Plus: Shifting capital away from oil & gas; Blue ammonia in Texas; $21 trillion needed for power grids; Heat pump sales jump; Governments lean in
Hi Everyone,
I hope you all had a nice Easter weekend. Our days of fun easter egg hunts are long since past, with almost no chocolate around.
A fair number of policy-related stories this issue – which I’ve chosen to place at the bottom in the policy section instead of salting them into relevant sections, so don’t miss those.
Consider forwarding on to others who would be interested and encourage them to subscribe.
Thanks!
Peter
Feature Story
India Set to Surpass China in Need for Oil as Growth Paths Diverge | Bloomberg via Yahoo
A swelling population, which has likely already surpassed that of China, will help to underpin that growth along with consumption trends. India’s transition from traditional gasoline and diesel-fueled transport is expected to lag other regions, whereas China’s adoption of electric vehicles is skyrocketing.
[Comment] India represents an important market for those believing demand for oil will quickly drop because of the growth in electric vehicles. India currently consumes about one in seven barrels of oil produced globally. The build-out of India’s grid to electrify more of their economy with zero emission power will simply take longer, especially in relation to transportation. Yes, the sale of electric two wheelers there is pretty incredible (300% in 2022), and perhaps will stoke the imagination for electric cars there too. However, in a region already struggling with blackouts, and more wanting air conditioning, it is hard to imagine EVs putting a dent in their demand for quite some time.
Finance & Sentiment
Global energy transition investments must quadruple to $5T to reach climate targets: IRENA | Utility Dive
The energy transition needs a “fundamental course correction” to reach the Paris Agreement’s goal of keeping global warming under a 2°C increase, including a quadrupling of investments and 1,000 GW deployed per year, says an upcoming report from the International Renewable Energy Agency.
[Comment] Again, the scale of what is needed is truly astounding and offers a reality check on how quickly economies will be able to transition off oil and gas. Do not mistake this for defeatism. Governments around the globe absolutely need to pursue the investment in incentives needed to reduce emissions. But how to pay for it all? Here in Canada, the oil and gas industry contributed over $50B to governments in 2022. While the world still needs oil and gas, Canada’s production can help finance the transition in other parts of the economy.
$11trn asset manager initiative urges members to stop investing in new oil and gas | edie
The UN-backed Net-Zero Asset Owner Alliance, which convenes members with $11trn of assets under management, is asking members to set exclusion policies for new oil and gas extraction capacity.
[Comment] Starving publicly traded oil and gas companies of access to capital and insurance, in the absence of any material reduction in demand, will simply mean more production shifts from publicly traded companies to private or national oil companies. And for all that, what will have been accomplished, except to shift production to regions with lower ESG standards?
Societe Generale Explains Why It Pulls Out Of Rio Grande LNG Project | Oil Price
[Excerpt] While the bank did not go into details about why it has pulled out of the project, a SocGen spokesperson referenced its climate commitments, which call for an end of all LNG financing when the project is not aligned with the bank’s human rights and ESG goals.
Banks face rising shareholder pressure through climate resolutions as AGMs loom | BNN Bloomberg
[Excerpt] Those pushing resolutions emphasize that it’s not so much about a simple pass or fail on these votes (they are non-binding even if they pass), but more about allowing them to engage with other shareholders, a way to communicate and create dialogue around the issues.
Activist Investors Seek TotalEnergies Vote to Curb Emissions Further | BNN Bloomberg
[Excerpt] Specifically, it wants TotalEnergies to align its 2030 target for so-called Scope 3 emissions — those targets tied to the use of its products by its clients — in line with the 2015 Paris Climate Agreement, it said. The company’s AGM is scheduled for on May 26.
Technology
Hydrogen
Germany and Denmark aim to build hydrogen pipeline between the two nations by 2028 | Hydrogen Insight
Climate ministers sign agreement in Copenhagen, two months after Berlin made similar deal with Norway. Germany and Denmark agreed to work together to build a hydrogen pipeline between the two countries by 2028 at the earliest.
EU sets new binding targets for green hydrogen use in industry and transport by 2030 | Hydrogen Insight
At least 42% of all H2 used in industry must be renewable by 2030, with a small percentage required in transport.
Yara and Enbridge plan blue ammonia project in Texas | Enbridge
The proposed facility, which includes autothermal reforming with carbon capture, will be located at the Enbridge Ingleside Energy Center (EIEC) near Corpus Christi, Texas. Once operational, the production facility will be capable of supplying low-carbon ammonia to meet growing global demand, with an expected capacity of 1.2–1.4 million tons per annum. Approximately 95 percent of the carbon dioxide (CO2) generated from the production process is anticipated to be captured and transported to nearby permanent geologic storage.
Fortescue signs renewable power supply for 300MW green hydrogen project | RenewEconomy
[Excerpt] As with many of FFI’s announcements, the project to build a 300MW green hydrogen facility is still in its very early stages – a full feasibility study is yet to be conducted, and the deal with Statkraft is conditional on the project getting finance.
Nordex: Early initiatives in the green hydrogen market to complement its core business | reve
The Group has recently entered into two strategic joint ventures: one for the manufacturing of electrolyzers, a key component in the production of green hydrogen, and the second for developing large green hydrogen assets.
Carbon Capture
Canada, German firm to sign carbon-capture cement partnership, sources say | Reuters
[Excerpt] Innovation Minister Francois-Philippe Champagne will announce the partnership in Edmonton, Alberta, where Heidelberg and pipeline company Enbridge Inc. are developing a plan to capture and sequester the Lehigh cement plant’s carbon emissions.
UK’s first carbon capture cement works moves forward | Energy Live News
The UK Government has confirmed that the Hanson Padeswood Cement Works carbon capture and storage project in North Wales will be one of eight projects taken forward to form the basis of the country’s new carbon capture, utilisation and storage (CCUS) clusters.
Consumer Goods
British supermarkets forge fresh collaboration to tackle Scope 3 emissions | edie
Eight of the UK’s biggest supermarkets, collectively representing an 80% share of the grocery market, have worked with WRAP and WWF to launch a new initiative to cut the sector’s climate impact.
[Excerpt] At the moment, different supermarkets are taking different approaches to emissions accounting, despite often using the same suppliers. This places the burden on producers and suppliers, who often do not have the same resources at their disposal as grocery giants.
Under the plan, the supermarkets will work with 17 key suppliers this year to trial WRAP’s new measurement and protocols for measuring Scope 3 (indirect) emissions. The protocols will then be rolled out across other suppliers.
The Grid
Global Net Zero Will Require $21 Trillion Investment In Power Grids | BloombergNEF
Electricity grids are the backbone of the energy transition, yet the networks we have today are not ready for the future. At least $21.4 trillion needs to be invested in the electricity grid by 2050 to support a net-zero trajectory for the world, according to a new report from BloombergNEF (BNEF).
[Comment] At the risk of sounding like a scratched record, the incredible scale of the buildout needed for net zero suggests 2050 is likely not be attainable. Which means we have to manage our expectations for how long we will need oil and gas, especially in places like India.
Octopus and British Gas customers paid £7m for avoiding peak-time energy use | edie
Octopus Energy has confirmed payments of £5.3m to customers who took part in the Demand Flexibility Service, launched to help balance the grid during the energy price crisis. British Gas has also posted its results with the scheme, confirming a total of £1.8m in payments to customers for avoiding the use of energy-intensive devices such as tumble driers and electric vehicle chargers.
[Comment] Yet another proof point for the role that demand side management or “non-wires solutions” can play. It really astounds me that there is almost zero recognition here in Alberta of the opportunity this represents for averting unnecessary build-out of electricity systems to meet peak demand. There is no residential time of use pricing and while some smart meters are being deployed, they are not being used. Wake up Alberta! Every other jurisdiction is figuring this out. Shift demand to off peak hours and lower overall system costs to rate-payers.
California Grid Needs $9.3 Billion Upgrade in Renewables Shift | Bloomberg via Yahoo
The California Independent System Operator identified 46 projects that will be needed to help planned solar plants and offshore wind farms plug into the grid while improving reliability in a state that has been plagued with blackouts.
Buildings
IEA: Heat pump sales reached record highs in 2022, with Europe leading the way | edie
[Excerpt] By the IEA’s estimations, EU nations ordered 49% more air-to-water heat pumps in 2022 than 2021, and 19% more air-to-air heat pumps. Almost half of all sales in Europe were attributable to France, Germany and Italy.
LG reveals plans for US heat pump factory | pv magazine
LG Electronics North America has revealed plans to manufacture 100% electric heat pumps in the United States for the first time.
Pinnacle Power eyes £1bn deployment for UK heat networks | edie
The new partnership between Pinnacle Power and DIF Capital Partners will accelerate the deployment of “town-and-city-scale heat networks” that will help to decarbonise tens of thousands of homes and buildings across the UK. Pinnacle Power states that deployed projects will total more than £1bn in value.
Energy Storage
Oil giant Shell to build its first big battery with massive project in Melbourne | RenewEconomy
[Excerpt] Shell Energy, the local power subsidiary, has teamed up with the Green Investment Group run by Macquarie Asset Management, and a local property group, to build the 200MW/400MWh Rangebank battery in the Rangebank business park in Melbourne’s south-east.
Australian developer claims big increase in energy density from solid state sulfur battery | RenewEconomy
[Excerpts] Li-S Energy says its third-generation battery has some major advantages over its previous, second-generation iteration, including a major (45%) increase in volumetric energy density. Using its patented Li-nanomesh technology, the cells incorporate Boron Nitride Nanotubes (BNNTs) into the cell construction to reduce dendrite growth, which improves both safety and the life cycle of the battery.
Solar and Wind
China Takes Its Climate Fight to the Rooftops | BNN Bloomberg
[Excerpts] The government is already constructing vast wind and solar farms in the country’s sparsely-populated inland deserts, but the infrastructure needed to connect them to the megacities of central and eastern China is costly and not fully built. So it’s weaponizing the country’s rooftops in the climate fight instead.
Brookfield seals deal for Origin buyout and $20 billion renewables splurge | RenewEconomy
US investment giant Brookfield says it has sealed the deal for the purchase of Australian energy utility Origin Energy, paving the way for a $20 billion plus splurge in renewables and storage assets over the next decade to fast-track the transition from coal to clean energy.
TenneT Awards EUR 23 Billion in Contracts for 22 GW of Offshore Wind Grid Connections in North Sea | offshoreWIND.biz
The Dutch-German transmission system operator (TSO), TenneT, has signed multiyear agreements with three consortia for the delivery of eleven 2 GW grid connections in the North Sea that will connect German and Dutch offshore wind farms to their respective grids on land.
Czechia adds US$2.5B rooftop PV and energy efficiency rebate pot | pv magazine
The Czech Republic is pouring an additional CZK 55 billion ($2.5 billion) into its New Green Savings program, which includes rooftop PV rebates, among other energy-saving measures in the residential sector.
[Comment] Wow. Just wow. Chechia has a population of approximately 10 million about one quarter that of Canada. An equivalent incentive would mean an incentive package worth over $13B here.
Developer starts building 800 MW project with US components in Illinois | pv magazine
Swift Current Energy, a Boston-based solar and wind project developer, has kicked off construction on the Double Black Diamond solar project in Illinois, an 800 MW(DC) utility-scale solar project that could become the largest solar project in the United States and the first to use only US-made modules, hardware and electrical components.
This renewables giant is going to use wooden wind turbine towers | Electrek
[Excerpt] RWE wants to use Modvion’s wooden turbine towers because it asserts in a statement that laminated wood is stronger than steel proportionate to its weight, which means lighter towers and less need for expensive reinforcements. Wooden towers can also be used with other steel turbine components.
Powerful new consortium joins rush for offshore wind with massive project in Victoria | RenewEconomy
Another major consortium has joined the rush to secure the rights to build a massive 3.5GW offshore wind project in Victoria’s Gippsland region, with news that UK giant SSE plc and the deep-pocketed, Singapore-based and Australian managed Equis Developments have joined forces.
Transportation
China Slowly Squeezes Global Carmakers Out of Its Massive Market | BNN Bloomberg
[Excerpt] Electrification has been fastest at the top and bottom of the Chinese auto market so the next phase of growth will have to come from the middle, where EV penetration is lower. This could bring further losses in market share for legacy automakers, unless they can quickly correct course.
Early sales data for 2023 shows this may already be playing out. Japanese brands were down 39% overall in January and February, while the Germans were down 21%. By contrast, BYD has already sold over 300,000 vehicles in that span, up more than 70%.
Hydrogen will be the ‘only viable economic choice for zero-emission long-haul trucking’: US freight body | Hydrogen Insight
[Excerpt] “There really are no viable alternatives to hydrogen for hauling freight 600+ miles per day with zero emissions,” the report explains. “While it is technically viable for a battery electric truck to go 800+ miles in a day with en-route charging and carrying equivalent freight weight to a diesel, the situations where this is feasible are limited.”
Growing sales but not emissions – Polestar reduces CO2 intensity by 8% during a record year | electrek
Polestar delivered 51,491 vehicles in 2022, up 80% from 2021 and beating its 50,000 annual global volume target. Despite the impressive growth, Polestar managed to reduce relative CO2 emissions for each vehicle sold by 8% compared to 2021 levels.
Ryder just ordered 4,000 electric vans from GM’s BrightDrop | electrek
Transport giant Ryder has ordered 4,000 of BrightDrop’s electric vans to add to its lease and rental fleet through 2025, and the first 200 are being ordered this year. General Motors launched the last-mile BrightDrop brand in 2021.
Europe’s EV Push Nearly Faltered Over Fringe Fuels That Are Years Away | BNN Bloomberg
It sounds inconceivable that Europe’s plan to usher in the age of electric vehicles almost went awry because of a prohibitively expensive technology that’s virtually unavailable, but that’s exactly what happened.
Paris votes to ban rental e-scooters | BBC
Almost 90% of votes cast on Sunday favoured a ban the battery-powered devices, official results showed. But under 8% of those eligible turned out to vote.
The Toronto to Montreal high-speed train just got another step closer | CTV News
[Excerpt] In a motion, council joined Oshawa in backing the creation of a high-speed rail network along the Quebec-Toronto corridor, which officials say would reduce travel between the two cities to just under three hours.
Volkswagen Has No Plans For New ICE Golf Beyond Current Model: CEO | Inside EVs
Volkswagen has no plans to invest money into a next-generation Golf with a combustion engine after production of the current model ends, the brand’s CEO Thomas Schaefer said in an interview.
Circular Economy
Report recommends capping production of plastics | Inside Climate News
[Excerpt] The report was produced by the Minderoo-Monoco Commission on Human Health, a body of scientists assembled by the Australian-based Minderoo Foundation, and published by Annals of Global Health, a peer-reviewed scientific journal.
The commission concluded that global plastic production, use and disposal patterns are responsible for significant harm to human health, the environment and the economy, and are causing deep societal injustices, particularly to children. It recommended establishing health-protective standards for plastic chemicals under a United Nations plastics treaty that’s being negotiated now, and a cap on plastic production, which is otherwise expected to triple by 2060.
[Comment] The thinking behind putting a cap on the production of plastic is the same as those aiming to limit production of oil and gas. On the surface, it sounds good. But until demand for something as ubiquitous as plastic is addressed, limiting supply and in so doing, making it more expensive is at best a backdoor way to go about it. How about an economy-wide “plastic tax”, just like a carbon tax operates in many jurisdictions. Ring-fence the tax revenue to be used exclusively for advancing alternatives or ways of making it more circular in design. A carbon tax, when smartly designed and redeployed can work to reduce demand. Why not apply the same approach to plastic? And for those wondering, I do know plastic comes from oil. If a carbon tax was operating well, shouldn’t it provide the price signal across the value chain? That would be a ‘first principles’ type of approach, but not always politically possible. All I am saying is that a cap on plastic production will be very hard to deploy effectively. Inevitably, production squeezed in one jurisdiction will simply mean demand will be met by production in other regions.
Policy
Japan Mulls Updating Hydrogen Plan With $113 Billion in Funds | BNN Bloomberg
Japan will consider setting aside 15 trillion yen ($113 billion) in public and private-sector funds over the next 15 years to create hydrogen and ammonia supply chain to help clean up its energy sector.
See also: Japan set to increase hydrogen ambitions sixfold and introduce new CfD-style subsidy scheme: Prime Minister | Hydrogen Insight
Australia to earmark $10 billion fund to support clean energy manufacturing | pv magazine
[Excerpt] The NRF will deliver co-investments in projects across a range of strategic industries, including renewables and low-emissions technologies, resources value adding, agriculture, transport, defence capability, and critical technologies such as artificial intelligence and robotics.
More generous than US | Green hydrogen could fetch a ‘fixed premium’ subsidy of up to €4/kg in EU’s first competitive auction | Hydrogen Insight
Green hydrogen producers could be able to bid for a “fixed premium” subsidy of up to €4 ($4.36) per kilogram of H2 in the EU’s first competitive auction, making Europe’s support regime potentially more generous than the US hydrogen tax credits, which offer producers up to $3/kg.
Canada: Breaking Down the Budget: What Canada’s 2023 Budget Means for Our Net-Zero Future | Delphi
[Excerpt] The budget outlines Canada’s answer to the Inflation Reduction Act: the “Made in Canada Plan,” which includes over $83 billion in clean economy tax credits and investments. As anticipated, the federal government is using similar approaches to the US, including several tax incentives that support private capital investment in solutions and technologies.
See also: Canada sets out its green tech support plan in face-off with US | Upstream
[Excerpt re: Carbon Capture Investment Tax Credit] The scope of the credit is widened to apply to projects looking into geological storage of carbon dioxide in British Columbia, Saskatchewan and Alberta. The proposal suggests the credit could also cover dual use heat and power equipment, and water use equipment, employed in the CCS process.
USDA offers $1B in renewables grants, including funds for ‘underutilized’ technology like small hydropower | Utility Dive
[Excerpt] The agency says that the maximum funding that can be requested is 50% of the total project cost for any energy-efficiency or zero-emissions renewable energy systems. Renewable energy systems can receive up to $1 million, while energy-efficiency projects can receive up to $500,000. All other projects can receive funding up to 25% of the project’s cost.
Maryland announces goals for massive offshore wind power increase | Reuters
Maryland Governor Wes Moore on Wednesday announced goals to more than quadruple the state’s offshore wind capacity to 8.5 gigawatts – enough to power nearly three million homes – as part of an effort by the state to achieve 100% clean energy by 2035.
Greece launches €200 million residential solar-plus-battery subsidy scheme | pv magazine
Greece’s Ministry of Environment and Energy has revealed a new €200 million ($215.3 million) subsidy program for solar projects and small storage systems in the residential and agricultural segments. The scheme is backed by the country’s post-pandemic recovery plan.
India to annually tender 50 GW of renewables over next 5 years | pv magazine
The structured bidding trajectory of India’s tenders will provide sufficient time for renewables developers to plan their finances, develop business plans, and manage the supply chain more efficiently, says Indian Power Minister R.K. Singh.
EU strikes deal on renewable energy law, agrees 42.5% target by 2030 | edie
Agreement on the EU’s renewable energy directive brings to a close an 18-month process to upgrade the bloc’s climate policies as part of work to achieve a 55% net reduction in greenhouse gas emissions by 2030.