Mar 3, 2026 · 40 min · 12 segments
Fighting Words. This year we look at energy arguments, battles and debates: the impact of data centers on power prices, the cost of solar plus storage as baseload power, the “primary energy fallacy”…
Michael CembalestHosta very chart-based experience okay so where are we um We always lead with this chart, which is, what's the pace of the energy transition? And to me, that means looking at renewables as a share of all useful final energy.
And so far, since 2010, this has been mostly a linear transition, right? Very different from the S-shaped technological adoption curves that you see in the technology sector.
And so now the pace of linearity is a little different here across countries, but these are linear transitions.
And this has been really important to understand because if you read a few years ago, all the things that were being written, you probably would have thought A, there would be a much faster pace of these renewable share uptake.
And B, there would be absolutely no economic benefit to investing in anything related to natural gas production or turbines or equipment.
So now the United States is all of a sudden looking at a fairly substantial power supply demand gap By the end of the decade, how big it is, nobody knows, but it's pretty clear to me that there's going to be a power supply demand gap, a lot of which is going to be filled or attempted to be filled with combined cycle turbines that people use on the grid and by behind-the-meter generation with different kinds of natural gas combustion equipment.
Mitsubishi, Siemens, and GE Vernova are the big dogs in the combined cycle turbine space.
Whether it's going to be enough to meet this projected demand is not clear yet.
And look at what's happened to the stocks of companies that make gas turbines and solid oxide fuel cells, which can consume natural gas and create power.
The returns on these stocks are astronomical and we compare them on the right to their respective home benchmarks.
And again, the reason why it's so important to understand the dynamics of the transition is it allows you to understand everything else around it.
And so we go to the next one here, having a challenging zoom day, that's for sure.
a very chart-based experience okay so where are we um We always lead with this chart, which is, what's the pace of the energy transition? And to me, that means looking at renewables as a share of all useful final energy.
And so far, since 2010, this has been mostly a linear transition, right? Very different from the S-shaped technological adoption curves that you see in the technology sector.
And so now the pace of linearity is a little different here across countries, but these are linear transitions.
And this has been really important to understand because if you read a few years ago, all the things that were being written, you probably would have thought A, there would be a much faster pace of these renewable share uptake.
And B, there would be absolutely no economic benefit to investing in anything related to natural gas production or turbines or equipment.
So now the United States is all of a sudden looking at a fairly substantial power supply demand gap By the end of the decade, how big it is, nobody knows, but it's pretty clear to me that there's going to be a power supply demand gap, a lot of which is going to be filled or attempted to be filled with combined cycle turbines that people use on the grid and by behind-the-meter generation with different kinds of natural gas combustion equipment.
Mitsubishi, Siemens, and GE Vernova are the big dogs in the combined cycle turbine space.
Whether it's going to be enough to meet this projected demand is not clear yet.
And look at what's happened to the stocks of companies that make gas turbines and solid oxide fuel cells, which can consume natural gas and create power.
The returns on these stocks are astronomical and we compare them on the right to their respective home benchmarks.
And again, the reason why it's so important to understand the dynamics of the transition is it allows you to understand everything else around it.
And so we go to the next one here, having a challenging zoom day, that's for sure.
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