In October-2022, we wrote that high interest rates could create an ‘unbridled disaster’ for new energies in 2023. So where could we have done better in helping our clients to navigate this challenging year? Our energy reflections on 2023 suggest some new year’s resolutions for 2024. They are clearer conclusions, predictions over moralizations, and looking through macro noise to keep long-term mega-trends in mind.
What has prompted this self-reflection is looking back on a report from October-2022, where I wrote – direct quote – that “each 1% increase in interest rates re-inflates new energies costs by 10-20%” and hence 2023 could be – again direct quote — an “unbridled disaster” for wind, solar, clean-tech (note below).
I am not bringing this up to do some kind of victory lap. Actually, the opposite, I think could have done a better job of helping my clients to navigate 2023.
The first self-reflection is about big conclusions. I did write that note above about interest rates. But then I also went on to write 37 other notes about different battery chemistries and CCS technologies. Hence a first resolution is to publish clearer summaries, which are clear, concise and regular. For those that do not have time to read all of our publications. Examples below.
The second self-reflection is a distinction, between predictions and normative aspirations. Honestly, I think one of the reasons I did not push harder on the idea that clean technologies could have a tough 2023 was to avoid ruffling feathers. I run a research firm focused on energy transition. I would like to see the world’s energy system materially improve over the course of my lifetime.
If I have a fear for, well, basically all long-term energy analysis being published today, it is that almost all energy forecasters have been brow-beaten into publishing normative aspirations about what should happen, as though they were predictions for what will happen. Really they are very different things. So for 2024, please don’t take it personally, but I am going to try to do less forecasting about what should happen, and more about what will happen.
The third self-reflection is about purpose. Research is about helping decision-makers to make good decisions and build cool stuff. Including in the face of macro turbulence, and going back to first principles (summary below).
After our energy reflections on 2023, we feel very lucky to help 260 world-class decision makers to build cool stuff. In a world that increasingly needs it. So here is wishing you a great wind-down to 2023, and I am looking forward to helping you build cool stuff in 2024.