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Tracking End-Use Emissions

I posted this graphic on Twitter a few days ago and thought I'd share it with those of you who don't follow me there.

The chart above is called a Sankey diagram and this one tracks energy consumption by source and end-use sector.

It's clear that to make the most progress toward decarbonization, we'll have to focus on the industrial and transportation sectors. The transportation tailwinds grow by the day, but industrial applications may prove to be the hardest to solve.

They're out of sight and out of mind.

Many of us don't see industrial applications on an everyday basis the way we see cars, buses, and airplanes. Several industrial processes make life easier and cheaper for a majority of the population despite their toll on the environment.

It's much harder to rally against what you don't understand or see regularly - add in convenience and the collective will is nearly non-existent.

Funding innovation in this sector is also risky and expensive with long time horizons to returns (if they ever happen) which has kept investment activity to a minimum. That's starting to change, but we have a long way to go.

The other big opportunity is "electrical system energy losses". I've spent time in my career owning P&L's in the power sector so I knew losses were high, but 65% was mildly shocking.

Unlike industrial processes powered by fossil fuels, the technology to solve these problems exist and are becoming increasingly viable solutions. The declining costs of hardware like sensors and the ubiquitous nature of software can make power plants more efficient with ROI's that make sense for both operators and investors.

When I first saw the line loss numbers over a decade ago, I was surprised by the inefficiencies of our power system. Now, I'm excited by the potential we have to solve them in the coming decades.