Buy and sell

I’ve been thinking about how trading – the practice of buying low and selling high – contributes to the energy transition and sustainability. I think about it across various components, commodities, products and services exchanged to help with the energy transition. For example, power is bought and sold, and so are solar panels, rare earth metals used for batteries, wind turbines, software systems, etc.

In general, trading creates liquidity in the market and in long run allows prices to converge towards the actual cost of production plus a competitive margin depending on how easy or difficult it is to source on both the supply and demand sides of the market. Concentration on either side would also influence the margins. I tend to think another impact of traders is just creating that sense of product/commodity availability. This is powerful as it plays an important role of enhancing adoption.

Trading can be a sustainable business if you know how to stay ahead on trends, keep close to the buyers and sellers. In the market for all of those components and works, there’s a mix of repeat and non-repeat buyers so you have the opportunity to hold on to a mix of long and short term supply contracts. Solving supply and trading operations issue are going to help you grow and is an excellent way of providing value. So don’t think buy-and-selling is a problem that has been solved nor take it for granted. We will always need traders, especially so for the good of the earth