Articles in Category: Green

The battle lines are being drawn. On one side are ranged automotive giants Toyota, Honda and Hyundai pouring billions into hydrogen fuel cells (FCEV), on the other are new upstarts like Tesla and established automotive firms like Nissan committed to the Electric Vehicle (EV) market.

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A bit like the Sony Betamax versus the JVC VHS video cassette recording formats in the ’70s — or Sony and Blu-Ray vs. Toshiba and HD-DVD more recently — the outcome of this monumental tussle will have far reaching ramifications for the industry and the competition will drive innovation and automotive advancement to the benefit of us all.

Unlike Beta/VHS where competing technologies hit the market at more or less the same time, EV has a clear head start on FCEV but like the video cassette market it may be the eventual winner if it is due to the quality of the product as much as the longevity of the experience. With video cassettes, Beta was generally reckoned to offer a better picture quality, in part because it recorded at a higher tape speed, yet its eventual failure had more to do with the fact Beta 1 only lasted 60 minutes compared to VHS’s 120 minutes. That’s the reason Beta is still used today in television production long after it ceded the home video market to VHS. Read more

This is part-2 of a series on India’s climate change plan. If you missed part 1, see yesterday’s post.

India is the world’s fourth-largest carbon emitter – after China, the US and the European Union – but, so far, it has resisted attempts to limit its energy use, asking developed nations, which it largely blames for the greenhouse gases, to fix the problem themselves.

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So, in that sense, yes, India’s recent Intended Nationally Determined Contribution (INDC) for 2030 was indeed “path-breaking.”

Development + Emissions Cuts

Economists, as well as industry analysts, are trying to figure out how the country will juggle development of its infrastructure and industry, especially in the light of the ‘Make In India’ campaign, and keeping pollution levels down.

The INDC mentioned some big-ticket infrastructure projects such as the dedicated rail freight corridor to shift away from road transportation. Researchers such as Navroz Dubash, senior fellow at the Centre for Policy Research, New Delhi, has dubbed this section as “somewhat vague.” But in the same breath, analysts and environmental groups have welcomed it because it brings a climate perspective to a huge portion of the economy, including energy, transportation, water, forests, agriculture.

Unlike countries such as China and the US, the Indian plan does not commit to an absolute reduction or peak level for carbon emissions, acknowledging, tacitly, that India’s pollution will continue to grow, although maybe at a slower pace.

Is Industrialization Possible Without Coal-Fired Power?

On another front, analysts have found India’s continued commitment to expanding coal power capacity quite perplexing. In the submitted plan, coal continues to dominate India’s power generation.

Reacting to this, Greenpeace was quoted in a Bloomberg report that expansion of coal power would hamper India’s development prospects by worsening the problems of air quality and water scarcity as well as contribute to the destruction of forests and the displacement of communities.

Clearly, there seems to be some measure of conflict between India’s energy use and its desire to keep the climate clean. In the past, India has often mentioned its growth plans — providing electricity to over 50% of Indians, the construction of roads and infrastructure, all of which will require energy-intensive processes like steel and automobile production, as well as natural resource mining. India is the fastest-growing region of the world, most of it powered by fossil fuels.

Reconciling Growth and Green

A research paper drawn up by the Brookings Institution, earlier in the year, articulates this well. It asks: how can India thread the needle between climate disaster and premature economic stagnation?

Though the challenge was great, it said, India will be an important enough partner at the upcoming climate talks to articulate a set of red and green lines. India, said the institute, would find it difficult to accede to any deal that would make its ongoing industrialization “the first industrial revolution in history to be nipped in the bud by international restrictions.”

There are others like former climate adviser to the UN climate secretariat, Mukul Sanwal, who predicted that by 2030, India was likely to use less coal than China and the US. People are discounting hydro-electric power in India, slated to be a big area of development.

Others, like Arunabha Ghosh, founder of the Council for Energy Environment and Water, have pointed out that the government was already spending on combating the adverse effects of climate change through its renewables program. Given India’s 300 million-plus people lacking access to electricity and the many development challenges industrialization poses, committing to more emissions cuts in the absence of support could risk its development imperatives.

For now, at least, the Indian government seems to be making all the popular choices. It recently announced an increased renewable energy target of 175 gigawatts by 2021-22, from the earlier predicted 38 GW. Of this, 100 GW was planned from solar, 60 GW from wind, 10 GW from biomass energy and 5 GW from hydro-electric. If these targets were realized, renewable energy was expected to contribute about 20% of electricity generation by 2021-22.

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The targets have been revised because India wanted to get more electricity from renewable energy, said Ashvini Kumar, Managing Director of Renewable Energy Corporation of India.

The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.

Recently, when Indian Environment Minister Prakash Javadekar referred India’s plan for tackling climate change as “a huge jump” for the country, he was not far off the mark, really.

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It’s been only a few days since India submitted its Intended Nationally Determined Contribution (INDC) for 2030 with a focus on clean energy to the United Nations (UN). The plan was presented about a month ahead of a major global warming conference in Paris, with India being the last of the 140 nations in the conference to submit a strategy.

A Vague ‘Plan’

While the plan, overall, received a thumbs up from a vast section of domestic and international environmental groups, the question on everyone’s mind is will India be able to pull this balancing act between development and climate control? Before going into that, let’s just understand some of the salient points of the INDC:

  • India intends to produce about 40% of its electricity in 2030 from “non-fossil fuel based sources” like solar, wind or hydroelectric power, with help from international funds and technology advances.
  • It pledged to reduce the emission intensity of its GDP by 35% over 2005 levels by 2020.
  • It will plant more trees by 2030 to absorb 2.5 to 3 billion tons of carbon dioxide.

The INDC mentioned some big-ticket infrastructure projects such as the dedicated rail freight corridor to shift the population from fossil-fuel-intensive road transportation. Researchers such as Navroz Dubash, senior fellow at the Centre for Policy Research in New Delhi, has dubbed this section as “somewhat vague.”

Environmental Community Still Embraces It

Yet, in the same breath, researchers have welcomed it because the plan will bring a climate-influenced perspective to a huge portion of the economy, including energy, transportation, water, forests and agriculture.

Unlike countries such as China and the US, the Indian plan does not commit to an absolute reduction or peak level for carbon emissions, acknowledging, tacitly, that India’s pollution will continue to grow, although (maybe) at a slower pace.

“India, even though not a part of the problem, has been an active and constructive participant in the search for solutions,” was one of the remarks in the 38-page INDC. Thus, the country made it clear that though its contribution to causing global warming is “relatively small as compared to the developed nations,” it was game to mitigate its adverse impacts, something that was expected to cost anything between $1 and $2 trillion.

Responsibility for Emissions

India, incidentally, is the world’s 4th-largest carbon emitter – after China, the USs, and the European Union. It has, so far, resisted attempts to limit its energy use, asking developed nations, which it largely blames for the greenhouse gases, to fix the problem. So, in that sense, yes, India’s INDC was indeed “path-breaking.”

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Economists as well as industry analysts were trying to figure out how the country would juggle its 2 responsibilities – development of India’s infrastructure and industry, especially in the light of the Make In India campaign, and trying to keep the pollution levels down.

The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner. This is part 1 of a 2-part look at India’s climate blueprint.

While our Renewables MMI is the only major index that showed positive growth this month, essentially erasing last month’s loss and increasing 1.8% to 55 from a score of 54 in September, it’s still mired in the low price trend it’s been stuck in for the last 5 months.

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That mini-trend, itself, was a drop from the renewable materials’ previous price range when it fluctuated in the 60s, itself a low-price trend. That string of monthly prices lasted all the way back to 2012.

As we have noted before, the renewables MMI is a bit of an outlier index. Its supply and demand picture hasn’t changed that much since we began tracking it, with demand for wind turbine metals, electrical transmission raw materials and solar silicon still operating as fairly niche markets.

Renewables_Chart_October-2015_FNLHow the Lockout GOES

A lot of the component metals of the index continue to suffer price problems due to market gluts that have nothing to do with end user adoption, particularly steel plate. We also can’t discount the fact that supplies may be a bit more constrained this month, at least for US grain-oriented electrical steel, due to the now 7-week-long worker lockout by Allegheny Technologies, Inc., 1 of only 2 US GOES producers. ATI claims that production is carrying on as usual, but work stoppages such as these rarely happen without some in production. Even a perceived lack of supply of GOES could cause buyers who need it to stockpile the metal.

On the demand side, another application of silicon solar photovoltaic panels is being attempted in California, using the solar power generated from them to heat, desalinate and clean used farm water for irrigation in the Golden State’s water-deprived central valley, the source of much of the produce enjoyed by the rest of the nation. It’s another of many promising applications that we don’t see affecting prices anytime soon. We’ve been there before.

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We expect renewables to continue to trade in this range for the rest of the year and likely for much of the next until commodities, as a class of investments, experience a wider market recovery. If you are a buyer of silicon, GOES or other renewables we would caution against buying forward as prices have shown no sign that this is a bottom and another shoe could drop at anytime, even in this low range.

TThe Renewables MMI® collects and weights 8 metal price points used extensively within the renewable energy industry to provide a unique view into renewable energy metal price trends over a 30-day period. For more information on the Renewables MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.

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US company SunEdison, Inc., one of the world’s largest global renewable energy development companies, has announced it has signed a Memorandum of Understanding (MoU) with the provincial government of Tamil Nadu in India to develop 2 gigawatts of wind and solar energy in the next 5 years. The 2 gw are part of SunEdison’s larger plan to develop 15.2 gw of renewable energy in India by 2022.

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“SunEdison is dedicated to furthering India’s renewable energy program, and has committed to develop and construct 15.2 gigawatts of clean and cost-effective wind and solar power projects in the country by 2022,” stated Pashupathy Gopalan, SunEdison’s president of the Asia-Pacific and Sub-Saharan Africa regions, in a statement. Gopalan signed the MoU at the Tamil Nadu Global Investors Meet at the Chennai Trade Center with Tamil Nadu Chief Minister Ms. Jayalalithaa. Read more

commoditiesroundtable_550The Commodities Roundtable is the Institute of Scrap Recycling Industries’ premiere event for buyers and sellers of scrap commodities. It includes roundtable discussions on copper, aluminum, ferrous metals, nickel/stainless and plastics. Each Roundtable takes an in-depth look at the commodity and provides important information recyclers can put to use the moment they get back to their office.

The conference will be held today through Friday at the Hilton Chicago. Register at ISRI’s website or live at the event.

Renewable energy sector metals and materials inputs fell again this month as Chinese demand has fallen with the second-largest economy in the world’s stock market.

Renewables_Chart_September-2015_FNLThe monthly Renewables MMI® registered a value of 54 in September, a decrease of 5.3% from 57 in August, another all-time low.

Prices Keep Falling

Steel plate, cathodes and silicon could not increase much in value this month and even grain-oriented electrical steel (GOES), the standout performer of our renewables metals, looks to have fallen. (More on that later this week.)

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Without strong demand from Europe and China for end-use products such as silicon photovoltaic solar panels and wind turbines, it’s difficult to foresee a price turnaround for these metals in the near future. One would think that prices falling so low would eventually increase demand and spur on bargain purchasing, but demand has not picked up, particularly in China where all markets are falling.

European Market Maturity

The problem in Europe is that much of the renewable energy generation market is already mature and won’t expand much anytime soon.

Around 80% of the electricity demand in Germany on a sunny Sunday last month was covered by photovoltaic and wind power. According to the evaluation by the German forum “Together against interim storage, and for responsible energy politics,” the photovoltaic plants at noon produced more than 24 gigawatts of solar power. Much of Europe is now a replacement market and not a building market. This is not the case with the emerging markets that panel and turbine manufacturers depend on.

Despite massive solar energy generation projects in India and China, the emerging markets are still moving slowly toward the technology. India’s “Solar Parks” are not slated for completion until 2022 and delays beyond that look possible.

Chinese Power Generation

Fixed government payments to Chinese solar power generation companies are determined partially by electricity consumption within the country. So with Chinese demand waning on the consumer side, solar power investments by utilities are decelerating with the rest of China’s economy. These firms’ revenues will likely fall as well. This could push China’s ruling communist party to move funding from solar companies back to the dirty coal-fired plants that Beijing has only recently admitted need to be shut down.

Despite the lack of demand, renewables prices have not broken out of the range we’ve seen for most of this year and are only marginally lower than they were before that, so most buyers should be able to wait to make their purchases without any great threat of missing out on a bargain.

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The AP ran an excellent investigative article recently about how, three years after California voters passed a ballot measure to raise taxes on corporations and generate clean energy jobs by funding energy-efficiency projects in schools, barely one-tenth of the promised jobs have been created, and the state has no comprehensive list to show how much work has been done or how much energy has been saved.

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Many predicted that the the Clean Energy Jobs Act would be impossible to enforce or track when it was passed by one of California’s distinctive referendums in 2012. Proposition 39 was passed by a wide margin with little actual language in the law to define what a “clean energy job” even was or how the state government would allocate the money generated for those clean energy jobs.

 

Solar Panel array

Photovoltaic solar array at the National Renewable Energy Laboratory in Golden, Colo.

The clean energy jobs fund was filled by changing tax language in the state code to end breaks for large corporations. Read more

Electric Vehicles, or EVs, — despite huge hype, state support and billions of dollars of car makers funds — still only represent a tiny proportion of total sales.

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According to an Economist Intelligence Unit (EIU) article just 0.4% of an estimated 85 million cars sold worldwide last year were EVs. Numbers are rising, but at least here in Europe even free charging points, free road tax, free or discounted parking and exemption from road, tunnel and ferry charges has not been enough to boost participation.

In the UK, grants of £5,000 ($7,700) per vehicle have helped bring the initially quite high cost down to more accessible levels. Life cycle costs are almost certainly lower than gasoline cars now, yet the largest selling EV in the UK, the Nissan Leaf only just passed 10,000 units, and the Leaf commands 2/3rds of the UK EV market. Growth in percentage terms looks significant as this graph from the EIU shows, with the EU now overtaking the US as the fastest growing major EV market but it also suggests incentives play a big part in persuading buyers to choose EV.

Source: EIU

Source: EIU

Range anxiety understandably seems the most significant hurdle. Petrol-Hybrid EVs are proving more acceptable where the fall back of a petrol engine can give a respectable range of over 400 miles in some cases and new models are getting better all the time. The Mitsubishi Outlander PHEV has been popular this year taking an estimated one-fifth share of the European EV market in the first five months of the year.

It will not go on sale in the US until 2016, the article reports, maybe to give the firm a chance to iron out any bugs before the hit the potentially larger US market. Europe is waiting for Tesla’s new offering, the Model 3 that is reported to be able to cover 200 miles on one charge, compared to the Leaf that manages less than 50, in spite of claims of 100.

Clearly, the technology has some way to go before it attracts a mass market and with governments’ enthusiasm waning – incentives are in many countries being reined back – it could be mass take up remains some way off. Modern diesel engines are managing real returns of over 70 miles per imperial gallon and petrol engines of around 50 mpg, the claims for PHEVs become harder to justify. Pure EVs will still prove popular with city planners for pollution reasons, but headwinds remain for the technology.

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The monthly Renewables MMI® registered a value of 57 in August, a decrease of 1.7% from 58 in July. Like many other metals that we track, this is an all-time low.

Renewables August 2015

Unlike some of the other metals we track, though, fundamentals haven’t really changed that much for silicon, cobalt cathodes and most of the renewable metals we track. The fact that the index fell only 1.7% — a pittance when compared to the steep drops of other indexes — it shows this is a low created by ongoing tepid demand and the bearish environment affecting all commodities.

The Steady, Slow Fall of Renewables

The slow fall of renewables may have more to do with the continually falling commodity prices of oil, liquid natural gas and other competing energy products. Uncertainty over the possibility of Iranian oil hitting the global market is only making crude potentially more competitive with solar panels, wind turbines and other renewable energy investments, too.

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We have long lamented the subsidized nature of renewable energy investments in the developed world and how those subsidies disconnect infrastructure investment costs from actual payback in the form of lower energy prices, but that’s something that won’t change anytime soon or help renewable energy inputs in the short term. Sorry, Milton, but prices will be just one part of the renewable energy information puzzle for the foreseeable future. We wish it wasn’t so, but it’s the reality. There is, however, no reason why they shouldn’t be a bigger part of that equation.

Subsidies Distort Payback Picture

If renewable energy investments were judged by how much solar panels on your house or, say, wind farms for a utility company, would cost to install and how long it would take lower energy bill prices to pay back those installation costs, we would likely see more US adoption and fewer poor investments in low-wind or solar areas. As it is, though, government incentives artificially distort those costs and create high-adoption areas, such as California, where there are incentives and high adoption and no incentives and low adoption, thanks to low oil and LNG prices, in places without the natural advantages.

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Prices for renewable inputs such as silicon are fairly stagnant in high-adoption countries such as Germany, too. The bearish commodity environment has hit low demand sectors as hard as the higher demand ones.

The Renewables MMI® collects and weights 8 metal price points used extensively within the renewable energy industry to provide a unique view into renewable energy metal price trends over a 30-day period. For more information on the Renewables MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.

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