Are we running out of oil and fossil fuel?

If you think about the amount of oil we have in the core of the earth and from oil production, we have never had so much. Back in the 70s, we talked a lot about oil supply. Today, there are actually more oil reserves than ever. Thanks to technology, we have been able to develop technology to produce oil in higher volumes and lower cost. Eventually, we will move away from oil, not because we are running short of oil, but rather, for the new emerging technology that will replace oil.

Today, the primary source of energy comes from fossil fuel and renewable energy with the cost curve of the latter gradually lowering. If the cost of renewable energy is more competitive, perhaps the future of renewable energy will come. According to PTT, the national energy company of Thailand, we now have the highest oil reserves of all time, and it really depends on the cost-effectiveness of the energy source that determines which energy will have the most usage.

Will there be a new technology that is going to drive down the cost curve of energy?

The opportunity is in renewable energy to create future businesses. The key to transitioning into the renewable sector is to look at the whole entire system - not only on oil and energy, but also on water, mobility, air, agriculture, and anything within that space. We have to see where each element fits in with the system and work from there. The role of the accelerators is not merely to fund the R&D stage for startups, but also to focus on commercialization of those existing technology and clean energy.

In Japan, the regulated retail market for power and energy has transformed from 10 “monopolies” in 2016 to 500 power producers today. This causes a lot of competition, which is good because this also creates new business opportunities.

Is “clean energy” really clean?

The chemical waste and material disposals from batteries and solar panel are not decomposed easily. There is minimal second life activity in those technologies. The answer is automation. Automation comes in to utilize the second life of those materials and extend the life cycle by 4-6 times. As the automation curve continues to grow and more entrepreneurs flow into the energy sector, we’ll get to the point where clean energy becomes cleaner.

Is shifting from centralized utility to a more distributed production of power becoming a reality?

In Japan, some people have started taking excess power from their solar panel rooftop and sell those to their neighbors. People with large rooftops can use this opportunity to earn extra money. However, there is still no storage method for power. And this is only doable during day time as the energy has to be transmitted directly off the solar rooftop during day time.

We are near the tipping point. Many companies in Japan are working on storage methods for energy. Once this comes to past, the adoption rate will be accelerated and the cost of energy will go down. On the other hand, PTT in Thailand has also advanced its research in power storage.

What’s the main driver of solar panel technology?

Efficiency. With machine learning and intelligence technology, energy won’t be a scarcity any longer. It will just be part of our daily lives. Everything we used will be shared and that will be a norm in 10 years time.

On the other hand, the cost of utility is one of the core deciding factors. We can’t simply consider the production cost of power alone, but instead, we have to take into account the cost of distribution (transmission). In Japan, 30% of the cost comes from the cost of distribution. If you can produce power cheaper on a solar rooftop by that margin, it’s going to change the market price and adoption rate renewable energy.

The conclusion

We are not running out of fossil fuel soon. But the industry will change. The landscape will also change. And there will be a lot of opportunities that come with it.