Michael Cembalest, Chairman of Market and Investment Strategy at J.P. Morgan, Published Our Annual Energy Reality Check

For the last few years, we have written an annual piece on energy. In doing so, we have worked with Vaclav Smil from the University of Manitoba (see biography below). In a recent article in Scientific American, Vaclav provided a rough road map for what the arc of renewable energy use might look like. The first three panels track the percentage of world energy that was based on coal, oil and natural gas in their respective adoption phases; note that it took several decades for each to reach 30% penetration rates3. The last panel shows modern renewable energy (ex-hydropower). Some argue that the pace of technological progress is faster now, and that there is an environmental urgency that did not exist in prior energy transitions. Perhaps; but given sunk capital costs, behavioral issues and complex systems involved, prior gradual transitions are a good starting point for the pace of future change.


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