We have done pretty good on our predictions in the past, so this year we changed it up. We have predictions on global changes and local developments. Let us know what you think. 

1. Oil prices will fall below $60 per barrel.  The current price is $78 per barrel.  After oil hit $145 per barrel in the 1990s, “everyone” was sure it would exceed $200 soon.  Then it fell below $25 per barrel.  Oil is one of several mineral resources which have been swinging up and down in price for decades.  With substitution of renewables for petroleum-based fuels, and with renewed production both domestically and outside the US, we predict that oil prices will be on a downward trend this year.  The current price is enough to stimulate investment in production but there will be a lag between the price signal and the supply response which typically leads to an overshoot.  That’s what has almost always caused the price to drop.  The same will likely be true of natural gas with diminishing demand, but we don’t think it will be as dramatic.  The latest data show the decrease in demand has resulted in oil and gas production in balance with demand, a reversal of the decades-long trend of oil imports.  The US still imports oil and gas but it also exports about an equal amount now.
2. The installed price of rooftop solar will decline more steeply in 2022 than in 2021.  The CPUC is likely to do something to allow utilities to pay less for the output of such installations, and that will undercut demand.  A drop in prices will follow.
3. A new microgrid will be developed in our region with at least 500 customers.  We keep expecting this to happen.  There is one on the North Coast for the Blue Lake Rancheria which Is similar to what we expect.  We know the interest is out there, but progress to build more has been slow.  We expect at least one project to advance in the year.
4.  The Air Resources Board will publish new, lower Carbon Intensity figures for renewable fuels made from captured CO2 (to produce methane and clean diesel, for example) which will drive interest in using them for backup and long-duration storage.  The required target for Carbon Intensity in the total fuel mix declines each year according to ARB rules.  That drives increased demand for lower carbon intensity fuels to meet the target in 2022.  Progress in captured CO2-derived fuels will lead to new options coming onto the list of possible options.  Bio-gas from dairies already has a strongly negative score (about -400 grams of CO2 equivalent per megajoule).  The new calculations will include some pathways that make renewable fuels more negative.
5.  California will receive a new application for an offshore wind farm.  Already two have been filed for sites within state waters along the Central Coast each with four floating wind turbine platforms with four 10-15 MW turbines each.  With the infrastructure bill and the push for more renewables, we expect at least one more application, possibly on the North Coast.
6. Nationally, renewables (solar, wind, small hydro, geothermal) will generate more GWh than coal and nuclear.  In 2021 we saw the return of coal-fired power generation with the first increase in decades, but the slide will resume. Renewables will surpass coal and become the second largest source of energy behind natural gas.
7. EV adoption will double in the US with twice as many delivered in 2022 than in 2021. The supply shortages slowed Volkswagen ID.4 and Ford’s Mustang sales in 2021. The Chevy Bolt EV and EUV faced recalls, but should return to strong sales in 2022. Most companies are releasing new EV models. New companies with significant preorders will start delivering.  We expect EVs to make up 10% of new purchases (more than double 2021).
8. There will be another SPAC deal with a regional company, as the boom slows.  SPACs will not get regulated and there will still be a fair amount of speculation associated with them.  But, as the shine wears off and scrutiny increases, the pace may lag.  Nevertheless, we expect to see some enormous investments in companies that are looking to scale.  The biggest investments last year were around the energy transition, such as ZEV companies looking to scale received major investment.  But they weren’t all happy stories. Lordstown motors is running low on cash. Engie subsidiary EVBox just terminated their potential merger. SPACs have 18-24 months to pick an acquisition target or return the money. In 2022 there are nearly 300 SPACs representing nearly $100 billion in value that will cross the 18 month threshold. We expect to see another.
9. CleanEdge’s Smart Grid Index QGRD will cross $120. It is now at $100. Last year muted Clean Energy Stocks. Following ETFs Like QCLN and ICLN has been typically what we do, and in those cases 2021 saw expectations brought in line with reality. They did not jump; as much as we thought. But some still grew YOY. This year, with all the focus on infrastructure growth, we think the indexes will rebound, and the grid and energy infrastructure stocks most of all.
10. Elon Musk will step down from the Tesla CEO position.  Musk chases innovation and Tesla is becoming more “normal”. Unless people tell him to go earlier, he will install a replacement by the end of the year. He still will argue with people about Tesla on Twitter but his SEC liability for doing so will be reduced.

Check out our past predictions below.

Scientists at Stanford are on the trail of giving degraded lithium-ion batteries a wake-up call to restore them to near-original performance.  Inactive clumps of lithium build up over a battery’s lifetime until they must be replaced to keep EV range intact.  This innovation is a change in the charging process that moves these clumps back to the anode, restoring their activity.  It may also help with the new lithium-metal batteries that start with far greater energy densities but then develop instabilities.  It can contribute to better fast-charging algorithms as well. Particularly useful is a high-voltage bump at the end of the charging cycle to dislodge the clumps.  This could mean far fewer degraded battery packs that need to be replaced and recycled.  Read more on this development here. By the way, Stanford and SLAC have become a hot spot for battery charging innovation, so expect more announcements coming from there.