Michael Liebrich, the original founder of New Energy Finance has a great story on his linked in page about what he calls Astongate (thanks to JL for passing me the details).
It centres on a story I read a few days in the national press which suggested that you’d need seven years for an electric car to surpass CO2 emissions from a conventional petrol car. Reading it at the time I was slightly suspicious, as it didn’t really sound right, not least because we all know that real world emissions from petrol and especially diesel cars are rarely what the manufacturers and their labs tell us it is. Rather like a builder’s quote for timescales for new work, I tend to take that number and double it in the real world.
Anyway, it sounds like my instinctive suspicion was well grounded as it has emerged that not only the numbers used in the report slightly dubious but the outfit pushing the report is not an entirely disinterested party. It is, as Michael alleges, “a sock-puppet PR company run from an address co-owned by Aston Martin’s Director of Global Government and Corporate Affairs”.
You can read Michael’s excellent take down of the story here : https://www.linkedin.com/pulse/astongate-fake-emission-figures-embattled-carmaker-sock-liebreich/?msgControlName=reply_to_group
Coincidentally this week also saw the release of an amazing piece of work by Max Roser of the ever wonderful Our World in Data. It is the definitive analysis of how renewable costs have fallen at an astonishing rate.
If anyone wants to contest the idea that renewables are crashing in price, direct them to this analysis here : https://ourworldindata.org/cheap-renewables-growth
I have pulled out two key charts that tell the story very clearly.
Crucially I think we have to accept that price isn’t the ONLY determinant. The first chart reminds us that safety is also a crucial factor i.e death caused. On this measure renewables AND nuclear does well. I would also argue – probably controversially – that stability of base load generation is a relevant consideration for some of the output of our grids, which is again where nuclear power comes in.
Rosen’s big point is a valuable one though – he schematises an obvious Virtuous Circle for new technologies, which starts with More deployment, which in turn results in Falls in price, which then makes new technologies Competitive in new markets, which in turn increases demand. Renewables have benefitted from this loop, what comes next ?
Foodtech coming to a supermarket or restaurant near you
Sticking with this theme of technology adoption, I’d suggest that we are a tipping point which is about to move from the more deployment phase to noticeable falls in price for meat and dairy alternatives, notably plant based products and cellular alternatives.
Two stories nicely captured this mega trend this week.
The first – thanks to AC – is that Singapore has granted approval to Eat Just’s cultivated chicken. According to one insider in this market, Eat Just “are not the most liked company in the (alternative foods) field due to past controversies, but it’s a big moment for the field.”. You can see the FT article here: https://www.ft.com/content/7fd6a222-d6d4-447a-96f8-4e78b9be6bf5
The other fascinating story is that “the iconic chocolate brand Lindt has released a range of vegan milk chocolate bars in the U.K.” according to Plant based News. The original story is here: https://plantbasednews.org/lifestyle/food/lindt-vegan-milk-chocolate-launches-in-uk/?mc_cid=6ab1e452fa&mc_eid=2006b18382
“The irresistible bars are made from oat milk and come in three favours – Cookie, Hazelnut, and salted Caramel. Each 100g bar is wrapped in completely recyclable packaging.” Interestingly, huge demand has already resulted in a sell out : “A frenzy ensued after The Conscious Candy Company announced it was the first retailer stocking the bars and as a result, they sold out straight away.”
I will be returning in much greater detail to the whole Foodtech story next year – with a dedicated new blog on the space – but for me, the alternative proteins story is one of the biggest stories of the 2020s. There are huge changes coming down the track and if you are interested in investing in this space, I’d suggest doing some research into a Jim Mellon backed vehicle called Agronomics, which is listed on AIM. You can see its early to mid stage VC portfolio here : https://agronomics.im/portfolio/
I will be covering this investment company in much more detail in later posts and articles but at the moment this newish vehicle is trading above Nav, that said it sounds like 2021 could bring some notable portfolio valuation milestones. For the record, I have started buying shares in this business, largely because I rate highly its three biggest investments to date: Blue Nalu, Mosa Meat and Meatable. I also like its focus on cellular grown meat as a better place to defend IP in this fast-evolving space.
Sticking with the milestones in technology argument, Deep Minds work on modelling protein folding is a really big thing according to everyone I have talked to in the biotech and genomics space. I have to say a lot of the detail flies over my head, but I can feel the excitement – if you want an excellent primer explanation as to why it is so important, this website has a first rate explanation : https://rootsofprogress.org/alphafold-protein-folding-explainer.
Again, I would repeat my bet that the 202s will be THE decade of huge advance in genomics and biotech.
Digital currencies generate an income??
Lastly, finishing off the tech theme, we come to digital currencies, which keep hitting new highs.
But even here, in this hype driven niche, we are seeing some really very interesting developments.
RealVision’s excellent Crypto analysis nicely sums up the Big story of this week: “BlockFi publicly announced that it will be releasing its Bitcoin Rewards Visa Credit Card in early 2021. Yep…
- It’s the world’s first Bitcoin Rewards Credit Card
- You earn 1.5% back in Bitcoin on every fiat purchase
- That Bitcoin will flow directly into your BlockFi account
Simple. Easy. Pretty damn revolutionary. And a bet on fiat currency devaluing even more with never-ending QE measures.”
The backing of Visa is super interesting for me and fits snugly alongside Paypals acceptance of digital currencies, all of which feeds into a narrative around mainstreaming. You can find out more about the new product here at Coinbase : https://www.coindesk.com/blockfi-announces-early-2021-launch-for-bitcoin-rewards-credit-card.
For me, the interesting coda is this comment:
“A lot of the debit cards that exist in the crypto ecosystem are the kind that are oriented around this idea of spending your crypto, which at least clients at BlockFi are not interested in doing,” [BlockFi’s CEO] Prince told CoinDesk in an interview. “They want to hold their bitcoin and earn a yield on it.”
That raises the fascinating idea that you can generate an income from Bitcoin and other currencies. So, unlike gold, which generates zip income (unless you lend it out physically), crypto currencies can generate their own yield. That is arguably, a gamechanger. And as luck would have it, the excellent Dylan Grice of Calderwood Capital, talked about this idea in greater detail last month in his regular – and hugely compelling – Popular Delusions newsletter.
Grice rightly identifies these digital currencies as the front line of the “Creative capitalist commons”, which might pick up the momentum initially created , and then squandered, by peer to peer projects and alternative finance (where innovation has slowed down markedly).
According to Grice, the key ideas here are that Ether is a form of programmable money that powers the rise of decentralized finance, which in turn is fully automated and completely democratic. Crucially ether also facilitates new technologies and platforms that can generate income.
One example quoted by Grice is Uniswap, a decentralized exchange, which is aiming to improve liquidity in digital currencies where everyone can participate in the funding of inventory i.e market-making has been democratized.
According to Grice “ instead of leaving coins idly in your wallet you can commit them to a Uniswap liquidity pool which will be used to provide inventory for a simple market-making algorithm Uniswap traders can use to buy and sell. In return for committing your coins you receive a token representing your share of the liquidity pool. There is no lock on your contribution, which you can withdraw at any time. Each trade costs 30bps of the transaction value which accrues to the pool.”
Over in stable coin land- think tether – there are similar ideas kicking around notably DAI coin which is aligned to the dollar , where a protocol called Compound operates which is in effect a smart contract which matches borrowers with lenders (another platform is apparently called Aave). Yields are around 4%.