How Lium is Powering Companies with Predictive Research
Lium is an independent market intelligence firm designed for institutional users by energy finance veterans. Lium's research process starts with big data and incorporates human experience and field-level observations to create flexible research products. Coverage includes solar, wind, power, shale services, and shale production. Data Synthesis, Human Touch.
About Daniel Cruise
Daniel Cruise is an energy finance veteran with over fifteen years experience in industry and equity research. He has worked in both buyside and sellside analyst roles for large financial institutions including Jefferies, Evercore-ISI, and Wells Fargo Securities before breaking out to serve clients with independent research. Daniel founded Coras Research, a well-known oilfield data firm, in 2015 and co-founded Lium in 2020 to expand coverage into power and renewables.
Q: It has been fascinating to observe how quickly capital is flowing from O&G into renewables. What could this trend mean?
A: We believe consumers will continue to demand energy from hydrocarbon sources for the foreseeable future, but the capital markets are speaking very clearly with their wallets in favor of rapidly emerging sustainable energy solutions. Access to capital and changes in the costs of wind and solar power have profound implications for power generation diversification, growth, and value creation. The U.S. is clearly moving toward a more diverse energy chain, positioning large scale development of renewable resources for upside. Case in point, the utility scale solar orderbook has doubled in the last 18 months alone while the U.S. oil and gas rig count declined by 60% over the same timeframe.
Q: We notice a need to “plug knowledge gaps” in the renewables market. How does Lium data help to fill in those gaps?
A: Our team of data scientists collect, back-test, and refine massive amounts of industry data. To this data, we apply algorithms to create predictive research about the fundamentals that drive value. This focus on predictive data is what really addresses those knowledge gaps you have noticed. Lium’s interactive models connect the dots to illustrate future outcomes. Members can even get in the driver’s seat and scenario test a wide variety of variables that influence future trends. For example, Lium clients can select different EV adoption rates to see how electricity demand changes as far out as 2030.
Q: So what is the data telling you about the most attractive investment opportunities and potential risks in the solar sector?
A: We see significant running room for utility scale solar with the U.S. orderbook ballooning to almost 40GW in recent quarters. This pushes large scale solar ahead of wind power for the first time, and the pipeline is now equal to all the capacity currently in service. Meanwhile, the recent leading indicators we are compiling for residential solar appear to be tracking behind extremely robust growth expectations for installations. Based on permits filed in 60 of the largest U.S. cities, activity is tracking up ~10-15% y/y. While this is constructive, we believe consensus expectations for residential solar companies are baking in growth closer to 30-40% this year.
Q: How about wind power - what does the latest Lium data tell us there?
A: Similar to solar, it’s sort of a tale of two cities in wind as well for us. Onshore wind is proving to be extremely volatile. In areas like California and Texas, it is adding significant risk in the summer months as wind speeds slow dramatically. Because the best wind resource on land is limited geographically, orderbook growth for onshore wind is slowing down. Meanwhile, U.S. offshore wind has massive potential. We are tracking roughly 30 GW in the pipeline (only 0.3 GW online now). While these are extremely long-cycle projects, any efforts to fast track them could be a big win for companies in this sector.
Q: I loved learning how Lium is a truly independent research platform that provides data that “wasn’t out there before” allowing Institutional users to make better investment decisions because of this NEW data. How does being independent influence your product and help your members avoid confirmation bias?
A: If we are putting out information that confirms what everyone already thinks, then we probably aren’t doing our job. Our job is to improve client returns and market efficiency by assembling market data in fresh and unbiased ways, even if it challenges the status quo or establishment.
At its core, Lium is a platform of research idealists and data junkies aligned around the singular goal of creating better returns in energy capital decisions. Staying independent is critical to this mission. As an independent research house, our conclusions are formed entirely by our data science and field-level research – no outside influences. We do not do banking deals or consulting projects or chase any revenue streams that might influence our views. We do not advocate for any political agenda or industry interest group. Market research is our only "product," so it has to be pure, accurate, practical, and unbiased for our platform to succeed. This kind of approach is exactly what we’d expect from our information sources if we were in our clients’ shoes.
Q: Besides being independent, how else is Lium’s research different from what’s out there today?
A: How much time do you have? Just kidding, but we think the platform stands out in three main ways beyond what we’ve already discussed here. First, we are comprehensive in our coverage of U.S. energy. As transportation fuel and grid inputs evolve, risk in one niche might be opportunity in another. But without covering the holistic matrix, one might miss these connections.
Second, we focus on data synthesis not analysis. Analysis literally means breaking something down into its parts. Instead, we focus on building up the components of disparate data so that they speak to each other and create better conclusions. Finally, I’d point to our emphasis on human touch. We are data scientists and believe in the power of big data, but we never underestimate the importance of including human experience and connections in our work. Field-level observations factor into how we build our models and think about big data.
Q: Do you have to be a paying client to get Lium insights?
A: Absolutely not! We believe strongly in creating universal access to good, unbiased, and reliable information about the energy markets. So we offer several levels of access to Lium’s research, including a 100% free option that provides valuable data to everyone that is interested. Free weekly reports, such as Solar Stats (here’s our latest issue) and Windometer, are made available inclusively at www.lium.com. For institutional users that need to go deeper into the data, we offer access to Lium’s interactive models, database downloads, and predictive reports with premium memberships.
Want to learn more?
If you're seeking a career in the power and renewables industry or you're seeking to hire talent for your company, you can complete the form on this page or get in touch with Michelle Dutemple, Principal Consultant at Progressive, at [email protected].