RESEARCH AND ANALYTICS

In 2020, ~60% of all electricity generated in the US was produced from fossil fuels (natural gas, coal and petroleum), far lesser than ~68% in 2011. So, what changed?

Over the years, coal has lost its importance in US electricity generation, following capacity cuts and lower utilization at coal plants. According to the EIA, ~44% of total electricity generated in 2011 was coal-based, which dropped to ~20% in 2020 i.e., less than half. During the same time, the share of natural gas as a source of electricity increased from 23% to 39%, while that of renewables (hydro, wind, solar, biomass, and geothermal) also zoomed from 12% to 20%. In fact, according to the EIA, 2020 was the first year since 1949 when coal did not feature in the top two sources of electricity generation in the US!

In the short term, the US is expected to generate more coal-based electricity in 2021-2022 than in 2020, as coal becomes cheaper relative to natural gas, whose prices are rising. However, in the long term, structural factors seem to favour usage of renewable sources. Their share of US electricity production should rise to 23% by 2022, and increasing investments (primarily solar and wind) along with gradually improving affordability should further fortify the importance of renewables in US electricity generation in the years to come!

China has been patiently waiting for an egg it laid in 2014 to hatch. Time to say hello to the Digital Yuan - the world’s first sovereign digital currency. China has already launched a few pilot programs, although the final legislation is yet to be published. And mind you, it will have global repercussions.

So, what is Digital Yuan, or the e-yuan as it is called? Basically, it’s programmable money that replaces cash and coins. But then how is it different from digital platforms like Alipay or WeChat? Well, it’s vastly different because they are just ‘digital ways’ to use ‘physical cash’; e-yuan is basically about completely replacing cash and coins. And if one compares it with cryptocurrencies, the e-yuan would be far less volatile as it is backed by a central bank (just like our money is today), whereas crytpos are decentralised and more volatile.

The e-yuan brings both domestic and international benefits for China. On the domestic front, the digitalization of currency reduces the cost of storing and producing notes and coins. It cannot be counterfeited easily and can track illegal activity since its programmable. But the bigger game is on the international front.

While China accounts for 44% of global digital transactions, the yuan’s share of forex trade is just 4% as compared to the US Dollar at 88%. If the e-yuan becomes an easy-to-use mechanism across the world, the digital currency could be a formidable independent alternative to the USD for cross-border payments in the years to come. And while that day maybe far away, one needs to keep a close watch on this space!

A famous quote from Chuck Palahniuk’s novel, Invisible Monsters, reads “You can only hold a smile for so long, after that it's just teeth.” Clearly, the need of holding our smiles for longer seems to be increasing. From exotic vacations to simple family dinners, so much of peoples’ lives is on display to the world today via social media. And while picture filters can help enhance your smile, they can’t make your teeth healthier! Fact: people across the world are willing to spend on both health as well as vanity; and rising disposable income allows them to do so.

Benefiting from being at this cusp of consumerism and healthcare, many markets have flourished, and a potential star in the making is the ‘clear aligners’ market – basically, invisible braces – driven by rising global awareness, the perennial need to look good, convenience, technological advancements, customizability and improving affordability. Properly aligned teeth also bring health benefits such as improved digestion from better chewing, and better oral hygiene due to optimum tooth gaps. Fortune Business Insights sized the global clear aligners market at USD 2.41bn in 2020 and expects it to reach USD 10.04bn by 2028: that’s ~20% growth annually!

Fun fact: According to Align Technology, a key player in this market, 60-75% of the world’s population has misaligned teeth, and the total volume opportunity for clear aligners is 500+ million. With potential new customers of just 15 million every year at present, this space is underpenetrated! Time to ‘brace’ for growth!