Five lessons we learned in 2013

GTM Research

Yesterday, I looked at the innovations that we should watch in 2014, so today I want to look at the stories from 2013 that I think offer some of the best insights into the challenges we face.  Over the past year, I have highlighted about 250 stories through my Friday Five segment, and in reviewing all of them, I noticed a how a few general topics dominated the discussion.  Interestingly enough, a hot-button political issue like Keystone XL was not in the top five, neither was an issue close to my heart: the food-energy-water nexus, although both were close.  The five that rose to the top did so because their long-term impact has greater scope or scale than an issue like KXL, or because they had more immediacy than the nexus (which will dominate politics in the coming decade).  As with any list, there are arguments to be made for and against, but here are the top five lessons learned, and when appropriate, a shout-out to the authors whose reporting I found most interesting and thorough.

Cost-competitiveness of renewable energy
Story after story this year reported on large power brokers entering into long-term power purchase agreements (PPA) with solar and wind providers.  These stories highlighted the fact that in many cases, the cost of these contracts over their lifetime equaled or bettered the price of even natural gas generation.  This sea change in the energy procurement arena even prompted authors in Europe - where utility scale renewable energy is well ahead of the US - to wonder what an energy economy without commodity costs might look like.  As a summary to this, Laurie Johnson of NRDC offered a study of which energy sources make the most sense to the American economy over the coming years, and not surprisingly, the economic answer is renewables.
New study: Clean energy least costly to power America's electricity needs

Decline of nuclear and coal, and the concerns about natural gas
Even just two years ago, with our country enjoying historically low energy prices and the US emerging as a potentially energy self-sufficient nation, if I had suggested that we would invite huge financial risk in basing our economy on coal, natural gas, and nuclear energy, I would have been laughed out of most rooms (if anyone were even listening in the first place).  Today, the chinks in the armor of our most established energy industry have expanded into real gaps in logic.  Nuclear, which has never made economic sense without significant government subsidy, has seen that lack of viability result in plant closings.  Coal, even without a carbon tax, has faced financial decline with the increase in natural gas holding down electricity prices.  Natural gas, even with the huge expansion of drilling over the past decade, has experienced a bevy of issues from proved drinking water pollution to increased methane releases that threatens to undermine the argument that natural gas is better for the environment than other fossil alternatives.
Nuclear plants, old and uncompetitive, are closing earlier than expected
World’s largest financial lending groups are rejecting coal
The climate risks of an over reliance on natural gas for electricity

GMO foods, the real story
Some call them the ultimate solution to world hunger. Some call them Frankenfoods. Some want them labeled in the supermarket so consumers have the ability to choose whether or not to buy them. Some fight labels claiming that such actions will bring a stigma to the industry. Whatever side of the debate you fall, genetically-modified organisms in food stands as one of the most important issues of our time. This year, Nathanael Johnson had a great series of stories about GMO, trying to separate truth from myth, and economic reality from hype.  I highly recommend all of them, but the one that caught my eye most focused on the real impact of GMO on farmers, and the fact that GMO seeds did not offer higher yields per se, but rather reduced risk of low yields.
Are GMO crops worth their weight in gold? To famers, not exactly

Increasing risks of climate change
The past year saw much debate about the influence of climate change on the scale and frequency of major storm events (like hurricane Sandy in 2012) or regional economies (Midwest drought of 2012).  It also saw the release of the latest IPCC assessment, and the subsequent discussion about the "slowing" of climate change.  While these debates continued, the insurance industry seemed to weigh in to a point by deciding that climate change has accelerated the frequency of major insurance-claim events.  In May, Eduardo Porter of the New York Times wrote a piece highlighting this sea change, and offering insights into what might happen going forward.
For insurers, no doubts on climate change

Emergence of electric vehicles
With the emergence of the Chevy Volt, and the expansion of the electric vehicle market to even more manufacturers, we saw a remarkable growth in an industry that still does not have the best technology out in the market.  States like California and Illinois made major investments in charging infrastructure, and the Department of Energy established regional hubs for battery technology research.  Even with the misstep of backing a company that did not have a proven technology, this year saw nothing but movement forward in the electric vehicle realm.  Issues still remain relative to the expansion of grid infrastructure to handle increased charging needs, and the aforementioned improvements in battery technology, but the future no longer wonders IF we will see a proliferation of electric vehicles, but simply WHERE they will find the best application.
EV sales skyrocketing

Editor's extra: election of a new pope
Much like NFL draft picks, we cannot know which story of 2013 will be most impactive for many years down the road. My guess along those lines is the election of Pope Francis in the Catholic Church. His immediate and deep impact on not only the world's Catholics, but also the world population in general have been significant. A forthcoming encyclical on the environment, coupled with his calls for major changes in the world economic structure and an end to the economies of greed could upset the culture of consumerism which would cause us to completely rethink our energy and environmental valuation. When all is said and done, this may be the biggest change we see.
Pope calls for church austerity, focus on poor

Happy New Year!