Hi there,
This week we look at what happens when 1/5th of the world’s oil supply gets locked up. The US war in Iran is driving up oil prices, changing the math for the energy transition. We unpack what higher prices mean today - and the long-term shifts that this shock may have kicked off.
Elsewhere in climate tech:
Electra and LG add a new link to Ontario’s battery value chain
Ontoly launches its carbon credit registry for building retrofits
BYD considers building in Canada - on its own terms
p.s. we’ve got a fresh coat of paint for the newsletter and podcast thanks to our friend Clare Willis! We’ll be rolling out an updated look and feel over the coming days. RIP to the old logo we got off Fiverr back at the beginning.
Will Hormuz tip the scales for clean energy?
Photo by Alexander Bobrov
What happened: Countries are scrambling to counter rising oil and gas prices after the US war in Iran cut off the Strait of Hormuz - and roughly 1/5th of the world’s oil supply.
The details: International Energy Agency member countries are releasing 400 million barrels to offset the supply crunch.
Canada is looking at delaying maintenance to free up capacity and transporting oil by rail to boost supply and cash in.
What’s the context: Supply shocks have upended energy priorities before. The 1970s oil crisis pushed countries like Denmark away from oil-based infrastructure and car dependence. Russia’s invasion of Ukraine in 2022 ramped up electrification in Europe, making domestic clean energy a security imperative.
Another supply shock could accelerate the energy transition as countries reconsider their reliance on fossil fuels.
UK Energy Secretary Ed Miliband said "There is one lesson from this crisis, and only one lesson … we need homegrown clean power that we can control.”
Why it matters: The shock is forcing decision-makers to reassess their exposure to fossil fuels. Not only because of high prices, but because of their volatility.
Data centres running on contracted renewables are gaining an edge on operating costs vs gas power
Electrification has a stronger ROI and lowers risk exposure for real estate investors
The green premium drops for low-carbon alternatives to fossil fuel-based chemicals and fertilizers - plus more stability
Driving an EV could be about 10x cheaper than driving a gas car depending on electricity prices (drivers in the US are paying an extra $1.65 billion at the pump each week)
Yes, but: Oil revenues are also rising, pulling more capital towards fossil fuel infrastructure in oil-producing countries like Canada.
The bottom line: Shocks don't guarantee a clean energy transition, but they create the conditions for one. Price signals may fade, particularly if the Strait re-opens soon, but the security question will linger.
SPONSORED BY SPRING
Spring’s Invest Together in Climate Innovation is BACK! We're curating a Top 10 of Canada’s climate and cleantech ventures currently raising investment for their innovative solutions. We'll connect them with a cohort of accredited investors ready to deploy a $200K investment prize.
10 ventures will receive investment readiness training, legal support and key connections. The investors will then select the Top 5 to continue into due diligence and pitch in our live finale. One will be named our 2026 Top Venture and receive the $200K prize.
Founder deadline is April 6th and the investor cohort deadline is April 27th.
In the field
Ontoly launched its carbon registry and certification platform for building retrofits, enabling high-quality carbon credits based on actual utility data rather than projections.
Virtual Grid deployed its first modular compute node in Western Canada, combining GPU capacity with battery storage to operate as both a data centre and virtual power plant for AI workloads.
CURA will build a pilot and commercial facility with Grand Forks Concrete, using electrochemistry to convert agricultural waste into low-carbon cement.
The federal government launched a new Request for Standing Offer for carbon removal, becoming the first national government to implement a dedicated CDR procurement program.
Electra Battery Materials signed a supply deal for battery-grade cobalt with LG Energy Solution to deliver 60% of its Ontario refinery's output through 2029, locking in demand.
Ballard will supply electric bus maker New Flyer with 50MW of fuel cells for hydrogen buses.
Diverso Energy and US-based Dandelion Energy partnered to deploy geothermal heating and cooling across US residential developments, combining Diverso's utility ownership model with Dandelion's builder relationships.
Wyvern launched two new partnerships to deploy its hyperspectral earth imaging across agriculture, environmental monitoring and mineral exploration in Saudi Arabia and pipeline monitoring for oil and gas in the US.
Rio Tinto and Prysmian produced low-carbon aluminum cables for data centres in an industrial trial using Rio Tinto’s low-carbon ELYSIS smelting technology.
Solar panels could be easier to disassemble and recycle according to new research from Western by using polycarbonate to encapsulate panels instead of EVA.
Catch Up: Clean Compute
In case you missed it, we just published Clean Compute: Powering Canada's Sovereign AI, a new research brief mapping the opportunity landscape across the full data centre stack.
The AI infrastructure race is picking up in Canada. $100B in investment is flowing and GWs of capacity is in the pipeline.
We mapped out the key drivers, who’s buying, and who’s building. Plus the real risks and constraints facing climate tech builders looking at this market.
Signals & Currents
BYD eyes Canada: The Chinese carmaker is considering opening a manufacturing plant in Canada and could acquire a legacy automaker to accelerate its expansion. But BYD says a joint venture isn’t a good fit for their vertically integrated business model.
Why it matters: Canada cut its tariffs on Chinese EVs earlier this year, and wants to see more Chinese carmakers invest in local manufacturing. Companies like BYD could still set up shop but keep ownership control.
Opening oil flows: Canada will increase oil production by 140,000 barrels / day as part of the International Energy Agency’s plan to increase supply impacted by the US’ war in Iran. The conflict is driving oil scarcity, with the US even easing sanctions on Russian oil.
Credit drop: Alberta carbon credit prices fell almost $10 per tonne as the deadline for a federal-provincial deal approaches and could slip past April 1. Credit prices rallied late last year when the deal was announced.
Meanwhile, a new report found that a stronger carbon price would increase the price per barrel by less than the cost of a Timbit.
Renewable writedown: ATCO's Canadian Utilities wrote down $408 million in Alberta renewable energy assets, citing the Smith government’s electricity system reforms that accept more congestion on the grid.
Bulletin Board
🚀 Invest Together in Climate Innovation: Spring’s investment prize for early-stage climate ventures ready to raise. Founders apply by April 6th, investors by April 27th.
🗓 N3 Summit: Canada’s flagship advanced manufacturing summit. March 31st, Toronto.
💻 Peak Power is hiring a VP, Project Development & Delivery.
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