Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.
Here are some fascinating figures (from Environment America) about the growth of renewables in the United States:
Between 2011 and 2020, renewable energy production (solar, wind, and geothermal) grew at an average rate of 15% per year. Assuming this same rate of growth, the US could be on target to meet all of its electricity needs with renewables by 2035.
The US produces 23x more solar power and 3x more wind power than it did in 2011.
The median efficiency for new residential solar panels increased by 37% from 2010 to 2019. At the same time, the cost of distributed solar photovoltaic systems fell by 71% and the cost of utility-scale systems fell by about 80% between 2010 and 2018.
During this same time period (2010-2018), the cost of land-based wind power fell by 66%.
The median range of new electric vehicles increased by more than 3x between 2011 and 2020. The median range is now more than 250 miles on a single charge. By the middle of this year, cumulative plug-in EV sales surpassed 2 million units.
Texas is the US state that currently produces the most renewable energy.
To download the full report by Environment America, click here.
This is a great 30 minute talk by Horace Dediu that is structured around his 10 commandments of micromobility. If you can’t see the embedded video above, click here. What I think that many of you will appreciate about the talk is that he focuses on smaller interventions. Think bike lanes over big hyperloop moonshoots. In his words, we’re going to get to where we want to go not through hyperbole, but through humility. And micromobility is all about humility.
I’m also a big fan of his last commandment. It is titled: cities always win. Yup.
McKinsey published a report last month on the future of electric vehicles and what that will mean for the industry. Many countries, cities, and companies have set some sort of electrification target for 2030. The US is targeting 50% EVs by 2030. Several countries have announced a flat-out end to ICE sales by 2030. And a number of OEMs have committed to the same.
But there are already cities, such as Oslo, which have reached EV majority. In July of this year, its passenger EV adoption figure was 66%, making Norway a global leader. What is clear is that the electrification of personal transport is well underway. Anecdotally, we are seeing that play out with the number of people now inquiring about electric charging infrastructure in our buildings (here in Toronto).
This move to electric will have many repercussions, including a major shift in the entire supply chain (which McKinsey outlines in their report). While ICE vehicles and EVs still both have things like tires, EVs require a whole slew of new and now growing components:
It is also going to force new public infrastructure:
But in parallel to the electrification of personal vehicles, we are also seeing a number of other trends and shifts. The electrification of public transport (Shenzhen has already electrified its entire bus and taxi fleets). The rise of micro-mobility (things like e-scooters). The ongoing push to discourage driving in urban centers. And the continuing goal of autonomous vehicles.
What all of this suggests to me is that the electrification of personal vehicles is only part of the story. The entire mobility landscape in our cities is changing and it will probably look a lot different by 2030.
With seemingly so much happening in the world these days — everything from COVID to climate change — it is perhaps easy to feel a little discouraged about the current state of affairs. But I am an optimist. And as I mentioned on Twitter a few weeks ago, I haven’t been this excited about the future of tech and the internet in a long time.
I believe in the resiliency of cities and, as I have been arguing on this blog all throughout COVID, I think the claims about the demise of our cities have been greatly exaggerated. In fact, I think this pandemic has forced us rethink a lot of things about our urban environments, including how we allocate and use our public spaces (think patios). Some of these changes have been for the better and they’re not going to go away.
I think the benefits of working in close proximity to others are too great to have everyone working remotely. Yes, we have learned that decentralization is possible. But there’s an overwhelming amount of research telling us that we’re all more innovative and productive when we cluster together in cities and in offices.
I have been back in the office almost 100% of the time since it has been possible to do that. And I am much happier and more productive as a result. There’s also research suggesting that there are psychological benefits to a reasonable commute. It creates a break in our day, allows us to detach from our work, and gives us time to process stuff in our mind.
I think things like digital fashion and augmented reality are going to have profound impact on the way we consume things. You could also argue that there’s a sustainability angle to more digital and less physical. And of course, I am excited about the transformations that I believe cryptocurrencies and blockchain technologies will continue to bring to many different industries (if not most).
This morning I was reading a Financial Times article about cryptocurrencies in the developing world. It it perhaps no surprise that many of these countries are providing to be early adopters. People are leapfrogging over to cryptocurrencies because their existing currencies and financial systems aren’t effective enough. That has lead to adoption and penetration that looks something like this according to FT:
There is, of course, many other things to be optimistic and excited about. But I’ll leave that for the comment section below. What are you excited about these days?
Building new buildings takes a really long time. It is not uncommon for development timelines to to span 5-10 years, and sometimes even longer. It is particularly frustrating when you see unnecessary roadblocks and delays throughout the process. But that’s a topic for another post.
Perhaps one of the positives of these timelines is that they force you to think well into the future. Take for example electric vehicles. Most car manufacturers have already announced aggressive electrification targets for the year 2030.
What that means is that if you’re starting a new project today, you have to assume that it will be completed into a world where many more people will be coming home and plugging in their car. Perhaps it will be the majority of people. So you probably need to plan for that.
Another way to think about development is that it is a leading indicator for what’s coming. If we stick with the example of cars and parking, I think it’s pretty clear that parking is becoming increasingly scarce in our biggest cities. The pressures are simply too great.
In all of our Toronto projects, we are currently building no more than about 0.4 parking spaces per suite. And there’s pressure to bring this number down even further. There are lots of examples of zero parking. The biggest reason is costs, but we also know that big cities don’t function well when everyone is driving around.
This is also not a new trend.
If you look at the multi-family buildings that Toronto completed in and around the 60s and 70s, many will have parking ratios in the range of 1-2 parking spaces per suite. This is totally untenable in today’s environment (except for a small subset of the market) and I bet you that a lot of this parking is now sitting vacant.
Things change. Development can sometimes tell you what those changes might be.
The International Energy Agency (IEA) has just published what it is calling the first comprehensive roadmap for transitioning the world to a net zero energy system by 2050. Turns out, it’s only going to take a complete overhaul of pretty much everything to hit this important target. We are going to need to start investing some $820 billion each year (starting in 2030) on our electrical grids to support the electrification of the global economy. 90% of electricity generation is going to need to come from renewables, with 70% likely coming from solar PV and wind alone. 60% of global car sales will need to be electric by 2030. We’ll need to completely halt the sale of internal combustion engine vehicles by 2035. And by 2040, we will need to have retrofitted at least half of our existing building stock.
Make no little plans. For a copy of the report, click here.
Here’s some food for thought around electrical vehicles. In this recent article in The American Conservative, Jordan McGillis argues that, “the electric vehicle is the climate idol of the unimaginative.”
Rather than simply changing what’s under the hood of our cars, we should be reexamining the broader impacts that the car has had on the urban landscape. Here’s an excerpt that speaks to this:
“All of the effort directed towards EV adoption would be better expended on improving our development patterns, bringing them to human-scale and reducing the necessity of the automobile. The obvious reform candidate is zoning. According to the New York Times, it is illegal to build anything other than a single-family home on 75 percent of land zoned for residential use in the United States. Zoning exclusively for single-family homes artificially flattens our cities, necessitates daily automobile commutes, and increases our greenhouse gas emissions. As Istvan Bart has documented for the Climate Strategy Institute, suburban sprawl bears more responsibility for increased emissions from transportation than either population or GDP.“
There is no question that electric vehicles are helpful to addressing climate change. But Jordan is also not wrong. We can’t ignore that built form is crucial to this discussion, and likely even more important.
First, he shows that cars in general have been getting a lot more expensive. Looking at new vehicle market share in the US according to price (above), you can see how quickly cars over $40k have become about half of the market. Only some of this is inflation.
Nathaniel then goes on to show just how many people lease a luxury vehicle (apparently this is called lease penetration). For Infiniti it’s 55.6%, for BMW it’s 49%, and for Mercedes it’s about 40%.
When you consider that “upfront cost parity” between EV and internal combustion vehicles is supposed to arrive sometime in 2024, there is an argument to be made that people are destined to start buying a lot more EVs in the near future.
They’re already buying expensive cars and EVs will soon be cost neutral in that regard. At the same time, a lot of people lease their cars and will be in a position to easily switch when it makes sense to do that.
I think the greater barrier to adoption at this point will be the charging network and “range anxiety.” Too many plug types and not enough charging stations, except maybe if you have a Tesla. But at some point that too will change, I’m sure.
Google Maps recently introduced a new feature that allows you to search for electric vehicle charging stations by plug type. Here’s what it looks like when I tried it here in Toronto:
While helpful, it demonstrates two things. One, there are too many plug types and that’s a problem for EV adoption. Nissans and Mitsubishis use CHAdeMO, BMWs use CCS, and Tesla has its own proprietary plug, for example.
Two, this is one the main reasons why Tesla is so far ahead when it comes to EVs. They’ve been very purposeful in building out an expansive network of charging stations so as to avoid what is very clearly a chicken-and-egg problem. You need great EVs and then places to charge said vehicles.
As of January 2021, Tesla operates over 2,105 Supercharger stations worldwide with over 1,094 stations in North America, 589 in Europe, and 423 in Asia/Pacific. This is how you start to compete when there are over 160,000 gas stations in the US alone.
Apple’s self-driving system and/or car project has been in the news again recently. Last month, Bloomberg reported that the company was hoping to start production by as early as 2024. But this week, projections were revised and we’re probably looking at least 5 years. The details are pretty limited at this stage, as is typical of Apple (although Hyundai has been saying things). It’s also not clear whether the company is set on developing both an electric vehicle and a self-driving system, or just the latter. But the company has been hiring lots of engineers to work on the project, including a bunch of ex-Tesla employees. Supposedly, Apple now has “several hundred engineers” working on this initiative, most of whom are focused on the self-driving system part. Who really knows how and when this all unfolds, but I would bet that software is going to continue eating the world.
