Plus: Falling EV sales are a problem for banks; Why you want banks to still finance oil and gas; Big data chasing lower emissions; Biden’s tariffs
Hi everyone,
Last issue I mentioned I was attending a net zero forum in Toronto for work. Being from the oil and gas sector, I was mostly in listen mode. My quick report: credible presentations by Transition Accelerator staff, but lots of wishful thinking among keynote speakers and many participants. There were a few bright spots sprinkled in – mostly by the points raised by those in attendance. Yet these forums have to be seen for what they quietly aim to do: be a place to go for those needing to be re-energized and less-so for real-world problem-solving with integrated thinking. To be fair, the Toronto forum attempted to crowd-source solutions to barriers in a way not yet seen in other conferences I have attended.
As usual, have a read of my take on China’s inexpensive EV and skim through other stories and my comments. Tell me what you think. Lastly, spread the word! Please continue to forward on to others and encourage them to subscribe.
Thanks,
Peter
Peter’s take: China’s inexpensive BYD Seagull EV
American Test Of $11,500 BYD Seagull: ‘This Doesn’t Come Across Cheap’ | Inside EVs
The video above posted in February gives us the next best thing to a first-hand look at BYD’s Seagull. The price quoted in the video is about USD$11,500. That is a staggeringly low price, given Tesla has for years been putting off the development of a $25,000 EV, something Musk acknowledged the market needed. Granted, the Seagull does not meet North American standards, so some modest upward pressure on the price can be expected. No wonder then, that the US Biden administration just two weeks ago increased the tariff on Chinese EVs to 100%, up from 25% previously. North American car makers have some scrambling to do to compete. Even in Europe, where the Seagull has been cleared for import there, has car makers worried. They know that tariffs cannot be depended on for the longer term, so they’ve been urgently chasing strategic alliances among themselves with the aim of reducing costs. Meanwhile, China is also considering its own tariffs. I have no special insights to how the tariff war will play out. What is clear is that China’s BYD has clearly demonstrated how to build an inexpensive (not “cheap”) electric car. And BYD more in store: a plug-in hybrid pick-up truck – see pic and link to story below.
Now, I also realize the reality that many remain unconvinced their next vehicle will be electric. Even with purchase price parity, the inconvenience of waiting to charge your car part ways through a road trip (perhaps multiple times) is not an experience upgrade, no matter how many more chargers get added to an ever-expanding network. Yet for typical in-city trips an EV serves just fine.
It has me watching the development of fast charging EV batteries, like that of StoreDot and CATL. In 10 minutes, StoreDot’s battery can add 320km of range and CATL’s is said to add 400km. Battery chemistry matters here, as some like sodium-ion (CATL’s) do not fare as well in cold-weather climates.
So where does that leaves us? For the time being, a slower transition to EVs. What would get us out of cars for longer trips: high speed rail is at least part of the answer that has not been given nearly the attention in the US and Canada that it should. What else? Tell me what you think.
2024 BYD Shark Is a Plug-In-Hybrid Pickup Truck Set to Take on the World | Car & Driver
Finance & Sentiment
Banks Warn of Growing Energy-Related Risks in Mortgage Portfolios | BNN Bloomberg
Across Europe, banks are trying to figure out how to handle a growing risk lurking in residential mortgage portfolios: energy consumption.
[Comment] If you’re like me, you’re wondering “why are European banks worried about the energy efficiency of homes – and how does it tie to mortgages?” It works like this: The EU has set a goal of cutting emissions in the building sector by 60% by 2030, and has made complete decarbonization a 2050 target. At 42% of energy consumed, buildings “are the single largest energy consumer in Europe,” according to the European Commission. Estimates are that it could cost homeowners €100,000 worth of renovations. The extra cost of debt on top of mortgage payments makes them more of a credit risk. On the other hand, if a homeowner chooses not to do upgrades, they risk not being able to sell or rent their non-compliant property. The cumulative exposure to banks is huge. In Germany alone, 60% of homes need some renovations with the total cost estimated at somewhere between €740 billion and €1 trillion. Bottom line is banks are left holding residential property assets that don’t have an easy path to compliance.
Falling EV Sales Are Upending Banker Climate Strategies | BNN Bloomberg
Electric vehicles have swiftly gone from a rare bright spot in the fight against climate change to a cause for concern. A slowdown in EV adoption has potentially huge implications for the energy transition. It also has ramifications for the many financial institutions that have pledged to decarbonize the loans and investments they make.
[Comment] This is an issue for banks lending to car makers in the US, Canada and Europe. If banks have any exposure to China (my guess is “unlikely”) then they wouldn’t need to be as concerned. Why? Because China’s transition to EVs is still going very strongly and is expected to be responsible for 60% of global EV sales this year.
Banks accused of undermining climate pledges with $705bn in fossil fuel financing | edie
The world’s biggest banks collectively provided more than $705bn to fossil fuel companies and projects in 2023, with almost half of them increasing their finance provisions to the sector year-on-year.
[Comment] Some of you may think this to be flawed thinking: we ought to thank the banks for doing so. Continued investment in oil and gas is needed through the transition, while there is still demand for oil and gas. To do otherwise would make fuel costs irresponsibly unaffordable at a time when inflation is hitting family budgets hard. Our focus must be on reducing demand for oil and gas: building codes, sustainable city design, hydrogen for heavy transport, etc.
Over 40% of Gen Z & Millennials Have or Plan to Change Jobs Over Climate Concerns: Deloitte Survey | ESG Today
Climate change and environmental sustainability concerns are increasingly driving workplace and consumer behaviors for Gen Zs and millennials, according to a new survey released by global professional services firm Deloitte, with more than 40% in each group reporting that they have left jobs, or plan to in the future, over climate concerns, and nearly two-thirds saying that they would pay more to purchase environmentally sustainable products.
Technology
Hydrogen
US Offers Conditional $1.66 Billion Loan To Hydrogen Producer Plug Power | Reuters
The U.S. Department of Energy said on Tuesday it has offered a conditional loan guarantee of up to $1.66 billion to Plug Power, opens new tab to help it build up to six plants to produce clean hydrogen.
Australia Invests Over $5 Billion to Develop Clean Hydrogen Sector | ESG Today
The government of Australia announced today (May 15) a series of large-scale investments aimed at boosting the country’s clean energy sector, including plans to invest A$8 billion (USD$5.3 billion) in hydrogen production and technology over the next 10 years.
Carbon Capture
Climeworks switches on the world’s largest direct air capture plant | edie
[Excerpts] The Swiss environmental services business has switched on the world’s largest direct air capture and storage facility in Iceland. It first broke ground in June 2022, and will be completed throughout 2024. It is designed for a nameplate capture capacity of up to 36,000 tonnes of CO2 per year.
Microsoft backs carbon capture projects in Denmark, Panama, and Canada | Data Center Dynamics
Microsoft is buying one million tons of carbon removal credits from a renewable energy company in Denmark as the tech giant continues to invest in carbon capture technology. It will make the purchase from the Avedøre power station in Copenhagen, which is operated by energy company Ørsted, in a deal that will run for 10 years from 2026.
Microsoft Signs Another Reforestation-Based Carbon Removal Megadeal | ESG Today
Microsoft and nature-based climate solutions startup re.green announced one of the largest-ever carbon removal agreements, with Microsoft purchasing 3 million tons of carbon removal credits over a 15-year period, generated through re.green’s reforestation projects in Brazil.
Big Data
Amazon pursues “emissions-first” AI energy strategy | Axios
Amazon is turning to artificial intelligence to improve power efficiency and lower emissions. Why it matters: As concerns mount over skyrocketing energy demands from data centers, electric vehicles and increasingly electrified homes, how the world meets manages this growth may determine if global climate goals are met.
Microsoft to Require Key Suppliers to Use 100% Carbon-Free Electricity as Supply Chain Emissions Jump | ESG Today
[Excerpts] While Microsoft has set a goal to reduce Scope 3 emissions by more than half by 2030 compared to 2020, the company reported that Scope 3 emissions in 2023 were actually more than 30% higher than in 2020. Scope 3 emissions represent the vast majority – more than 96% – of Microsoft’s total emissions footprint, with the growth in Scope 3 driving a 29% increase in total emissions since 2020, despite a decline in the company’s direct Scope 1 and 2 emissions.
Urban Design & Buildings
Two Years In, the UK’s Heat Pump Subsidy Is Finally Gaining Momentum | BNN Bloomberg
Two years after the UK announced a subsidy geared at boosting adoption of heat pumps in households, the policy is starting to make inroads, according to the minister in charge of it. The government offers £7,500 to homeowners in England and Wales who want to replace a fossil fuel heating system with a heat pump, one of the most generous subsidies in Europe.
£557 million allocated to public buildings to spur decarbonisation | Current±
[Excerpt] (UK) The latest phase of the Public Sector Decarbonisation Scheme, which has funded over 1,000 projects since 2020, will provide £530 million of government investment for energy efficiency upgrades, including heat pumps, solar panels, insulation, and low-energy lighting, in public buildings across the country.
Energy Storage
World’s largest compressed air energy storage project comes online in China | pv magazine
Image: ZCGN
Zhongchu Guoneng Technology Co., Ltd. (ZCGN) has switched on the world’s largest compressed air energy storage project in China. The $207.8 million energy storage power station has a capacity of 300 MW/1,800 MWh and uses an underground salt cave.
Neoen to build its biggest battery to shift energy to evening peak in nuclear-dominated Ontario | RenewEconomy
French renewable energy company Neoen has announced plans to build its biggest battery project to date – a 400 MW, four hour battery (1600 MWh) to shift excess energy to the evening peak in the nuclear dominated Canadian province of Ontario.
Origin Energy unveils plans for 2 GWh battery in Australia | pv magazine
Australian energy giant Origin Energy has revealed plans to build what could be the biggest battery energy storage system (BESS) in the state of Queensland, as it continues the expansion of its renewable energy generation and storage portfolio.
£3bn pumped hydro storage project slated for Loch Ness | edie
Glen Earrach Energy (GEE) has today (17 May) unveiled plans to develop a £3bn, 2GW pumped hydro storage project, located near Loch Ness in Scotland, that could generate enough clean energy to power one million homes each year.
Residential solar + storage surged in California after NEM 3.0: LBNL | Utility Dive
Storage attachment rates on new residential photovoltaic systems in California spiked from about 10% to approximately 60% following the April 2023 enactment of the state’s net energy metering tariff, known as NEM 3.0, net billing tariff or NBT, Lawrence Berkeley National Laboratory said in a technical brief released earlier this month. NEM 3.0 reduces residential PV system owners’ earnings from electricity exported to the grid, incentivizing storage attachments, according to the LBNL report.
[Comment] Basically what happens when the rules change to compensate homeowners less for power exported to the grid, the homeowners decide to install batteries to store their solar power and use it themselves to offset peak demand charges.
Solar and Wind
New Sun Cable takes shape with 12GW of wind added to world’s biggest renewable project | RenewEconomy
[Excerpt] Quinbrook quickly identified that wind energy would be a useful addition to the project that was originally focused on 20 GW of solar and 42 GWh of battery storage. After nearly a year of studies, Quinbrook now has a better idea of what that might look like – 12 GW of wind, with the solar component reduced from 20 GW to 12 GW, and the storage component also reduced to 32 GWh – thanks in part to the role that wind will play in providing power after the sun goes down.
Plans unveiled for massive $3.5 billion wind and solar powered green iron project for Queensland | RenewEconomy
Quinbrook Infrastructure Partners has thrown its hefty investment weight behind ambitious plans to convert Queensland magnetite ore into green iron, using the state’s vast wind and solar resources and and one biggest renewable hydrogen projects under development in Australia.
Alberta Power Producer Cancels Wind Farm, Shelves 3 Other Projects as ‘Pristine Viewscapes’ Ruling Bites | The Energy Mix
TransAlta Corporation has cancelled a wind farm in southern Alberta and put three other projects worth an estimated C$500 million on hold, citing recent changes in the province’s grid regulations and uncertainty about further shifts on the near horizon.
Grew Energy begins work on 3.2 GW ingot-module factory in India | pv magazine
Grew Energy has started building a 3.2 GW ingot-module factory in India. The facility will produce 2.8 GW of ingots, wafers, and cells per year, along with 3.2 GW of high-efficiency PV modules.
[Comment] News that silicon ingot manufacturing capacity is coming to somewhere other than China is good news. Based on the manufacturing capacity under construction, China’s share of global polysilicon, ingot, and wafer production is projected to reach almost 95% – an unhealthy concentration.
New York gives Empire Wind the green light | reNEWS.biz
Governor Kathy Hochul has announced that the New York State Public Service Commission has granted Equinor’s Empire Offshore Wind its final approval, authorising the project to begin construction on the 810MW offshore wind farm.
Transportation
Oakland is now first in the US to have a 100% electric school bus fleet – and it’s V2G | electrek
Photo: Zum
An Oakland, California, school district is the first in the US to transition to a 100% electric school bus system with vehicle-to-grid (V2G) technology.
Honda revs up on EVs, aiming for lucrative US, China markets | AP News
Japanese automaker Honda reaffirmed its commitment to electric vehicles Thursday, saying it will invest 10 trillion yen ($65 billion) through fiscal 2031 to deliver EV models around the world, including the U.S. and China.
Volkswagen Walks Back EV-or-Bust Strategy That Rankled Rivals | BNN Bloomberg
Volkswagen AG’s all-in on electric vehicles plan is no more. The namesake VW brand, which pitched its ID family of electric cars as central to its future, admitted last week it will need more plug-in hybrids as EV sales decelerate.
Japan’s Asahi Kasei chooses Port Colborne, Ont., for its $1.6-billion EV battery separator plant | Electric Autonomy
Japan-based multinational company Asahi Kasei Corp. is investing $1.6 billion to build Canada’s first lithium-ion EV battery separator plant in Port Colborne, Ont. Based on earlier reports, the plant is to be a joint-venture with Honda Canada as part of its EV battery supply chain — although Honda wasn’t present, or even mentioned, at the official announcement.
EV maker Tesla breaks ground on Megapack energy storage battery factory in Shanghai | AP News
Electric vehicle maker Tesla has begun construction of a factory in Shanghai to make its Megapack energy storage batteries, Chinese state media reported Thursday. The $200 million plant in Shanghai’s Lingang pilot free trade zone will be the first Tesla battery plant outside the United States.
Bevy of new electric trucks coming to market in Canada in 2024 | Electric Autonomy
Fleets and businesses shopping for electric commercial trucks now have an increasing menu of vehicle options to choose from. In recent weeks, three manufacturers have announced they are bringing a total of seven new models of electric trucks to market in Canada: the Lion8 Tractor, the VMC 1200 Class 3 and the ZM Trucks Class 4, 5, 6 and “baby8.”
Circular Economy
European call for 25% circular material use by 2030 | Jon Smieja, VP of Circularity
The Belgium-based European Waste Management Association is calling for legally binding targets of 25 percent circular material use by 2030 and 75 percent recycling of all waste materials in the European Union by 2035. The association’s manifesto is a call to action ahead of the upcoming EU elections (via Recycling Today).
Policy
What are Biden’s new tariffs on China goods? | Reuters
President Joe Biden is hiking tariffs on $18 billion in Chinese goods including electric vehicles, batteries, semiconductors, steel, aluminum, critical minerals, solar cells, ship-to-shore cranes, and medical products, while retaining Trump-era tariffs on over $300 billion in goods. The United States Trade Representative’s Office told Reuters it anticipates the effective date will be in approximately 90 days.
[Comment] The increase to 100% in 2024 from the current 25% for EVs from China is particularly noteworthy. Basically, the US has to double the price of a Chinese EV in order for domestic EVs to be able to compete.