Leftist dreams of an electrified transportation system will soon collide with reality
The power grid in North America is now vulnerable to frequent outages
In the mid-1980’s I was Chairman and controlling shareholder (through The Enfield Corporation Limited (Enfield) which I founded in 1984) of Federal Pioneer Electric, one of Canada’s largest manufactureres of loadcentres, swithgear and transformers and a key competitor of GE Canada where I served as Vice President, Corporate Development before founding Enfield. During those years, I became quite familiar with the structure of the electrical grid in Canada. GE and Federal Pioneer products found markets in all sectors of the power grid from generating stations through to residential loadcentres like the service entrance panel you probably have in your home.
Source: Thunder Said Energy
As governments in Canada and United States promote the specious theory that CO2 causes climate change, they have promoted major investments in so-called “renewables” for power generation and electrical power for vehicles (called EV’s). The ability of the power grid to accomodate the increased demand for reliable power is under strain. As the chart above outlines:
Interconnecton costs have risen four fold and lead times to build them have doubled
Major investments in batteries have failed to avoid power outages since the battery backups for renewables provides barely an hour or two of backup while periods when wind turbines are becalmed and solar panels are covered with snow or suffering from darkness are much longer than the battery backups can cover.
Transformers, switchgear and service entrance equipment is in short supply with lead times for transformers and switchgear now one to five years in many markets
Over regulation with cumbersome permitting requiremetns have delayed projects as much as fifteen to twenty years
End user power outages are more common already and that is likely to get worse
Connection of new data centres to support the burgeoning AI industry and the EV charging network needed for the rising number of Tesla’s and other EV’s now experience lead times of three to five years.
When leftist governments use the power of the state to try to force a square peg into a round hole, a lot of “unintended consequences” are inevitable. The climate cult believes these efforts are needed to “save the planet” which is absurd, but regardless of their beliefs the damage to the quality of your life is an inevitable outcome and you are well-advised to buy a natural gas powered generator for your home and keep your ICE vehicle.
One investment opportunity this charade has created is a small, Guelph, Ontario company called Hammond Manufacturing (HMM.A on the TMX). A manufacturer of transformers which are in high demand, Hammond trades at less than 7 times earnings and has fewer than 9 million shares outstanding. It will continue to benefit from institutional stupidity in Ottawa and Washington. With a market capitalization of only ~CDN$130 million, almost a double over the past year, Hammond remains an interesting micro-cap value play.