Articles in Category: Green

Swedish carmaker Volvo is betting the farm on electric vehicles.

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In an announcement this week, Volvo cars said beginning in 2019, it will no longer launch new car models powered only by an internal combustion engine. According to the Financial Times, pure and electric hybrid cars will be the only game in town for the Swedish carmaker.

Following hot on the heels of Tesla’s launch of its most affordable mass-produced Model 3 — which, since March last year, has taken nearly 400,000 pre-orders, a remarkable vote of confidence in what has become one of the most exciting brands in the automotive industry — does Volvo’s announcement spell the end of the internal combustion engine?

Regardless of the headlines, Volvo is not turning its back on petroleum and diesel engines just yet.

Reading between the lines, the pledge is to launch five new models between 2019 and 2021, all of which will have petrol and diesel hybrid options, plus electric vehicle EV) versions, not five new models which are EV only. Although Volvo is owned by Chinese manufacturer Geely — and as such does not have to report to shareholders on a quarterly basis, giving greater flexibility to invest today for the longer term — the Swedish carmaker is still not saying it can achieve this on its own.

Rather, Volvo’s announcement is saying to the market it is seeking cooperation among battery manufacturers and infrastructure providers to provide solutions to the two biggest challenges EVs face: limited range and limited charging infrastructure.

The first challenge, range, requires continued massive investment in research and development to drive down battery costs and increase power density. The latter challenge requires a massive investment, not just in charging points, but also in configuring electricity grids to cope with demand if EVs achieve scale.

Volvo’s Chinese ownership probably influenced these strategic goals in another way.

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This morning in metals news, copper slipped from its two-month high on the London Metal Exchange (LME), Canadian researchers have discovered a way to make metals processing greener and nickel hits its lowest price in a year.

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Copper Falls in Anticipation of Federal Reserve Interest Rate Decision

Copper fell from a two-month high on the LME — and dropped 1.1% on the Shanghai Futures Exchange — ahead of the U.S. Federal Reserve’s decision this week regarding raising the interest rate (which many expect it to do), Reuters reported.

The decision is scheduled to be announced Wednesday afternoon, after the conclusion of a two-day policy meeting.

An uptick in the interest rate is expected to shore up the dollar, making dollar-based commodities more expensive for holders of other currencies and leading to a dip in demand, Reuters reported.

Researchers Announce Environmentally Friendlier Way to Process Metals

A Canadian team of researchers recently announced a new method for processing metals without toxic chemicals or reagents, Science Daily reported.

The team outlined its approach in a recently published article in Science Advances. Through their method, the scientists seek to perfect a process that curbs the negative environmental impacts of processing metals, using easily recyclable compounds instead of toxic materials.

The discovery was the result of a collaboration between Jean-Philip Lumb and Tomislav Friscic at McGill University in Montreal, and Kim Baines of Western University in London, Ont.

As demand for electric vehicles grows and green initiatives become more visible, it’s not surprising to see movement toward making the entire production process going green — for example, from the processing of raw metals all the way to a final product itself (a “green” vehicle).

Nickel Falls to One-Year Low

It isn’t a good time for nickel, which fell to its lowest price in a year Tuesday in a climate of falling Chinese steel prices and a weak forecast for the Chinese economy, Reuters reported.

As the Chinese government tackles credit debts — the nation was recently downgraded by rating agency Moody’s for the first time since 1989 — many expect growth to slow in the second half of the year. That prediction has already been borne out by weak April and May Chinese economic data, according to the article.

Caroline Bain, chief commodities economist at Capital Economics in London, told Reuters that China’s efforts to rein in credit growth and curb excessive behavior on the property market is “bad news” for metals.

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Editor’s Note: This is the second of two posts — the first of which ran yesterday — from our Sohrab Darabshaw on renewable energy in India. 

India saw nearly $10 billion invested, both in 2015 and in 2016, in renewable energy projects. Last year, $1.9 billion of green bonds were issued. India’s solar targets alone need $100 billion of debt.

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Posting in the Bloomberg View opinion section, columnist Mihir Sharma, however, struck a slightly skeptical note.

“India is not like China, or the U.S., or Australia or Germany when it comes to meeting its Paris pledges,” he wrote. “In India, hundreds of millions of people still live without electricity — a big part of what keeps them desperately poor. India also has a shrunken manufacturing sector, partly because electricity is so expensive (relatively) and its supply so variable. No democratically accountable Indian government can ever favor an international agreement over fixing these two problems.”

Sharma added coal “looks bad” in India at the moment because “its economy is struggling and because it is so services-intensive. Over the past few years, coal plants have used less and less of their capacity as growth has slowed.”

But, if India’s economy does take off, Prime Minister Narendra Modi might indeed be faced with such a choice.

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Editor’s Note: This is the first of two posts from our Sohrab Darabshaw on the renewables industry in India. Check back tomorrow for Part 2. 

Energy experts, the domestic media, research organizations and even representatives of other governments seem pretty sure that India is the next green-energy giant in the making (U.S. President Donald Trump’s recent assertions notwithstanding).

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Trump, while announcing his country’s intention to withdraw from the Paris climate accord, justified it on the grounds that the agreement was unfair to the U.S., and that it was skewed unfairly in favour of developing countries, such as India.

In the wake of that move, many in the Indian media have pointed out that a fact that the Trump administration seemed to have missed was that while India was the third-largest contributor to carbon emissions today, the U.S. was the second. The U.S.’s per capita carbon emission was still significantly higher than other large countries, according to data from the World Bank, and far higher than that of both India and China, according to a report in the online publication Scroll.

Not many within or outside the country are doubting India’s stated aim of ensuring that 40% of energy used would come from non-fossil fuels and rapidly developing renewable energy sources by 2030.

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After a 17-point leap in our Renewables MMI from April to May, the sub-index — which tracks metals and materials going into the renewable energy industry — posted no movement for our June reading, standing at 71.

(A quick note: Last month, the sub-index rose to 71 after a recalibration of our index to better account for cobalt price fluctuations.)

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But that doesn’t mean there were not big swings within the sector — far from it.

U.S. steel plate, the heavy hitter of this group, posted a 4.8% drop last month — but that quickly reversed itself.

This time around, U.S. steel plate bounced back, posting a 2.7% increase. The bounceback followed a trend of exclusive growth for U.S. steel plate in 2017, as the 4.8% drop reflected by the May 1 price marked the only month-to-month drop of the year thus far.

Unlike steel plate, U.S. grain-oriented electrical steel (GOES) went in the other direction, posting a price drop that nearly erased previous the April-May price increase. This month, GOES dropped 6.2%, one month after prices rose by 9.1%. (More on how GOES does/doesn’t trend along with broader steel markets in the section below.)

Abroad, steel plate also had good months in China and Japan. Chinese steel plate rose by 2.8%, while Japanese steel plate got a 0.7% boost.

What’s the Deal With GOES?

As MetalMiner’s Executive Editor Lisa Reisman wrote Thursday, GOES prices have been on a “roller coaster ride” so far this year.

“GOES prices do not tend to follow general steel price trends, nor does simple fundamental (supply and demand) analysis help explain price trends,” Reisman wrote.

Globally, however, GOES prices are on the rise. Why? That has been driven by an increased demand for electric cars and GOES producers in the U.S., Korea and Japan securing tonnage at a $400-500/metric ton increase over previously contracted prices.

Domestically, while prices for GOES — metals used in electrical transformers — went down this month, Reisman predicted that likely won’t become a trend throughout the remainder of the year.

“It’s hard to see any outcome not resulting in rising U.S. GOES prices for the second half of the year,” she wrote.

Again, looking to the global picture, good news for this sector is the growth of the renewable energy industry overall.

Free Download: The May 2017 MMI Report

The BBC reported the U.K. has set renewable energy production records this year. In the U.S., CNBC reported even in states like Kansas — which two years ago repealed a renewable energy mandate that called for 20% of the state’s electrical power to come from renewable sources by 2020 — have ramped up renewable energy production.

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This doubtful week, a Stanford economist made the bold proclamation that electric vehicles will completely displace their petrol and diesel counterparts by 2025, and India’s plan to triple steel production by 2030 was met with more than a few raised eyebrows.

Grand Plans

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Speaking of India, its ascent as a promising market for renewable energy has been truly impressive. Consultancy EY recently published its 2017 Renewable Energy Country Attractiveness Index (RECAI), and India took the number two spot, beating out the U.S., which slipped to third place.

India had been number nine in 2013, before Narendra Modi, who views developing renewable energy to wean India off coal as a top priority, became prime minister. Modi aims to boost India’s renewables capacity to 175 GW by 2022 (currently capacity stands at 57 GW).

India has similarly high ambitions for steel, as Sohrab Darabshaw reported earlier this week. The country aims to triple its steel production capacity by 2030, which would mean adding 182 million tons of capacity. Read more

The headline of this article from The Telegraph provocatively reads “The end of petrol and diesel cars? All vehicles will be electric by 2025, says expert.”

However passionately the argument is made, the 2025 deadline that comes from a report entitled “Rethinking Transportation 2020–2030” by Stanford University economist Tony Seba is almost certainly wildly optimistic. Nevertheless, it makes a good headline, and The Telegraph loves nothing better than good attention grabber.

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Seba is well known for his challenging and — some would say — self-publicising proclamations. But the basic logic of his argument that a combination of trends and converging technologies will have a transformational effect on the energy and transportation markets sometime in the next decade is probably out only in terms of timing.

Long a vocal advocate for renewable technologies, the professor has repeatedly pointed to the falling cost of solar power supported by wind, hydro and, in some cases, geothermal and biomass as sounding the death knell for conventional carbon fuels such as coal, oil and natural gas. In that respect, his case is hard to argue against.

As an outlier, the British government remains stubbornly committed to subsidising a nuclear power station at Hinckley Point at a cost of around £92.50/MWh ($120/MWh) — when even in the overcast U.K., solar was being won at £71.00/MWh in 2015 and prices have fallen further since.

Wind power can be even cheaper, at least in windy Britain. Although it is widely acknowledged that the power delivery from both wind and solar is intermittent, renewables can be made increasingly viable through a combination of improving storage technology and greater integration of power grids and smart technologies allowing transmission companies to partially even out the generation and consumption over a wider area. Read more

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This morning in metals news, we have the latest rankings of promising renewables markets from EY, a continued decline in U.S. oil supply, and a weaker U.S. dollar.

The Renewables Race

China and India took the top spots on consultancy EY’s 2017 Renewable Energy Country Attractiveness Index (RECAI), edging past the United States, which had fallen from first to third place. The downward shift for the U.S. is largely due to the expected demise of the Clean Power Plan.

Free Download: The May 2017 MMI Report

Since taking office in 2014, India’s prime minister Narendra Modi has been nothing but ambitious in his plans to reduce the country’s dependency on coal and ramp up renewable energy capacity. India’s current renewables capacity stands at 57 GW, and Modi’s plan is to reach 175 GW by 2022, including 100 GW of solar. Read more

Here’s What Happened

  • The Renewables MMI spiked upwards for the month of May (but not a terribly huge spike in the scheme of things; see the bullet below), ending at a value of 71.
  • * Editor’s note: We’ve recalibrated the index to better take into account cobalt price fluctuations, hence the spike from 54 in April to 71 in May.
  • However, the Big Heavy of our sub-index that tracks metals and materials going into the renewable energy industry is the U.S. steel plate price. That price point took a 4.8% dive.

What’s Going On in the Background?

  • Several stories from the solar sector have been making waves lately. “Growth has slowed in the rooftop solar industry in the past year,” writes Jessica Goodheart in this piece, “but many see the evolution of battery storage technology and vehicle electrification as promising for the long-term health of the residential solar industry.”
  • And the policy picture? “Industry leaders have been cautiously optimistic that Republicans will leave be the federal Solar Investment Tax Credit (ITC), a major policy driver of rooftop solar, in spite of Trump’s efforts to roll back the Clean Power Plan,” Goodheart notes.

What Metal Buyers Should Look Out For

  • Keep an eye out on steel plate’s raw material inputs — iron ore prices surged in April, as we reported in our May Monthly Buying Outlook, while coking coal prices swelled due to supply disruptions in Australia.

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India’s renewable energy sector just got bigger thanks to an investment from U.K.-owned CDC Group  of up to $100 million to support renewable energy projects.

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The announcement was made by the U.K.’s Secretary of State for Business, Energy and Industry Strategy Greg Clark at the inaugural India-U.K. Energy for Growth Dialogue in New Delhi on April 6. He also met with India’s Minister for Power, New & Renewable Energy, Coal and Mines, Piyush Goyal, to talk about large-scale, private sector investments between the two countries in the area of energy.

The two ministers agreed that on the power and renewables front, the focus will be on the introduction of performance-improving smart technologies, energy efficiency and accelerating the deployment of renewable energy.

For some time now, CDC Group Plc, the U.K. government’s development finance institution, has made its known that it seeks to set up its own renewable energy platform focused on the eastern part of India, and even neighboring countries such as Bangladesh.

The finance institution is contemplating leveraging its experience in running Globeleq Africa, a company in which it acquired a majority stake in 2015, for green energy investments in Asia. Globeleq has a 1,200-megawatt gren power generation capacity spread across Côte d’Ivoire, Cameroon, Kenya, South Africa and Tanzania.

As reported by MetalMiner, India aims to generate over half of its electricity through renewable and nuclear energy by 2027. The world’s largest democracy published a draft 10-year national electricity plan in December, which said it aimed to generate 275 gigawatts of renewable energy, and about 85 gw of other non-fossil fuel power such as nuclear energy, by the next decade. This would make up 57% of the country’s total electricity capacity by 2027, more than meeting its commitment to the Paris Agreement of generating 40% of its power through non-fossil fuel means by 2030.

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India has been taking massive forward strides in the renewable energy sector. Already, as per one estimate, it is set to overtake Japan as the world’s third-largest solar power market in 2017.  Taiwanese research firm EnergyTrend predicted that the global solar photovoltaic demand was expected to remain stable at 74 gw in 2017, with the Indian market experiencing sustained growth. The country was expected to add 14% to the global solar photovoltaic demand, the equivalent of the addition of 90 gw over the next five years.