Late last year I kicked off an eight-part series of online articles for DNV. I challenged our energy team to convince me that we’d solve three big decarbonization challenges well enough and quickly enough that we’d achieve meaningful, lasting, and unfettered progress on addressing climate change. And while most of the team’s answers to that challenge were completed a few months ago, I’d been wavering on how to close this series.
And the main reason I didn’t want to do that was because I wasn’t convinced. Until this past weekend. So what changed?
In truth, there were three catalysts and we’ll get to those shortly. The first was a refreshing characterization of the supercycle of investment in the climatetech space at the Energy Impact Partners annual general meeting a few weeks ago. The second was the momentous passage of the Inflation Reduction Act. But the clincher was watching Episode 4 of Netflix’s perfect telling of Neil Gaiman’s The Sandman. Bear with me here.
In the original #convinceme challenge, I asked our DNV team to cover the economics of decarbonization, supply-side vs demand-side impacts, and the pace of technological scaling. Convince me that there are enough solutions, dynamics, and market forces to make massive decarbonization a reality.
The series of #convinceme articles did an excellent job addressing many of my questions. We addressed the changing nature of regulations and of energy programs. We tackled the outlook for grid transformation and utility business models. And we put a few stakes in the ground for the increasing importance of midstream program channels, and partnerships. More recently, we went deeper into the topic of Meaningful Electrification and the critical role of EVs in our future
But despite these thought pieces, we went through the first half of this year with rising inflation, supply chain, and cost of capital issues - driving tremendous market uncertainty across the US. This uncertainty coupled with a fatalistic war pushed energy issues to the top of the political agenda. And it was here in a chasm of politics, that positive momentum appeared all but ready to stall climate action, quite possibly for the last and most-needed time.
So it was within that context that I was delighted to see presentations from Hans Kobler and Lindsay Lugar at Energy Impact Partners characterizing just how uniquely positioned the clean energy industry is for the years ahead. Despite inflation, despite capital costs, despite a few years of market hype and failed SPACs, and despite catalytic world events, they eloquently explained that we are in unique time in history – in a climate investing supercycle. Where declining technology costs, coupled with corporate, utility, and rising end-user expectations, abundant investment capital, and a growing pool of experienced and ambitious talent will all drive a feedback loop to help us decarbonize our grids, our institutions, and our economy. And to achieve net zero, we will need to spend at least $6 trillion per year until 2050 - an unprecedented market opportunity never before seen in history. In my many interactions with entrepreneurs within and outside of DNV, building the solutions to achieve decarbonization, I’m newly optimistic that we can bring capital and talent together, and we’re going to get to the good work done.
And then this past weekend, after 40 years of inaction the US finally passed the bipartisan Inflation Reduction Act – the largest single climate-focused legislation in US history which will touch every part of the clean energy economy. And this coming only a few weeks after the White House invoked the Defense Production Act to supercharge domestic clean manufacturing. While many others (here, here, and here) have done a better job summarizing the IRA than I could ever do it is the second reason I’m confident that we are now on the path to meaningfully alter our climate trajectory. There’s never been a better time to be convinced that we are back on track.
And then there’s the awe inspiring scene in Episode 4 of Netflix’s The Sandman of a battle between the dream king and the lord of hell – a battle that ends with the realization that nothing can beat hope. In leadership we sometimes use the cliché that hope can never be a strategy, but without going down the rabbit hole of fandom, and for someone who has read all 3,000 pages of Gaiman’s true epic over six times, a battle for dreams in hell would be an appropriate analogy for many of us who’ve lived much of our careers in and around climate and energy - there are plenty of days that have seemed hopeless. But here in the summer of 2022, bringing hope back to the fore was a fitting coda to close out our #convinceme series and persuade this dreamer that the future is full of hope again.
I’m convinced of it.
More articles from the series: