We just completed our 25thAnnual Wall Street Green Summit this week in New York. Despite all the negative press on renewables and ESG, the bottom line is sustainability is alive and well in many manifestations from plant-based food, to carbon credit generation, next generation biochar, reforestation, ocean technology, to more funds forming and deploying in sustainable finance. Last year $2.2 trillion was deployed in this sector, actually up 5%. But the market opportunity is sized at $215 trillion by 2025 according to Bloomberg New Energy Finance. We have a long way to grow and the world is ready for adoption of cleaner and greener technologies.
My 50-year lens on sustainability is that it takes decades to build the momentum to make change mainstream. As someone at both Woodstock 1969 and Earth Day 1970 with my solar power t-shirt at Carnegie-Mellon, the new ideas start as outliers and then become mainstream. Case in point, I was eating organic food at food coop in Pittsburgh in 1971. Today, organic food is everywhere.
In the deep tech world of climate technology, it involves long lead times and capital intensiveness not computer apps. This market took the failures of cleantech 1.0 for Silicon Valley to learn. The tech bros kept talking about disruptive technologies when the reality is incremental change. The energy industry which is 73% of greenhouse gases thinks in 40 year cycles so there is no disruption coming for this $ 8 trillion industry. These new climate technologies will be acquired through acquisitions not an active IPO market.
The biggest issue at the Wall Street Green Summit this year continues to be AI and Sustainability. We have been covering this issue for 10 years and now it looks like the US grid is underfunded for ongoing generation capacity. It must be remembered that the Energy Policy Act of 1992 deregulated the investor-owned utility sector which at that time was 110. Today that number is 40. Investor-owned utilities supply 72% of US power. The irony of deregulation has always been industry consolidation not more competition.
Invest, As Key Speaker on Plant-based Innovation and Alternative Proteins InvestingSo when bit coin miners started nibbling at electric generation capacity in the past decade, that was the tip of iceberg as data centers will consume enormous amounts of baseload electricity power generation. That new supply of electricity will come from natural gas and renewables plus energy storage. We don’t burn oil for electric power generation in the US. Coal burn declined from 55% of baseload capacity to less than 15% today. Some new coal capacity is coming online according to Babcock & Wilcox. In my opinion, nuclear power will be off the table short-term despite the enormous press emphasis on SMR, small modular reactors, and will take until 2032 to 2035 to get rolling. The United States has only built one nuclear plant since 1978. Georgia Power’s Vogtle plant cost over $31 billion with cost overruns despite federal loan guarantees and was seven years late to bring online. Also, no one likes to talk about the need to train a new generation of nuclear engineers. The human capital for nuclear energy is not there now. Electricity consumption for hyperscale data centers are estimated to almost double baseload capacity by 2030. This will lead to some rolling blackouts and brownouts for those peak electricity demand days.
The silver lining of sustainability is the next generation. Sustainability is not a political issue for young people. They live and breathe it. The Times are A’Changing. The world is not moving backward to the fossil fuel age but to a pathway of cleaner, greener and sustainable. Just ask your kids!
About the author, Peter Fusaro, Founder, Wall Street Green Summit and Wall Street Cap Intro. New York Times best-selling author of 17 books and note international authority on ClimateTech and the energy transition.
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