Additional Global IT

bigadaj

AnotherJoe wrote: »

They probably don’t agree with that forecast or those are income funds and the income is hard to turn down? Just like OPEC think electric cars will be 10% of the market by 2050 when it will most likely be game over for gasoline engines ten years previously at least.

There are plenty of examples of so called experts who fail to see the revolutionary new technologies that destroyed their businesses. Kodak, Nokia being two recent examples. The smart people at Arthur Andersen (IIRC) advised AT&T in the mid 1980s not to invest in mobile technology as they thought the total market by 2000 would be 900,000 users. It was 109 million. And now I think it’s uo to a billion, anyway by the late 90s it was as too late for AT&T to get into it.

Or in this industry look at the German company RWE who a few years back invested €10Bn which was lost a year later when the project started they invested in were derailed by new wind power and solar. They even instituted a root and branch analysis to see why they made those poor investments, essentially, they were too blinkered about business as usual to look outside and see the rapid advances being made.

And whose the big expert in funds who recently screwed up and didn’t see the Prudentual fiasco coming and was buying their shares like it was a going out if fashion ? Forget his name.

Finally, maybe Shell do get it they are starting to roll out electric charging stations at their petrol stations. Whether that will make a difference I doubt but who knows.

I think you're making too much of technological advances and not enough of the political element.

The reason that renewables are growing is down to the political will and things like taxation, that's a reasonable view and one that people have to consider, though whether it's the magic wand that will put an end to climate change is another matter.

AnotherJoe

bigadaj wrote: »

I think you're making too much of technological advances and not enough of the political element.

The reason that renewables are growing is down to the political will and things like taxation, that's a reasonable view and one that people have to consider, though whether it's the magic wand that will put an end to climate change is another matter.

Nope, the reason that renewables are growing is that they are now cheaper than many fossil fuels. That is without subsidies.

Thats only changed over the past 2 or so years so its easy to miss, and its also easy to underestimate technological change when its exponential, eg solar cost has been dropping at roughly 12-15% efficiency over the past 30 or so years. That might seem small beer, but its accumulated year on year, it means that (I'm remembering these numbers so might be a bit off) a unit of power than cost $100 in the 1970's is now $1, and once you fall under a threshold of cost, all of a sudden its renewables all the way, because fossil fuel costs by and large arent falling.



This kind of step change is catching many out.

EDIT Look at this one showing how solar equates to other sources. Easy to see why you might have dismissed solar just a few years ago.



And, what I've read recently is that not only is solar and wind now cheaper, they are just about now crossing the threshhold where a new installation of wind / solar can be cheaper than just paying for the running costs of an old fossil fuel plant.

I think Einstein said that compound interest is the most powerful force in the universe. Well, this is an example of that.

bigadaj

Einstein never said that, but it's annoyingly quoted very often.

Political risk comes in many forms, the vast majority of solar and wind production comes out of China, so being largely reliant on them is in itself a massive political risk. More so than fossil fuel out of the Middle East for example, for the us at least.

The correct approach in almost all situations is to not go for one solution, and the correct approach is to diversify, some legacy fossil fuel generation makes sense, to go 100% for renewables is just as risk as going all fossil fuel, all nuclear etc

Edit - your references also make no note of the heavy tax on fossil fuel in most developed economies now, just look at fuel in the uk, taxation makes up 80% of the cost at the pump.

Alexland

Einstein said it was fine to quote him on anything if it helped prove a point.

AnotherJoe

bigadaj wrote: »

Political risk comes in many forms, the vast majority of solar and wind production comes out of China, so being largely reliant on them is in itself a massive political risk. More so than fossil fuel out of the Middle East for example, for the us at least.

The correct approach in almost all situations is to not go for one solution, and the correct approach is to diversify, some legacy fossil fuel generation makes sense, to go 100% for renewables is just as risk as going all fossil fuel, all nuclear etc

.

China is certainly the biggest producer of solar panels, or their constituents. But theres a lot of wind energy being produced in N Europe (I dont know where the turbines themselves are made, they are pretty big so generally relatively local I'd have thought)

In any case, we arent reliant on them in the same way we are reliant on ME oil. Once you've got a turbine or a solar panel it doesn't matter where it comes from, the energy flows, unlike if you are importing oil.

Windpower is displacing coal in the UK. I agree we need diverse sources for the time being (there are other approaches to get round that) , but that by itself implies more solar and wind, less coal and oil.

bigadaj wrote: »

Edit - your references also make no note of the heavy tax on fossil fuel in most developed economies now, just look at fuel in the uk, taxation makes up 80% of the cost at the pump.

Well that just makes the case even more doesn't it? AFAIK those numbers are tax / subsidy free apart from anything integral which might well include fossil where i think there are a lot of hidden subsidies, not to mention the way they impose their external costs on others.

In any event, whatever the numbers are precisely, the point is that as renewable costs continue to fall *, and fossil doesnt, and usually cant, the writing is on the wall and getting back to the point of this thread, that doesn't bode well for Shell and BP.

Maybe they can pivot quickly into new technologies, i know they do talk about it, and Shell rolling out chargers for cars at service stations is an interesting sign, whether they can walk the walk remains to be seen.

bigadaj

I think you are very naive to assume those numbers you quite are tax or subsidy free, they may well be US biased which would reduce the effect of fuel tax substantially, but not knowing the basis on which people are providing statistics is very poor, particularly in an area such as environment where the vast majority of research is biased one way or the other.

I'm not sure why you think large objects are produced locally, the cost of shipping is relatively low so producing goods in low labour economies is still far cheaper than anywhere in Northern Europe.

With respect to there's still the research that shows that the energy production form a turbine is net negative when you take production, construction and maintenance costs into account, offshore wind prices have fallen dramatically but only recently come below new nuclear.

Diversification is key, it's incredibly stupid to just rely on a single source such as renewables as you are then a hostage to fortune. It's incredibly sad that in the uk we haven't been able to make an industry fro wave or tidal, but no just piggyback in inappropriate technology because we have lost any sort of risk or innovation that was the hall mark in Victorian times. We have the second highest tidal range in the world, with huge amounts of free energy going begging, but we'll try solar, brilliant.

The problem with renewables, at least the solar or wind everyone is espousing, is that it is unreliable. There was huge play earlier this year abiut national grid being 100% renewable, but that was for a few hours at most. When the sun doesn't shine and the wind doesn't blow, or indeed blows too hard, everyone's lights turn off, unless you have coal, gas, oil, nuclear etc

It's classic British ignorance, we want all the nice fluffy renewables but when we realise this comes at a generation and convenience costs then we'll companion like hell, and just moan about the government, evil power companies, etc etc

greenglide

I'm not sure why you think large objects are produced locally, the cost of shipping is relatively low so producing goods in low labour economies is still far cheaper than anywhere in Northern Europe

i believe that they are built or planned on the Tyne, the Humber at the very least as well as multiple locations in Europe.

Someone obviously thinks there is money to be made by manufacturing in Europe.

Clearly renewables can only be used in isolation if we have a viable storage system and we are a fair distance from that yet but that doesn't mean we can't use renewables alongside convential power generation.

unless, of course, we want to be climate change deniers and bury out heads in the sand.

IanSt

greenglide wrote: »

Clearly renewables can only be used in isolation if we have a viable storage system

This was the big reason why I thought renewables wouldn't catch on in any but niche areas in the UK, but with the amount of money that I see going into electric vehicle research then I reckon battery storage systems could prove me wrong.

bigadaj

IanSt wrote: »

This was the big reason why I thought renewables wouldn't catch on in any but niche areas in the UK, but with the amount of money that I see going into electric vehicle research then I reckon battery storage systems could prove me wrong.

It's a political as well s an environmental issue, there's now an urgency to phase out ice vehicles on the relatively near future.

You'd expect the large oil majors to be pushing forward in this area, whether they'll be successful is another matter. I'd have more confidence in BP or Shell than Exxon for example, the aramco listing seems like a last grasp dash with no prospect of innovation, however when you're pumping oil for cents per barrel then they'll always be some market I guess.

Sue58

After much thought and research into the various holdings, I decided to add Bakers to my global portfolio alongside SMT and Witan. Bankers and Witan also have reasonable yields although I am mainly invested for growth. Personally, I don't feel there is anything wrong with holding three global IT's.