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Copper’s Price Breakout and Big Role in a Net Zero World

Jennifer L
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Copper’s Price Breakout and Big Role in a Net Zero World

Copper is a metal in high demand amidst the energy transition towards net zero emissions and low carbon. This demand stems from its crucial role in powering many technologies pivotal to this transition, including renewable energy generation, electric vehicles, and efficient grid infrastructure.

Copper Prices are Breaking Out

In 2024, copper equities experienced a significant upturn, largely driven by a series of market dynamics including reductions in Chinese smelter activity, global supply concerns, and robust demand forecasts. 

copper price

Notably, companies like Antofagasta have seen their share values surge, with the top five copper firms witnessing impressive growth. They outperform the broader materials sector.

Supply Challenges and Market Optimism

The closure of the Cobre Panama mine, a substantial global copper source, shifted market expectations from surplus to deficit, contributing to the upward price trajectory. This shift was amplified in March when Chinese smelters decided to reduce output amid a concentrate shortage, leading to a notable price increase as seen below. 

copper prices climb 2024

Market analysts suggest this trend reflects a mix of speculative buying and genuine supply constraints, pointing to a potentially sustained bullish market for copper.

Meanwhile, the majority of copper-focused equities are currently at or near their 52-week highs. Many are trading above consensus net asset value and analysts’ long-term copper price assumptions.

Implications for Investors and Future Demand

While the rally in copper prices is encouraging for investors, analysts caution that the market needs to validate this trend beyond short-term momentum. The sector’s performance could influence earnings, especially if copper maintains its price above $4 per pound.

Beyond immediate market mechanics, copper’s role in powering AI technology and supporting green energy transitions underscores its long-term value. This signals a sustained demand and investment interest in the metal’s future.

The Critical Role of Copper in Net Zero

Copper plays a crucial role in achieving net zero goals due to its indispensable properties in various key technologies essential for the transition to sustainable energy.

As the world shifts towards renewable energy sources such as solar and wind power, copper is vital for the efficient transmission and distribution of electricity. Additionally, copper is integral in the manufacturing of electric vehicles (EVs) and the development of robust grid infrastructure to support EV adoption.

Its conductivity, durability, and efficiency make copper an essential component in enabling the transition to a cleaner, more sustainable energy landscape. And thereby, contributing significantly to the realization of net zero emissions targets.

Here are the detailed reasons for copper’s significance:

High Electrical Conductivity

Copper has the highest electrical conductivity rating of all non-precious metals. This property is crucial for the efficient transmission of electricity in various applications, including renewable energy technologies like solar photovoltaics (PV) and wind turbines, as well as electric vehicles (EVs) and the infrastructure that supports them, such as charging stations and the electrical grid.

copper demand for wind and solar
Image from Visualcapitalist.com

Thermal Conductivity and Efficiency

Copper’s thermal efficiency is about 60% greater than aluminum, which means it can remove heat far more rapidly. This makes it ideal for use in components that generate significant amounts of heat, such as electric motors and inverters. Efficient heat dissipation is essential for maintaining the performance and longevity of these components.

Ductility and Malleability

Copper is easily shaped into wires, pipes, or sheets, which is beneficial for manufacturing a wide range of components used in renewable energy systems and EVs. Its ductility allows for the creation of fine, intricate wiring needed in advanced electrical systems.

Recyclability

Copper is 100% recyclable and can be used repeatedly without any loss of performance. This sustainability aspect is critical for the energy transition, as it supports the circular economy and reduces the need for new mining activities.

Essential Role in Renewable Energy Technologies

Renewable energy systems, such as solar PV and wind turbines, require significantly more copper compared to traditional energy systems. For instance, solar PV installations can use between 2,450–6,985kg of copper per megawatt of power generation, and a typical 660-kW wind turbine contains around 350kg of copper. The copper is used in the cabling, wiring, and heat exchangers that are integral to the operation of these systems.

copper in renewable energy for net zero

Demand in Electric Vehicles

EVs use up to four times as much copper when compared to an internal combustion engine (ICE) passenger car. Copper is used in every major EV component, from the motor to the inverter and the electrical wiring. A fully electric vehicle can use up to a mile of copper wiring, according to Wood Mackenzie.

Infrastructure Development

As the transition to renewable energy and electrification accelerates, the demand for copper in infrastructure development, such as power grids and charging stations, is expected to rise. Copper is used extensively in the electrical grid to connect renewable energy sources to consumers and in charging stations to facilitate the rapid charging of EVs.

Copper Supply and Demand Challenges for Net Zero

The demand for copper is projected to grow significantly, with estimates suggesting that it could nearly double by 2035. However, the supply of copper is not keeping pace with this demand, leading to concerns about potential shortages that could hinder the energy transition. 

copper supply and demand for net zero
Chart from Visualcapitalist.com

New mining initiatives and increased recycling efforts are needed to meet the growing demand for copper in the energy transition.

Copper’s unique physical properties, its role in renewable energy technologies, and its importance in the infrastructure necessary for a low-carbon future are the main reasons for its high demand in the energy transition to net zero emissions. 

The challenges associated with meeting this demand underscore the need for strategic investments in copper production and recycling to support the global shift toward sustainable energy sources.

Is the Battery Boom Heating Up? California Leads the Charge!

Jennifer L
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Is the Battery Boom Heating Up? California Leads the Charge!

California ISO (CAISO) is gearing up for another rapid expansion in battery storage capacity in 2024, building upon its position as the leading provider of electrochemical energy storage assets in the United States. 

Developers are set to install 6,813 MW of battery power storage within CAISO’s jurisdiction this year, per S&P Global Market Intelligence data. It will largely consist of 4-hour lithium-ion resources, marking a significant increase from the additions seen in 2023. 

Non-hydro energy storage connected to CAISO’s grid stood at 8,453 MW at the start of the year. Most of which was built over the past 4 years.

Charging Ahead with Battery Power

Battery projects constitute the largest portion of the planned 12,126 MW of net CAISO capacity additions in 2024. This is followed by an anticipated new solar capacity of 4,801 MW, often integrated with storage. 

California ISO 2024 capacity additions, retirements

Despite potential delays in development timelines, many projects scheduled for completion in 2024 are progressing toward energization ahead of the peak summer demand season. Among them is Calpine Corp.’s Nova Power Bank in Menifee, Calif., a massive 680-MW/2,720-MWh battery system expected to come online in June.

Backed by 5 separate offtake agreements and over $1 billion in debt financing, the Nova Power Bank marks the emergence of Houston-headquartered Calpine as a major developer of battery storage facilities in the United States.

This expansion complements its existing portfolio of approximately 26 GW of operating gas and geothermal assets across North America.

The Nova Power Bank project is set to be deployed in phases. Two 230-MW sections are slated to enter commercial operations in June under contracts with Southern California Edison Co. (SCE). This will be followed by a 50-MW phase for community choice aggregator Peninsula Clean Energy in August. 

Furthermore, another 110-MW section for SCE will start service in September, with a final 60-MW tranche to start in 2025. This timeline positions the Nova Power Bank to become operational in less than 5 years following the retirement of GE’s financially struggling combined-cycle gas plant in January 2020.

Alex Makler, senior vice president of Calpine’s Western US region, noted in an interview. 

“It’s [battery storage] not only economically valuable; it’s really valuable from a system planning standpoint. It helps with ensuring reliability, adequate supply and it makes room for even more development of renewables.”

Powering Progress with Clean Energy Projects

Arevon Energy Inc. is also actively constructing storage and solar projects in California. These include the Condor Battery Storage Project in San Bernardino County and the Vikings solar-plus-storage complex in Imperial County.

Long-term offtake agreements with utilities and community choice aggregators support these projects. 

The contracts assist in meeting the requirements set forth by the California Public Utilities Commission’s significant 2021 mandate for load-serving entities to secure a minimum of 11,500 MW of clean energy resources by 2026.

The directive was originally designed to address potential shortfalls resulting from the anticipated decommissioning of Pacific Gas and Electric Co.’s 2,240-MW Diablo Canyon nuclear power plant in San Luis Obispo County, California, as well as several aging gas plants.

Diablo Canyon nuclear power plant in San Luis
Diablo Canyon nuclear power plant in San Luis Obispo County

The aim is to meet state regulations mandating the procurement of clean energy resources. The delay in retirements of aging gas plants and the Diablo Canyon nuclear power plant has prompted a slowdown in generation retirements in California, with only minimal capacity expected to retire in 2024.

As the development of energy resources accelerates, CAISO is undertaking reforms to streamline its generator interconnection process. This is to ensure a smoother pathway for future energy and storage projects. 

This initiative aligns with the state’s ambitious goals, such as those outlined in Senate Bill 100. The ultimate goal is to reinforce the importance of timely and efficient resource onboarding to maintain progress toward sustainable energy.

Energizing Homes with Sustainable Battery Solutions

Once finalized, the Nova Power Bank project could provide power for up to 680,000 homes for up to 4 hours. This capacity is particularly crucial during the early evening hours when power demand surges, coinciding with low solar power generation. 

Calpine is actively exploring opportunities to enhance or replace additional facilities within its portfolio with battery systems. This move aligns with a broader industry trend of leveraging existing infrastructure and leveraging federal tax credits.

Calpine has already integrated lithium-ion batteries into its operations at the Russell City Energy Center in Hayward, California, providing “black start” capability to aid grid recovery from blackouts. Integrating batteries into generation operations allows for quicker starts and smoother startup or shutdown processes, Makler explained. 

The company boasts a pipeline of around 2,000 MW of additional battery power storage capacity in California. This includes standalone projects and systems co-located with other power plants.

The state has massively increased its battery storage by 757% in just 4 years, from 2020 to 2023 as seen below.

California energy storage 2023
Source: California Energy Commission

California ISO is leading the charge in battery storage expansion, with 6,813 MW of capacity slated for installation in 2024. As the state pushes towards clean energy goals, streamlined interconnection processes and innovative projects like Nova Power Bank will be instrumental in maintaining progress towards its decarbonization journey.

SLB to Acquire 80% of Aker Carbon Capture: A Massive Boost for CCUS

Saptakee S
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0
SLB to Acquire 80% of Aker Carbon Capture: A Massive Boost for CCUS

Schlumberger aka SLB, the leading oilfield services company in the US Schlumberger aka SLB, the leading oilfield services company in the US has acquired a majority stake in Norway’s Aker Carbon Capture to advance their carbon capture technology at an industrial scale. 

This merger, announced in late March 2024, is a significant step in reinforcing the decarbonization objectives of both companies.

Unlocking the SLB- Aker Carbon Capture Deal 

SLB is set to acquire 80% of Aker Carbon Capture Holding (ACCH) for NOK 4.12 billion, including the operations of ACC. ACC will retain a 20% ownership, cementing its role as a key player in the partnership.

SLB will also integrate its carbon capture business into the merged entity. Over the following three years, SLB could make extra payments of up to NOK 1.36 billion depending on the business’s performance. 

The regulatory approval of the transaction is pending but expected to close by the second quarter of 2024. 

With SLB’s merging into ACC, the stage is set to leverage technology, expertise, and delivery platforms. It promises to reshape the landscape of carbon capture and utilization.

Olivier Le Peuch, CEO of SLB, emphasizes the urgent need to scale carbon capture technologies to meet global net-zero targets. 

She has also highlighted the importance of lowering the operational cost and has noted, 

“Crucial to this scale-up is the ability to lower capture costs, which often represent as much as 50-70% of the total spend of a CCUS project. We are excited to create this business with ACC to accelerate the deployment of carbon capture technologies that will shift the economics of carbon capture across high-emitting industrial sectors.”

SLB and ACC aim to accelerate the deployment of carbon capture solutions across high-emission industries, catalyzing a transformative shift in the economics of carbon capture. 

SLB’S carbon budget curve:

SLB

Source: SLB

SLB’s sustainability report 2022 charts out:

“The carbon budget curve shows the reduction in CO2 e emissions needed over the coming century to limit the global rise in temperature to only 1.5 degrees C, as set by the Paris Agreement. Climate change projections show that the world will reach the budget for this target just eight years from now—in 2030.”

SLB’s mission is to balance emissions in the coming decades with ongoing net negative carbon actions post-2050 to safeguard the planet.

SLB: Pioneering Pathways in New Frontiers

Last year, SLB signed a strategic partnership with Microsoft and the Northern Lights joint venture. It underscored the crucial role of digitalization in streamlining carbon capture workflows. 

From SLB’s official website, we discovered that the company is developing extraordinary industry-leading CCUS technologies to address CO2 emissions.

We have streamlined their work ethics below:  

  1. Select and design sequestration sites for carbon capture and treatment. Construct high-quality wells to ensure long-term integrity.
  2. Monitor CO2, verify performance, and assure regulatory compliance.
  3. Use digital tools- automation, AI, data management, and sophisticated sensors to enhance operations. 
  4. Pioneer an advanced technology portfolio tailored to support CCUS operations throughout every project phase.

SLB’s collaboration with Aker aims to enhance the efficiency and scalability of carbon capture operations. The former can demonstrate its expertise by integrating cloud-based platforms and advanced simulation systems. 

Aker’s Global Carbon Capture and Storage (CCS) Ambition

Carbon capture and storage (CCS) reduces or removes CO2 emissions, offering industrial emitters viable decarbonization options. The International Energy Agency (IEA) strongly believes that “reaching net zero will be virtually impossible without CCUS.” 

The IEA estimates that by 2030 the world will need to capture over one gigaton of CO2 annually. This figure is expected to surge over six gigatons by 2050.

Egil Fagerland, CEO of ACC has noted,

“The decision to combine ACC and SLB’s carbon capture business is underpinned by a strategic vision that reflects our commitment to accelerate the industrial adoption of carbon capture,” 

He also believes that the company’s integrated suite of technologies and extensive global reach will scale up its profits. Consequently, it would benefit their customers, employees, and shareholders.

In parallel with the merger, Aker BP and OMV (Norge) AS have secured a Poseidon license, in CCS on the Norwegian Continental Shelf. The Poseidon license has the potential to store over 5 million tons of CO2 per year. It paves the way for the injection of captured emissions from industrial sources across North-West Europe.

Image: A typical CCS value chain:

AKER

source: Aker Carbon Capture

Furthermore, the US government’s commitment has also fuelled the momentum to combat climate change. The Biden Administration’s ambitious emissions reduction targets have spurred investment in carbon capture initiatives. In this mission, technology and innovation will play a pivotal role in achieving net zero by 2050. 

The merger between SLB and Aker Carbon Capture ushers a new era in industrial carbon capture. United with a common vision, these industry titans should lead the way to a greener future. 

Netflix, Apple, Shell, Delta Join Kenya’s Carbon Credit Boom

Jennifer L
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Netflix, Apple, Shell, Delta Join Kenya’s Carbon Credit Boom

According to a recent report by the World Bank, American video streaming company Netflix, technology giant Apple, and British oil multinational Shell are among the prominent global companies tapping into Kenya’s voluntary carbon market (VCM).

The report, titled ‘Carbon Market Guidebook for Kenyan Enterprises,’ reveals that in 2022, Kenya ranked as the second largest issuer of VCM carbon credits in Africa, trailing only the Democratic Republic of the Congo. 

Since the launch of the African Carbon Markets Initiative (ACMI) in 2022, Africa’s huge carbon credit potential has been unlocked. ACMI aims to mobilize climate finance for the continent, focusing on clean energy access and sustainable development. By leveraging carbon markets, the ACMI directs funds to emissions reduction projects, addressing energy poverty and promoting renewable energy. 

From Hollywood to Oil Fields: Big Players Enter Kenya’s Carbon Market

Since 2011, Kenya has issued over 59 metric tons of carbon credits to various projects. Eighty three percent of these credits come from voluntary markets.

carbon credits issued in Kenya

Most of the voluntary carbon credits issued in Kenya stem from nature-based projects. However, the report further highlights that tech-based projects are beginning to emerge in the market.

In a carbon credit market, organizations and individuals purchase credits generated through emission reduction projects to offset their carbon footprint. Companies whose business operations pollute pay significant sums to support initiatives aimed at removing or absorbing CO2 from the atmosphere. 

Each credit represents the reduction or removal of one tonne of CO2 from the air, often achieved through projects focused on combating deforestation, particularly in developing countries.

The primary purchasers of VCM credits in Kenya have been major corporations such as Netflix, Apple, Shell, Air France-KLM, BHP, Delta Air Lines, and Kering, the report notes. Other notable companies participating in Kenya’s carbon credits market include Nedbank from South Africa, Nespresso from Switzerland, and Zenlen Inc.

Unveiling Kenya’s Carbon Credit Landscape

The report highlights that most of the carbon credits generated from Kenya in voluntary markets have been attributed to forestry and land use projects. Specifically, these credits have been issued to four developers, three of which are based in Kenya: 

  • Wildlife Works Carbon, 
  • Chyulu Hills Conservation Trust, and 
  • Northern Rangelands Trust. 

These organizations have contributed to carbon credit generation through initiatives aimed at reducing emissions from deforestation and forest degradation (REDD+). They also focus on implementing sustainable grassland management projects to support local environmental conservation efforts.

Additionally, household and community-based credits, particularly those related to cookstoves, represent another significant type of credit generated in the country.

However, there’s limited transparency regarding the prices paid for these credits. They have primarily been sold through bilateral negotiations over the counter, making it challenging to determine the exact prices. The enterprises responsible for these credits are more fragmented and often rely on carbon credit revenue to achieve profitability.

A small portion of credits generated in Kenya have also been sold in compliance markets, issued through the Clean Development Mechanism.

The World Bank has previously estimated the cost of eliminating a ton of carbon dioxide to be between $40 and $80 based on the Paris Climate Agreement. Yet, the specific prices paid for these Kenyan credits remain undisclosed. 

Carbon Credit Rush: Kenya Emerges as Africa’s Contender

In 2021, several major companies purchased carbon credits from Kenya and Uganda. Delta acquired a total of 1,164 kilotons of Carbon equivalent (KtCO₂e) from both countries, while Netflix and BHP purchased 699 and 200 KtCO₂e from Kenya alone.

In 2022, 11 million VCM credits were issued to Kenya, making it the second-largest issuer of carbon credits in Africa after the Democratic Republic of the Congo, which issued 24 million credits.

Zambia, Uganda, and Malawi issued 4, 3, and 3 million credits, respectively.

VCM credits issued in Africa 2022

The call for carbon credits as a significant revenue source for Kenya comes amid growing awareness of the environmental impact of industries such as fossil fuels, agriculture, fashion, and transportation. President William Ruto has been advocating for carbon credits to mitigate emissions and generate income for the country.

At the 28th United Nations Climate Summit (COP28) held in Dubai in December last year, Kenya joined other nations in emphasizing the importance of carbon markets as complementary to emission reduction efforts. The countries stressed the need for transparency and high-integrity standards to maximize the effectiveness of these markets.

In response to this, the Ministry of Environment in Kenya published draft regulations that would regulate the carbon market. Among the proposals is the stipulation that 25% of the revenue generated by private companies from the sale of carbon credits would be directed to the government.

Additionally, the ministry plans to establish a national carbon registry that would serve as a database for all issued or recognized carbon credits. Private companies have to register with this registry and pay a fee to begin accumulating carbon credits.

These measures aim to ensure market accountability and transparency while providing a framework for revenue generation and conservation efforts.

Kenya’s voluntary carbon market is gaining traction among global players, with tech giants and oil companies jumping into the fray. With Africa’s carbon credit potential unlocked, Kenya aims to harness this market to combat climate change and drive sustainable development.

Could Merchant Nuclear Plants be the Savior of Power-Hungry Data Centers?

Jennifer L
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Could Merchant Nuclear Plants be the Savior of Power-Hungry Data Centers?

Merchant nuclear power plants are finding a sweet spot in supplying on-site energy to tech companies constructing data centers across the United States. With a combined capacity of nearly 22 gigawatts (GW), these nuclear reactors possess advantages like ample space and cooling water.

By having nuclear generation on-site, data centers can avoid congested interconnection queues, ensuring a reliable power supply.

Constellation Energy Corp., Vistra Corp., NRG Energy Inc., and Public Service Enterprise Group Inc. are among the companies benefitting from the surge in their stock prices. These firms could reap significant financial rewards as electricity markets tighten, driven by the rising energy demands of data centers.

Powering the Digital Age

The growing energy needs of data centers are creating ripple effects in both the power generation and retail markets. Major tech companies, like Amazon Web Services Inc., are willing to pay premiums for continuous electricity. This is evidenced by their recent purchase of a data center campus in Pennsylvania for $650 million. 

The campus, boasting a capacity of up to 960 MW for datacenters, sits adjacent to Talen’s Susquehanna Nuclear power plant. The nuclear facility generates a whopping 2,494 MW of power to fuel its operations.

This Amazon transaction signals an increased interest in securing round-the-clock power supply from nuclear plants. The potential pricing is expected to be around $30 per megawatt-hour (MWh).

The International Energy Agency forecasts that electricity consumption in data centers will rise from 200 terawatt-hours (TWh) in 2022 to around 1,050 TWh in 2026. That is equivalent to the energy demand of Germany.

US datacenter electricity consumption 2022-2026

This surge is expected to represent about 6% of the United State’s total power demand. The country is home to 33% of the world’s data centers. 

The Growing Demand of Energy-Hungry AI

According to the IEA report, data centers globally consumed 460 terawatt-hours (TWh) of electricity in 2022, which accounted for 2% of total global electricity usage. Within data centers, the most energy-intensive processes are computing power and cooling. 

With the rapid expansion of Artificial Intelligence (AI) services in the past year, data center providers have been investing in power-hungry Graphics Processing Units (GPUs) to meet the growing demand.

Another estimate forecasts that by 2027 the AI sector could use between 85 to 134 terawatt-hours every year. That figure is equivalent to the annual energy demand of the Netherlands.

In a study where the authors tested 88 different AI models across various applications, they repeated each task 1,000 times and estimated the energy consumption.

They found that many tasks showed low energy use. For instance, the AI model generated 0.002 kWh for classifying written samples and 0.047 kWh for generating text. To put this into perspective, it’s like the energy consumed during nine seconds or 3.5 minutes of Netflix streaming, respectively, for each task repeated 1,000 times. 

However, image-generation AI models had significantly higher energy consumption, averaging 2.907 kWh per 1,000 inferences. The paper highlights that this is nearly equivalent to the energy used to charge an average smartphone, emphasizing the energy-intensive nature of AI image generation.

In Alex de Vries estimates, a PhD candidate, from 2010 to 2018, energy consumption in data centers remained relatively steady. It constituted about 1-2% of global energy consumption.

While demand increased during this period, de Vries explains that hardware efficiency also improved, effectively counterbalancing the rise in demand.

Renewable Solutions for Data Center Growth 

In response to this alarming increase in energy demand to meet data center expansion, grid planners have adjusted their load growth forecasts accordingly, reflecting the escalating energy demands of data centers.

nuclear power plants to serve datacenters demand

Due to their sizable capacities, nuclear plants like the Salem units in New Jersey and Beaver Valley in Pennsylvania are ideal for colocation with data centers.

Renewables’ developers, such as AES Corp. and NextEra Energy Inc., are also well-positioned to capitalize on the data center boom. They could offer on-site primary power generation solutions to tech giants.

Meanwhile, renewable developers have secured contracts for over 4,000 MW of capacity, catering to data centers’ energy needs. AES, for instance, has contracted 1,000 MW from its Bellefield and Bellefield 2 solar projects in California. Each project comes with battery storage capacity.

Additionally, innovative combinations of wind, solar, and natural gas-fired generation are being explored to provide reliable, low-carbon power to data centers.

As the demand for data centers continues to grow, the convergence of nuclear energy and technology industries presents lucrative opportunities for both traditional and renewable energy providers to meet the evolving needs of the digital age.

Could those merchant nuclear plants be the answer to the rapid growth of data centers and the rise of AIs? This would be an interesting development to have an eye on.

Laconic Works with Emsurge to Make Carbon Market More Efficient

Jennifer L
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0
Laconic Works with Emsurge to Make Carbon Market More Efficient

Laconic has announced a strategic partnership with Emsurge Limited to provide subscribers of its SADAR™ NCM platform with access to live wholesale carbon pricing data. This collaboration aims to empower Laconic customers with real-time insights and analysis to make informed decisions in the carbon market.

Through the partnership, Laconic SADAR™ NCM subscribers will gain access to live wholesale carbon pricing, including anonymous daily bids, ask, and last-traded pricing on voluntary carbon credits. This integration of continuous updates from Emstream broker clients to the Emsurge data stream will enable Laconic customers to have real-time price discovery, trading, and valuation data within a single platform.

Empowering Decisions with Real-Time Insights

The Laconic SADAR™ NCM platform plays a crucial role in providing the structured information interchange required for carbon markets to function properly at scale. By integrating carbon pricing data, Laconic SADAR™ NCM subscribers can evaluate the valuation of complete portfolios and individual constituent positions. 

Additionally, subscribers can utilize the platform’s watch-list functionality to automate pre-trade diligence activities and capitalize on transient market conditions.

Buyers and traders of voluntary carbon credits can source these carbon market financial instruments in various platforms and marketplaces. These credits are available in spot markets, carbon exchanges, and directly from developers. 

Other online marketplaces also trade carbon credits, like Salesforce’s Net Zero Marketplace. These markets share the same goal: to make carbon credits available to wider supporters of carbon emission reduction projects. 

The biggest challenge is to make these markets more transparent and trustworthy to help scale up carbon reduction initiatives. 

This is where the Laconic SADAR™ Natural Capital Monetization platform comes in to help the market. 

Tailored specifically for the carbon market ecosystem, SADAR™ NCM stands out as the premier carbon data management and interchange platform globally. Subscribers of SADAR™ NCM gain privileged access to timely and accurate information. This precisely meets the liquidity and compliance needs essential for conducting trades efficiently within the global financial markets.

Laconic SADAR NCM platform

Unlocking Transparency in Trading Carbon Credits

The carbon credit platform also uses the Laconic Universal Carbon Identifier (LUCID). It is a groundbreaking initiative establishing the first globally harmonized record of carbon credit issuance in the industry. 

This unique identifier code serves as a reference point, linking each carbon credit to its distinct geospatial data, physical provenance information, jurisdictional compliance confirmations, and additionality activity.

Much like an ISIN (International Securities Identification Number) serves as a globally harmonized identifier for financial securities such as stocks and bonds, LUCID™ provides a standardized framework for tracking and verifying the origins and attributes of carbon credits.

Laconic universal carbon identifier LUCIDOn the project details page, users can access a historical view of the project’s carbon credit vintage, including retired credits. Additionally, they have the option to explore the project’s documents and leverage Laconic’s data pedigree engine scoring. This scoring assesses the quality of the data associated with the project and provides an overall evaluation of its quality.

Laconic SADAR NCM platform project sample

Melissa Lindsay, CEO, and Founder of Emsurge Limited, emphasized the significance of their partnership with Laconic. She particularly noted that:

“Laconic’s SADAR™ NCM platform provides participants with a much needed, trusted analysis of the accuracy and transparency of data. Emsurge’s pricing data feed will give Laconic’s customers actionable insights to make more informed investment decisions.”

Pioneering Carbon Trading Evolution

Emsurge Limited, a UK-based SaaS company, specializes in digitalizing traditionally opaque brokered environmental product markets. Founded in 2018 alongside Emstream, Emsurge captures live market data from hundreds of carbon projects worldwide. 

With over 10 million tonnes of carbon traded and a substantial list of companies and projects on its platform, Emsurge is instrumental in scaling climate finance through digital market infrastructure.

Emstream focuses on the Voluntary Carbon Market (VCM) and provides the necessary technology to facilitate its scalability. They employ a hybrid approach, using both voice and digital channels, to connect buyers or investors with carbon projects that align with their interests and objectives.

Emstream also provides free access to its wholesale broking platform, Emsurge, for corporate buyers, project developers, or traders who value transparency. Emsurge stands out as the sole procurement platform offering a wide range of opportunities, including spot, forward, term, and project finance options, within the carbon and IRECs (Renewable Energy Certificates) markets.

Working together with Laconic, Emsurge brings carbon trading to the next level. 

Andrew Gilmour, Laconic’s Co-Founder and CEO, reiterated the company’s commitment to eliminating market friction and enabling carbon trading at scale. He highlighted the SADAR™ NCM platform’s role in building trust through verified and immutable carbon project data.

Laconic’s collaboration with Emsurge heralds a new era in carbon market transparency and efficiency. Together, they aim to enable governments, corporations, and financial institutions to engage equitably in carbon trading activities globally.

Expert Predicts ‘Double-Digit’ Price Hike for CCP-Labeled Carbon Credits

Jennifer L
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0
Expert Predicts ‘Double-Digit’ Price Hike for CCP-Labeled Carbon Credits

The Integrity Council for the Voluntary Carbon Market’s (ICVCM) issuance of Core Carbon Principle (CCP) labels could significantly impact the price of carbon credits, potentially increasing it by $10 or more, according to Simon Jones, Founder and Managing Director of Emral Carbon. Jones made this assertion during a webinar panel hosted by the carbon intelligence platform Abatable.

Charting the Course to Premium Carbon Credits

Drawing parallels with projects under Article 6 of the Paris Agreement, Jones noted that cookstove projects with corresponding adjustments have been trading at a premium in the double digits. 

Article 6 establishes mechanisms for countries to transfer credits to other nations while ensuring they aren’t counted twice. For instance, Ghana issued a corresponding adjustment to a volume of cookstove credits developed by atmosfair in November. This move will safeguard them from being counted towards the country’s nationally determined contributions.

Other market experts also express confidence in the likelihood of carbon credits labeled with CCPs commanding a double-digit premium compared to those without such labels. This potential premium could significantly impact the carbon credit market.

Currently, the Voluntary REDD+ Credits Average stands at $11.21 per metric ton for V23. Meanwhile, biochar credits typically trade at over $100 per metric ton. Bids for biochar credits were reportedly heard between $134 to $145 per metric ton.

The Integrity Council for the Voluntary Carbon Market has been evaluating over 100 carbon credit methodologies from 6 different registries based on its CCPs and Assessment Framework published last year. The Working Group has categorized carbon credits into one of 3 types of assessment.

The Council has initially aimed at announcing its first CCP labels by the end of March. But it has adjusted this timeline and expects to announce which methodologies have met its principles over the coming months. 

Projections and Realities of CCP Label Assessments

The webinar hosted by Abatable aimed to explore the potential impact of CCP labels and other quality frameworks on stratifying the voluntary carbon markets. Around 71% of the market’s total credits are represented by methodologies applied for assessment by the ICVCM.

Abatable, conducting its own evaluation of methodologies based on the ICVCM framework, anticipates that only 6.4% are likely to receive a Core Carbon Principle (CCP) label. 

These methodologies, primarily focused on waste management and industrial efficiency, currently offer 32 million credits. This accounts for 3.8% of the existing supply.

A further 36.7% of methodologies are deemed to have a medium likelihood of receiving a CCP label. Meanwhile, the majority of the credits come from renewable energy and cookstove projects.

About 54% of the surplus credits in the market were from methodologies that are currently undergoing review by the CCP, per Abatable report.

credit stock by submittal for CCP approval
Source: Abatable

However, methodologies related to nature-based solutions are less likely to receive a CCP label due to ICVCM’s stringent permanence requirements. For over 2 years, the prices of nature-based carbon credits (NGEO) have been on a never-ending cliff as seen below. 

nature based carbon offset price

NGEOs, or Nature-Based Carbon Credits, are credits generated by projects implementing nature-based solutions to reduce, remove, or prevent carbon emissions. These projects often involve activities such as forest conservation or restoration, which sequester carbon in trees and soil, or agricultural practices that decrease emissions and enhance carbon storage.

However, despite their potential environmental benefits, the demand for NGEOs has been diminishing. This decline is largely attributed to the absence of standardized regulations governing carbon markets. Recent studies have highlighted concerns about the reliability of the system, particularly emphasizing the lack of clear rules and guidelines.

Navigating the Future of CCP Labels

Coco Chernel, a research associate at Abatable, emphasized that those projections are based on a conservative interpretation of ICVCM’s Assessment Framework. The final determination of CCP labels may depend on the multi-stakeholder working groups’ interpretations of uncertainties and the Assessment Framework.

Simon Jones of Emral Carbon highlighted that CCP labels and other quality initiatives could create multiple tiers within the carbon market, potentially resulting in a four-tiered market structure. He further said that:

“They [CCP labels] can’t be used as a proxy for project-level quality. So, you still need to do your due diligence on individual projects. I think one also has to bear in mind insurability, bankability of projects, and so on.”

Jones also pointed out that the timing of ICVCM’s label announcements could have unforeseen impacts on carbon markets. As ICVCM prioritizes methodologies delivering the highest volume, relying solely on CCP-labeled credits may overlook high-quality projects and credits that are not at the forefront of the queue.

Overall, CCP labels aim to enhance transparency and quality assurance in the voluntary carbon market. Still, stakeholders should remain vigilant and conduct thorough assessments to ensure the credibility and integrity of carbon credits.

PM Narendra Modi and Elon Musk to Announce Historic EV Deal

Saptakee S
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PM Narendra Modi and Elon Musk to Announce Historic EV Deal

The world’s two renowned and powerful figures PM Narendra Modi and Elon Musk will meet in India on April 22. Their camaraderie began back in 2015, and Musk, a self-proclaimed big fan of Modi, has ambitious plans to bring Tesla to India. 

Speculations are running high on the EV deal, with analysts assessing its potential impact on the Indian economy and identifying the potential beneficiaries. Everyone is eagerly awaiting the announcement from Musk and Modi to see what they will unveil.

Anticipation Builds: What to Expect from Modi-Musk Epic Meet

PM Narendra Modi met Elon Musk during a political visit to the US in June 2023. That time Musk said,

“I am confident that Tesla will be in India… as soon as humanly possible.” 

Moving on, in April 2024, there are strong indications that Tesla will finally enter the Indian automotive market. Musk, himself has confirmed his India visit and excitement to meet the PM of India via X. 

As per news, Tesla, the EV giant will be making its debut in the country. The highly awaited meeting may reveal a groundbreaking partnership poised to revolutionize India’s transportation sector.

The Tesla-Indian government deal holds immense promise for both parties. It signifies a significant step for India in achieving its ambitious goals of electrifying its vehicle fleet and combating air pollution. Tesla’s entry into the Indian market is expected to spur the adoption of EVs and stimulate investment in the renewable energy landscape.

India presents Tesla with a vast market full of potential. With a population exceeding 1.3 billion, it offers a lucrative opportunity for Tesla to expand its global presence and boost sales of its EVs. 

Moreover, India’s ambitious renewable energy goals and favorable government policies create an environment conducive to Tesla’s success.

To summarize:

  • Tesla’s entry will directly and indirectly enhance the country’s economy. 
  • Boost new job opportunities from the establishment of long-term operation of factories. 
  • Improved localization of Tesla vehicles will cut prices, rendering EVs more affordable for Indian consumers.

However, PM Narendra Modi has made his vision clear by noting, 

“Whoever wishes to invest can do so, but it must be built by Indians so that the youth of my country gets employment.”

Projected Growth Report of India’s EVs through 2022-2030

 

 

 

 

 

 

 

 

 

 

 

source: statista

Gearing Up: Tesla’s $500M Bold Investment Plan for India’s EVs Industry

Musk expressed his desire to introduce Tesla vehicles in India long back. However, he also pointed out that ‘India has the highest import duties in the world by far of any large country’. 

Here’s a peek into the regulatory framework for EV manufacturers in India

Investment and Manufacturing Requirements for Global Companies 

The recently introduced EV policy by the Indian government aligns with the company’s goals but it comes with specific requirements that must be fulfilled. They are:

  • Global companies entering India’s EV market must invest a minimum of Rs 4,150 crore to establish electric vehicle manufacturing plants.
  • There’s no cap on investment, but companies have a 3-year window to start manufacturing electric cars locally.
  • Within five years, they must incorporate at least 50% locally-produced parts, with 25% to be made in India by the third year.
  • The government will permit the import of completely built electric cars (CBU) valued at a minimum of $35,000 (Rs. 29.2 lakh), including cost, insurance, and freight.

Currently, Tata Motors dominates the local EV market, with MG Motor India and Mahindra & Mahindra closely behind.

Tesla’s Unique Situation for the Indian Market

Tesla can import a limited number of electric cars to India at a reduced tax rate of 15% if they invest at least USD 500 million and establish manufacturing plants within three years; otherwise, the tax rate is 70%.

In 2021, Tesla approached the Indian government, requesting duty cuts for importing its vehicles. Elon Musk stated in 2022 that Tesla wouldn’t start manufacturing in India unless allowed to sell and service its cars there. He had previously hinted at the possibility of setting up a manufacturing unit in India, depending on the performance of its imported vehicles. 

Tesla’s Advantage: Thriving in India’s Booming EV Landscape

India’s rapidly growing EV market presents Tesla with an opportunity to expand its global market presence and enhance its brand value. 

A market research report by INSIDEEVs stated that in 2023:

  • Tesla produced over 1.84 million electric vehicles globally and delivered over 1.8 million electric vehicles to customers.
  • It means production spiked by 35%, while deliveries by 38% in just one year.
  • Furthermore, in Q4, Tesla produced a global total of 494,989 electric cars, marking a 13% increase compared to the previous year.

The recent results reveal a slower year-over-year growth rate and highlight serious competition from Chinese EV giant BYD. Despite Tesla’s impressive Q4 results, BYD outpaced them in delivering more low-cost BEVs, (priced at $10,000). This is an indication of intense competition in 2024 and beyond.

Some media reports suggest that this year, Tesla’s stock has plummeted by more than 30%. It took a sharp dip earlier this week after the company abandoned its plans for a low-cost EV. But Musk denied this. To bolster the declining stock, he had to market Tesla’s robotaxi.

Therefore, 

  • Musk’s plan to get Tesla to India may be a ray of hope for the company’s dwindling sales and stock value. 
  • Anticipation is high for introducing Tesla’s renowned electric cars like the Model S, Model 3, and Model X on Indian roads. 

Projected total deliveries of Tesla Model S/X/3/Y, Cybertruck quarterly report from 2015-2023

source: insideevs

Furthermore, Santosh Iyer, MD & CEO of Mercedes in India, discussed the influx of global EVs to the country with the leading newspaper, The Times of India (TOI). He noted, 

“Our EV charging bays will be open for Tesla cars, just like they are for an EV of any other brand.”

In India, Mercedes Benz has a network of 116 charging stations across 36 locations and sells EVs through dealerships.

Additionally, expectations are soaring for Tesla’s cutting-edge Lithium battery technology and autonomous driving capabilities to redefine India’s automotive industry.

Based on this speculation, it’s evident that a partnership between PM Narendra Modi and Elon Musk could significantly boost net-zero goals. Tesla’s technological expertise combined with India’s expansive market potential can expedite the transition to a cleaner, greener future.

FERC Grants Waiver for Solar Project Amidst Local Resistance

Jennifer L
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FERC Grants Waiver for Solar Project Amidst Local Resistance

The Federal Energy Regulatory Commission (FERC) has granted a waiver to PJM Interconnection LLC, allowing a 210-MW solar project in Indiana to relocate to a different location on the same transmission line. Despite objections from PJM and Commissioner Mark Christie, the waiver was approved, enabling the Rush Solar Project II to proceed with its plans.

Originally intended for Rush County, the solar project faced setbacks. The county, along with neighboring Fayette County, imposed moratoriums on solar permit applications until at least January 2025. In response, Rush Solar sought permission to move the project to Dearborn County under alternate site provisions in PJM’s grid connection study process.

Local Land Concerns and Regulatory Hurdles

The challenges encountered by Rush Solar highlight local land concerns in states like Indiana. This is where renewable energy policy is not uniformly addressed at the state level.

Brian Flory of Solar United Neighbors noted the diverse county policies regarding solar power, with some counties welcoming it while others oppose it.

Indiana’s agricultural landscape, with a significant portion of corn production going to ethanol, adds complexity to the debate. Concerns over land use changes, particularly the conversion of farmland to solar farms, have led to resistance from residents.

PJM objected to the waiver, citing conflicts with interconnection queue reforms and questioning Rush Solar’s good faith in seeking the waiver. PJM argued that granting the waiver could set a precedent for circumventing site control requirements. And it may also delay grid studies for other projects in the interconnect queue.

Despite these objections, FERC approved the waiver, allowing Rush Solar to proceed with its solar project in Dearborn County. The decision underscores the complexities and challenges of renewable energy development at the local level amidst evolving regulatory landscapes.

Just for April, several states involving large renewable developers have made significant strides in advancing massive solar projects. Virginia, Illinois, and Texas have approved solar projects, boosting their renewable energy supply. 

FERC’s Decision and Dissenting Voice

In an April 5 order, the majority of the FERC determined that Rush Solar met the criteria for a waiver, despite objections from PJM Interconnection LLC. The commission concluded that Rush Solar acted in good faith, engaged with local officials, and pursued alternative sites only after the county moratoriums were imposed.

FERC stated that the waiver was limited in scope. It allows Rush Solar to change the project site to a non-adjacent alternate site while remaining subject to other site control verification requirements.

The commission rejected PJM’s concern that granting the waiver would encourage circumvention of site control requirements, noting that Rush Solar had originally intended to locate the project in Rush County.

However, Commissioner Mark Christie dissented, arguing that the majority disregarded the more stringent site control requirements approved for PJM in November 2022. He expressed concern that the order failed to adequately justify granting the waiver.

Moreover, it could undermine efforts to reduce speculative projects and grid connection study delays.

Corporate Support and Community Solar Growth

The corporate world in the U.S. is also keen on supporting the unstoppable rise of solar power. 

A White House report reveals plans for the announcement of over 100 gigawatts (GW) of solar module manufacturing capacity. This capacity could potentially produce enough solar panels to power approximately 10% of homes in the U.S., amounting to over $13 billion in investments.

US solar capacity projections

Apart from Amazon which is leading the pack of renewable giants, startups are also making waves in this revolution.

Boston-based Nexamp Inc. has secured $520 million in funding to bolster its national portfolio of community solar projects. Led by Manulife Investment Management Ltd., the capital raise also saw participation from existing investors Diamond Generating Corp. and Generate Capital PBC. 

Community solar projects offer consumers the benefits of onsite solar generation without the complexities of rooftop solar. This enables them to earn credits on their power bills by owning or subscribing to a portion of a community solar farm.

This electricity model is gaining traction in the US, with 6.5 GW of community solar arrays already installed, according to the Solar Energy Industries Association. The association predicts an additional 6 GW of capacity will be added to the community solar market over the next five years. 

Nexamp’s latest funding round highlights the crucial role of community solar in providing clean and affordable energy solutions to all Americans, remarked CEO Zaid Ashai.

Nexamp currently serves over 80,000 customers and manages a 1.5-GW portfolio, including projects in progress. The company intends to expand its capacity by multiple gigawatts in the coming years, aiming to provide power to over a million customers.

The FERC’s approval of the Rush Solar Project II’s relocation reflects the complexities of renewable energy development at the local level. Despite objections, the decision highlights the balancing act between regulatory requirements and the imperative for renewable energy expansion. Moreover, investments like Nexamp’s underscore a growing commitment from corporate and startup sectors to support clean energy solutions in the US.

America to See a Surge in Renewable Capacity in 2024

Jennifer L
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America to See a Surge in Renewable Capacity in 2024

The United States is poised for a significant boost in renewable energy capacity by over 67 gigawatts (GW) in 2024, driven by policy shifts and economic factors, per S&P Global Market Intelligence analysis. Solar energy, in particular, is set to lead the charge, with over 56 GW of capacity expected to come online. 

This surge reflects a broader trend toward cleaner energy sources and marks a pivotal moment in America’s energy transition. Additionally, around 11 GW of wind generation and 21 GW of energy storage are projected to come online.

Solar Dominance in America’s Energy Landscape

While natural gas has been considered a transitional fuel, the analysis indicates a net gain of only 394 megawatts (MW) of natural gas capacity in 2024. This is overshadowed by planned retirements, with 4,028 MW of natural gas expected to be retired. 

US 2024 solar capacity additions, retirements

The only new nuclear capacity addition is the 1,114-MW unit 4 at the Vogtle Nuclear Plant in Georgia. 

But the International Energy Agency (IEA) forecasted that nuclear power will reach an all-time high in 2025. Industry experts also believe that nuclear will start to soar this year.

US Energy Secretary Jennifer Granholm recently stated that wind and solar energy could surpass coal generation for the first time in US history. The trend towards cleaner energy sources will continue, to achieve 80% clean energy on the path to 100% clean electricity by 2035.

In 2024, around 5 GW of fossil-fired capacity will retire, which is less than half of the previous year’s total. Of this, around 3,634 MW of gas-fired capacity and 1,035 MW of coal-fired resources will shut down.

2024 US capacity additions, retirements by fuel type

However, the challenges and opportunities of the energy transition are evident, particularly in grid operator PJM Interconnection LLC. 

PJM has seen a surge in renewables, prompting concerns about reliability risks. Solar energy has surpassed natural gas in new service requests, indicating a shift in the energy landscape.

Cargill’s Sustainable Power Partnership

Solar energy is taking the lead in the energy landscape, with 56 GW of solar capacity this year. Within the PJM Interconnection region alone, around 9 GW of solar capacity is anticipated.

PJM plans for about 10 GW of new capacity additions in 2024, with minimal retirements of just 80 MW from wind generation.

Cargill Inc., a major player in the food industry, has expanded its renewable energy portfolio by contracting an additional 300 MW of wind and solar capacity. With this addition, Cargill’s offsite renewable energy portfolio now stands at 716 MW.

The largest private company in the US has embarked on its first journey using specialized sails partially powered by the wind in 2023. Their goal is to examine how wind energy can contribute to reducing energy and carbon emissions in the shipping industry.

The company has entered into five power purchase agreements (PPAs) to bring online the new wind and solar capacity. However, the specific locations of these new generating resources were not disclose. 

Still, once operational later this year, they can help Cargill reduce its carbon emissions by nearly 820,000 metric tons/year.

Cargill’s global renewable energy portfolio comprises 15 projects across 12 countries. These include virtual PPAs with: 

  • Ocean Breeze Energy GmbH & Co. KG for 35 MW from the Bard offshore wind farm in Germany, 
  • Galileo Green Energy GmbH for 55 MW from a solar project in Italy, 
  • Vattenfall AB for 78 MW from the Hanze Windpark project in the Netherlands, 
  • TC Energy Corp. subsidiary Blue Cloud Wind Energy LLC for 130 MW from a Texas wind farm, and
  • A self-production contract for generation from a wind farm in Bahia, Brazil.

Regional Insights into Renewable Energy Expansion

The Electric Reliability Council of Texas Inc. (ERCOT) will also see over 27 GW of new resources added in 2024, including over 16 GW of solar capacity, according to S&P Global. Additionally, nearly 8 GW of energy storage, over 2 GW of wind resources, and 790 MW of natural gas generation are part of the planned capacity additions.

California ISO will also add over 12 GW of capacity, with 5 GW and 7 GW, from solar and energy storage, respectively. ISOs refer to independent system operators.

In the Midcontinent ISO (MISO) region, over 12 GW of capacity additions are projected. Meanwhile, the retirement in this region will be at 1,368 MW of fossil fuel generation.

ISO New England is forecast to add over 2 GW of capacity, offset by 1,692 MW of natural gas retirements. Meanwhile, the New York ISO region will add 2,044 MW of capacity in 2024.

Within the Southwest Power Pool (SPP) region, about 2 GW of renewable capacity additions are anticipated, along with 788 MW of natural gas additions.

Outside of formal ISO or RTO regions, approximately 25 GW of capacity additions and 2 GW of retirements are forecasted. This includes over 14 GW of solar projects, followed by over 4 GW of energy storage, 2 GW of wind, and 2 GW of gas.

As the US continues its transition towards a more sustainable energy future, the surge in renewable energy capacity in 2024 underscores the nation’s commitment to combating climate change and embracing clean energy solutions. 

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