Firstly, I'm surprised that OPEC appears to be getting its act together to control supply and therefore increase prices.
I'd largely decided that either (or both) the Saudi's had lost control of the price setting process within OPEC or they were trying something that would take a few more years to either work or not.
The agreed cuts in production are relatively small, and come at a time of fallling demand for oil. Oil, despite increasing sharply in price today is still around the $50 a barrel level. Less than half the $110 barrel recent peak. We've also yet to see if the dirty work of allocating the cuts in production amongst members will happen.
I don't think this changes my general assumption that oil and gas will remain significantly lower than recent highs for at least a few years because OPEC are unable or unwilling to drive up the price significantly. But that assumption is now on the watch list.
Secondly, I've been surprised by how quickly solar generated electricity costs are falling. Record low prices in the Middle East of $23 per MWH or £18 (compared to £50 $65 in the UK at the moment or £100 $130 for Hinkley Point C.
At $23 per MWH solar electricity is cheaper than the gas you would burn in CCGT to generate the same volume of electricity. Which leaves a lot of value left over to build complementary infrastructure like High Voltage DC transmission cables, or storage. It also makes places like the Middle East pretty attractive for high energy intense industries.
This doesn't appear to be a trend only in the Middle East. Latin America (also close to the equator) has seen sharply falling solar prices.
I'm not sure what's driving this. My guess is that solar generation balance of plant costs are falling but I'm not sure why.
My current assumption for solar electricity is that I expected the costs to fall by 1-2% year on year for a decade or two leading to cost parity with other grid sources in good locations over the decade 2020-2030. Looks like I might have to keep an eye on this assumption too. I think there is a virtuous circle operating in solar generation where learning curve effects and economies of scale make marginal production cheaper as total production increases so it could be that solar generation is about to fall more steeply in price than I anticipated.
Thirdly, I'm surprised to discover I might be making a small personal investment in some solar panels of my own so I need to go an remind myself how the Feed-In Tarrifs work.
My assumption had been that as I lived in a ground floor flat in Victorian tenament building in Edinburgh my own personal experience of renewable generation would be limited. Again, one to watch.
So, it's been a surprising week in energy.