The Oil Drum: Canada

Al Gore has made a major speech in Washington this morning, setting out an ambitious goal for the USA to produce all of its electricity from carbon-free sources by 2020. I thought I'd comment on the technical feasibility of the plan, and the underlying economics of such an endeavour.

from the Department of Energy's recently published study about bringing wind power to 20% of total generation

The short answer is: while 100% is probably unrealistic, it's not unreasonable to expect to be able to get pretty close to that number (say, in the 50-90% range) in that timeframe, and it is very likely that it makes a LOT of sense economically.

Disclosure (or reminder): I am an investment banker for the energy sector. I do a lot of work with the wind sector, as the posts in my wind power series attest, but not only. Whether a pipeline or a wind farm, the job of a project financier is to ensure that the projects make sense for all interested parties (including the regulator) in the long run, and wind projects have to meet the same hurdles as other power plants or oil fields. Thus I'm supposed to remain level-headed when discussing wind projects!

"Amid the recent rallies in equity and bond markets, the yield curve's inversion has received scant media attention," New York-based DBRS analysts David Roberts and Tobias Moerschen commented.

"Most observers seem to have moved on, as the potentially worrying yield curve signal seems at odds with the ongoing economic expansion."

However, the DBRS study warns that the yield curve is a forward-looking indicator, pointing a year or so into the future.

"Moreover, the persistence of the U.S. yield curve's inversion strengthens its predictive power."