2015 Cleantech predictions: Green Button will expand, oil prices will remain volatile and quantum dots will arrive
Note: This blog was written by Lynda O’Malley in collaboration with Joe Lee.
Last year was a good year for cleantech. Globally, clean energy investments were up 16% to $310 billion in 2014. The United States’ solar sector is now creating jobs 20 times faster than the American economy overall, and in the past five years, Canadian clean energy jobs are up 37%, surpassing oilsands jobs.
Last year, the MaRS Market Intelligence team published our cleantech and advanced materials predictions for 2014. We predicted that, globally, the renewable energy sector would continue to surge, that programs like Green Button (which ensures that consumers have access to their energy data in a secure, standardized format) would continue to unlock electricity savings in Ontario, that energy storage would make ground in the province and that the industrial Internet would advance.
Let’s take a look back at some of these predictions, as we flesh out what we think we will see in 2015.
Energy storage broke ground in 2014
As we predicted, energy storage had a good 2014 in Ontario. We saw the first flywheel (developed by Temporal Power in partnership with NRStor) and battery storage facilities installed and connected to Ontario’s power grid. We’ll definitely see more advances in this space in Ontario in 2015.
Green Button program expands from energy to water data
More utilities and consumers adopted the Green Button standard in 2014, and a Connect My Data (CMD) pilot was launched. Phase 1 of the CMD pilot is currently underway at London Hydro and Hydro One, with GOODcoins, Energent, BuiltSpace and Eyedro providing the initial apps and five more companies recently added.
Green Button adoption will continue to progress and, as the CMD pilot for electricity data access graduates from the pilot phase, we should expect to see a surge in energy data analytics applications hitting the home energy market, offering consumers many more tools to take advantage of this data. In addition, 2015 will see increased uptake of Green Button by the commercial and industrial sectors, with corresponding apps developed for these market players.
Green Button is a standard that is applicable not only to electricity data, but also to water and gas data. This year, look out for the expansion of Green Button to water data. We predict that the groundwork required to enable the standard will be well underway in 2015 and that the initiative will become live in late 2015 or early 2016.
Oil drops, cleantech shrugs
Last year saw a significant drop in oil prices. A combination of weak demand growth, supply glut and new technologies have led to market conditions where oil prices have been trading at the mid-$40 to mid-$50 range since the beginning of 2015. We predict that oil prices will stay volatile and relatively low in 2015. It is hard to believe that there will be any meaningful recovery to oil prices unless the underlying economic factors shift drastically. (For a full explanation of the situation, check out this interview with Goldman Sachs’ Jeffrey Currie on Bloomberg TV.)
At US$40 to $60 per barrel, American and Canadian oil operations are not as profitable as they once were. In Canada, new oilsands projects can have very high initial capital expenditures, in the range of US$68 to $96 for some projects. This has led many Canadian oilsands producers to slash their capital investments—by 33% in 2015. Older projects that have break-even costs of US$26 to $42 are still safe, but they’re under pressure to closely monitor the situation, with limited risk-taking and new investments.
While enthusiasm for clean technologies may dampen as a result of low oil prices, clean energy solutions continue their exponential improvements and are well on their way to becoming critical parts of a modern economy’s energy portfolio. (A gap between clean energy technologies and carbon-based energy is ideal for clean energy businesses. A reduction in this pricing gap has been a market barrier for clean energy technology and low oil prices exacerbate this challenge. Missed the exponential story? Check out this article by Peter Diamandis.)
With 2014 going down on record as the hottest year since record-keeping began in 1880, climate change will continue to be a major driver of clean technologies going forward, and that isn’t going away with a temporary dip (or dive, rather) in prices. For analysis of our continued inaction in responding to the predicament of climate change and the solutions available to unlock the huge opportunities inherent in clean technologies, see Tom Rand’s new book Waking the Frog or watch the video below from the book’s launch.
A carbon price is coming to Ontario
Here’s another prediction: A carbon price will come to Ontario in 2015, or at least by the first half of 2016. The province is expected to release its carbon strategy in the spring of this year. The province may look to the Quebec-California example, or perhaps to the British Columbia example. BC’s carbon tax has seen much success. Gas consumption is down and consumers are less negatively affected because the BC carbon tax is revenue neutral.
As the Economist notes, the fall in the price of oil and gas provides a once-in-a-generation opportunity to fix bad energy policies. Canada has put a lot of eggs in its extractive industries basket. We can use these low oil prices to introduce measures to help us diversify our economy and hedge against the volatility of oil, like reducing the subsidies this sector receives. While altering energy policy will likely introduce economic discomfort for some stakeholders in the short term (commuters, for example), it’s likely better to reduce subsidies and to add a carbon price now in a revenue-neutral manner while oil prices are low, rather than waiting until oil prices jump again and political will and support disappear.
Is it naive to predict that, globally, the world will finally agree to tackle climate change in Paris from November 30 to December 11, 2015, at the United Nations Framework Convention on Climate Change’s Conference of the Parties 21? As the Guardian writes, perhaps the stars really will align in 2015.
Quantum Dot TVs to be ready for primetime
On the advanced materials side, some exciting stuff was seen from TV manufacturers at this year’s Consumer Electronics Show (CES). At CES, it was all about 4K resolution, curved screens, super-thin and smarter TVs. However, a select few companies began to show more TVs that include a technology feature known as quantum dots, and we predict that this technology will matter a lot more than other features in 2015 and beyond.
The current crop of LED TVs produce blue light for their backlight, which creates a problem for consumers who want everything that an LED TV can offer, along with a deep, rich black experience that only plasma (which is no longer manufactured) and OLED TVs (which are very expensive) have been known to provide. Quantum dots are light-emitting nanocrystals that were invented at Bell Labs in 1982. Because of the crystals’ ability to absorb and convert light, LED TVs with quantum dots can provide the darker blacks that consumers want. (Yes, the technology can be applied to solar energy, too, but that’s a story for another day.)
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Joe LeeJoe is an analyst with MaRS Market Intelligence, providing market insight services for the information technology, communications and entertainment sector. See more…
Lynda O'MalleyLynda is a cleantech industry analyst with the Market Intelligence team, helping cleantech and advanced materials entrepreneurs and startups get the market intelligence they need to grow their companies. See more…