Dock Insights
October 3, 2023
In its latest Net Zero Roadmap, the International Energy Agency last week issued a complex, two-part message: achieving net zero by 2050 is still possible, but it requires reaching unprecedented levels of renewables deployment and investment. By the early 2030s, global annual clean energy investment must reach $4.5 trillion – two and a half times the record high projected for 2023.
IEA’s findings underscore a parallel concern about the U.S. clean energy industry. Despite widespread (and entirely justified!) enthusiasm for the Inflation Reduction Act and other significant policy and industry milestones, the U.S. clean energy industry is not accelerating. It is most definitely growing. But it is not accelerating to match the scale of deployment that’s needed to limit global temperature rise to safe levels.
Discussion along these lines typically focuses on permitting, interconnection, and new transmission bottlenecks, and for good reason. Approvals for even smallish solar PV projects can take years, most new generation in interconnection queues will never be built, and well-known challenges around new transmission have frustrated efforts for decades.
What’s less recognized and, I’d argue, just as important is that these bottlenecks, inefficiencies and failures to scale apply across the board in clean energy – not just to building new infrastructure but also, for example, to the process of going to market with new clean energy projects and the myriad contracts, market forecasts, regulatory forms, loan applications, pitch decks, and other documents involved. Companies can struggle mightily to manage this, and it holds them back. But projects can only move as fast as information flows.
Here’s a noteworthy stat. Since 2018, we at Dock Energy have supported $1 billion worth of solar PV projects. (We provide purpose-built, secure virtual deal rooms for due diligence and underwriting, plus lifetime data management for clean energy projects.) In all, that $1B of solar required 94,000 documents. If IEA’s prescribed renewables buildout comes to pass with similar levels of paperwork, that’s 423 million documents per year. You can see why, in an industry marked by thin margins, streamlining workflows will only become more important to developers and owner/operators eager to cut costs, maximize efficiencies and bring projects online faster.
Better data management isn't just an early-stage issue. Projects generate reams of data over their lifetimes (see graphic), which can easily run 25 years or more. So far, the projects we've worked on have averaged roughly 400 documents each – more than enough to gum things up.
On data, the industry partly controls its own destiny. It should start by stepping up its data game. The APIs that allow different software applications to easily communicate in other sectors are utterly lacking in the energy industry, where in-house teams solve company-specific problems in ways that are siloed from the marketplace (if not the companies themselves).
That doesn’t scale. The software stack that’s emerging for the energy transition – spanning electrification, built-world decarbonization, fintech, and energy infrastructure and management – needs to be able to communicate with itself, starting with APIs for easy data in/out.
I don’t mean to understate the challenge here, as developing these tools will require significant cross-sector collaboration and long-term vision. But it must happen: the energy world is too diverse and complex for a single entity to wield the transformative power that Google, Apple, and Microsoft have done elsewhere. And with a pile of 423 million documents looming skyward every year (or whatever the actual number ends up being), inefficiencies will continue to hold back the energy transition – unless we invest in APIs to grow and elevate our data ecosystem, starting now.
At Dock Energy, we build smart, automated tools so customers and partners can change the world. As one piece of the puzzle, we know as well as anyone how much companies in our space depend on each other. If you’re as interested in clean energy data as we are, and how new APIs could considerably streamline new projects, we want to hear from you. Please get in touch!