FEBRUARY 1, 2023

Good morning,

Anca connects the dots on new clean energy records with a double-dose Data Dive, and we have a Voices article on the importance of a cleaner and more reliable electricity grid.

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Send your energy photos, story tips and more to news@ciphernews.com or reach us directly at amy@ciphernews.com and anca@ciphernews.com.

In Europe and around the world, clean energy records broken

Source: BloombergNEF • "Energy Transition Investment Trends 2023." Fossil fuel values for 2018-2021 were derived from the International Energy Agency’s “World Investment 2022” report and 2022 fossil fuel investments are BNEF estimates.

BY: ANCA GURZU

Records broken in Europe and around the world show the energy transition in action, at times driven by geopolitics.

At the global level, 2022 was the first year investments to deploy clean energy technologies surpassed the $1 trillion mark and put them on par with fossil fuel investments, according to new data from BloombergNEF.

In the European Union, wind and solar overtook natural gas for the first time to generate a fifth of the bloc’s electricity last year, a record amount, according to a report out this week by the energy think tank Ember.

Taken together, wind and solar were Europe’s largest source of electricity when compared to other sources individually, as Carbon Brief noted.

As Europe scrambled to replace increasingly dwindling supplies of natural gas from Russia—historically the bloc’s biggest supplier—the share of coal power increased by just 1.5 percentage points to provide 16% of the EU’s electricity needs, the report found.

“The shocks of 2022 only caused a minor ripple in coal power and a huge wave of support for renewables,” Dave Jones, Ember’s head of data insights, said in a statement. “Any fears of a coal rebound are now dead.”.

On top of the gas crisis sparked by Russia’s war in Ukraine, the EU also faced the lowest levels of hydro and nuclear power generation in at least two decades, due to an acute drought and outages at French nuclear reactors. The resulting deficit equalled 7% of Europe’s total electricity demand in 2022.

Record growth in wind and solar, as well as lower electricity demand in the last quarter of the year, helped cushion that deficit, according to the analysis.

Source: Ember "European Electricity Review" • Data is from 2022. "Other" includes less significant sources of electricity such as bioenergy, geothermal energy and fossil fuel generation from oil and petroleum products.

At the global level, investments in renewable energy, including wind, solar and biofuels, achieved a new record of $495 billion committed in 2022, up 17% from the year before, the BloombergNEF report found. Electrified transport, including spending on electric vehicles and connected infrastructure, almost overtook renewables with $466 billion spent in 2022, a 54% year-on-year increase.

Even with these impressive gains, the report states global investments in low carbon technologies need to triple immediately to meet society’s goal to essentially emit zero emissions by 2050.

Lunchtime Reads and Hot Takes

New technique from U.S. national lab promises to strip carbon dioxide emissions from power plants and factories at record-low cost — CNBC

Amy’s take: Using a metaphor of spaghetti and grapes to describe capturing carbon—how illustrative and hunger-inducing.

EU plans to relax curbs on tax credits in response to ‘toxic’ US subsidies — Financial Times (paywall)

Anca’s take: Key word here is “plans.” It will be a while before the EU has a unified position on the best response to the Inflation Reduction Act, as many countries are at odds over the best way forward.

Big winners from Biden’s climate law: Republicans who voted against it — POLITICO and The Wall Street Journal

Amy’s take: I know electoral lines are the obvious media focus, but numerous factors go into why companies choose where to build and politics are often a correlating, not casual, factor. The WSJ article gets into some of these dynamics in the latter half.

UK green industries fear threat from US climate bill — Financial Times (paywall)

Anca’s take: Competitiveness fears are spilling over in the ex-EU nation, but experts warn “not [to] put up protectionist walls.”

Which technologies get cheaper over time, and why? — Volts

Amy’s take: Move over Keanu, there’s a new matrix in town—an energy matrix that shows the factors driving cost reduction (or lack thereof).

Emissions divide now greater within countries than between them – study — The Guardian

Anca’s take: What an interesting read! Key message: There’s a growing divide between the rich “polluting elite” and the rest of the world’s population. What implications will this have for climate policy?

How the White House found EJ areas without using race — E&E News (paywall)

Amy’s take: This is a fascinating and sobering take on just how closely correlated race is with factors that signify a disadvantaged community.

Lithium’s Historic Rally Fuels Record Profits for China’s Miners — Bloomberg

Anca’s take: Good news for EV demand, not so good news for those trying to counter China’s dominance in the sector.

Europe’s Energy Crisis Leaves Almost All Of Pakistan Without Power — Oilprice.com

Amy’s take: Europe’s energy crisis is hitting developing countries the hardest.

'One-of-kind project' | First-ever vertical axis floating wind turbine cleared for Norway trials — Recharge

Anca’s take: Check out the cool photo!

More of what we're reading:

• General Motors invests $650mn in US lithium mine to secure EV battery materials — Financial Times (paywall)

• Japan's Eneos opens green hydrogen test plant in Australia — Reuters

• Dead whales and tough economics bedevil Biden’s massive wind energy push — The Washington Post

• Bill Gates Is Backing an Aussie Startup Trying to Stop Cows Burping Methane — Bloomberg

• Grid connection costs spike, especially for renewables — Axios

• Microsoft and ArcelorMittal back MIT spinout trying to green the $1.6 trillion steel industry — CNBC

Moving from talk to action on grid reliability

BY: ROB GRAMLICH

Rob Gramlich is Founder and President of Grid Strategies LLC, an economic, engineering and policy consulting firm focused on clean energy integration into the bulk power system. You can reach him at rgramlich@gridstrategiesllc.com.

Increasingly common severe weather events are catapulting America’s aging power system into the headlines.

Late last year, millions of people across the United States lost power during winter storm Elliot and dozens of people died. When winter storm Uri struck Texas in February 2021, more than 200 people perished.

Indeed, when the lights are out for even a few hours, life as we know it is disrupted, often with tragic consequences.

During multiple severe weather incidents over the last decade, many electricity generation plants fell victim to extreme heat or cold. Few people outside the industry realize that when a plant fails in one area, power must be delivered from far away to keep the lights on. But that approach only works when the power grid, or the regional transmission network, has enough capacity to move large amounts of power over long distances.

A robust grid is key to both providing reliable service through severe weather and enabling decarbonization by connecting clean energy resources.

Despite increased attention on the grid from the public and lawmakers, little actual policy has passed. With divided government in the current Congress, leadership will likely need to come from states to collaborate on regional grid plans and from the nation’s transmission regulator, the Federal Energy Regulatory Commission.

In 2021 and 2022, Congress and federal executive agencies almost achieved three goals that could have transformed the grid:

1.   A tax credit for large-scale interregional transmission would have made new lines cheaper for consumers and eased the path to cost recovery and investment.

2.   A proposed FERC rule would have made transmission planning more proactive for long term reliability and to connect the future energy mix in each region.

3.   And a bill from West Virginia Senator Joe Manchin would have addressed cost allocation and streamlined the federal permitting process.

But as of now, none of those measures are in place.

Some smaller transmission measures did make it into IRA and the Infrastructure Investment and Jobs Act passed in 2021. But grid funding from these laws is in the range of $5 billion—not a particularly impactful amount in a sector that spends $5 billion every few months. Plus, the focus of these laws is on loans, which few transmission developers want to use because the problem is not access to initial capital but recouping that money when the project is complete.

Without much help from Congress, electric utilities and state and federal regulators need to step up.

Over the last two years, FERC collaborated with state regulators to create a promising proposal for transmission planning that would have, for the first time, required utilities to plan on a long-term basis for reliability and anticipated future energy sources. Unfortunately, whether intentional or not, the proposal includes loopholes.

Instead of firmly requiring utilities to plan for reliability and future energy sources, the Commission proposed only to make those considerations optional. Unless strengthened, the result could be a toothless piece of guidance the industry ignores. 

Encouragingly, the newly designated Interim FERC Chair, Willie Phillips, recently stated reliability and transmission will be top priorities this year. An opportunity exists to plug the loopholes and pass a rule that makes long-term reliability planning a requirement.

Meanwhile, no state, utility or region needs to wait for FERC’s action. Each region can produce their own plans for the future of their power grid and submit those plans to FERC for approval on cost allocation and recovery. FERC tends to approve proposals when regions work together to create a cohesive roadmap.

There are many opportunities to increase delivery capacity with new technologies over existing transmission corridors, which can happen quickly while bigger plans are developed.

The California and Midwest systems, for example, are already making their own plans with active involvement from states and utilities in those regions. Both have incorporated expectations of the future resource mix and included reliability in their long-term plans. Almost all of the Midwest’s expansion plans utilize existing corridors, making new construction easier.

For both reliable service and climate mitigation, there is no alternative to pressing forward with ambitious grid planning and policies. Reliable, affordable and clean power depend on it.

AND FINALLY...

Singapore’s Supertrees

Anca snapped this photo of three of Singapore's 18 Supertrees with the iconic Marina Bay Sands in the background. The Supertrees are vertical gardens housing over 162,900 plants of over 200 species of orchids, ferns and tropical plants. Seven of them are topped with photovoltaic cells that produce solar power.

Each week, we feature a photo that is somehow related to energy, the thing we all need but don’t notice until it’s expensive or gone. Email your ideas and photos to news@ciphernews.com.

Editor’s note: In addition to supporting Cipher, Breakthrough Energy also supports and partners with a range of entities working to tackle climate change, including nonprofits, corporations, startups and research firms. For more information on Cipher’s editorial policy, click here.