Economics

Solar created the duck curve. Batteries are now flattening it. This chart shows median wholesale electricity prices in New South Wales during the second quarter of each year. In 2023, prices surged towards $300/MWh during the evening peak. In 2026, that peak is below $100/MWh. While the chart shows NSW, this same pattern is emerging across Queensland, Victoria and South Australia as well. The driver of this is becoming familiar: batteries. ✅ Batteries create demand during solar-rich daytime hours, preventing midday prices from falling as deeply. ✅ They discharge after sunset, adding supply when evening demand rises. ✅ This reduces reliance on gas and hydro during the evening peak, when they have traditionally set higher prices. The scale of the battery build-out is now large enough to reshape both electricity supply and demand. Modo estimates that registered home-battery power capacity across Australia's National Electricity Market has reached 7.8 GW, overtaking the 7.7 GW of operational grid-scale batteries. Those home batteries increasingly charge during solar-rich daytime hours, then meet household demand after sunset - reducing grid demand. Meanwhile, grid-scale batteries add supply directly into the evening market. Batteries are also increasingly determining the wholesale price. In Q2, battery charging and discharging set prices in 36% of NEM dispatch intervals, up from 17% a year earlier. During the evening peak, battery discharge was the dominant price-setter. The curve is therefore being flattened from both directions: more demand when solar is abundant and more supply when evening demand rises. As battery capacity grows, the gap between the cheapest and most expensive hours is narrowing. That means lower peak prices, less volatility and a more productive use of daytime solar.

This time Is different We don't often say that about the Fed, but after yesterday's FOMC meeting, we think it may actually be true. In fact, we believe yesterday's meeting ushered in a new era of monetary policy in the United States.    For the better part of two decades, monetary policy has followed a familiar playbook: extensive forward guidance, frequent communication, data dependence and the  Federal Funds rate as the primary policy tool. While leadership has changed, the broader framework has remained remarkably consistent.   What we heard yesterday suggests the possibility of a meaningful evolution.   We believe the Fed may be moving toward a framework that places less emphasis on signaling every move in advance and more emphasis on assessing where inflation, employment and broader economic conditions are heading. In a world of real-time data and increasingly sophisticated analytics, that could prove to be a healthier and more effective approach.   We also continue to hear indications that the policy toolkit could broaden beyond the overnight policy rate, with greater consideration of balance sheet policy, liquidity conditions, money supply dynamics and longer-term interest rates.   Importantly, change does not automatically mean more volatility. A broader set of tools and a more forward-looking approach could ultimately increase confidence in policy outcomes rather than diminish it.   For investors, the near-term message remains straightforward: inflation is still above target and remains the Fed's primary focus. While rate hikes are far from certain, they remain a possibility that markets need to respect.   That's one reason we continue to favor income-oriented fixed income opportunities over pure interest-rate expressions. And when markets overreact to uncertainty around policy change, we think there may be opportunities to sell volatility rather than buy it.   This time may indeed be different, and it will be fascinating to watch how this evolution in monetary policy unfolds. The real question is whether less signaling creates more uncertainty, or ultimately more confidence in the Fed's ability to achieve its objectives.

The European Central Bank is now making the economic case for decarbonisation. Not as climate policy. As monetary policy. Frank Elderson, ECB board member, argues in the Financial Times that Europe's dependence on imported fossil fuels is a structural threat to price stability (👉 https://lnkd.in/eKWWjKbh). The data is damning: energy price shocks pushed euro area inflation to 10.6% in October 2022. Every geopolitical tremor in the Middle East shows up in European energy bills. And the ECB is caught in an impossible bind: tighten to fight inflation and deepen the slowdown, ease to support growth and entrench inflation. The solution is not better forecasting models or finetuned monetary policy. It is cheaper energy. Spain shows what is possible. Wholesale electricity prices in early 2024 were approximately 40% lower than they would have been had wind and solar generation remained at 2019 levels ( 👉 https://lnkd.in/edXgxh9q). Once the infrastructure is built, the energy itself is virtually free. Volatile global commodity markets simply become less relevant. Elderson is explicit: €660 billion per year in clean energy investment sounds large. But Europe already spends nearly €400 billion annually on fossil fuel imports, money that leaves the continent and buys geopolitical vulnerability. Analysis in the UK shows that for every pound invested in sustainable energy, benefits outweigh costs by a factor of 2.2 to 4.1 ( 👉 https://lnkd.in/emEXVfiw). This is precisely what I argued in my piece for Triodos a few weeks ago: Europe's crisis response has been backwards. We keep treating energy dependence as a shock to manage rather than a structural problem to fix. (👉https://lnkd.in/ehFqA6iY) The ECB cannot decarbonise Europe. What it can do is name the conditions: keep the ETS, mobilise capital toward renewable capacity, strip out fossil fuel subsidies, and stop confusing cheap fossil fuels with affordable energy. If people need help with energy costs, target it: don't suppress the price signal that drives the transition. The cheapest energy is the energy we no longer have to import.

The latest reporting from the Financial Times highlights a point that energy analysts have been making for years: geopolitical shocks consistently strengthen the case for renewables, electrification and storage. Microsoft’s global vice-president for energy notes that oil and gas price spikes linked to the Middle East conflict reinforce the value of wind, solar and batteries in providing price stability. Once installed, renewables offer predictable cost profiles and reduce exposure to volatile global fuel markets. We saw this dynamic after Russia’s invasion of Ukraine. Europe accelerated solar deployment, heat pump uptake increased in several countries, and governments revisited questions of energy security through the lens of diversification and electrification. The underlying issue remains unchanged. Fossil fuels must continuously flow through complex global supply chains. When those flows are disrupted, prices spike and economies are exposed. Renewables, by contrast, are capital intensive upfront but deliver long term domestic supply and insulation from commodity shocks. There are short term risks. Inflation, higher interest rates and supply chain constraints can slow clean energy investment. Some governments may also respond by doubling down on gas infrastructure. The policy challenge is to avoid locking in further structural vulnerability. Energy security and climate policy are not competing objectives. In a world of recurrent geopolitical instability, they are increasingly aligned.

During my time serving in government, I saw firsthand how geopolitics can impact energy production and flows, with cascading impacts on market and macroeconomic trends.   We're already seeing this play out following the last few days in the Middle East. U.S. and Israeli strikes on Iran triggered retaliatory action across the region that has disrupted energy production and transit.   The market reaction is changing quickly. Since I recorded this video on Monday, oil and gas prices have jumped further, and equities have shifted toward a risk-off move as investors price in continued escalation. Bonds sold off further, reflecting inflation fears in developed markets. Due to the segmented nature of natural gas markets, the impact of higher prices will hit regions differently, with Europe more exposed than the U.S. to elevated LNG prices.   The central question: will this remain a short-term volatility spike or evolve into a broader supply shock? The duration of the disruption and the severity of transit impacts are the core variables I'm watching.   ⬇️ Watch the full video for my latest take on what this could mean for markets.

Starting May 1, 2026, China will implement a zero-tariff policy on all products from 53 African nations with diplomatic ties (excluding Eswatini), significantly boosting market access for agricultural, mineral, and manufactured goods. This initiative aims to deepen trade relations, support industrialization, and diversify trade routes. This policy covers all products from 53 African nations, expanding upon previous duty-free access for 33 least-developed countries to include middle-income nations like South Africa. The initiative aims to boost exports of processed, value-added goods and stimulate investment in African manufacturing. China will further promote trade facilitation, such as upgrading its "green channel" for faster customs clearance and advancing trade agreements. The new policy strengthens China-Africa economic cooperation and offers African nations an alternative to higher tariffs elsewhere. It is expected to enhance trade capacity, though its success depends on overcoming non-tariff barriers, enhancing infrastructure, and fostering local industrialization. But will this deepen African productive capacity or simply accelerate raw material extraction under better branding? Trade policy alone does not create transformation. Strategy does. If this deal is to work for Africans, not just for the politicians announcing it, several things must happen: 1. Move beyond raw exports. Zero tariffs on cocoa beans or unprocessed minerals mean little if we are not exporting chocolate, batteries, and finished goods. Industrial policy must sit alongside trade policy. 2. Fix internal bottlenecks. Ports. Power. Rail. Customs efficiency within Africa. Non-tariff barriers between African countries often hurt us more than tariffs abroad. 3. Align with AfCFTA. This cannot become a substitute for intra-African trade. It should strengthen regional value chains, not fragment them. 4. Protect standards and leverage. African governments must negotiate from a position of long-term national interest, ensuring technology transfer, local job creation, and skills development. 5. Strengthen private sector capacity. SMEs and manufacturers need financing, quality certification support, and export readiness programs, otherwise only a handful of large players will benefit. Opportunity without strategy can become dependency. But opportunity with coordination, transparency, and industrial ambition? That is how continents rise. The real work now shifts from Beijing to African capitals and from political announcements to implementation discipline. #Africa #TradePolicy #Industrialization #AfCFTA #ChinaAfrica #EconomicTransformation

More than half of U.S. professionals (56%) say they plan to look for a new job in 2026, yet 76% feel unprepared for the search. Our new hiring data helps to explain why the U.S. job market still feels sluggish as this new year begins: 📌 Hiring remains subdued. While national hiring accelerated 6% month-over-month in December, it’s still down just over 2% relative to a year ago and continues to be 20% slower than in pre‑pandemic times. 📈 Competition among job seekers remains elevated. U.S. applicants per open role have doubled since the Spring of 2022. And according to new research from LinkedIn, nearly two-thirds (64%) of people in the U.S. say finding a job has become more challenging, citing competition as the main hurdle, followed by uncertainty about which roles they’re qualified for and skills gaps. 📉 Worker confidence is low. Our Workforce Confidence Index continues to remain subdued, down -4 points in comparison to last year. Unsurprisingly, active job seekers are feeling the least confident, with their confidence levels hovering around all time lows. 📊 Certain corners of the labor market show signs of recovery. We saw hiring pick up year-over-year compared to December 2024 across industries like Manufacturing (+4%), Technology, Information and Media (+3%) and Entertainment Providers (+1%). And across metros, year-over-year hiring was strongest in Miami-Fort Lauderdale (+7%), and across the Midwest in Detroit (+6%), and Minneapolis-St. Paul (+5%). We've identified some of the fastest growing jobs across our platform and highlighted them in our new Jobs on the Rise list. Here are the key insights: 📍 AI continues to reshape the landscape. For the second year in a row, AI Engineers take the top spot, with additional AI-centric roles like AI Consultants, AI/ML Researchers and Data Annotators rounding out the list. This signals strong demand across both technical and AI-adjacent roles. 🔧 Jobs supporting AI infrastructure are growing. We’re seeing an influx of roles like Datacenter Technicians, Commissioning Managers, and Construction Project Leads, as they are essential to the expanding AI ecosystem. 📈 Entrepreneurial paths are increasingly common.  Founders, Independent Consultants and Strategic Advisors rank among LinkedIn's Jobs on the Rise, signaling more professionals are creating their own opportunities. In fact, over the last year, we’ve seen a 69% increase in LinkedIn members in the U.S. adding ‘founder’ to their profile.   📣 Sales and revenue roles remain essential. From roles like Field Marketing Representatives, and Advertising Sales Specialists to Fundraising Officers, businesses are continuing to invest in and hire for roles that help increase their bottom line, even as uncertainty persists. Even in a cooling labor market, opportunity is shifting, and better understanding where momentum is building can help job seekers feel more confident about their next move. https://lnkd.in/JOTR26US

Is there an AI bubble? With the massive number of dollars going into AI infrastructure such as OpenAI’s $1.4 trillion plan and Nvidia briefly reaching a $5 trillion market cap, many have asked if speculation and hype have driven the values of AI investments above sustainable values. However, AI isn’t monolithic, and different areas look bubbly to different degrees. - AI application layer: There is underinvestment. The potential is still much greater than most realize. - AI infrastructure for inference: This still needs significant investment. - AI infrastructure for model training: I’m still cautiously optimistic about this sector, but there could also be a bubble. Caveat: I am absolutely not giving investment advice! AI application layer. There are many applications yet to be built over the coming decade using new AI technology. Almost by definition, applications that are built on top of AI infrastructure/technology (such as LLM APIs) have to be more valuable than the infrastructure, since we need them to be able to pay the infrastructure and technology providers. I am seeing many green shoots across many businesses that are applying agentic workflows, and am confident this will grow. I have also spoken with many Venture Capital investors who hesitate to invest in AI applications because they feel they don’t know how to pick winners, whereas the recipe for deploying $1B to build AI infrastructure is better understood. Some have also bought into the hype that almost all AI applications will be wiped out merely by frontier LLM companies improving their foundation models. Overall, I believe there is significant underinvestment in AI applications. This area remains a huge focus for my venture studio, AI Fund. AI infrastructure for inference. Despite AI’s low penetration today, infrastructure providers are already struggling to fulfill demand for processing power to generate tokens. Several of my teams are worried about whether we can get enough inference capacity, and both cost and inference throughput are limiting our ability to use even more. It is a good problem to have that businesses are supply-constrained rather than demand-constrained. The latter is a much more common problem, when not enough people want your product. But insufficient supply is nonetheless a problem, which is why I am glad our industry is investing significantly in scaling up inference capacity. As one concrete example of high demand for token generation, highly agentic coders are progressing rapidly. I’ve long been a fan of Claude Code; OpenAI Codex also improved dramatically with the release of GPT-5; and Gemini 3 has made Google CLI very competitive. As these tools improve, their adoption will grow. At the same time, overall market penetration is still low, and many developers are still using older generations of coding tools (and some aren’t even using any agentic coding tools). [Truncated for length. Full text: https://lnkd.in/gnMYckzB ]

Every two years, we ask thousands of decision-makers around the world one essential question: What are the top risks your organization faces? Since 2007, Aon’s Global Risk Management Survey has offered one of the most comprehensive views of risk anywhere. What began as a list of concerns has evolved into a dynamic signal system — tracking how global volatility shifts and what leaders must do to adapt. This year’s results are revealing. For the first time, geopolitical volatility enters the global Top Ten. Cyber risk remains at the top, but its meaning has expanded. It now reflects the influence of artificial intelligence, supply chain fragility and the pace of digital transformation. Risks once considered operational now impact strategy, brand, capital and talent. Over nearly two decades, we’ve watched business interruption, regulatory change and economic volatility rise, fall and re-emerge in new forms. To illustrate that journey, we created a visual timeline that shows how the risk landscape has evolved — reminding us that resilience isn’t a fixed destination. It’s a capability to be built and continuously redefined. At Aon, we’re in the business of better decisions. That means helping leaders act on what this data reveals: risk is accelerating, complexity is increasing and the ability to navigate both is now a defining advantage. Explore the full report and how it connects to your next decision: https://aon.io/46Q1Xqp   

91% of new energy is now 75% cheaper than alternatives New data reveals a fundamental shift in the energy landscape, as per trends from the last years. Over the past decade, renewable energy costs have plummeted across all major technologies: • Solar PV costs dropped 75% • Onshore wind fell 62% • Offshore wind decreased 60% • Concentrated solar power declined 54% The strategic implications are clear: 81% of renewable capacity added in 2023 now delivers electricity at lower costs than alternatives, which can save a lot of resources of business. For businesses, this data underscores three critical considerations: →Financial optimisation: Renewable investments now offer superior long-term cost predictability compared to volatile fossil fuel markets. →Risk mitigation: Early movers in renewable adoption are positioning themselves ahead of inevitable regulatory and market shifts. →Stakeholder value: ESG-focused investors and customers increasingly expect measurable progress on clean energy transitions. Source: International Renewable Energy Agency (IRENA) Our World in Data Visual Capitalist #renewableenergy #sustainability #cleanenergy #energytransition #ceo #csuite #esg #sustainablebusiness #climatetech #energyeconomics #leadership #futureofenergy #solarpower #windpower #cleantech #energyinnovation