New Energy Weekly – First Week

The first week of the new administration fulfilled many of our concerns about its impact on new energy

The first week of the new administration fulfilled many of our concerns about its impact on new energy. The largest being the elimination of the electric vehicle tax credit. Even mighty Tesla (Nasdaq: TSLA), whose CEO helped elect this president, fell 6% over the last month.

It halted the development of offshore wind farms. And put a moratorium on both wind and solar farm leases on public land. After natural gas, those were the two fastest growing sectors.
Electrification remains a concern. The chart of the net electric power generation below shows which sources grew and which declined since 2001.

In total, net generation grew from 3.7 billion megawatt hours to 4.2 billion megawatt hours. While natural gas power generation grew, it didn’t quite replace the loss from coal power plants. Wind and solar made up the gap.

The issue is that without wind and solar growth, we would produce less electricity today than we did in the past. And that is a huge problem.

Electrification is a fact. Companies sank $500 billion into industrial and manufacturing facilities for the expansion of data centers. The artificial intelligence industry will cause electricity demand to rise 4.7% over the next five years. That is twice the estimate from previous forecasts.

The reason is simple…AI uses a lot of electricity. According to a Goldman Sachs report, a ChatGPT query uses ten times the electricity as a simple Google search.

Here’s their outlook:

We need all the sources of power we can get. The best-case scenario here is that the demand forecast will spur more nuclear power development. We’ll keep an eye on it for you.

For the Good,
The Mangrove Investor Team