Plus: Exits from hydrogen; Exxon chasing carbon capture; Google and Amazon invest in nuclear; More bigger batteries; EV price parity with UK crossover
Hi everyone,
I have a bit of a different offering in Peter’s Take, o
n the topic of insurance.
Please keep the feedback coming and share with others you think would be interested.
I’ll see, though I may have to stretch the time until the next issue for personal reasons.
All the best,
Peter
Peter’s take: Homeowner insurance deserts
Recently, I came across the term “insurance deserts” and went digging to learn more, wondering if these were mapped. I learned the term has emerged to describe areas where obtaining homeowner insurance has become increasingly difficult or even impossible. This phenomenon is largely driven by the growing frequency and severity of natural disasters, such as wildfires, hurricanes, and floods, which have made certain regions too risky for insurance companies to cover. For some homeowners, it means facing either higher premiums or the prospect of being uninsurable.
It matters not whether you agree with the science of climate change.
This is a rare departure from my usual commentary, though it answers a call from readers to post more signpost stories related to climate change adaptation. The adaptation in this case is showing up in a variety of ways. The first, of course, is insurance providers adjusting to the new reality. Secondly, governments are also bearing the brunt of costs, adjusting policy where they can while politicians take feel the pressure from voters. Thirdly, homeowners are making tough choices about what to do – if they can – to rebuild, perhaps without insurance or move to places of lower risk. In any case, it is sure to be painfully expensive.
It has me watching for how adaptation across the three areas I noted evolves. Hurricanes Helene and Milton are now both estimated to cost $50 billion.
I was unable to find maps of actual “insurance deserts”. Instead, I offer up the following two sources for the US. Below is a third source – “hot off the press” dated Oct 16th. Click the images for the source.
Source: US Congressional Budget Office – presentation to American Academy of Actuaries Annual Meeting, Oct. 16, 2024
Finance & Sentiment
OPEC trimmed its forecast for oil demand growth. “Despite electric car growth, vehicles powered by a combustion engine will account for more than 70 percent of the global fleet in 2050, affirming strong oil demand growth for the long term.” I found it interesting that one of the reasons for lowering demand growth was China. China’s rapid shift to EVs is likely part of the answer – a deliberate geopolitical strategy to reduce reliance on middle east oil.
Technology
Hydrogen
Fortescue has formally shelved a giant 1GW green hydrogen project in British Columbia on account of a lack of cheap power.
Orsted decided to exit multiple Danish green hydrogen projects, part of a strategic shift away from clean fuels.
Plug Power and Allied Green have executed a binding framework agreement for 3 GW electrolyzer capacity for green ammonia production in Australia.
Toyota has unveiled hydrogen cartridges for portable vehicle charging. I assume they are refillable, though how and where would be the question. Battery electric has won the fight over passenger cars. Perhaps Toyota still believes in hydrogen cars?
Carbon Capture
Denmark has launched tenders for carbon capture and storage worth $4.2bn.
Exxon has secured over 271,000 acres in Texas waters for offshore CO2 capture.
The Grid
Texas regulator wants data centers to build their own power plants. I’m guessing most will reach for natural-gas fired power.
Urban Design & Buildings
Canada’s Federal government released a first set of standardized housing designs, though they won’t be permit-ready until ‘early 2025’. They will include row housing, fourplexes, sixplexes, and accessory dwelling units.
Small Modular Reactors
Google is investing in the development of next gen small modular reactors and agreeing to purchase energy once the sites start supplying US grids.
Amazon announced small modular reactor deals with Dominion, X-energy, Energy Northwest.
The two stories above demonstrate how “big data” is looking to meet emissions reduction targets while still meeting growing needs for reliable and affordable energy, driven in part by increased use of AI.
Energy Storage
UK utility SSE has started constructing a 320MW/640MWh battery energy storage system (BESS) in North Yorkshire, northern England.
A battery 8X the current largest advances planning in Australia. It is driven by an agenda for 100% renewable power in South Australia, where the grid there currently relies on gas to back up renewables.
Nevada is getting the world’s first lithium-sulfur battery gigafactory
[Excerpt] Lithium-sulfur batteries are up to 40% lighter than lithium-ion batteries and use materials that are more abundant in the US, unlike traditional lithium-ion batteries that rely on imported minerals like nickel, cobalt, and graphite. However, they still have challenges to address, such as a shorter lifespan and less stability than lithium-ion batteries, before they go mainstream.
Sweco is designing one of Europe’s largest battery energy storage systems in Belgium. The planned Green Turtle battery park will have a capacity of 700 megawatts, resulting in a storage capacity of 2,800 megawatt hours, which is equivalent to the average annual energy consumption of 385,000 households.
Solar and Wind
Equinor has become the second largest owner in Ørsted, as part of its strategy to add more renewables to its portfolio.
China has made a record-smashing 26 MW offshore wind turbine. Made by Dongfang Electric, it is the largest in size and capacity. Surely, an upper limit must be close.
Transportation
Stellantis crossover set to achieve sticker price parity in the UK
The new Vauxhall Frontera shown here is a mid-size crossover set to launch in the UK later this year with a £23,495 price tag (approx. US$30,705) for either the EV or ICE version. Meanwhile, Goldman Sachs thinks EV battery prices may nearly halve again by 2026, bringing the prospect of wider EV sticker price parity.
BYD expects big sales in Germany’s market with EVs priced around $30,000 (€25,000).
Musk unveiled an electric robotaxi dud, which may see production in 2027, if significant regulatory barriers are overcome. This is flawed thinking. Autonomous cars will not be fastest way to get around in the cities of the future. They will only make congestion worse with inevitably empty cars driving around.
A UK bus operator has committed £500 million to buy 1,200 zero emission buses, mostly battery electric.