Articles in Category: Environment

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.

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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

Earlier this decade, there was no lack of hype around electric and hybrid cars. Sales were expected to take off, driving demand for lithium, nickel, cobalt and a host of rare earth elements above supply.

That was, in part, motivation for a rare earths bubble, but demand have remained manageable as high sales of electric vehicles have failed to materialise. In reality, electric and hybrid cars have gained traction only gradually as the range of EVs grew and as hybrids struggled to make dramatic improvements in fuel efficiency resulting from advances in internal combustion, particularly diesel engine technology.

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Sooner or later, however, a combination of improving technology and pressure from legislation forcing changes in buyer choices should result in electric vehicles merging into the mainstream. A sure sign that the day is drawing nearer would be when established main brands set targets for themselves.

Well, this week Volkswagen did just that. The Financial Times covered an announcement made by Herbert Diess, head of the VW brand (the largest part of the VW Group), that the brand would sell one million electric cars by 2025 and leapfrog Tesla as the world’s premier volume EV manufacturer. As part of VW’s central plan, the FT reports, the firm is going to sell electric cars at the price of today’s diesel models and intends the entire electric fleet to be profitable from day one. Read more

Proposals based on environmental grounds to limit polluting industries in the greater Beijing area during next winter’s primary heating period (November to March) gave a boost to the aluminum market from the moment they were first mooted last year.

Beijing’s robust implementation of environmental audits and regulation of aluminum plants this year have added to a sense that the authorities are getting serious about pollution and the environmental impact of energy intensive industries like aluminum smelting. But, as Reuter’s columnist Andy Home opined, it is protectionism in the rest of the world that is going to add backbone to these trends and act as the driving force behind further action on Beijing’s part.

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In an article this week, Home explained how the latest investigation into aluminum imports, along the same lines as an earlier steel case, has been launched under Section 232(b) of the Trade Expansion Act of 1962, which lets a president act against imports on national security grounds. The reasoning is the U.S. has but one smelter left in operation, Century’s Kentucky smelter, capable of producing the high grades required for defence and aerospace companies making combat aircraft and the like.

China supplies almost no primary aluminum to the U.S. market. Following U.S. smelter closures, surging imports are being increasingly met by Russia and the United Arab Emirates, while the bulk continues to be supplied by Canada, as the graph below from Reuters shows.

Where China has an impact is in semi-finished products, such as sheet, plate, foil, bars, tubes and sections. Here the growth of Chinese exports to the world — and U.S. imports — has been much more significant. According to Home, on that measure China has been by some margin the largest-volume supplier to the U.S. market in recent years. Read more

Beijing is caught in something of a quandary.

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On the one hand, an admirable, and increasingly important social imperative, the Chinese government’s focus on air pollution, has resulted in a crackdown on a range of polluting industries. Coal-fired power stations around Beijing and other major cities have been closed. Steel capacity has been targeted for cutbacks, although not universally.

Reports suggest rebar production used in construction has been prioritized over other product areas and that’s just one example of selective enforcement. A recent report by Reuters states new aluminum production capacity has been halted. What China fails to meet capacity cutback targets — an issue one suspects would have been “worked around” a year or two back when environmental considerations where less of an imperative?

This crackdown on output comes at the same time as the economy is performing quite well. Official data released last week showed China’s economy grew by a better-than-expected 6.9% comparing the March quarter to the same period in the previous year, Australian Financial Review reports. That is up from 6.8% in the final quarter of 2016. Industrial production was also far better than forecast, growing at 7.6% in March compared to 6.3% in first two months of the year. Read more

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.

The American Iron and Steel Institute praised the executive action taken by President Donald Trump today to, among other things, essentially undo the Environmental Protection Agency‘s Clean Power Plan.

The AISI said in a statement that today’s executive orders will begin the process of “revising and overturning several onerous environmental regulations designed in the previous administration that could adversely impact the competitiveness of domestic steelmakers,” the trade organization said.

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It directs the EPA to review and revise regulations of greenhouse gas emissions from electricity generating utilities. The Clean Power Plan was challenged in court and it has not yet gone into effect but it would have required utilities to cut emissions.

“The domestic steel industry has made substantial gains in reducing our energy usage as well as our environmental footprint, and we remain committed to our sustainable performance,” said Thomas J. Gibson, president and CEO of AISI. “However, these burdensome regulations could harm the international competitiveness of energy-intensive, trade-exposed U.S. industries like steel.’

President Trump will use an executive order today to dismantle the Obama administration’s climate change agenda, according to Environmental Protection Agency Administrator Scott Pruitt.

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The order will compel the EPA to review the Obama administration’s chief climate rule for power plant emissions, the 2015 Clean Power Plan, Pruitt said.

“We’ve made tremendous progress on our environment, and we can be both pro-jobs and pro-environment,” Pruitt told ABC’s George Stephanopoulos on “This Week.” “And the executive order’s going to address the past administration’s effort to kill jobs across this country through the Clean Power Plan.”

The action will order several other federal agencies to undo the Obama administration’s climate change work: It will tell the Interior Department to end a moratorium on new coal leasing on federal land, the official said, and the Obama administration’s assault on methane emissions — outlined in early 2014 and overseen by Interior and EPA — will be ended, too.

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A major hydraulic fracturing regulation from the Bureau of Land Management will be reviewed under the order. It will also end President Obama’s climate action plan, the main 2013 directive outlining the federal government’s response to climate change.

For an industry that has for decades been criticized by environmental groups as the root of all evil it is ironic that oil and gas producers are aligned in championing carbon capture with such enthusiasm.

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The fossil fuel industry is at the forefront of lobbying for radical changes in public policy into research to cut the costs of extracting CO2 from hydrocarbon energy. Industry leaders like Bob Dudley from BP are quoted in the Telegraph as saying, “we can’t just keep our heads in the sand”.

The reality is the hydrocarbon industry has seen the writing on the wall. Public attitudes are hardening, aided by worries about particulate emissions from diesel cars and air pollution in major cities from Beijing to Delhi and even in western capitals like London. The industry is under huge pressure from sovereign wealth funds, pension funds and activist shareholders to find long-term solutions to the carbon question and thwart claims that hydrocarbons are our sunset energy source. Read more

We have long lamented that while solar energy production is a mature generation technology that should be used in nearly the entire U.S., the inability of our electronic grid in much of the country to store solar-generated energy limits its use to when the sun is shining. This almost always requires a backup (usually burning natural gas) for those hours when the sun does not shine.

Renewables MMIIt’s been a few years since we last talked about the baseline load problem that causes utilities that have abundant solar generation, particularly subsidized photovoltaic silicon panels on homeowners’ roofs, to bring energy costs down to zero during the day while the complete lack of generation at night forces them to give much of their short-term stored energy away before the sun goes down.

California Dreamin’: Solar for All

The Wall Street Journal recently reported that, stepping in where government and university research have failed to deliver solutions, for-profit California utilities — including PG&E Corp., Edison International and Sempra Energy — are testing new ways to network solar panels, battery storage, two-way communication devices and software to create “virtual power plants” that manage green power and feed it into California’s power grid. In California, real-time wholesale energy prices often hit zero during the day while the need for energy at night can spike them to as high as $1,000 a megawatt hour.

If California wants to stand as a land of free-flowing solar without even the need of the fossil fuel industries that the Trump administration says it wants to re-energize, then it will need a way to store its solar power, particularly if it wants to retire its last nuclear plant in 2025. Power company AES brought 400,000 lithium-ion batteries online last month in Escondido, Calif., (near San Diego) where Sempra plans to use them as a “virtual power plant” to smooth out its energy flows over the 24-hour service day.

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Electric car manufacturer Tesla, Inc. is supplying batteries to Los Angeles area network that will serve Edison International, to create the largest storage facility in the world if no one builds a bigger one by 2020 when it’s slated to be completed. The facility will be able to deliver 360 mw/h to the grid for a full day on short notice.

The 2,2000-mw Diablo Canyon nuclear plant is owned by PG&E, which wants to retire it by 2025 to meet stringent state energy codes as well avoid costly upgrades to the aging plant. Its first unit began churning out power in 1986 for the company then known as Pacific Gas & Electric.

Many utilities avoid building lithium-ion battery virtual plants because they remain considerably more expensive to build and set up than traditional power plants. California’s state laws make them more desirable there because of both environmental policies (read, climate change goals) and the regulatory hurdles and costs of just building a new plant in the Golden State. Of course, that hasn’t stopped the state from approving and building them, but the utilities that have shuttered plants early are now turning to the virtual plants to shore up their own bottom lines. PG&E Is testing batteries, software and several technologies to upgrade its grid and replace Diablo Canyon.

Intermittency, What is it Good For?

If Tesla, PG&E, Sempra and Edison can solve the grid intermittence problem in California then economies of scale could reduce the costs of virtual plants elsewhere and incentivize grid modernization via market prices rather than regulation. The costs of energy from a virtual plant will still likely cost more per mw/h than those of a new gas peaker plant, but only experimentation in cost reduction from actual working plants providing energy 24/7 can bring down those costs and deliver the innovation necessary to both optimize and right-size battery-based virtual plants. The utilities deserve praise from both customers and investors for boldly going where none have gone before. Once again, the market provides.

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The Renewables MMI inched up 1.9% this month in the very mature actual metals market.

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