty Four Letter Word That Keeps The Lights ON
Is Anyone Taking Action Today?
China Will Generate More Nuclear Power Than Both France and the United States by 2030
On August 19, during a State Council meeting, Chinese Premier Li Qiang approved 11 nuclear reactors in the coastal provinces of Jiangsu, Shandong, Guangdong, Zhejiang, and Guangxi, with an estimated total investment of $33.3 billion. The development aligns with China’s broader green transition goals outlined in a recent guideline, which identified coastal nuclear power alongside wind, solar, and hydropower as central to decarbonizing energy-intensive industries and building clean energy bases.
Bloomberg Green Daily 19 Dec 2024
China hits a milestone in the desert. The country connected one of the world’s largest ever solar projects. The 4-gigawatt facility, located in the Taklamakan Desert, was linked to the grid on Wednesday.
Actionable Ideas for traders
Bloomberg Green Daily 19 Dec 2024
The world’s third largest pension fund will begin to exit coal. South Korea’s National Pension Service will need to sell holdings in some overseas coal producers and potentially the nation’s state-run utility under stricter government climate policies.
Short term, we can expect some coal miners stocks to take a hit, but long term for the next few years, we should be buyers or consider LEAPs.
One last note to think about. Electric in China is very cheap, and according to friends living there, China is considering selling land, which they have never done. The general consensus is perhaps another 2 years for this change to become law. Some suggested the reason for this change is China is wanting to lure Expats to live there.
