Here is a great article I read in The Australian on the weekend....

Here is a great article I read in The Australian on the weekend.

One point I liked in particular;

• Popular Mechanicsmagazine recently did an experiment that involved powering three electric vehicles with rooftop solar and concluded that buying a rooftop PV system to power your car is like prepaying three years’ worth of petrol and then never paying again.

This is where I see Tesla going, a fully integrated company which will build energy independence and wealth for those living in the sun. It will more than offset the slightly more expensive EV market.

Tesla, as you no doubt know has a JV with Panasonic (customer of Sojitz, who will buy graphite from KNL) and it’s matters like this which will see graphite classed alone because it can’t be lumped with mine or energy products. As Germany likes to say, it is a “critical resource”.

Story in full;

There was a time when OPEC meetings were more important than central bank meetings (yes, children, it’s true!) but these days the oil cartel is a spent force, a curiosity, its meetings of only passing interest.
There was a frisson following this week’s effort in Vienna, partly because they agreed on something and partly because everyone’s a bit tired of Trump-watching and it was a welcome relief to deal with an actual announcement rather than the president-elect’s tweets.
But there was an air of nostalgia about the latest OPEC meeting, of an era passing. Yes, they agreed on a 1.2 million-barrel-a-day production cut, but really … they did labour mightily to bring forth that mouse.
Today’s OPEC members account for only about a third of global oil production, and if you include Russia it’s still less than half. These days the marginal producers are not the Middle East pumpers, but the US frackers, and their wellhead break-even cost has fallen to less than $US40 a barrel.
That simple fact alone has destroyed OPEC’s already waning power. Its members know that even agreeing on significant production cuts probably won’t sustainably push up the oil price beyond a brief lurch — it will just cost them market share.
This is an excellent outcome for the world, draining the might of malevolent mobs like the Saudi royal family, the Iranian mullahs, the Russian elites and their corporate retainers, ill-used power and wealth that is based upon the random accident of oil reserves.
But even more excellent is what’s coming next: the democracy of sunshine.
Unlike oil and coal, solar power is distributed evenly and is cheap to mine — everyone can do it with a few thousand dollars. It’s true that some people can’t afford even that much money, and some places are too cloudy and rely on more expensive wind turbines, but wind is a form of solar power as well.
But the important thing is that sunshine has zero marginal cost, and so does the internet. Combining those two things is producing an energy revolution.
A new book by Jeremy Rifkin called The Zero Marginal Cost Society describes how the internet is reducing marginal costs towards zero in industry after industry, leading to the rise of the “collaborative commons” and the “eclipse of capitalism”.
The capitalists won’t go down without a fight, of course.
This week BMW, Daimler, Ford, Volkswagen, Audi and Porsche signed a deal to build a network of super-fast battery charging stations throughout Europe, starting next year, and they’re all spending billions developing electric cars.
Building fast charging stations is worth a try, but one expensive gamble on this — Shai Agassi’s Better Place — has already come to grief, for the simple reason people charge their cars at home with zero marginal cost solar power, and always will.
Popular Mechanics magazine recently did an experiment that involved powering three electric vehicles with rooftop solar and concluded that buying a rooftop PV system to power your car is like prepaying three years’ worth of petrol and then never paying again.
When this piece of logic plays out, not only will OPEC be bereft of power, its members will be broke and so will the shale frackers who have been eating their lunch up to now.
After that, the next, or perhaps concurrent, “zero marginal cost” disruption will be the electricity business. At a recent Tesla shareholder meeting, CEO Elon Musk said the company’s new solar shingles would cost less than a normal roof and the energy would be free.
And now blockchain technology is being employed to allow households to trade with each other, cutting out the big electricity retailers.
A Perth-based start-up named Power Ledger has been named in a Bloomberg New Energy Finance report as a global leader in the development blockchain as a platform for trading electricity, with the potential to “rapidly disrupt” the energy market.
Blockchain is the “distributed ledger” technology behind bitcoin, which is also beginning to take off. This week, daily bitcoin transactions peaked at 334,000, as millennials got on board. Apparently there have been 170 million successful bitcoin transactions so far, and the current run rate is 120 million a year, growing fast.
I spoke to one of the founders of Power Ledger this week, Dave Martin, and asked him how disruptive what he’s doing will be for the existing power industry.
He said: “It’s potentially entirely and utterly disrupting. … the technology is working. The rooftop PV storage is working. The trading platform that we’ve developed as an alternative to the current one is working.
“And so, the big … challenge for us now is to actually sit back and rethink the way the whole governance framework sits together. For the last 50 or so years, we’ve had a model that ran in one direction.
“So, all of our governance systems, whether it be commercial systems, market systems, or legal framework, is predicated on that physical framework of the electricity system running in one direction.
“Now … the time has come for us to sit back and rethink about how the energy system works.
“It’s the democratisation of power supplies.”
Someone who can’t install rooftop PV, either because they can’t afford it or live in an apartment, can buy cheap power from someone down the road. And the seller, in turn, will have a better case for investing in a solar PV and battery system.
Forty years ago, OPEC, led by Saudi Arabia, held the world to ransom because the Arabian Plate used to be under water, and trillions of marine creatures sank to the bottom and built up layers of organic matter that eventually turned into easily accessed reservoirs of oil.
Then technology unlocked the harder to get at energy locked in shale, and then other technology captured the sunshine that rains down upon the earth.
And now technology is helping people to arrange the sharing of accommodation (Airbnb), driving (Uber) and soon, electricity.
Combine that with impartial democracy of sunshine and I’d say the traditional energy industry is in big trouble.