For Professional Clients and, in Switzerland, for Qualified Investors only. In Israel for Sophisticated Investors only.
English
  • English
en
  • en
Filter by theme
Filter by date
Filter by boutique
Filter by theme
Filter by date
Filter by boutique
No posts matching your criteria
Clear theme
Clear all
No posts matching your criteria
Clear date
Clear all
No posts matching your criteria
Clear boutique
Clear all
For Professional Clients and, in Switzerland, for Qualified Investors only. In Israel for Sophisticated Investors only.
English
  • English
en
  • en
© 2019. BNY Mellon Investment Management International Limited. All rights reserved.
IDEAS AND KNOWLEDGE TO INSPIRE YOUR INVESTMENTS THINKING
12 December 2018

What does California’s duck curve tell us about the future of energy?

California finds itself at the forefront of a quest to find new avenues for energy efficiency. Blessed by its sunny climate and a splurge of investment in solar panels, utilities in the Golden State now produce a glut of cheap energy during its many cloudless days. Hence, as capacity has built out, the required base load from non-solar sources during the day has fallen further and further. According to one estimate, the net load for energy companies generating non-solar electricity during peak sunlight hours on a typical spring day has declined from over 22,000 megawatts in 2012 to less than 13,000 megawatts today, a drop of nearly 50%.

 

While that’s fine in theory it does create a headache when the sun goes down. That’s when traditional generators of energy, whether nuclear, gas or coal, face a sudden requirement to ramp up their contribution to the grid as solar fades.

 
Plotted on a chart, this supply/demand dynamic takes on a distinctly anatine shape, hence the name, the duck curve.

 
Utilities are working hard to find a solution to this duck-shaped dilemma, including time-of-use plans, smart grids and news ways of storing energy. As more renewables come online and the energy mix changes we think utilities will be transformed. We’re not quite there yet but we do believe it’s an interesting area for investment.

 
Jim Lydotes, portfolio manager. Mellon – a BNY Mellon company.

Please note the content on this website is for Investment Professionals only and should be shared responsibly. No other persons should rely on the information contained within this website.

 

Investment Managers are appointed by BNY Mellon Investment Management EMEA Limited (BNYMIM EMEA) or affiliated fund operating companies to undertake portfolio management activities in relation to contracts for products and services entered into by clients with BNYMIM EMEA or the BNY Mellon funds.

 

Mellon was formed on 31 January 2018, through the merger of The Boston Company and Standish into Mellon Capital. Effective 2 January 2019, the combined firm was renamed Mellon Investments Corporation.

Subscribe to updates