Economics

Solar created the duck curve. Batteries are now flattening it. This chart shows average wholesale electricity prices in Victoria during the first quarter of each year. A few years ago, growing solar generation was pushing midday electricity prices deep into negative territory while evening prices remained extremely high. This year, the shape of the curve is noticeably flatter. Compared to 2024 and 2025: ✅ Midday prices are higher, and no longer negative ✅ Morning and evening peak prices are much lower ✅ Overall price volatility has fallen significantly The main reason is battery storage. By charging during the middle of the day and discharging during the evening peak, batteries are creating demand when prices are low and boosting supply when prices are high. And what's interesting is that this impact has largely been achieved using today's fleet of relatively short-duration batteries, typically providing 2-4 hours of storage. According to the Victoria's State Electricity Commission, this is a "great proof point" of the role batteries can play in intraday firming and reshaping electricity markets. The benefits extend beyond lower evening peaks. By absorbing surplus solar generation, batteries can also reduce curtailment risk and improve the value of renewable electricity during the middle of the day. And the story isn't over. Encouraged by the success of shorter-duration batteries, the SEC is now exploring investments in 8-12 hour storage to help manage longer periods of low solar and wind output. Solar changed the shape of electricity markets. Now batteries are changing it again. H/t Rebecca Tilbrook, SEC Victoria

Working from home reduces the motherhood penalty by 77%. Seventy. Seven. Percent. A new study from Italy found that when mothers can work from home, they're less likely to reduce their hours and more likely to continue progressing in their careers. Which, when you think about it, is hardly shocking. It's much easier to stay on track at work when you're not spending two hours a day commuting, frantically trying to get to nursery before it closes and operating with the logistical complexity of a mid-sized military operation. But there's more.. Fathers' flexibility matters too. Some people insist on calling it the "parenthood penalty", but mothers and fathers do not experience parenthood in the labour market in the same way. Mothers take the financial hit. Fathers generally don't. However, when fathers have access to remote work, mothers' financial losses after childbirth are significantly smaller. Why? Because childcare, school pickups, sick days and life admin stop being Mum's problem by default and start becoming a shared responsibility. The researchers found that a father's ability to work remotely has almost as much impact on a mother's earnings as her own ability to do so. The report goes even further. It estimates that if all jobs that could be done remotely actually allowed people to work remotely, the lifetime gender earnings gap would shrink by 30%. Thirty percent. Just by letting people work from the place where they also happen to keep the tiny humans alive. Imagine that. https://lnkd.in/eBjMe3NM

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.

Wars don’t just destroy nations. They expose how fragile our systems really are. Over the past few years, every global disruption, from conflicts to pandemics to supply shocks, has shown us one thing clearly: We have built a world that is highly efficient… but dangerously dependent. - Food travels thousands of kilometres before it reaches our plates. - Energy systems rely on distant, unstable sources. - Waste is exported, outsourced, and forgotten. And the moment something breaks somewhere in the world, everyone, everywhere, feels it. Maybe the question isn’t: How do we make global systems stronger? Maybe the question is: Why are we so dependent on them in the first place? And what if our cities, towns and villages could: • Grow more of their own food • Generate more of their own energy • Manage their own waste • Create and consume locally This isn’t about isolation. It’s about resilience. Because when systems are decentralised: • Communities recover faster • Livelihoods are created locally • Environmental impact reduces • And people regain a sense of ownership This is where sustainability meets survival. Decentralised production systems are not just a climate solution. They are a risk mitigation strategy for an uncertain world. The future isn’t global vs local. It’s global and local. In fact, its hyperlocal. But the balance has clearly tipped too far. If there’s one lesson from the world we’re witnessing today, it’s this: The strongest communities are the least dependent ones. Time to build local. Time to act resilient. Time to rethink how we produce, consume, and live. What do you think? #Decentralisation #Sustainability #Resilience #ClimateAction #LocalEconomies #CircularEconomy

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.

Since Russia’s invasion of Ukraine, natural gas prices in Europe have stayed far above those in the United States — with serious implications for competitiveness, energy security, and the transition to clean energy. In September 2025, European natural gas averaged $11.1 per MMBtu, 274% higher than the U.S. price of $3.0 per MMBtu — nearly four times as high. Before the crisis, in 2019, Europe’s price was $4.8 per MMBtu, already 87% above the U.S. level. Despite progress on diversifying supply and reducing demand, this persistent price gap underscores the structural challenges Europe faces as it shifts away from fossil fuels while maintaining industrial competitiveness. The long-term answer? Investing in energy efficiency, renewables, and electrification — the only sustainable way to reduce both dependency and exposure to volatile global gas markets.

In Delhi, the temperature hit 42.1°C this year. But some people didn't have the luxury of going indoors because the street was their workplace. India’s 3 crore+ street vendors from fruit sellers to chaat walas spend over 12 hours a day under the open sky. They’re not just battling heat; they’re battling the vanishing shade. A recent study by Azim Premji University in Hyderabad reveals a disturbing trend: "As Indian cities grow vertically, their green cover shrinks." And the hardest hit? Women, migrants, and informal workers who depend on those trees for a livelihood. “When the tree was there, I sold 20 plates of Bhel. Now, I sit in the sun and barely manage 6.” -  a street vendor in Delhi. This isn't an isolated story. According to Greenpeace India & National Hawkers Federation (2024) survey: - 50% of street vendors in Delhi lost income during the summer months - 80% saw a dip in footfall due to extreme heat - ₹500–₹600 worth of goods go bad daily due to heat damage - 71% couldn’t afford medical care - Women vendors reported rising BP, menstrual irregularities, and sleep deprivation. And yet, despite Delhi hitting a record-breaking 50°C last year, heatwaves are still not recognized as a national disaster. Worse, street vendors are often left out of urban planning and climate resilience strategies. Green spaces are not aesthetic choices- they are economic lifelines. For many vendors, a tree is more than shade. It’s a signboard, a cooling system, and a guarantee of survival. And yet, the people who pollute the least are paying the highest price for climate change. If you’re in a position to influence policy, design public spaces, or fund local initiatives - pause and ask: Are we building cities that everyone can survive in?

I’ve been headhunting in the CPG industry for the past decade, and I’ve never seen a post-inflation market like we’re in right now. For the past three years, customers have been capitulating to price hikes by extending their budgets. But now, they’re at a breaking point. American families, already tethering on edges of their budgets, do not have the ability or the desire to expand their budget in order to accommodate increased prices. I’m sure you’d agree with this, because my family certainly does. With grocery bills through the roof, we’d rather skip on groceries and essentials rather than paying a premium right now. A couple things led us here, starting the pandemic and the post-pandemic impact on spending and savings. Secondly, the wave of AI and tech developments that caught us off guard. So, where do the companies go now? Once the “price increase” playbook is done, CPG brands can only win in both value and volume by shifting gears. In my chats with executives, I’m sensing a change in tone. To stay competitive, they’re looking for ways to shift from the post-pandemic survival mindset to a growth-focused one that accommodates the customer as well. Rather than hiking prices, the focus is now on bringing down costs, and getting to terms with consumer’s limited budgets and increasing product choices. Layoffs aren’t the only way to bring down costs. In my view, CPG companies do have the leeway to embrace data-driven innovation and efficiency to cut costs. Here are some of the ways in which companies can use AI and ML to achieve targets in 2025 and beyond: 1/ Predicting the demand: Post-pandemic behavior is tough to predict, especially in CPG markets. With AI, the companies can now leverage real-time insights from sources like point-of-sale systems, social media, and even economic indicators to see future trends more clearly. PepsiCo, uses Tastewise to track what consumers are eating across 60+ million touchpoints and making decisions that align with local preference. 2/ Inventory management: With AI-powered predictive analytics, companies are now turning inventory management into a science. Procter & Gamble’s Supply Chain 3.0 initiative is one example of this shift. 3/ Increased personalization: Leaders are tapping into geographical intelligence to connect meaningfully with audiences. Estée Lauder has a voice-enabled makeup assistant for visually impaired customers, reaching a new market while boosting brand loyalty. Bottom line is: customers are no longer meeting brands where they’re at. It’s high time that companies start caring about customers and their shrinking bottom lines. Are you excited to see your grocery bill go down in the next few months? #CPG #AI #ML #fmcg #marketing #trending

The relocation decisions of male-female couples are predominantly determined by what's best for the man's career: 1. Couples are more likely to relocate when a man is laid off than after a woman is. 2. Men's earnings increase following a couple's move to a new commuting zone, while women's earnings stay the same or decline. This in part because women spend less time working, particularly in the first year after the move when they are more likely than men to be job hunting. The gender gap persists for at least five years and is largest among couples who are in their 20s. The researchers study Germany and Sweden, and attribute the results to relocation decisions being driven by antiquated gender norms. They conclude that "households in both countries place less weight on income earned by a woman compared to a man, particularly in Germany." By Seema Jayachandran, Lea Nassal, Matthew J. Notowidigdo, Marie Paul, Heather Sarsons, and Elin Sundberg. https://lnkd.in/eHSXi5Mj

1st Time Ever, CLO Market For the first time ever in the history of the U.S. CLO market an interesting dynamic has emerged. CLO new issue volume is at a record levels, YET the size of the CLO market has declined. This table below illustrates 10-years of history; however, one can go all the way back to 1990 (first CLO ever issued) to see that this is indeed a first. Negative net issuance despite record primary issue occurred as seasoned/older CLOs that are past their reinvestment period are amortizing or being liquidated, either into the open market (BWIC) or used to form new CLO from the same manager. Demand for CLO tranches starts with the AAA tranche since it is ~60% of the capital structure. AAA demand is rock solid, led by large U.S. & Japanese banks, global insurance companies, and the new kid on the block: Janus’ CLO ETF (JAAA) which has grown to $10B, creating an additional bid for AAAs. As a result, CLO liabilities have tightened, which is accretive for CLO equity investors. CLO managers employ teams of investment professionals that are experts in underwriting each BSL, building and managing a highly diversified portfolio with an enduring credit profile to maintain low default rates, and avoiding CCCs, a bifurcation that drives default rates. Cash flow distributions to CLO equity investors benefit from tighter CLO liabilities, the return generated during the warehouse period as the CLO ramps, +reinvestment during the investment period, +active management that adds alpha via relative value generated by CLO manager, +repricing and extensions of CLO liabilities later in the CLO life span. Today, CLO equity holders are earning their highest cash distribution in years, resulting in mid-teens IRRs, strong DPI and MOICs. I believe this dynamic will continue to be net-positive for world-class CLO managers, who have proven incredibly adept managing through the cycles. The kicker is when the CLO manager shares a portion (10-20%) of its management fees that it earns from managing the CLO (~40 bps) with the CLO equity holders. This fee sharing arrangement was first introduced post-GFC when CLO managers raised CLO equity funds required under risk-retention requirements known as The Volcker Rule. Since the Volker rule is no longer applied to U.S. CLOs, fee sharing arrangements are less prevalent today, but available from select managers. Conclusion: The technical condition that exists today, with tight liabilities and net-negative primary issuance, yet robust new issue supply and improving credit dynamics represents a unique opportunity for CLO equity.