Plus: Carbon credit deals; $2.3B solar + storage and a $4.3B powerline in Nevada; mixed signals for US offshore wind; $3B for US EV batteries
Hi everyone,
Check out “Peter’s Take” below. The slimmed-up format should make the rest a reasonably quick read. I welcome your comments and feedback and story suggestions. These really do help!
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Thanks,
Peter
Peter’s take: Gentle densification in NA cities matters
I came across a story in the Calgary Herald that made me dig a little deeper. The headline was “Private space trumps amenities, survey finds”. The survey, completed by simplydbs, and titled: 2024 Multi-Residential Satisfaction Survey, compiles the responses from over 20,000 residents in multi-family rental properties across Canada. Among the findings:
“62% of residents would choose larger suites with less amenities over smaller suites with more enhanced building amenities”
Another finding: “39% of respondents would pay more, per month, to live in a net zero-carbon building.
I mention the “more space” aspect, because it made me go looking at recent work by the Trottier Energy Institute which released two reports earlier this year: The State of Energy and GHG emissions in Canada and Pathways for a net-zero Canada. I’ll admit I didn’t read them both in their entirety, but did focus on buildings and transport. The one bit that stood out for me was this:
“However, a further look at the residential sector reveals a few conflicting trends. On the one hand, the energy use per unit of floor space declined by 24% between 2000 and 2019; on the other, floor space increased by 46% between 2000 and 2020, well beyond population growth (24%). All building types have seen a significant increase in average floor space, with a rise of 39% for single detached homes, 72% for single attached homes, and 56% for apartments. These figures suggest that new constructions are very significantly larger per unit, irrespective of the evolution of the distribution of building types. In other words, such large increases in the average floor space of building types between 2000 and 2020 are driven by new constructions with much larger floor areas per unit and more than cancel out efficiency gains per unit of floor space.”
The connection between the two: people want more space. The market has responded and has been giving it to them.
Regular reader of Energy Shift know I have been advocating the merits of densifying existing Canadian and US cities. Calgary has recently taken a positive step with city-wide re-zoning to enable gentle densification. It’s a bit early to say, though I’m watching development permits for rowhouses, duplex infills, 2X2-plexes, and backyard cottages. Early signals are encouraging. Previously, such redevelopments required a hearing at city Council. Now they only need a development permit, provided proposals stay within the guidelines. Many more cities have already done likewise for removing zoning barriers.
As older nearer-to-downtown neighborhoods thicken up with more dwellings per hectare, the resident population starts to justify more neighborhood-scale amenities within walking/biking distance. More frequent bus transit becomes justifiable as well. Together these offer the hope of greater mode shift away from car dependency, since EVs seem still out of reach for many (no provincial subsidies here). Plus, more shared walls mean more energy efficient housing.
All of the above made me wonder if anyone has modeled the incremental GHG benefits of densification.
Enter m ddl and the Canadian Urban Institute, who are partnering to assess climate benefits of middle housing, having recently been awarded funding from Alberta Ecotrust. They plan to quantify the lifecycle GHG benefits from small-scale, multi-unit housing forms and then assess future scenarios of gentle densification in Calgary for the contribution to the city’s net-zero by 2050 ambition. From there, they will look at land use policies and climate programs to equip industry and policy makers with the ways to better enable middle housing.
I’m really curious to see the results when they come in! I’ve joined the m ddl community. See if that’s something for you too.
Finance & Sentiment
The Hague became the first city in the world to ban oil and air travel ads, including cruise ships and air travel. The Hague hosts Netherlands federal government and other EU and international agencies. I’m watching to see if other European cities to do likewise.
Australia has passed a law that mandates climate reporting in 2025 for larger companies, and later for medium and smaller companies. I’ll be watching to see how these disclosures will be weaponized for “naming and shaming” to shift capital away from oil and gas.
Not surprisingly, ING has stopped financing new oil and gas projects.
Technology
Hydrogen
Australia has signed a $660 million hydrogen pact with Germany. The deal means both governments will invest in new commercial hydrogen supply and includes guaranteed access to the European market.
Carbon Capture & Removal
Occidental’s 1PointFive has secured funding of up to $500 million from US Department of Energy to support the development of its South Texas Direct Air Capture (DAC) Hub. DAC is very expensive, so this trial represents a critical juncture for proving up the economics. Time will tell.
Google has signed a 100,000-tonne carbon removal deal at a landmark $100/ton with Direct Air Capture (DAC) technology company Holocene. Google won’t get the credits until the early 2030’s. Holocene aims to receive the $180/tonne credit. Now you see how expensive DAC is.
Microsoft, Meta and Google each signed their own carbon removal deals. Microsoft is using rocket-like tech working with Arbor. Google is investing in Brazilian reforestation and Meta is investing in nature-based carbon removal credits. Meanwhile, ERM opened a voluntary carbon credit sourcing platform and MSCI launched a new carbon credit project ratings system.
Urban Design & Buildings
The largest heat pump in the Netherlands is now online in Utrecht, generating heat up to 75 C for the local network by using purified hot wastewater (sewage, showers, dishwashers) from a regional water authority. Precious few examples of this kind of innovation in Canada and US.
Energy Storage
Another large solar + storage project has been approved in New South Wales. Acen Australia’s Birriwa project is comprised of 600MW of solar and a large 600MW/1200MWh battery.
Construction has started on a 2.4GW pumped hydro project in China. Said to commence power generation in 2030, the scale and speed with which China develops these projects is remarkable.
Image: State Grid Corp of China
Private equity investor Actis is investing $600 million into a 3.5 GW/4.5 GWh solar-plus-storage project in the Philippines. It is said to be the biggest project of its kind in the world and will be visible from space after completion in 2026. Yes, projects continue to get bigger!
US BLM has approved Arevia Power’s $2.3 billion solar+storage project in Nevada Arevia Power’s 700 MW solar, plus 700 MW/2.8 GWh battery storage Libra Solar project will be the biggest co-located project in the state of Nevada. Arevia has a PPA with NV Energy, which also received final Federal approval for its massive $4.2 billion, 350-mile Greenlink West transmission line from Vegas to Yerington, near Lake Tahoe. The line greatly increases the state’s transmission capacity – enough to power about 4.7 million homes.
Works begin on 1.4 GWh Inner Mongolia project combining lithium-ion, redox flow storage technologies. The first-phase storage plant will feature a mix of energy storage chemistries, with 505 MW/1,010 MWh coming from lithium iron phosphate battery storage and 100 MW/400 MWh of all-vanadium liquid flow battery energy storage capacity.
Solar and Wind
Leading Light Wind, a 2.4 GW New Jersey offshore wind project is being paused. Invenergy and energyRe had planned to use the massive 18MW Haliade X turbines. GE Vernova, the supplier has decided to not build those turbines. With rising costs from other vendors, they are left without a turbine supplier.
Construction has begun on a 1.1 GW solar project in Tibet and is believed to be the largest in the world to combine animal husbandry.
Just 2.9GW in bids for wind offshore New England were submitted – less than half of the 6.8GW sought. Massachusetts and Rhode Island selected projects, but Connecticut did not. The three bids are being reviewed, meaning that negotiations between developers, states and utilities will now commence. Given rising costs, supply chain issues, I am tempering my expectations that deals will be landed, and the projects get built.
Huawei has built the world’s largest microgrid in Saudi Arabia, combining 400MW solar with a 1.3GWh battery.
Transportation
Volvo has decided to drop its pledge for 100% electric car sales by 2030 and has instead adjusted its target to allow up to 10% of sales to come from plug-in hybrids. They are citing several market challenges, including slower build-out of charging infrastructure and reduced government incentives. Another signpost of slower growth in EV sales.
Northvolt is pausing work at its cathode material production facility in Skellefteå, Sweden, sold a site at Borlänge, Sweden, is looking for partners for its project in Gdańsk, Poland. Northvolt said it remains committed to its facilities NOVO in Sweden, Northvolt Drei in Germany and Northvolt Six near Montreal, Canada. Other companies have had to adjust their battery plans this year due to slower growth of EVs: Volkswagen AG, Stellantis NV and Mercedes-Benz Group AG.
Brookfield is investing $1.1B in Sustainable Aviation Fuels provider Infinium.
The idea is to help scale up production of low carbon fuels. At Project Roadrunner in Texas, Infinium is using renewable or carbon-free electricity to synthesize captured CO2 to make the e-SAF fuel which is said to have 90% less lifecycle emissions compared to conventional aviation fuel. Airlines have aggressive sustainability goals and have so far struggled to source SAF, so this changes the SAF supply picture.
Solid state battery maker Factorial claims 80% EV range boost and partners with Mercedes on its development. Factorial said its sulfide-based system addresses concerns over flammable liquid electrolyte designs. It will also maintain stability when operating at temperatures over 194°F (90°C). They’re aiming to achieve an energy density of up to 450Wh/kg, much more than the 232-244 Wh/kg typically found in Tesla’s 4680 battery. No word on when to expect actual production, which is what I look for.
Study finds that the “vast majority” of EV batteries will outlast the vehicle. Instead of degrading at 2.3% per year, new findings show degradation is down to 1.8% per year.
CATL has unveiled a new “cutting-edge” electric bus battery that boasts an industry-leading energy density of 175Wh/kg and a lifespan of up to 15 years.
Circular Economy
Approximately 2TW of solar panels have been installed around the world – providing five times that of nuclear energy. Many are being replaced before the 25-year life expectancy. Can they be redeployed for second life?
Policy
The European Commission has given the green light to a €1.2 billion ($1.3 billion) state aid program in Poland that provides direct grants to companies producing solar panels, batteries, heat pumps, and other renewable equipment components.
The US Department of Energy on Friday announced $3 billion for projects to bolster the electric vehicle and grid battery supply chain, from mining to recycling.