Last week Joe Rogan interviewed futurist Ray Kurzweil.
If you’re unfamiliar, Kurzweil is probably most well-known for his book, The Singularity is Near, which details the moment where AI surprasses humans and triggers an “intelligence explosion” by 2045.
As an inventor, computer scientist, and entrepreneur, Kurzweil is considered to be one of the most brilliant minds of the 21st century. I’ve personally read his books, watched his interviews, and listened to dozens of his presentations on AI, life extension, and nanotechnology. Many, of which, you can still watch on YouTube.
To say I’m a fan would be an understatement.
Now overall, the interview was quite fascinating. But one thing in particular stood out for me.
It was Kurzweil’s comments on renewable energy.
Here’s a brief segment of that conversation …
RK: We now are getting about 1,000 times as much energy from the sun that we did 20 years ago.
JR: Because the implementation of solar panels and the like has the, the function of it increased exponentially as well. The function of what I had understood was that there was a bottleneck in the technology as far as how much you could extract from the sun from those panels.
RK: No, I mean, it’s, it’s increased 99.7% since we started. And it does the same every year. It’s an exponential curve. And if you look at the curve, we’ll be getting 100% of all the energy we need in 10 years … I mean, we’re gonna go to all renewable energy, wind and sun within 10 years including our ability to store the energy.
JR: All renewable in 10 years. So what are they gonna do with all these nuclear plants and coal power plants and all these, that, that’s completely unnecessary.
RK: People say we need nuclear power which we don’t, I mean, you can get it all from the sun and, and the wind within 10 years.
Kurzweil’s take is not trivial, and his data analysis is sound. But just because he says we can get all the energy we need from renewables and storage in ten years, doesn’t mean it’ll actually happen.
First, to accomplish such a thing, you’d have to be free of any man-made obstacles to growth that can’t possibly be figured into this exponential growth equation. These include, but are not limited to …
- Capital requirements to build and maintain the infrastructure necessary to support the rapid development of renewable energy and storage technology
- The politicization of energy markets
- Policy influence from legacy energy sectors
- Overreliance on centralized energy infrastructure
- Geopolitical events that can slow the production of critical materials required for renewable energy and storage applications
Truth is, Kurzweil’s analysis of exponential growth in technology is sound. In fact, we could actually meet the majority of our energy needs today from renewable energy and storage, coupled with energy conservation and efficiency measures. But those obstacles to growth have existed for a long time. And it is unlikely that any of those obstacles will be removed within our lifetimes.
I don’t say this to sound defeatist. It’s just an observation of truth.
But here’s another observation of truth …
As renewable energy and storage technology continues to improve rapidly, production costs will continue to fall. This is not the case for oil, coal, gas, and even nuclear. And this truism is what will prove to be the primary motivator of our transition to a global energy economy heavily weighted in renewables and storage.
No, we won’t be there in ten years.
We won’t be there in 20 years, either.
But one can simply not ignore the rapid growth of renewable energy over the past 25 years.
In 2023, global annual renewable energy capacity additions increased by nearly 50%, thereby representing the fastest growth rate in two decades. 2023 was also the 22nd year in a row that renewable energy capacity additions set a new record.
Today, about 30% of the world’s electricity comes from renewables, and according to data from the IEA, by 2028, renewable energy will account for about 42% of global electricity generation.
Worth noting, wind and solar are expected to generate more electricity than hydropower this year, and more electricity than coal by 2025. To put that into perspective, coal is currently the largest source of electricity generation in the world.
Indeed, the transition from fossil fuels to renewables IS happening, and this dictates that your portfolio should have some exposure to renewable energy, as well as some of the mining companies that will continue to benefit from the rise of renewable energy.
Here are some to keep an eye on …
- Enphase (NASDAQ: ENPH)
- First Solar (NASDAQ: FSLR)
- Hannon Armstrong (NYSE: HASI)
- Clearway Energy (NYSE: CWEN)
- Ormat (NYSE: ORA)
- Vale SA (NYSE: VALE)
- Glencore (OTCBB: GLNCY)
- Lundin Mining (OTCBB: LUNMF)
- Freeport-McMoRan (NYSE: FCX)
- MP Materials (NYSE: MP)
