Unavoidable Trend in Renewable Energy: Consolidation

My colleague who sent me this piece on ocean wave energy jokingly disapproved of my unenthusiastic response:  “Always the cynic! Merry Christmas!”  I write back:

Ha!  Well, I believe in consolidation, since I’ve seen it happen so many times.  In 2008/09, I used to go to all the electric vehicle shows when they were geographically convenient.  There were hundreds of booths, mostly occupied by vendors who were hopeful to be successful in this budding industry—maybe a dozen of would-be OEMs, and scads of purveyors of charging infrastructure and other accoutrements.  Now, there are so few potential players in the EV community, most of those shows no longer even exist. 

The reason?  Consolidation.  The few winners have won and the many losers have lost.

It’s obvious that the same phenomenon is unfolding in the energy space.  The world does not need—and the market will not support—a wide variety of renewable energy solutions.  The winners (solar and wind) have become so dominant, and their costs (due to scale) have become so low, that they’ve crushed the other solutions like insects.

Of course, as I wrote earlier, there will always be “point solutions” for those odd little areas that have incredible resources of one type or another, like Iceland with its geothermal, island nations in the extreme latitudes with their tidal, equatorial nations with OTEC, etc.

But this (lots of players fighting for the crumbs) is not a pretty picture for developers.  It will be decades before all this is worked out, and investors in wave energy, tidal, ocean current, etc. have limited patience.

Btw, if you’re looking for something in the automotive or energy world that does not change, it’s pictured above: girls.  They’ve been using girls to sell cars for 100 years, and I’ll bet they’ll be doing it 100 years after I’m gone.