Exclusive: Major companies united to push climate solutions

At-a-Glance:

A group of eight large companies, including tech and entertainment heavy hitters such as Amazon, Google, Microsoft, Salesforce, Disney and Netflix, are joining environmental groups and the U.N. to devise ways to scale funding for climate solutions. The collective will be called the Business Alliance to Scale Climate Solutions (BASCS), and will serve as a knowledge-sharing network that has the potential to accelerate companies’ emissions reduction efforts. To learn more, read “Exclusive: Major companies united to push climate solutions.”

Key Takeaways:

  • The new alliance allows firms that might otherwise compete with one another to launch clean energy projects to collaborate before engaging in such competition.
  • The alliance is explicit about preventing companies from simply trying to offset their emissions, and firms that join need to agree to core principles that emphasize the need for absolute emissions cuts.
  • Max Scher, who heads clean energy and carbon programs at Salesforce, told Axios that the alliance is unique in that it’s by businesses for businesses, and aims to break down silos in which many currently operate.

Path to 100% Perspective:

The global energy market is constantly evolving. Current market trends show the energy landscape is in transition towards more flexible energy systems with a rapidly increasing share of renewable energy, declining inflexible baseload generation and wider applications of storage technology. The declining costs of renewables have begun to reduce new investments into coal and other inflexible baseload technologies; a transition which will eventually cause renewables to become the new baseload. In 2017 itself, 14% of electricity generation worldwide was attributed to wind and solar. A focus on a renewable energy future is now unwavering for collaborators across public and private sectors alike.

Oil Majors Look to Fill Businesses’ Growing Appetite for Green Power

At-a-Glance:

Businesses are buying more renewable power, and oil majors want a piece of the action. European oil companies including BP PLC and Royal Dutch Shell PLC are building new wind and solar projects and striking deals to supply electricity to big corporate buyers like Amazon.com Inc. and Microsoft Corp., treading into the domain of traditional power companies. To learn more, read Oil Majors Look to Fill Businesses’ Growing Appetite for Green Power.” Reading this article may require a subscription from the news outlet.

Key Takeaways:

  • Oil companies say securing long-term deals to supply electricity will provide a new source of income and underpin their expansion into wind and solar power as they seek to reduce their dependence on fossil fuels and prepare for a lower-carbon economy.
  • Corporate power-purchase agreements are an area of focus for BP’s solar-power joint venture Lightsource BP, which this year signed deals to supply Amazon, Verizon Communications Inc. and a unit of insurer Allianz SE.
  • New deals continue to be struck at a rapid pace, rising 75% in the first four months of the year versus the same period a year ago, the BNEF data showed.

Path to 100% Perspective:

Bloomberg New Energy Finance projects that new wind and solar will cost less than existing coal and gas generation in China by 2027, and that new wind and solar will be cheaper than existing goal and gas generation in most of the world by 2030. As wind and solar power become increasingly cost-competitive, investments in traditional, inflexible base load plants such as large coal, nuclear, and gas combined-cycle plants are declining. This signals an end to the era of large, centralized power plants that run on fossil fuels.

All Roads Lead to Net Zero, Not Just the Easy Ones

At-a-Glance:

In May, the International Energy Agency published a report that details the pathway to net-zero emissions in the global energy system. The IEA was born of an oil crisis and its long-term mandate has been the security of the energy supply, to include enough fossil fuel to run the power, transport, and industrial processes of developed economies. It’s a redefinition of a guiding principle for the global energy system—from securing adequate supply to minimizing, or even zeroing out, the impacts of demand. To learn more, read All Roads Lead to Net Zero, Not Just the Easy Ones.” Reading this article may require a subscription from the news outlet.

Key Takeaways:

  • Aluminum is one of the world’s most ubiquitous metals, used in everything from consumer goods to electronics to infrastructure.
    • Producing it is energy-intensive, and at the moment, more than two-thirds of its energy consumption comes from coal and natural gas.
    • Aluminum is responsible for about 4% of industrial emissions and 1% of all global emissions.
  • Alcoa, Rio Tinto, Apple, the government of Canada, and the provincial government of Quebec have invested in a developing process that uses inert anodes—which don’t produce CO₂—and zero-carbon power to drive emissions to zero.
  • BNEF ran the numbers and the production costs with this method could be lower than with traditional methods—and significantly lower than with processes that use carbon offsets to cancel out their CO₂ emissions.

Path to 100% Perspective:

Clean energy investments around the world have been growing at more than $300 billion annually over the course of the past five years. McKinsey’s Global Energy Perspective 2019 predicts that by 2035, renewable energy generation will account for 50% of the world’s total generation. That, in turn, is expected to substantially increase the demand for several metals such as copper, aluminium, bauxite, iron, lead, graphite, tin, nickel and zinc which are used to produce renewable energy.

Stockpiles of various metals, to include aluminum, are deplenishing, while the time to find new reserves is increasing. This could lead to a situation where the production of metals will not be able to keep up with increasing demand. The Rocky Mountain Institute’s Renewable Resources at Mines tracker, estimates there are 57 mines across 21 countries with a total installed renewable energy capacity of 1178 MW.

 

Photo by Ricardo Gomez Angel on Unsplash

How Green Energy Will Transform the Ranks of the World’s Biggest Electric Generators

At-a-Glance:

The world’s energy sector has embarked on a transitional journey to a clean, green, low-carbon future powered by windmills and solar panels. It’s going to be a long trip. According to the International Energy Agency, we still derive an incredible 80% of our primary energy from fossil fuels—with oil contributing 32%, coal 27% and natural gas 23%. To learn more, read How Green Energy Will Transform the Ranks of the World’s Biggest Electric Generators.” Reading this article may require a subscription from the news outlet.

Key Takeaways:

  • Electric industry analyst Hugh Wynne of research shop SSR says carbon dioxide will be regulated in one way or another, via a carbon tax, cap-and-trade or emissions allowances.
  • Analysts believe companies with stubbornly high emissions are going to have to pay to pollute — while those with low emissions will enjoy a profitability advantage.
  • Wynne found the “dirtiest” utilities are those with coal-fired fleets in China, Russia and India.
  • Meanwhile, some of the more progressively minded utility companies are keen to take advantage of new tools evolving out of advances in machine learning and artificial intelligence.
  • Forbes Global 2000 companies Southern Company, Exelon, and Dominion Energy are all customers of a startup called Urbint, which was founded by Forbes 30 Under 30 alum Corey Capasso and has raised more than $40 million in funding for its A.I.-driven infrastructure safety platform.

Path to 100% Perspective:

Artificial intelligence (AI) is a very broad field. Forecasts for price and power are generated by AI and represent the expected trajectory or probability distribution of that value. In the end, as a power trader, it is important to remember the historical data is not a picture of the future, but rather a statistical distribution that can be leveraged to inform the most probable outcome of the unknown future. AI is more capable at leveraging statistics than people will ever be. The benefit of using AI is more effective utilization of the existing infrastructure. There is quite a bit of under-utilized infrastructure in the power generation industry. However, with the use of greater intelligence on the edges of the network coupled with great intelligence at the points of central dispatch, under-utilized infrastructure can be maximized for a more reliable power system.

How Wind and Solar Power Got the Best of the Pandemic AND Wind, Solar Power Made Strong Gains in 2020, IEA Says

At-a-Glance:

Global recessions, wars, and pandemics have a way of driving down energy demand. Last year, the International Energy Agency (IEA) said the collapse in global primary energy demand brought on by COVID-19 was the biggest drop since the end of World War II, itself the biggest drop since the influenza pandemic after World War I. IEA also reported that renewable power capacity grew at its fastest pace this century in 2020, raising its growth forecast for wind and solar power for this year and next.According to the Paris-based energy watchdog, renewables were the only energy source for which demand increased last year. The addition to the world’s renewable electricity capacity last year was 45% more than in the prior year and the biggest jump since 1999, as wind and solar farms sprang up across the world’s major economies. To learn more, read How Wind and Solar Power Got the Best of the Pandemic AND Wind, Solar Power Made Strong Gains in 2020, IEA Says.” Reading these articles may require a subscription from the news outlets.

Key Takeaways:

  • Renewable energy installations not only increased during the pandemic, they exceeded even the most bullish of expectations, with wind installations increasing 90% and solar increasing 23%.
  • IEA estimates that in 2022, renewables will account for 90% of new power capacity expansion globally.
  • ​​“Wind and solar power are giving us more reasons to be optimistic about our climate goals as they break record after record,” said IEA Executive Director Fatih Birol, adding that greater use of lower-carbon electricity was needed for the world to achieve its carbon-reduction goals.
  • The European Union plans to spend $1 trillion to reach its goal of net carbon neutrality by 2050.

Path to 100% Perspective:

U.S. renewable energy adoption continues to rise, in 2019, renewable energy sources accounted for 17.5% of total utility-scale electricity generation, with renewable energy generation reaching 720 TWh. More than 70% of energy stimulus funding is currently allocated to legacy fossil fuels, compared to less than 30% to clean energy. However, reallocating $72 billion in energy stimulus funding could achieve:

  • 107 GW of new renewable energy capacity
  • 6.5 % rise in share of renewable electricity generation (from 17.5% to 24% renewable electricity).
  • 544,000 new jobs in renewable energy, 175% more jobs than if the same stimulus was used to revive the legacy energy sector.

The Climate Transition: How an Oil Company Becomes a Renewables Company

At-a-Glance:

In late April, a raft of oil majors released their first quarter results with companies like Royal Dutch Shell Plc showing a return to pre-pandemic profit levels. At the same time, some of the majors increased their energy transition commitments. Spanish firm Repsol SA devoted 40% of its capital expenditure to low-carbon projects, and France’s Total SE stated plans to increase its renewable energy capacity five-fold over the next four years. To learn more, read “The Climate Transition: How an Oil Company Becomes a Renewables Company.”  Reading this article may require a subscription from the news outlet.

Key Takeaways:

  • Norway’s state-owned oil producer, Equinor ASA posted more than $2.6 billion of earnings in the first quarter of 2021, 49% of which was from renewable energy.
  • Last quarter, Equinor earned more from renewables than it did from oil and gas exploration and production.
  • Equinor is farming down to two European oil majors: BP Plc is buying into the U.S. projects, and Italy’s Eni SpA is buying into the U.K. projects – they are paying Equinor for the privilege of taking on the early stages of developing offshore wind.
  • One reason Equinor could be an early developer of U.S. offshore wind is that it has decades of experience developing and operating offshore oil and gas assets.
  • Equinor is two-thirds owned by the Kingdom of Norway, with Norway’s Government Pension Fund Global owning another 3.59% of the company via Folketrygdfondet, which expects its portfolio companies to integrate climate change considerations into policies and strategy.

Path to 100% Perspective:

Bloomberg New Energy Finance has found that more than two-thirds of Earth’s population already lives in countries where solar or wind — or both — are the least-expensive sources of new electricity generation. As wind and solar power become increasingly cost-competitive, investments in traditional, inflexible base load plants such as large coal, nuclear, and gas combined-cycle plants are declining. This signals an end to the era of large, centralized power plants that run on fossil fuels. Global financial trends reflect this dramatic shift, with renewable generation attracting more investment dollars than fossil-powered generation year after year. Worldwide investment in renewables has exceeded $230 billion for nine years in a row.

Wartsila case study: DC-coupled energy storage systems ideal for real-time trading

At-a-Glance:

With more opportunities to sell energy into new energy markets, energy developers are thinking creatively about wasted energy and harnessing greater efficiency. There are two important evolutions in energy storage technology that solar power producers are opting for when purchasing new systems: solar projects are leveraging the efficiencies of DC-coupled design in energy systems just at the emergence of market bidding as a new industry standard. As more developers pair solar systems with energy storage, the convergence of these two trends serve as an anchor design for utility-scale solar and storage projects going forward to ensure these systems are as optimized and impactful as possible. To learn more, read “Wärtsilä case study: DC-coupled energy storage systems ideal for real-time trading.”

Key Takeaways:

  • Wärtsilä recently announced a solar PV and storage project that incorporates both DC-coupled design and market bidding and illustrates the most efficient designs and revenue-generating systems out there.
  • The Wärtsilä system, a 40-MW/80-MWh energy storage system, located in Mitchell County, Georgia, will enable a subsidiary of RWE Renewables (Hickory Park Solar) to sell nearly 200 MW of generation from the solar PV panels to Georgia Power Company.
  • The RWE project is Wärtsilä’s first DC-coupled system and the largest application of the GridSolv Quantum solution which is a fully integrated modular energy storage system that is highly optimized for DC-coupled systems.
  • The RWE project is also the first application of Wärtsilä’s new cloud-based IntelliBidder software. IntelliBidder leverages machine learning and optimization algorithms based on automated and forecasted data and real-time trading for elevated value-based asset management and portfolio optimization.

Path to 100% Perspective:

This is one of the very few projects globally on this scale using DC-coupling. Delivery of this innovative equipment is scheduled for September 2021 and the plant is expected to commence commercial operations in November. The global technology company previously delivered energy storage solutions to RWE Renewables in Texas and Arizona.

Texas House advances plan to subsidize power plant weatherization

At-a-Glance:

A plan to help finance what will likely become mandatory power plant upgrades to withstand more extreme weather in the wake of the February power crisis received preliminary approval in the Texas House. To learn more, read “Texas House advances plan to subsidize power plant weatherization.” Reading this article may require a subscription from the news outlet.

Key Takeaways:

  • House Bill 2000 and the corresponding House Joint Resolution 2 would allocate $2 billion of state funds to help finance what could be expensive – and likely mandatory – upgrades to power plants in Texas to withstand more extreme weather by providing electricity generators with access to grants and low-cost loans.
  • In 2013, the Legislature created the State Water Implementation Fund for Texas, known as SWIFT, by allocating $2 billion from Texas’ economic stabilization fund. It offers subsidies and help with low-cost loans for municipal water infrastructure projects.
  • The “SURF” fund would function similarly, but instead of offering low-cost loans and grants to municipalities, the fund would also offer those financing tools to for-profit power generating companies and others to upgrade plants to withstand more extreme weather.
  • An amendment, which was adopted, would allow the fund to be used for projects that also reduce electricity demand on the grid.

Path to 100% Perspective:

As the energy transition continues, power plants must be able to balance and respond to the grid to produce power during periods when the renewable generation does not match the load – during the winter and unusual weather conditions such as heat waves. Many power plants in Texas were not designed for extreme ambient temperatures, which caused them to become inoperable during below freezing temperatures. Winterizing gas supply and power plants will be required to avoid another blackout scenario. Although it is more expensive to winterize the gas supply and power plants, it is necessary to offer reliability.

 

Photo by Anna Valberg on Unsplash

New SunPower CEO Wants Buying Solar as Easy as Amazon Purchases

At-a-Glance:

The new CEO of SunPower Corp. – a veteran of Amazon.com Inc. – wants to make the rooftop solar-buying process easier for homeowners. in an interview Wednesday. “Until we make getting solar as simple as buying a book on Amazon, we’re not going to stop,” SunPower Chief Executive Officer Peter Faricy said. To learn more, read “New SunPower CEO Wants Buying Solar as Easy as Amazon Purchases.” Reading this article may require a subscription from the news outlet.

Key Takeaways:

  • Interest in residential solar is surging in the U.S. with climate change a threat to the power grid, however, only about 3% of the country’s homes are equipped with panels.
  • Rooftop-solar companies attribute market penetration to lengthy permitting processes and low-tech sales techniques.
  • SunPower’s new CEO, Peter Faricy, who spent 13 years at Amazon.com, thinks the solar business is ripe for digital innovation.
  • SunPower deployed 77 megawatts of residential solar in the first quarter, up from 70 megawatts during the same period last year.

Path to 100% Perspective:

Solar energy generates only about 2% of Earth’s electricity today, it is projected to generate 22% by 2050. Electric utilities and governments across the world are moving towards 100% carbon-free energy. To succeed, they need to not only increase renewable generation, but also to rapidly reduce the use of fossil fuels. Renewables and storage alone cannot rapidly decarbonize  power systems fast enough. Optimizing power resources, renewable energy and future fuels is the way to pave the Path to 100%.

Tucson Electric turns on its biggest renewable-energy plants to date

At-a-Glance:

The electricity powering most of Tucson, including the University of Arizona, got a little cleaner the week of May 3, as Tucson Electric Power Company (TEP) switched on its biggest solar and wind power plants to date. To learn more, read “Tucson Electric turns on its biggest renewable-energy plants to date.” Reading this article may require a subscription from the news outlet.

Key Takeaways:

  • The 1,130 acre project, built and owned by NextEra Energy, includes 30MW of linked battery storage to bank solar power for use when the sun goes down.
    • The Wilmot Energy Center is expected to generate enough energy to power the equivalent of 26,000 typical TEP homes.
  • TEP’s biggest renewable energy resource, the 250MW Oso Grande Wind Project in New Mexico, went online a couple of weeks later. Consisting of 62 wind turbines on 24,000 acres, Oso Grande is expected to generate enough energy each year to serve about 90,000 homes.
  • With Wilmot and Oso Grande online, TEP will have 628MW of large, community-scale wind and solar resources – with the 99MW Borderlands Wind Project, being built 100 miles south of Gallup, New Mexico, coming online by the end of 2021.
  • The new solar and wind farms will help TEP toward its goal of generating 70% of its power from renewables and cutting its carbon emissions by 80% by 2035.
  • TEP has dedicated a portion of its output to provide the UA campus with “100% clean energy” under a 20-year, green energy agreement announced in 2019.

Path to 100% Perspective:

Electric utilities such as TEP are embracing their role in reducing climate emissions by shifting to renewable energy sources, like solar and wind. As a growing number of cities, states, and nations set goals for increasing amounts of renewable energy, economics is helping bring those plans to fruition. Over the past 20 years, the cost per kilowatt of wind power plants has decreased by 40%, while the cost of solar generation has dropped by 90%. The cost-competitiveness of renewables is making it possible to accelerate decarbonization of power systems such as TEP.

The Renewable Energy Asset Rotation Cycle Is Stuck

At-a-Glance:

Bloomberg NEF calculates that meeting the goals of the Paris Agreement with a combination of zero-carbon electricity and hydrogen would require more than $60 trillion of power sector investment, plus more than $30 trillion of investment in hydrogen production and transport by 2050. Flex a few technical choices – such as switching over dedicated nuclear power plants to manufacturing hydrogen – and the total price tag is $100 trillion or more. To learn more, read “The Renewable Energy Asset Rotation Cycle Is Stuck.” Reading this article may require a subscription from the news outlet.

Key Takeaways:

  • Pumping up the flow of trillions of dollars from giant asset managers to early stage companies looking to make these investments will be a big job for the world’s capital markets and will depend on financial systems functioning perfectly.
  • Currently, some assets aren’t rotating like they used to, particularly in Europe. EDP, Portugal’s major electric utility, rotated 87% of its assets from 2014 to 2016, but intends to only rotate 35% of mostly-renewable assets from now until 2025.
  • There are a number of reasons rotation might be slow.
    • Renewable assets with stable financial returns look attractive on the corporate balance sheet.
    • Green finance allows companies to refinance assets advantageously and increase those returns on their books without cashing out of early-stage assets.

Path to 100% Perspective:

The U.S. is a global leader in renewable energy with the second largest installed capacity in the world. Total private sector investment in renewable energy reached a record USD $55.5 billion in 2019, an increase of 28% year on year. Federal government support for clean energy has been significantly reduced in recent years, with federal energy initiatives primarily being focused on the fossil fuel sector. However, given the scale and depth of its energy market, the U.S. has the economic and technological potential to scale-up renewable energy at an unprecedented rate.

$15 trillion global hydrogen investment needed to 2050-research

At-a-Glance:

Decarbonizing energy and other industries globally using hydrogen will require investment of almost $15 trillion between now and 2050, the Energy Transitions Commission (ETC) said in a report in April. The ETC is an international coalition of executives from the energy industry committed to achieving net zero emissions by mid-century, a goal set by the Paris climate agreement. To learn more, read $15 trillion global hydrogen investment needed to 2050-research.”

Key Takeaways:

  • Hydrogen use is forecast to grow to 500-800 million tons a year by mid-century, accounting for 15-20% of total final energy demand, from 115 million tons currently.
  • Producing green hydrogen will need zero-carbon electricity supply to increase by 30,000 terawatt hours (TWh) by 2050, on top of 90,000 TWh needed for decarbonization generally, the ETC said.
  • Around 85% of the required investment would be in electricity generation and 15% in electrolysers, hydrogen production facilities and transport and storage infrastructure.
  • Large-scale geological storage will be needed for the hydrogen produced, given the limited capacity and large costs of compressed hydrogen containers. Salt caverns will offer the lowest cost but if 5% of total annual hydrogen use in 2050 needs to be stored, it needs about 4,000 typical size salt caverns, compared with only about 100 in use for natural gas today, the report said.

Path to 100% Perspective:

As coal, diesel and legacy natural gas plants are retired to achieve ambitious decarbonization goals, the need for new dispatchable capacity is necessary for reliability and resiliency in future power systems. Short-duration and long-duration energy storage are both necessary in future power systems and they each have different roles. Long-duration storage has been the missing piece of the decarbonization puzzle, however, the use of battery storage in this application is not economical or viable.

The most economical long-duration storage is formed with green hydrogen-based future fuels, such as hydrogen, ammonia, carbon neutral methanol and methane.These fuels can be used to generate electricity in flexible power plants. Such flexible power plants provide carbon neutral firm, dispatchable capacity to the grid at any time.

 

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