Research, studies, science
Background & publications
FIRM News Dr. Clemens Wieck
Climate stress tests – where is the stress?
Many banks in Germany and Europe have greatly advanced the development and analysis of climate scenarios as part of capital planning and stress testing in recent years. The basis for this is usually scenarios from the Network for Greening the Financial System (NGFS) or the International Energy Agency (IEA). With a growing understanding of th...
PV-Magazin.com Dr. Uwe Dahlmeier
Solar power with battery storage is cheaper in the grid than without: why the narrative of expensive battery storage endangers more than just the development of photovoltaics.
The energy transition needs virtual grids
Batteries extend the use of existing grid capacity; they create virtual grids by using the free capacity available in off-peak periods. This will lead to significantly falling grid fees per kilowatt hour. Virtual grids thus further reduce the cost of renewables.
Energy transition to net zero
Total energy consumption - by energy source - to 2050
The empirically based modelling gives 2045 as the expected value for the energy transition to net zero, i.e. the transition is expected to be complete in ~ 20 years. This contrasts with many models used so far, for example those of the IEA3. Numerous models proved to be fundamentally unreliable. This was what prompted us to develop a new model. Meanwhile the call for new, more reliable approaches, for new epistemological approaches in modelling, is being made from prominent quarters as well, for example by the Bank for International Settlement (BIS)4.
Figure 1: empirically based modelling of the energy transition. In the history, up to 2023, the Corona crisis in 2020 is clearly visible. The forecast decline in total energy consumption up to 2023 is not an error; it is due to the rising efficiency of energy applications.
3 https://www.pv-magazine.de/2018/11/20/iea-und-photovoltaik-das-geht-einfach-nicht-zusammen/
4 Meanwhile the call for new, more reliable approaches, for new epistemological approaches in modelling, is being made from prominent quarters as well, for example by the Bank for International Settlement (BIS) in The green swan, https://www.bis.org/publ/othp31.htm.
5 TWH
We develop forward-looking solution concepts
About Dr. Dahlmeier Financial Risk Management AG
More than 7 years ago we devoted ourselves to creating a new modelling approach. Our many years of practical experience from advisory work and from building up the modelling function of an internationally active major bank were an important foundation for this.
With the empirically based model created in 2018 we have an almost uniquely reliable tool for assessing the energy transition and its effects on the economy. It even meets the Bank for International Settlement's (BIS) requirement for new epistemological approaches.
Our results have met with excellent response, for example in our engagements as keynote speakers6, in a publication for FIRM produced together with KPMG, and in a publication in PV-Magazine. On this basis of our outstandingly reliable model we develop forward-looking solution concepts for positioning yourself successfully in the accelerating competition of the energy transition and its far-reaching effects.
We help you to prepare, on the basis of transition scenarios, for their effects on your business activities. This applies to strategic as well as to operational aspects. Using the transition to your advantage is a matter of great concern to us. The successful and efficient implementation of our solution concepts in practice is always an important goal for us.
We are glad to help you, with great enthusiasm, to recognise and seize the opportunities of the transition and to balance the opportunities against the risks. Do not hope for the best – seize it and shape it. We stand by your side with experience and foresight.
6 E.g. Asset Management Association Switzerland https://www.linkedin.com/posts/asset-management-association-switzerland_riskmanagementday2023-sustainablefinance-activity-7067051702184497152-MPKs/?originalSubdomain=de or at a credit rating company.
Our expertise for your success
Our services at a glance
The energy transition and its impact on business strategy
Highly probable developments and their effects on the economic environment
Opportunity & risk identification
Recognising opportunities as they open up, forward-looking management of emerging risks
Scenario analyses
For example: the effects of energy price jumps, faster development in other energy technologies such as nuclear fusion
The energy transition is
“the greatest economic transformation in history”.
The speed, the scale and the costs of the transition can already be assessed very well today. ”
Philipp Hildebrand
former President of the SNB, Vice Chairman BlackRock
The 3 most important key points
The energy transition towards renewable energies has been running exponentially for 48 years. In the case of PV, the globally installed capacity doubles roughly every 2 years, and with every doubling the price falls by ~ 23%. This long period, 48 years, makes us lose sight of the development in exponential growth. But by now renewable energies, including with battery storage, are the cheapest sources of electricity. Prices continue to fall, which guarantees the successful change. It is precisely this change that will have dramatic effects on the fossil sector, on the entire economy.
Renewable energies continue to grow exponentially and the energy shift will turn the economy upside down. Six years ago about 1% of global electricity production came from PV, today it is 7%, and in another 6 years it will be 49%. The rest of electricity production will then also be essentially CO2-free (wind, water and a small share of nuclear power).
Fossil fuels will reach their peak in 2026/2027. At the latest with the decline in consumption, the market will turn away from fossil fuels. A displacement competition will set in, and the losses will exceed those from the financial crisis many times over. E.g. BIS – The green swan. A shock to financial stability is probable. Withdrawing from exposures (equities, bonds, loans, etc.) or relocating will then not be possible without considerable losses.
Market turbulence is possible at very short notice. With his drill baby drill policy, the American president is increasing the risk of a Minsky moment. Scenarios are the best available risk management concept. Qualified scenarios make provision possible if they are drawn up incorporating the available information. This information includes current scientific publications on the further course of events, stock market trends that have been visible for a long time, and comprehensive computer simulations. Making use of these opportunities can be decisive. They can secure the existence of companies, of funds and pension funds as well as of entire credit portfolios. Time is pressing. Even when the scenarios are available, implementing far-reaching adjustments takes time, from involving the supervisory bodies and adjusting the strategy through to implementing the management methods.
We look forward to hearing from you
Founding partner and member of the board of directors
Dr. Dahlmeier
Dr. Dahlmeier (founding partner and member of the board of directors) is a senior financial risk manager with more than 25 years of experience in highly professional organisations (KPMG, PwC, Sal. Oppenheim jr. & Cie). He has many years of leadership and project experience in an international environment. His know-how covers the FS sector as well as the energy and commodity sector. His professional focus lies in the energy transition, FS risk management and quantitative modelling. As a member of the board of directors, he is responsible for the strategic objectives, the choice of cooperation partners and market development.
Contact
We are delighted to help you identify and seize the opportunities presented by the transition, and to balance these opportunities against the risks.
