Feb 6, 2019
| 7 min read

Digital Insider

Energy Recap

Welcome to a new series of Momenta Digital Insiders. These are short pieces that  complement our longer, more in-depth deep dives. They'll tell you key takeaways and  explore different aspects of the market evolution, and why it’s relevant. In our first Digital Insider,  we explore the future of renewable energy - including examples of growth, challenges and opportunities. We contend that it's time for the groundwork for the Internet of Energy.

  

Disruption catalysts are at hand

 Solar energy is on the verge of becoming the cheapest source of power on a global basis, without any subsidies:

Wind energy blows cheaper

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Solar costs mirror IT price declines

 It took 5 years for solar to reach 1% of total world electricity but only 2.5 years to reach 2%. 

MP_DEEP+DIVE_DIGITAL_energy_distruptionArtboard 1Batteries power killer combinations

  •  Batteries are the key to reaching 80-90% of energy generation from renewable sources.
  • Lithium Ion battery prices have declined by nearly 80% since 2010

Coal is the canary in the industry

EVs, sharing and autonomy create conditions for peak oil demand

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  • An electric autonomous vehicle will be 10X cheaper per mile than traditional automobiles
  •  Ford estimates the cost of the final assembly area for EVs will be half the cost of traditional autos, factory capital cost will also be half, and labor hours will be 30% less
  • Ark Invest predicts that EVs will account for 10% of total vehicles by 2025  but account for half of total miles driven

 

What are the implications of energy disruption?

What are the risks for producers?

  • Companies in the extraction, refinancing and distribution business need to anticipate fundamental challenges to their viability
  •  A decline in demand and commensurate crash in the price of oil could result in billions of dollars in stranded assets
  •  Producers will need to maintain their existing businesses and infrastructure while balancing opportunities to expand into more sustainable ventures

 What are the risks for utilities?

 Utilities must navigate a thicket of regulatory constraints, along with:

 

It's time for the groundwork for the Internet of Energy 

  • The cleantech industry needs to face the impact of the removal of subsidies.
  • For O&G, an economic slowdown could further dampen prices, creating additional pressures to leverage analytics and AI to optimize operations and preserve assets.
  • Utilities will need to plan carefully for the transition to a next-generation grid
  • The strong labor market presents challenges to incumbents who must compete for talent 

The pace of change will continue to be governed by regulatory structures, organizational inertia, incumbent competitive dynamics and the vast interdepencies between transportation, industry, energy and government. 

We look for winners to lead with vision and mastery of the technology, but above all to bring a new digital culture to the fore. 

Want to know more? Take a look at our Deep Dive for a more in-depth analysis.
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Momenta Partners encompasses leading Strategic Advisory, Talent, and Investment practices. We’re the guiding hand behind leading industrials’ IoT strategies, over 100 IoT leadership placements, and 17+ young IoT disruptors. Schedule a free consultation to learn more about our Connected Industry practice.