Plus: RBC disclosure deal with NYC pension fund; Electrolyser manufacturing at “severe overcapacity”; Natural gas backs up solar eclipse
Hi everyone,
I hope you had an enjoyable Easter. We delayed having our Easter turkey until this past Sunday and man, was it tasty!
I’ve salted lots of comments throughout, so enjoy the reading! As always, continue to forward on to others and encourage them to subscribe.
Thanks,
Peter
Peter’s take: The pull back on EVs in the US continues
I had an exceptional number of stories in the Transportation section, so I’m drawing your attention to the three stories below. There is some hard-core negative sentiment towards EVs in the US, with 30% saying they will never own an EV. Sociologically, we tend to drive longer distances in the US and Canada. It is becoming clearer that enough buyers are not ready to make the switch – and certainly not willing to make the switch as fast as the car makers thought.
I can’t help but wonder what this means for gas stations in the US and Canada if we need to hold on to gas drive trains while most other passenger cars are EVs. Surely, the business model of the convenience stores will see significant erosion over time as more people charge their EVs at home or work.
Ford drastically cuts workforce at F-150 Lightning EV plant amid ‘much slower’ demand | electrek
Starting April 1, one-third of the workforce will remain on-site at Ford’s Rouge EV plant in Michigan. Ford is drastically cutting its workforce at the facility where the F-150 Lightning is built, with demand “much slower” than expected.
Ford to delay production of new electric pickup and large SUV as US EV sales growth slows | AP News
With U.S. electric vehicle sales starting to slow, Ford Motor Co. says it will delay rolling out new electric pickup trucks and a new large electric SUV as it adds gas-electric hybrids to its model lineup. The Dearborn, Michigan, company said Thursday that a much ballyhooed new electric pickup to be built at a new factory in Tennessee will be delayed by a year until 2026.
Kia suddenly shifts to hybrids, affordable EVs amid ‘waning global demand’ | electrek
Kia is following in Ford’s footsteps after suddenly announcing plans to introduce more hybrids as it expects slower EV demand. To boost sales and fend off low-cost Chinese rivals, Kia will introduce a new lineup of affordable EVs in addition to hybrids starting this year.
Scan the stories for other places where I’ve comments and skim the headlines for stories of interest.
Royal Bank reaches deal with New York City pensions to disclose clean energy funding | Financial Post
New York City retirement plans reached an agreement with Royal Bank of Canada for the lender to disclose how much financing it provides for clean-energy projects relative to fossil fuels. Royal Bank plans to report a clean-energy supply financing ratio in its 2024 climate report.
[Comment] This made me go looking for what BNEF defines as a “low carbon investment: “It covers a wide scope of sectors central to the transition, including renewable energy, energy storage, nuclear, hydrogen, carbon capture, electrified transport and buildings, clean industry, clean shipping and power grids.”
I also wanted to get an idea of where the banks stood most on their respective ratios, because I read that BNEF researchers “say it needs to reach four to one by 2030 to help the world avoid the worst consequences of global warming”. I found the graph below from Bloomberg Green back as reported mid-December, 2023.
US announces $6 bln in grants to decarbonize heavy industry | Reuters
The Biden administration said on Wednesday it is directing $6 billion in funding to speed decarbonization projects in energy-hungry industries like steel, aluminum and cement making that contribute nearly 25% of U.S. greenhouse gas emissions.
[Comment] I know, this belongs in the “policy” section, but I didn’t want you to miss it.
Citi Says 42% of Energy Clients Unprepared for Low-Carbon Future | BNN Bloomberg
Citigroup Inc. said more than a third of its clients in the energy sector don’t have a clear plan on how they’ll reach net zero. The disclosure was made in the company’s latest climate report published Thursday and is based on initial results from its so-called net zero review template, which is designed to help the bank assess the emissions of its carbon-intensive clients and their plans for reducing them.
From Bloomberg Green (daily email: subscribe here)
Banks Shying Away From Fossil Fuels Bolster Private Credit Deals
Private credit managers are doing significantly more fossil-fuel deals now than just a few years ago, stepping into a void left by banks exiting assets they worry pose too big a climate risk. The value of private credit deals in the oil and gas industry topped $9 billion in the 24 months through 2023, up from $450 million arranged in the preceding two years. The figures offer the clearest signal yet that fossil-fuel exclusion policies among banks—driven by regulatory and public relations concerns—are shifting some oil, gas and coal assets to less transparent corners of the market. It’s a trend that investors say is only going to increase in the coming years.
[Comment] The pressure on banks, per the RBC story above, means that more lending is going private, along with the healthy profits that goes along with that lending. The trend of ever-increasing disclosure requirements can also expect to trigger more small and medium-sized oil and gas companies to go private as well. Insurance is another area that will be harder to come by for oil and gas, leaving them to “self insure”.
Technology
Hydrogen
‘Severe overcapacity’ | The global supply of electrolysers far outstrips demand from green hydrogen projects: BNEF | Hydrogen Insight
Electrolyser manufacturers have invested too quickly into new factories, with “severe overcapacity” compared to actual demand from green hydrogen project developers in the coming year, warns research firm BloombergNEF (BNEF).
[Comment] At 21 GW, China accounts for 68% of global electrolyser capacity. I couldn’t access the BNEF report, though from my other reading last year, I lost track of the many announcements for new Chinese electrolyser plants. The recent massive growth in China is at least partly to blame. Shockingly, “factories around the world could produce up to 31.7GW of electrolysers per year at the end of 2023 — nearly 17 times what was delivered that year and more than seven times the capacity expected to be delivered in 2024.”
JERA, Exxon to explore development of hydrogen and ammonia production project in US | Reuters
JERA, Japan’s top power generator, said on Monday it has agreed with Exxon Mobil to jointly explore the development of a low-carbon hydrogen and ammonia production project in the United States. Exxon is developing what is expected to be the world’s largest low-carbon hydrogen production plant at its Baytown Complex east of Houston in Texas, with an annual output capacity of about 900,000 metric tons of hydrogen and more than 1 million tons of ammonia. The project aims to start production in 2028.
Japan’s Top Utility Pilots Ammonia Use to Reduce Coal Emissions | BNN Bloomberg
Japan’s top power producer Jera Co. is piloting a controversial emissions reduction technology that substitutes a portion of coal with ammonia for electricity generation, according to a company statement. Jera started the first of its kind demonstration at its Hekinan Thermal Power Station in the Aichi prefecture on Monday, along with manufacturer IHI Corp. The utility aims to replace 20% of coal heating value with fuel ammonia in its large-scale, commercial power plant.
Carbon Capture
US Steel plant in Indiana to host a $150M carbon capture experiment | Canary Media
Credit: The Times of Northwest Indiana (nwi.com)
[Excerpt] When completed in 2026, it will capture 50,000 metric tons per year of the carbon dioxide the plant currently dumps into the atmosphere, “mineralize” it, and ultimately turn it into the ubiquitous industrial product calcium carbonate. The project will capture less than 1 percent of the roughly 10 million metric tons per year of carbon dioxide that Gary Works emits.
Oil Giants Plan to Bury Massive Amounts of CO2 in Southeast Asia | BNN Bloomberg
Just as they first ventured to do over a century ago, the world’s largest oil companies are staking claims far from home — this time to swallow, rather than spew, planet-warming industrial emissions. Carbon dioxide storage is emerging as a potential multi-billion-dollar revenue stream for firms like Exxon Mobil Corp., Shell Plc and Chevron Corp., which are under global pressure to rein in the unfettered burning of fossil fuels.
SLB to invest nearly $400 million in carbon capture company in push to scale technology | CNBC
The oilfield services giant SLB, formerly known as Schlumberger, is aiming to accelerate the deployment of carbon capture technology through an investment in Norway’s Aker Carbon Capture.
The Grid
Monday’s eclipse could cut US solar output by 40 GWh. Here’s how 5 grid operators are preparing | Utility Dive
Despite the reduced renewables, “at the end of the day, we’re going to be fine,” said Michael Lee, CEO of Octopus Energy US, a demand response provider operating in the Texas market. Experts broadly expect natural gas to take up most of the solar slack during the eclipse.
Urban Design & Buildings
Exploring the first international declaration on pathways to building decarbonization | GreenBiz
Signed by representatives from 70 countries including the United States, the Declaration establishes shared values, a common framework, and a course of action for international cooperation around accelerating the transition to a decarbonized and resilient built environment.
Small Modular Reactors
Amazon, Google and Microsoft signal growing interest in nuclear, geothermal power | GreenBiz
The push to commercialize artificial intelligence is swelling the electricity demands of the three biggest cloud computing companies — Amazon, Google and Microsoft — and they’re looking for carbon-free energy, including nuclear and geothermal, to reduce the greenhouse gas emissions from that growth.
Indian Oil in Talks with State Nuclear Firm for Small Reactors | BNN Bloomberg
State-run Indian Oil Corp. Ltd. is in preliminary talks with India’s atomic power monopoly to build small nuclear units, an early-stage technology seen as a cost-effective alternative to larger plants. The refiner and fuel retailer is exploring a partnership with state-controlled Nuclear Power Corp. of India Ltd. to use small modular reactors, or SMRs, in its refineries for clean power, Alok Sharma, Indian Oil’s director for research and development, said at a conference in New Delhi Wednesday.
Energy Storage
QuantumScape delivers Alpha-2 solid-state prototypes to EV automakers, moving closer to commercialization | electrek
Solid-state battery developer QuantumScape has shared its latest milestone, delivering prototype samples to OEMs en route to commercialization and EV implementation one day. By delivering the Alpha-2 cells, the company has already fulfilled one of its 2024 goals, and it’s only March.
[Comment] I have been following QuantumScape fairly closely over the past couple of years. They project their QSE-5 solid-state cell could achieve an energy density of 800Wh/l. “Project”, as in “hope to achieve”. I almost included one of their graphs, until I looked closer at the axis – a classic way of magnifying results. They hope to achieve perhaps a 15% improvement over existing energy density, but here is where it gets interesting: achieving that in roughly half the typical charging time of EVs available today.
UK developer Statera wins planning consent for 6-hour, 1.7GWh battery storage project | Energy Storage News
UK-based energy company Statera Energy has secured planning consent for a 290MW/1,740MWh battery energy storage system (BESS) to be developed in Devon, a county in Southwest England.
CATL announces electric vehicle battery with 1.5 million kilometre warranty | The Driven
The world’s largest battery maker CATL has announced a new electric vehicle battery pack with a 1.5 million kilometre, 15 year warranty. The new lithium iron phosphate (LFP) battery will be able to cater to different market segments, including buses, light trucks and heavy trucks, and will be used in future products from Yutong Bus and Yutong Heavy Industries.
Solar and Wind
Ohio’s largest solar farm will also be the US’s largest agrivoltaics project | electrek
Photo: Erich Burnett/Oberlin College
[Excerpt] The 800-megawatt (MW) solar farm will have two 3.5-mile-long transmission lines. It will also be paired with a 300 MW battery energy storage facility and create enough electricity to power 170,000 households. Oak Run will graze at least 1,000 sheep and grow crops on 2,000 acres after the first year of operation. Within eight years of operation, at least 70% of the farmable project area, or at least 4,000 acres, will include agrivoltaics.
[Comment] It took a lot of opposition to force the developer to agree to the approval condition requiring agrivoltaics. I just think this makes so much sense and worry developers don’t want to take the time to line up the right partner(s) and figure out how to make it work more often.
Profits Not Prices Drive Renewable Development, New Book Says | BNN Bloomberg
[Excerpts] The basic argument is simple and it’s something that the world doesn’t want to admit: The business of developing and owning and operating solar and wind farms and selling the electricity is kind of a shitty business. It’s really not a very attractive business. It’s a very competitive business where returns are not just low, but volatile and difficult to predict. All of that has a chilling effect on investment in that sector.
Unless governments are willing to either assume the burden of renewables development through public ownership, public financing or essentially compel private firms to build renewables like they do in wartime, they will have to keep subsidies and tax credits in place indefinitely or else renewables investment will collapse because of the unfavorable economics. The Inflation Reduction Act is a testimony to that.
[Comment] We always knew the return on investment for renewables was a challenge. He makes a good point about higher delivery costs, if transmission capacity isn’t in place. Gas-fired generators benefit from legacy gas pipeline infrastructure, though.
Malaysian giant plans to build up to 2GW Australian wind and solar in five years | RenewEconomy
Malaysian infrastructure giant Gamuda Berhad has announced it will turn its Australian market focus to renewables, with plans to build a 1 to 2 gigawatt portfolio of wind and solar projects within five years.
[Comment] I’ve never heard of this company before, but it is building $4.5 billion in road and rail projects in Australia. So, it is believable.
Transportation
No Doubt About It: EVs Really Are Cleaner Than Gasoline Cars | BloombergNEF
When it comes to lifecycle emissions, the answer is a resounding yes. According to a new report by BloombergNEF, in all analyzed cases, EVs have lower lifecycle emissions than gas cars. Just how much lower depends on how far they are driven, and the cleanliness of the grid where they charge.
[Comment] Not surprisingly, charging EVs during the day, to take advantage of solar power, can dramatically reduce charging-related emissions, especially in the US.
Watch out Tesla, smartphone builder Xiaomi’s SU7 EV offers 434 mile range for under $30k | electrek
Apple may have bailed on its plans to build its own EV, but a Chinese competitor has completed the feat, and on paper, it has the makings to be one helluva first entry into the segment. Today, Xiaomi officially launched its first-ever EV, the SU7 – decked out with advanced battery tech, lightning-fast charging, and a mouth-watering range – all for starting MSRPs that will turn some heads.
U.S. cities are clamoring for electric buses. Why can’t manufacturers keep up? | Fast Company
[Excerpt] On June 21, just five days before the announcement (by the FTA for ~$800 million for zero emission buses), Nova Bus said that it was exiting the U.S. market. Then, in August, electric bus manufacturer Proterra filed for bankruptcy. Since 2003, at least 10 bus manufacturers have bowed out of the U.S. market. Now just four remain, according to Jared Schnader, senior director of the bus division at transportation nonprofit CalStart.
[Comment] The lack of bus manufacturer comes at a rare moment in time when there is unique policy ambition alignment for zero emissions buses: it is a key part of Biden administration climate agenda, plus they can help cities and states achieve climate goals. Too bad we are still building cities that struggle with designs that would make buses more attractive. The US is going in the wrong direction: in 1970, 9% of Americans commuted by bus. Fifty years later that is down to 5%. Among the solutions: the Strong Towns approach: devolve decision-making to the lowest competent level (cascade this from Federal-to-State-to-Cities).
These Revolutionary Electric Bikes Don’t Need Batteries Or Recharging, A World First | WECB Radio
The era of electric bikes burdened by polluting, non-recyclable batteries is nearing its end. This change is thanks to the innovation of a French manufacturer who has shifted focus to supercapacitors. In Orléans, Loiret, the electric bike PI-POP emerges as the world’s first bike without batteries or the need for recharging. This innovation stands on the brink of transforming the biking landscape.
[Comment] I’ll admit to practically forgetting about supercapacitors. I just dismissed them years ago as not having a practical use-case. This development could change my mind.
An electric pickup from Nissan and Mitsubishi? Automakers team up to take on US market | electrek
Japanese automakers Nissan and Mitsubishi are joining forces to catch up as the US market transitions to EVs. Nissan and Mitsubishi will jointly develop an electric pickup for the US market.
Hyundai reveals ambitious $50 billion investment to secure a top 3 spot in the EV market | electrek
Hyundai announced a massive $50 billion (68 trillion won) investment to secure its position as the auto market transitions to EVs. The Korean automaker will hire 80,000 people in Korea to help it become a top-three EV maker by 2030.
Volvo makes its last diesel car and puts it in a museum | electrek
Swedish automaker Volvo has rolled out its last diesel-powered passenger vehicle, after a 45-year relationship with the powertrain and cranking out millions of oil-burning cars. Between 2012 and 2016, diesel accounted for half of the company’s global sales. But those days are over now as the company moves toward an all-electric future.
BYD launches lower-priced version of its Tesla Model 3 rival electric sedan, starting at $25K | electrek
Global EV leader BYD launched a new version of its Seal electric sedan Monday, with starting prices around $25,000 (179,800 yuan). The Seal Honor Edition is BYD’s latest lower-priced EV to roll out, fueling its “liberation battle” against gas-powered cars.
Circular Economy
How Tersus handles the resale ‘dirty work’ for The North Face, Arc’teryx and others | GreenBiz
If you ask Steve Madsen, founder and chief technology officer of Tersus Solutions, to describe what his company does, he replies, “The stuff nobody else really wants to do.” “We receive the product, we sort it, we condition-grade it, we clean it, we repair it, we put it on a shelf and we ship it to the customer. We provide all the touches that have to be done,” Madsen says.
This from Circularity Weekly:
Why H&M is turning away from polyester recycled from bottles
H&M’s new deal to buy $600 million of “circular” polyester over seven years from Syre, a Swedish startup it co-founded, underlines one of fashion’s dirty secrets: Making new polyester from recycled bottles sounds environmentally friendly, but polyester is a huge source of pollution. And recycling bottles to make more polyester might be worse than keeping the bottles in the beverage industry.
Consider subscribing to Circularity Weekly here.
Policy
Germany’s €23 Billion Green Experiment to Save Its Industrial Economy | BNN Bloomberg
Europe’s largest economy is running a €23 billion ($24.9 billion) experiment to reach net zero by 2045 without destroying its energy-intensive industrial base. The government of Olaf Scholz announced earlier this month so-called “climate protection contracts” to help companies in sectors like steel, cement and glass cover additional expenses incurred in using cleaner technologies, compared with conventional processes.
EPA awards $20 billion in green bank grants for clean energy projects nationwide | MSN
The Environmental Protection Agency on Thursday awarded $20 billion in federal green bank grants to eight community development banks and nonprofit organizations to use on projects combating climate change in disadvantaged communities and helping Americans save money and reduce their carbon footprints.
US announces $6 bln in grants to decarbonize heavy industry | Reuters
The Biden administration said on Wednesday it is directing $6 billion in funding to speed decarbonization projects in energy-hungry industries like steel, aluminum and cement making that contribute nearly 25% of U.S. greenhouse gas emissions.