Plus: SEC mandates emissions disclosure; UK to invest $26B in hydrogen; Induction ovens with batteries; Rivian’s R2 SUV; Alberta curbs wind & solar
Hi everyone,
The last two weeks flew by fast. Skim the stories, noting my comments throughout. This week, we learn about the explosive growth in the use of AI. Generative AI (think image processing) is especially energy-hungry, requiring us to think about the impact on our electricity grids. See Peter’s take below.
As always, continue to forward on and encourage others to subscribe.
Thanks,
Peter
Peter’s take: the true cost of AI – and can we afford it?
A friend and neighbor (thanks Norm) shared this article with me and I strongly encourage you to read it. I believe you will be required to sign in to get free access. Trust me, it is worth it for this one. While it has a US-focus, I expect there are parallels for other countries around the globe.
Amid explosive demand, America is running out of power | Washington Post
Artificial intelligence, data centers and the boom in clean-tech manufacturing are pushing America’s aging power grid to the brink. Utilities can’t keep up. [Excerpt] In Georgia, demand for industrial power is surging to record highs, with the projection of new electricity use for the next decade now 17 times what it was only recently.
It made me go on a learning journey to better understand how generative AI – the computationally heavy type of AI use is among the driver for ever bigger data centers hungry for electricity. ExtremeTech says that “Using generative AI to produce just a handful of “new” images consumes as much energy as fully charging a smartphone”. Consider that before you ask Micrsoft COPILOT to “make a mountain scene” or other such picture.
You have likely already used some form of generative AI already or been the subject of one used by a company you’ve interacted with. I found this list to be very informative: Top 100+ Generative AI Applications / Use Cases in 2024
For the recreational uses, there is a hidden cost. Especially for image processing, it comes with a need for more electricity. Even if all the demand for that electricity is zero-emissions, one has to wonder at the cumulative cost. Given the exploding use of generative AI, I believe this is unlikely to continue to be offered for free. Grids are just not going to be able to keep up. Something will have to give. Watch for the big tech companies (Apple, Google, Amazon, Microsoft, etc.) to find ways to make you pay.
Finance & Sentiment
SEC ruling: US mandates corporate emissions and climate risk disclosures | edie
The USA’s Securities and Exchange Commission (SEC) has approved a much-anticipated mandate requiring public companies to annually report their greenhouse gas emissions and climate-related risks.
[Comment] For a more technical view, see here from Latham & Watkins LLP
Europe’s Biggest Pension Fund ABP Tightens ESG Guardrails | Financial Post
Europe’s biggest pension fund is imposing stricter environmental, social and governance requirements on its portfolio, as it steers more capital toward companies it assesses to be greener and fairer. ABP, which is based in the Netherlands, said the policy means it will apply tougher screening when it reviews holdings for climate and biodiversity risk, according to a statement on Monday.
Warren Buffett Regrets Owning Electric Utilities | Oil Price
[Excerpts] Mr. Buffett discusses two reasons why he appears to have soured on the business prospects for US-regulated electric utilities: 1) Ongoing business disruption from increasing wildfire risk due to climate change which has led to two bankruptcies thus far. 2) The erosion of rate base, rate of return regulatory norms at the state level to the detriment of capital providers like Berkshire Hathaway.
[Comment] The first reason is self-explanatory, while the second requires some explanation to unpack the underlying reasons contributing changing “regulatory norms”. Across numerous states, I’ve watched utilities attempt to make the case to electricity system market regulators for rate increases to cover the costs of building out various forms of infrastructure – often wind and solar to meet two expectations of market regulators: reduce emissions and meet growing demand. Regulators have to strike the balance of what is acceptable – factoring in the interests of both parties: rate-payers and utilities. I take it from this that utilities have generally come out on the losing end – having to accept less of a rate hike and therefore lower returns. In this, I am stretching my interpretation of the landscape as someone who is not an industry insider. If you happen to have insights here, I’m happy to take them. A recent case in point: More natural gas, offshore wind, and higher customer bills in Duke’s revised energy plan (Duke, operating in several states like Florida and the Carolinas, may not be the best example – though it reinforces the point).
Technology
Hydrogen
Chinese company gets order for world’s first ammonia powered container ship | Qingdoa
A Chinese company has received an order from a Belgian ship owner to build the world’s first ammonia-powered container ship, marking a new breakthrough for the country’s shipbuilding industry in clean energy-powered maritime delivery, according to the China State Shipbuilding Corp, or CSSC.
[Comment] I’m pretty sure the vessel referred to is the Yara Eyde (pictured) which is expected to sail between Norway and Germany in 2026.
Petrochina to build a 736.5 km hydrogen pipeline in Northen China | China Hydrogen Bulletin
Petrochina, the largest integrated oil and gas company in China, announced it will build a 736.5 km hydrogen pipeline in Hebei province, Northen China. Construction will begin from June 2024 and is expected to be completed by June 2027. The pipeline is set to be the longest pure hydrogen transportation pipeline in China so far.
UK to Invest $26.5B in Hydrogen Projects | Rig Zone
The United Kingdom (UK) government is boosting seven low carbon hydrogen projects with over $26.52 billion (GBP 21 million) in investment, in a bid to become a world leader in hydrogen.
Equinor scraps green hydrogen plan for world’s largest offshore wind farm | Upstream Online
[Excerpt] “With the confirmation of an onshore grid connection location in the East Riding of Yorkshire, the option to direct the wind energy produced by Dogger Bank D towards hydrogen production, as publicly consulted on in Autumn 2023, has been retired from the project,” said SSE and Equinor.
Carbon Capture
Santos secures Moomba CCS funding, first project phase 80% complete | Oil & Gas Journal
Santos Ltd. has secured financing for its share of the $220 million Moomba carbon capture and storage (CCS) project in South Australia and said the first phase of the CCS project is now 80% complete. The financing will be used to cover project costs incurred to date and to draw down upon as the project progresses to first injection targeted for mid-2024, the company said in a late February update.
Ethanol Maker Valero to Join $8 Billion Carbon Pipeline Project | Financial Post
US fuel refiner Valero Energy Corp. is joining a massive carbon-capture and storage project in the heart of US corn country, lending support to a proposed pipeline plan that faces major hurdles.
Urban Design & Buildings
How to Design a City That Fights Loneliness | Bloomberg City Lab
[Comment] I found this a fascinating read. Just one small excerpt: Small details like seating arrangements also matter. Benches shouldn’t be placed directly across from one another, said Elokda, or side-by-side, which discourages any interaction. Instead he advises them to be arranged at an angle to one another, giving users the option to acknowledge or engage with one another. Framing a space with trees or buildings can also make people more comfortable by creating a sense of enclosure or refuge.
Induction ovens with big batteries solve lots of problems | electrek
Induction stoves are a great, safe way to save on electricity costs and can heat much quicker, safer, and more accurately than natural gas or propane stoves. But a new breed of these stoves includes huge batteries, which opens up new opportunities by only requiring a 120V outlet, offering 40-sec water boiling, backup power to other appliances like the refrigerator, and even [US] IRA tax rebates. Let’s take a look at two of these new models and try to understand if it makes sense for an oven to have a huge battery over a more centralized Powerwall type of home backup battery.
[Comment] As soon as I read the headline, I knew what they were doing and thought “of course somebody would come up with that idea”. Feels like it needs more product development iteration if it is ever to see mass adoption.
How the world’s largest design firm is spearheading the sustainable building movement | GreenBiz
Gensler is the world’s largest design firm by many metrics: It works on 1.25 billion square feet of buildings and urban spaces a year and generated more than $1.78 billion in revenue in 2022. This year the company is increasing its effort to use its scale and global reach to help make the built environment healthier and more sustainable.
Bigger and bigger homes are wiping out gains in energy efficiency | One Step Off The Grid
[Excerpt] We found a home designed in 2022 had a 7.6% larger conditioned floor area than a home designed in 2018. And a home designed in 2022 was predicted to require 10% more energy for heating and cooling than a home designed four years earlier.
[Comment] This analysis is based on over half a million Australian homes. It leverages a Nationwide House Energy Rating Scheme. A similar system exists in the UK, so buyers know what they are getting – energy efficiency-wise. Sadly, none such system exists in Canada. I don’t think there is one in the US either. Why not?
Bike lanes are good for business | Business Insider
Study after study proves it. So why do so many shops and restaurants still oppose better streets? [Excerpt] …I’ve read every study and report I could find that looked specifically at the economics of bike lanes since 1984 — 32 research articles, to be exact. The results show that making streets friendlier for bikes — and sidewalks friendlier for pedestrians — is actually good for business. The rise of “complete streets” and “road diets,” as urban planners call them, has been a huge boon to businesses in cities.
Energy Storage
Over 1.8GW of energy storage clears in ISO New England’s latest Forward Capacity Auction | Energy Storage News
Results of the 18th Forward Capacity Auction (FCA) held by ISO New England have been filed, with energy storage’s participation having soared in recent years. ISO New England also noted at that time that nearly all capacity supply obligations were awarded to wind, solar PV, energy storage or demand side reduction technologies. A total 31.5GW was awarded, selected from 36.8GW of qualified resources including 4,100MW new-build projects of various technologies.
Canada Infrastructure Bank loan enables Indigenous communities to hold stake in energy storage projects | Energy Storage News
Energy Storage Canada (ESC) is “thrilled” that the Canada Infrastructure Bank’s (CIB’s) loan for a large-scale battery storage portfolio will enable Indigenous communities to hold a stake in it. Justin Wahid Rangooni, executive director of national trade association ESC, commented on the Crown Corporation vehicle for investing in infrastructure’s CA$138.2 million (US$101.82 million) commitment to three projects in the Atlantic Canadian province of Nova Scotia.
Tata Group to develop multi-billion pound battery manufacturing facility in Somerset | Current
Tata Group’s battery business, Agratas, is set to develop a new battery gigafactory in Somerset, which will be the largest in the UK. [Excerpt] The gigafactory, which will have an output of 40GWh, could supply almost half the projected battery manufacturing capacity required for the UK’s automotive sector, an area of the energy transition that continues to grow.
Solar and Wind
Have we been doing Solar wrong all along?
Check out this 13-minute video to learn about a new way of installing solar panels. Thanks to Randy for sharing it with me.
These canceled New York offshore wind farms totaling 1.7 GW just officially made a comeback | electrek
Equinor’s Empire Wind 1 and Eversource and Ørsted’s Sunrise Wind previously canceled their offshore wind contracts with New York, but now they’re back. Governor Kathy Hochul today (D-NY) announced that New York State conditionally awarded the 810 megawatt (MW) Empire Wind 1 and the 924 MW Sunrise Wind from its fourth offshore wind solicitation.
[Comment] If you want more details, see here.
EU approves €3 billion for solar, onshore wind in Romania | pv magazine
The European Commission has approved €3 billion ($3.9 billion) for solar and onshore wind projects in Romania, with two-way contracts-for-difference through competitive bidding procedures.
AGL plans huge 2GW, 2,000 MWh wind, solar and battery hub in NSW | RenewEconomy
Energy utility AGL – still the country’s biggest coal generator and polluter – has unveiled plans for a new joint venture in south-west NSW that would include 1.5 GW of wind and solar and a giant four hour battery. The Pottinger Energy Park – to be developed with the privately held Someva Renewables, will include a 1.2 GW wind farm (with more than 200 turbines), a 300 MW solar farm, and a 500 MW, 2000 MWh battery.
Transportation
Rivian R2 electric SUV scores over 68,000 reservations in under 24 hours | electrek
Rivian R2 (Source: Rivian)
After launching its more affordable R2 electric SUV Thursday, Rivian’s (RIVN) CEO RJ Scaringe said the EV scored over 68,000 reservations in under 24 hours.
Rivian Pausing New Georgia Factory, Offers New R2 and R3 | Bloomberg via Yahoo
Rivian Automotive Inc. is halting plans to build a new multibillion-dollar factory in Georgia, an abrupt reversal aimed at cutting costs while the company prepares to launch a cheaper electric vehicle. The decision will save the automaker more than $2.25 billion in capital expenditures, the company said in a filing Thursday. Shifting planned production of the forthcoming R2 model to an existing facility in Illinois will allow Rivian to begin deliveries in the first half of 2026, earlier than expected.
Apple’s EV Wind Down Offers Reprieve to Tesla and Detroit Rivals | BNN Bloomberg
The sudden demise of Apple Inc.’s electric vehicle program is a bleak sign for the car market. It’s also a welcome boon for automakers themselves. Tesla Inc. and Detroit’s automakers can breathe a sigh of relief after the electronics giant scrapped its car program, eliminating a threat in an EV market where growth is slowing and providing a pool of engineers and other talent who may be out of a job.
Climate-conscious travelers are jumpstarting Europe’s sleeper trains | AP News
[Excerpt] Though still a niche and relatively pricey market, demand for sleeper trains is increasing. The online platform Trainline said overnight bookings in 2023 rose 147% compared to 2019, the year before the pandemic. And a climate survey by the European Investment Bank found that 62 percent of respondents supported a ban on short flights.
BYD launches cheaper Seagull electric car with starting price under $10,000 to fuel price war | electrek
BYD’s cheapest electric car just got even more affordable. The EV maker is fueling its price war with gas-powered cars with the launch of its newest “mini Lamborghini” electric car. The BYD Seagull EV Honor Edition starts at $9,700 (69,800 yuan), 5% cheaper than the previous model.
Stellantis Bets $6.1 Billion on Brazil as Regional Hybrid Leader | BNN Bloomberg
Stellantis NV, the automotive group that owns brands like Fiat, Jeep, Peugeot, Citroen and Ram, plans to invest 30 billion reais ($6.1 billion) in Brazil to boost production of flex-hybrid models for domestic use and potential export to neighboring countries, making it the latest automaker to bet big on the South American nation this year. [Excerpt] The country’s most popular models are so-called flexible-fuel vehicles capable of running completely on biofuel produced from sugar cane, making them by most accounts cleaner than pure gasoline engines.
7 OEM charging network venture IONNA commences operations in North America | electrek
Seven months after seven major OEMs shared plans to join forces and implement a new EV charging network of over 30,000 piles in North America, the joint venture, now called IONNA, has officially received regulatory approval to begin operations. The alliance consists of BMW, GM, Honda, Hyundai, Kia, Mercedes-Benz, and Stellantis.
Honda launches first plug-in hydrogen fuel cell EV | electrek
Honda’s popular CR-V compact crossover is now getting a hydrogen-powered plug-in hybrid version that will begin deliveries this year in California – the car allows you to recharge via Level 2 charging for quick trips, or rely on hydrogen power for long hauls.
[Comment] I’m going to ask the question of a three-year old: But why? Hydrogen fueling stations are a rare thing in the US (really only around LA and San Francisco) – and getting rarer.
Boston is going is going big on installing curbside EV chargers | electrek
Boston’s “Recharge Boston: Boston’s Zero Emission Vehicle Program,” has a goal of every household being within a 10 minute walk of a public EV charging station or EV car share, so installing 250 curbside EV chargers is part of that program.
Policy
Canada’s Oil-rich Alberta Curbs New Wind, Solar Projects | Barrons
Oil-rich Alberta on Wednesday unveiled new rules for renewable energy projects, effectively banning wind and solar on large swaths of agricultural lands and in areas that could obstruct the majestic Rocky Mountain views the Canadian province is known for.
[Comment] Nothing like throwing all manner of policy uncertainty as a way to stifle investment. Feels very much like the current government playing to their rural political base [heavy sigh and head shaking]. While some of the changes make sense, they likely could have made those without the “policy” pause. More analysis from Bennett Jones here.