Tesla Signs A Landmark Multi-Billion Dollar 15 GWh Megapack Deal

Jennifer L
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Tesla Signs A Landmark Multi-Billion Dollar 15 GWh Megapack Deal

While Tesla’s energy storage segment is smaller than its automotive business, it has been experiencing significant growth. This segment has rapidly accelerated and expanded after maintaining consistent growth over the years, with recent massive Megapack contracts secured. 

Tesla and Intersect Power have signed a contract for 15.3 GWh of Megapacks, Tesla’s advanced battery storage system, for the latter’s solar and storage projects through 2030. This deal, along with previous agreements, positions Intersect Power as one of the top global buyers and operators of Megapacks. It has nearly 10 GWh of large-scale storage expected by the end of 2027.

Though the contract’s cost wasn’t disclosed, the massive energy involved says it’s a multi-billion dollar deal, depending on pricing. 

Tesla’s Megapack is a large-scale lithium-based battery energy storage system aimed at improving grid stability and preventing outages. Each unit has a storage capacity of over 3 MWh, sufficient to power 3,600 homes for 1 hour.

Tesla’s Battery Energy Storage Crazy Growth

Despite a decline in automotive revenues, Tesla has seen growth in other business segments, particularly in energy storage, which is becoming increasingly profitable. With the rising number of Megapack installations and an expanding fleet, Tesla expects consistent profit growth in this segment.

In Q1 2024, Tesla’s energy storage deployments hit a record high of 4.1 GWh. Revenue and gross profit from the Energy Generation and Storage segment also reached all-time highs.

In Q2 2024, Tesla Energy deployed 9.4 GWh of energy storage products, including Megapacks, Powerwalls, and solar products. That’s more than double the Q1 2024 deployment (132% increase) and up 157% year-over-year.

Tesla energy storage deployments Q2 2024

Tesla has previously supplied 2.4 GWh of Megapacks for Intersect Power’s solar and storage facilities, which are either operational or under construction.

The new agreement will see more than half of the Megapacks used for 4 major battery installations in California and Texas. They will begin operations by the end of 2027, including some of the biggest battery installations in the U.S. The remainder will be allocated to future solar and storage projects coming online between 2028 and 2030.

Mike Snyder, Senior Director of Tesla Energy, stated, 

“Intersect continues to be an exceptional partner, and their development expertise combined with the plug-and-play nature of Tesla’s vertically integrated technology enables the speed and scale needed to enhance grid resilience and support greater renewables integration.”

Amplifying Intersect Power’s Leadership in Clean Energy Storage

Intersect Power is a clean energy company focused on innovative, scalable low-carbon solutions. Established in 2016, the company develops, owns, and operates some of the world’s largest clean energy resources, delivering low-carbon electricity, fuels, and related products for both domestic and international markets.

Intersect Power is committed to advancing grid-tied renewables and large-scale clean energy assets, including battery storage, data centers, and green fuels. It has a portfolio of 2.2 GW of operating solar PV and 2.4 GWh of storage.

The energy company is known for its large and adaptable Battery Energy Storage Systems (BESS) at its solar and storage facilities in Texas and California. The Megapacks are set for delivery in 2025 and 2026 and will be produced at Tesla’s Megafactory in Lathrop, California.

Currently, Intersect Power has 2.4 GWh of Tesla Megapacks either operational or under construction. These include the 1 GWh at the Oberon solar and storage facility and 448 MWh at the Athos III solar and storage facility in California. An additional 1 GWh of Megapacks is being installed at the Radian and Lumina solar and storage facilities in Texas. Their full operational status are expected within the year.

According to the U.S. Energy Information Administration, battery storage capacity in the country has been on the rise since 2021. It is projected to increase by 89% by the end of 2024, provided that developers bring all planned energy storage systems online as scheduled.

US battery installed capacity 2024Current plans indicate that U.S. battery capacity could exceed 30 gigawatts (GW) by the end of 2024, surpassing the capacities of petroleum liquids, geothermal, wood and wood waste, and landfill gas.

Developers anticipate bringing over 300 utility-scale battery storage projects online in the United States by 2025. And about 50% of these planned capacity installations are in Texas.

Tesla Energy’s Power Gain Major Boost with Megapacks

Tesla Energy has also signed a $375 million contract to provide Megapacks for a major battery project in Australia. The agreement will support the construction of a 415 MW/1660 MWh battery, one of the world’s largest four-hour duration batteries.

The Megapacks will be used for Akaysha Energy’s Orana Battery Energy Storage System (BESS), located in New South Wales within the Central West Orana Renewable Energy Zone (REZ).

Tesla Megapacks have been making notable strides in Australia’s energy market. In October 2023, a 150 MW/300 MWh Tesla Megapack system was commissioned in New South Wales. 

Earlier this year, a 250 MW/500 MWh project broke ground in Queensland. Additionally, in April 2024, Tesla Energy was awarded a contract by Neoen to expand the Collie Battery, aiming to transform it into the largest battery in Australia, with a final capacity of 560 MW/2,240 MWh.

This Megapack agreement, alongside Tesla and Intersect Power’s significant deal underscore the growing demand for advanced energy storage solutions. These partnerships are set to enhance grid stability and support the transition to a low-carbon economy worldwide.

Nickel Market in Turmoil: BHP to Halt Operations Due to Price Plunge

Jennifer L
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Nickel Market in Turmoil: BHP to Halt Operations Due to Price Plunge

In recent developments within the global nickel market, the trajectory of prices has undergone a significant downturn. Consequently, nickel prices have plummeted from the highs recorded in recent years, primarily driven by a global oversupply. 

This has led BHP Group to suspend its operations in Western Australia, reflecting the economic challenges within the industry.

BHP’s Bold Move

BHP Group Ltd., one of the largest mining companies, announced the suspension of its Nickel West operations and West Musgrave nickel project in Western Australia. This decision was attributed to the inability to overcome economic challenges posed by the global oversupply of nickel. 

nickel supply and price

From October, BHP will halt mining and processing operations at several key sites, including the Kwinana refinery, Kalgoorlie smelter, and Mt. Keith and Leinster mines. The development of West Musgrave will also be suspended as the company begins its care and maintenance program.

Geraldine Slattery, BHP’s Australia president, cited substantial economic challenges driven by the oversupply of nickel as the reason for the suspension. BHP has flagged an underlying EBITDA loss of approximately $300 million for its Australian nickel operations for the financial year ending June 30, 2024.

Despite the suspension, BHP plans to continue supporting its workforce and local communities during the transition. The company will invest about $300 million annually in its Western Australian nickel facilities, enabling a potential restart of operations. BHP will review its decision to halt operations by February 2027.

Australia’s resources minister, Madeleine King, expressed disappointment over BHP’s decision, highlighting its substantial impact on the workers and communities of Kwinana, Kambalda, and Kalgoorlie. Western Australian Premier Roger Cook echoed these sentiments, noting that the move would affect thousands of workers. Cook emphasized the importance of diversifying the economy to build resilience in the resources sector.

The Rapid Growth Shaking Up the Nickel Market

The rapid expansion of Indonesia’s nickel industry has led to a market oversupply, resulting in significant price declines from the highs of 2022 and 2023. As of July 10, the London Metal Exchange (LME) cash price for nickel was $16,606.41 per metric ton, a 46.4% drop from the 2023 high of $30,958/t on January 3, according to S&P Global Market Intelligence data.

In 2022, nickel prices peaked at $48,241/t on March 10 due to a historic short squeeze and remained volatile, often exceeding $30,000/t. The current price is down 65.6% from the 2022 high.

nickel prices

The primary nickel surplus limits the potential for price increases, with LME stocks reaching a two-year high on May 29 as supply growth, particularly from Indonesia and China, continues to outpace demand, according to S&P Global Commodity Insights analyst Anna Duquiatan. While nickel prices rose earlier this year due to protests in New Caledonia and US and UK sanctions on Russian metal, they have since decreased but remain higher than at the start of the year.

Seizing Opportunity in a Challenging Market

While expected, BHP’s decision to suspend operations at its nickel assets in Western Australia is a significant blow to the local mining industry. This suspension will result in 1,600 employees being either redeployed or offered redundancies. Although nickel exploration and development will continue, Australia’s nickel mining industry is effectively coming to a halt.

While the market remains in oversupply, some industry players see opportunities amid the challenges. 

The adversity presents an opportunity for Lunnon Metals, which is eyeing the mothballed Kambalda nickel concentrator.

With BHP’s suspension of Nickel West operations and the West Musgrave project amid the global nickel downturn, Lunnon is now exploring other processing options for its Baker and Foster nickel deposits. The company is considering a larger role in the district.

Lunnon sees potential in capitalizing on the mothballed Kambalda nickel concentrator by “either purchasing, leasing or otherwise making use of” the plant and its associated infrastructure and utilities. Additionally, the company envisions the possibility of jointly or solely building a new concentrator in the future to “meet the needs of various local stakeholders in Kambalda or further afield.”

Despite the challenging sentiment surrounding nickel, Lunnon Metals remains optimistic about the future of the commodity in Australia and is charting a path forward. Market analysts also share the same sentiment.

nickel market outlook 2028

While short-term price movements are driven by speculative activities and immediate market conditions, the long-term outlook for nickel remains positive, primarily due to its critical role in the energy transition. Increasing demand from renewable energy technologies, EVs, and energy storage solutions will drive long-term demand growth for nickel.

As the nickel market grapples with oversupply and declining prices, BHP’s suspension of operations marks a significant impact on the industry. However, companies like Lunnon Metals are exploring new opportunities to navigate this challenging landscape. This highlights the sector’s resilience and adaptability.

HSBC Opens New Unit For Low-Carbon Finance, Alongside $1 Trillion Pledge

Jennifer L
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HSBC Opens New Unit For Low-Carbon Finance, Alongside $1 Trillion Pledge

Global financial services group HSBC is launching a new business unit, HSBC Infrastructure Finance (HIF), to focus on infrastructure financing and project finance advisory opportunities tied to the transition to a low-carbon economy. The bank has appointed former UK Member of Parliament Danny Alexander as CEO of the new unit.

HIF aims to secure a significant share of deals in major markets. It will also integrate elements from the bank’s Global Banking Real Asset Finance team.

Taking the Helm and Driving Infrastructure Finance in Transition Markets

The new unit plans to expand HSBC’s debt origination and distribution businesses by building new relationships with both public and private sector entities.

Greg Guyett, CEO of Global Banking and Markets at HSBC, remarked on the announcement, noting that: 

“We have a leading presence in the regions where infrastructure needs to be developed and financed to enable a just transition to a low carbon economy. We also look to support the UK government’s program to build critical infrastructure in Britain to grow the economy whilst decarbonizing it.”

Danny Alexander, currently the vice president for policy and strategy at the Asian Infrastructure Investment Bank (AIIB) and a former UK government minister, will lead the division. 

Alexander’s appointment is intended to accelerate collaboration with governments, multilateral development banks, and companies, including supporting the UK government’s new initiatives.

In his post announcing the appointment, Alexander expressed his excitement about leading HIF and pursuing significant infrastructure financing and advisory opportunities related to the low carbon transition in strategic markets.

HSBC’s Net Zero Plan

The launch of HIF follows HSBC’s release of its first Net Zero Transition Plan earlier this year, detailing its strategy to finance and support the transition to net zero. The bank set a 2050 net zero target in 2020, committing to align its financing activities with the Paris Agreement’s goals. 

In 2021, HSBC made the transition to net zero one of the 4 key pillars of our corporate strategy. Since 2020, the global financier has taken several steps to begin executing its net zero ambition and managing climate risks. The banking company’s net zero journey is below.

HSBC NET ZERO JOURNEY

HSBC net zero journey to 2050

The bank’s transition plan covers the HSBC Group and it focuses primarily on the sectors and customers where they anticipate making the most significant impact on emissions reductions. 

For each sector, the bank describes the necessary technologies, investment needs, and external dependencies for a viable net zero by 2050 pathway, and identifies where a 1.5°C-aligned 2030 pathway is most at risk. The company also outlines its related portfolio, aims, targets, and actions to support sector decarbonization.

HSBC’s emissions from its own operations and supply chain are relatively small compared to its financed emissions, but reducing them is crucial for becoming a net zero bank. 

HSBC Greenhouse Gas Emissions from Own Operations

HSBC GHG carbon emissions or footprint
Source from HSBC Net Zero Transition Plan

The bank aims to achieve net zero in its own operations and supply chain by 2030, including 100% renewable electricity and minimizing its direct impact on nature. This involves cutting emissions across energy consumption, travel, and supply chains.

In 2022, HSBC exceeded targeted reductions by achieving a 58.5% decrease in energy and travel emissions compared to 2019 levels. This accomplishment was driven by the bank’s three key efforts:

  1. A 24% reduction in energy consumption achieved through optimizing building use and strategically reducing office space and data center operations.
  2. Purchasing 48% of energy from renewable sources by leveraging renewable tariffs and engaging with landlords.
  3. An 85% reduction in business travel, primarily attributed to Covid-19-related international travel restrictions.

Looking forward to 2030, HSBC aims for a further 50% reduction in energy consumption. High-quality carbon removal or offsets will be used only for residual emissions that cannot be otherwise reduced from 2030 onwards.

The financier engages with market participants to develop carbon credits and support initiatives for a credible carbon market. Climate Asset Management, HSBC’s joint venture, is sourcing high-quality carbon removals. The bank also participates in HKEX’s International Carbon Market Council and advocate for integrity in the voluntary carbon market through initiatives like the Integrity Council.

It’s important to note that HSBC does not plan to use carbon offsets to meet its net zero by 2050 portfolio financed emissions target or related interim 2030 sectoral financed emissions targets.

The bank will regularly review emerging guidance from standard setters like the Greenhouse Gas Protocol and the Science Based Targets Initiative (SBTi) to assess and incorporate customers’ use of carbon credits into its customer transition plan assessment process.

Aligning Financing with Global Climate Goals

To achieve GHG emissions reduction targets and reach net zero, HSBC is implementing a plan, focusing on these three areas:

  1. Supporting Customers

HSBC is prioritizing the transition of its customers to net zero by providing finance, services, insights, and tools. The bank is engaging with corporate customers on their transition plans and offering products and services to facilitate this shift.

  1. Transforming Operations

In 2021, HSBC made the “transition to net zero” one of the four pillars of its corporate strategy. This integration into the corporate strategy has led to embedding net zero considerations into sustainability risk policies, risk evaluation, decision-making tools, and processes. The bank aims to be net zero in its own operations and supply chain by 2030.

  1. Partnering for Systemic Change

HSBC is engaging with stakeholders across geographies to support policies, regulations, and partnerships that facilitate the transition to net zero. The bank is a signatory of the Taskforce on Climate-related Financial Disclosures (TCFD) and advocates for climate risk disclosures.

The bank also pledged to prioritize financing and investment that contributes to the low carbon transition, aiming to support customers with $750 billion to $1 trillion in finance and investment by 2030.

HSBC’s launch of Infrastructure Finance underscores its commitment to supporting the transition to a low-carbon economy through strategic infrastructure investments. With a robust net zero strategy in place, HSBC aims to play a pivotal role in shaping sustainable finance globally.

Sungrow and Algihaz Join Forces for 7.8 GW Energy Storage in Saudi Arabia

Saptakee S
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Sungrow and Algihaz Join Forces for 7.8 GW Energy Storage in Saudi Arabia

Sungrow Power Supply, a Chinese photovoltaic inverter manufacturing giant recently announced to partner with Saudi Arabia’s Algihaz Holding for a massive energy storage project. In this project, Sungrow will build a 7.8 GW energy storage system to boost Saudi Arabia’s power grid stability and reliability. Media reports that this will be the largest off-grid energy storage project in the Middle East.

Sungrow’s Ambitious Timeline: Powering Saudi Vision 2030

Saudi Arabia, the world’s largest crude oil exporter, is committed to expanding its renewable energy sector under Crown Prince Muhammad bin Salman bin Abdel Aziz Al Saud’s Vision 2030 plan proposed in 2016. By 2030, Saudi Arabia aims for solar and wind energy to make up 50% of its energy mix, totaling 58.7 GWh.

Sungrow has outlined the project timeline and many other significant attributes. It will span three sites in Najran, Madaya, and Khamis Mushait of Saudi Arabia comprising ~ 7.8 million battery cells.

Furthermore, the project is intended to last more than 15 years, with prominent challenges including climatic conditions, massive scale, critical logistics, and tight delivery schedules. Product delivery will start this year, with a full grid connection expected to be completed by next year.

Sungrow’s representative on addressing some leading media agencies noted that the company will deliver over 1,500 units of its latest Power Titan 2.0 liquid-cooled storage system. The integrated AC storage design and high energy density can reduce operation area by 55%. Furthermore, Sungrow’s preliminary technical and financial involvement will ensure on-time on-site installation and grid connection, meeting all deadlines.

For operations and maintenance, it will deploy an intelligent energy management system (EMS). This modern technology will monitor real-time levels and ensure safety and efficacy during production. However, neither of the parties disclosed the deal value.

Sungrow Charging toward Net-Zero

The 2023 sustainability report reveals,

“Sungrow has pledged to achieve carbon neutrality on the operational level by 2028, carbon neutrality across the supply chain by 2038, and net zero emissions across the supply chain by 2048.” 

Renewables and Revenue

They offer solutions for utility-scale, commercial, industrial, and residential applications, including floating PV plants, NEV driving solutions, EV charging, and renewable hydrogen production.

The power titan installed rooftop PV power stations with a total capacity of nearly 13 MW. This saved over 1,300 MWh of electricity annually and raised green electricity consumption to 55%. They reduced energy consumption per unit product by 6.8% compared to 2020. According to S&P Global, Sungrow tops the global position in PV inverter shipments for 2023.

Sungrow’s operating revenue surged by 79.5% in 2023, reaching $10.2 billion. Meanwhile, its net profit attributable to shareholders soared by 162.7% to $1.3 billion.

Carbon Footprint:

For 2023: The proportion of green electricity use reached 55% in 2023. Greenhouse gas emissions (scope 1 and scope 2) were reduced to 41,755 tons of CO equivalent, which is a decrease of 1,502 tons compared to 2022.

Sungrowsource: Sungrow 2023 Sustainability Report

Algihaz Holding: Innovating for Vision 2030’s Energy Goals

Algihaz Holding, a Saudi company with a diverse portfolio, operates primarily in the power and energy sector, using both conventional and renewable sources.

Like Sungrow, Algihaz is actively driving the energy transition as its commitment to Saudi Vision 2030. The company invests in innovative projects to deliver solutions across the Arab Kingdom and globally. Its partnership with Sungrow exemplifies this commitment.

Middle East’s Renewable Energy Scenario 

Saudi Arabia is actively transitioning from fossil fuels to renewable energy as part of its Vision 2030 initiative. A few years back, Saudi Aramco’s collaboration with Huawei, focused on integrating advanced technologies to enhance the efficiency and sustainability of energy production. The news of Huawei constructing the world’s second-largest off-grid battery energy storage project in Saudi Arabia has made headlines recently. This project has now achieved an energy storage capacity of 1.3 GWh.

The Kingdom is investing heavily in renewable energy. The $500 billion NEOM city will run entirely on renewable energy. The Sakaka Solar Power Plant is another crucial project. It is the country’s first large-scale solar initiative, reducing reliance on oil.

IEA has highlighted that even though clean energy investment in the Middle East is rising, it is still dominating as a supplier of oil and gas.

IEA Middle East Renewable Energysource: IEA

Overall, the Middle East’s renewable energy landscape looks promising in the coming years, with global companies eager to invest. Furthermore, China’s leading PV inverter company, Sungrow exploring the Saudi market, which will open numerous opportunities for the future.

Canada Carbon Rebate to Offset Carbon Pricing Costs For Millions of Canadians

Jennifer L
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Canada Carbon Rebate to Offset Carbon Pricing Costs For Millions of Canadians

Canada’s Prime Minister, Justin Trudeau, recently announced the rollout of the carbon rebate, now known as the Canada Carbon Rebate. This rebate is designed to offset the expenses Canadians incur from carbon pricing when purchasing gasoline and is distributed quarterly on the 15th of each month, starting from April. 

The Canada Carbon Rebate Program

The Canada Carbon Rebate (CCR), formerly known as the Climate Action Incentive Payment (CAIP), is a tax-free amount designed to help eligible individuals and families offset the cost of federal carbon price. It includes a basic amount and a supplement for residents of small and rural communities.

The amount Canadians receive from the carbon rebate varies depending on their province of residence and household size. Each year, the rebate is determined based on the anticipated revenue collected by the federal government from carbon pricing in each province. 

For instance, a single taxpaying adult in New Brunswick can expect to receive approximately $95 in each quarterly payment. In contrast, a family of four in Alberta is likely to receive $450 per deposit. 

Provinces where fossil fuels contribute more to electricity generation receive higher rebates due to the higher carbon pricing costs borne by consumers. Starting from the last payment of the year, a 10% increase in the rural supplement acknowledges the greater energy needs of rural residents and their limited access to cleaner transportation options. 

This initiative is a cornerstone of Canada’s strategy to reduce emissions and build a sustainable future, as emphasized by Steven Guilbeault, Minister of Environment and Climate Change. He highlights that pricing pollution is an effective method to cut emissions while ensuring all revenues are returned to Canadians. 

The Canada Carbon Rebate aims to provide households with extra income every three months, supporting essential expenses such as groceries and rent. 

  • Canadians can use an online estimator tool to gauge their potential rebate, ensuring transparency and clarity in the process.

Here are the key details to keep in mind:

Distribution and Eligibility:

The Canada Carbon Rebate returns 90% of the revenue collected from the carbon levy to households in eight provinces where it is applicable. Provinces like British Columbia and Quebec, with their own carbon pricing systems, do not receive federal rebates.

Installments and Amount:

The rebate is distributed in four instalments annually, tailored to household size and province of residence. Families of four can expect to receive between $190 and $450 in this instalment.

Factors Affecting Rebates:

Provinces where fossil fuels contribute more to electricity generation receive higher rebates, reflecting higher carbon pricing costs borne by consumers in those regions.

The announcement also marks the deadline for small businesses to file tax returns to qualify for the new automatic refundable tax credit aimed at offsetting carbon pricing costs. This initiative replaces a previous grant system that saw limited success, returning only $35 million of an owed $2.5 billion from April 2019 to March 2024.

There have been challenges with bank deposits failing to clearly identify the rebates as intended by the government. This causes confusion among recipients. Recent legislative changes now mandate banks to use the label “CdaCarbonRebate” for these deposits, aiming to enhance clarity and transparency for recipients.

These developments underscore Ottawa’s ongoing efforts to manage carbon pricing impacts on both households and small businesses. Overall, it reflects broader strategies to address climate change while supporting economic resilience.

Eureka Moment! Amazon Hits 100% Renewable Energy Goal 7 Years Ahead

Saptakee S
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Eureka Moment! Amazon Hits 100% Renewable Energy Goal 7 Years Ahead

July 10 marked an extraordinary moment for Amazon, reaching its 100% renewable energy goal a stunning seven years ahead of schedule. Originally set for 2030, the rapid transition across all operations surprised the world. So how did Amazon achieve this moment of massive success? Let’s discover…

Decoding Amazon’s Journey to 100% Renewable Energy

Bloomberg NEF reported that Amazon has invested billions in installing 500 solar and wind projects globally. This is enough to power 7.6 million U.S. homes. The retail giant has been the world’s top corporate buyer of renewable energy in the last four years. They have set an example by adapting to the growing demand for AI while exploring new energy sources and approaches for achieving carbon neutrality.

Amazon’s Chief Sustainability Officer Kara Hurst has elaborately said,

“Reaching our renewable energy goal is an incredible achievement, and we’re proud of the work we’ve done to get here, seven years early. We also know that this is just a moment in time, and our work to decarbonize our operations will not always be the same each year—we’ll continue to make progress, while also constantly evolving on our path to 2040. Our teams will remain ambitious, and continue to do what is right for our business, customers, and the planet. That’s why we’ll continue investing in solar and wind projects, while supporting other forms of carbon-free energy, like nuclear, battery storage, and emerging technologies that can help power our operations for decades to come.”

Once all projects are operational, they can remove approximately 27.8 MMT CO2 annually. Here are some remarkable achievements driving Amazon’s transition to 100% renewable energy:

Mississippi’s Wind Farm Powering Amazon Data Centers

Delta Wind, one of the Mississippi’s largest wind farms supplies carbon-free energy to power Amazon’s local operations and data centers. Apart from this, Amazon has also partnered with Entergy to develop 650 MW of new renewable energy projects in Mississippi over the next three years. It aims to reach 1.3 GW of clean energy through solar and wind farms in the state.

Amazon Leads in Offshore Wind Projects in Europe

Currently, Amazon supports 1.7 GW capacity across six offshore wind farms in Europe. It expects to power 1.8 million average European homes once they become 100% operational. This makes Amazon the top corporate purchaser of offshore wind globally.  The 750 MW Amazon-Shell HKN Offshore Wind Project which began operations last year, provides renewable energy across the Dutch coast.

Expanding Renewable Energy in Asia Pacific

Amazon has a robust grip over the Asia Pacific region. Its portfolio includes 80 renewable energy projects throughout India, Australia, China, Indonesia, Japan, New Zealand, Singapore, and South Korea. The company invested in 50 wind and solar projects with a total capacity of 920 MW in India, alone.

As the largest corporate purchaser in Japan, Amazon has enabled 20 projects, including 14 onsite solar installations and six offsite wind and solar projects. Amazon has helped Japan overcome its energy challenges. It works closely with industry groups and policy stakeholders to expand renewable energy procurement in the corporate sector.

AI Powers Solar Storage for 24/7 Energy

Energy demand for decarbonizing the grid is unstable when reliant on solar and wind power. Amazon believes incorporating AI and ML in carbon-free energy (CFE) can be a game-changer for grid stability. The company has developed a unique formula for installing battery storage systems with solar projects to ensure an uninterrupted CFE supply. A recent blog post highlights the significance of the Baldy Mesa solar farm, operated by AES, where machine learning models from Amazon Web Services (AWS) predict optimal times for the battery to charge and discharge energy. This innovation enhances the efficiency of solar-powered projects, even when sunlight is limited.

According to the International Energy Association (IEA),

“The global fleet of wind turbines generates over 400 billion data points annually. AI and ML models can use this data to enhance the efficiency of carbon-free energy projects.”

Amazon’s Net Zero Strategy and Carbon Footprint 

Amazon’s goal is to achieve net zero carbon emissions by 2040. This is a decade ahead of the Paris Climate Agreement timeline. By joining the Climate Pledge, Amazon believes in regularly measuring and reporting their GHG emissions, implementing decarbonization strategies, and using credible carbon offsets to neutralize any remaining emissions.

Amazon carbon footprintsource: Amazon 2023 sustainability report

According to its annual sustainability report, Amazon reported a 3% reduction in overall emissions in 2023. Its total emissions fell from 70.74 MMT CO2e equivalent in 2022 to 68.82 MMT CO2e in 2023, with meeting the target of 100% renewable electricity globally.

Wood Mackenzie Predicts $196 Billion Investment in CCUS by 2034

Saptakee S
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Wood Mackenzie Predicts $196 Billion Investment in CCUS by 2034

Wood Mackenzie, the global leader in providing data analytics and solutions in sustainability and renewable energy has recently rolled out a media statement on cost brackets for expanding CCUS, worldwide. It has predicted an investment of around $196 billion in 2034.

What Does Wood Mackenzie’s 10-Year CCUS Market Forecast Say?

In this analysis, Wood Mackenzie has estimated that global carbon capture capacity can surge up to 440Mtpa and storage capacity will go up to 664 Mtpa. The combined process will require $196bn of total investment by 2034 out of which USD 80B is expected to come from the North American and European Governments. 

We have discovered from the report that nearly half of global investment focuses on CO2 capture. The remaining half will be distributed between the transport and storage sectors at $53B and $43B, respectively. Plans are underway to allocate 70% of the total value chain investment in North America and Europe. The report has further emphasized that increasing production projections does not mean that Wood Mackenzie expects carbon capture supply to meet immediate demands. Long-term projects anticipated for 2034 need up to 640 Mtpa of CO2 storage, but expected commissions are lacking by 200 Mtpa.

Hetal Gandhi, APAC CCUS lead with Wood Mackenzie has put her insights in the press release.

She said out of the total announced projects, 71% are in North America and Europe, backed by government incentives. The US Inflation Reduction Act, UK business models, Canada’s Investment Tax Credit, and the Netherlands SDE++ scheme are key contributors. The new EU Industrial Carbon Management Strategy is also expected to boost European projects. She highlighted that China and India are the largest emitters in the Asia-Pacific region but lack proper CCS infrastructure.

Her predictions say that the power and chemical sectors will face significant gaps between demand and supply until 2034. This region needs utmost CCUS upgradation. Notably, China, India, Latin America, the Middle East, and Africa face development constraints due to a lack of policy, regulatory frameworks, and funding support. Government funding for CCUS in key countries totals around $80 billion. The US leads with 50% of the total, followed by the UK at 33% and Canada at 10%.

Wood Mackenziesource: Wood Mackenzie

Using the Investment Effectively, A Wood Mac Study

Following the previous analysis, WoodMac has deep-dived into the role of CCUs in global decarbonization. The research wing has analyzed that some countries are investing in CCUS to decarbonize tough sectors like cement, chemicals, steel, refining, and power. On the other hand, some view CCUS as a long-term decarbonization tool.

 Hetal has schemed out some important points to effectively utilize the investment. She believes that CCUS can be most effective when the technology is affordable and sustainable infrastructure is in place for carbon capture and storage. The key focus should be on heavy emitters.

CCUS has garnered significant attention for addressing climate change. Currently, the global CCUS capacity is around 63 Mtpa, which might surge to 1,700 Mtpa by 2050. However, to keep global warming within 1.5 degrees above pre-industrial levels, capacity would need to reach 7,750 Mtpa. Presently, most CCUS projects are targeting the power and gas sector. In the future, CCUS will be crucial for the cement and steel industries, which have limited alternatives to fossil fuels. The production of blue hydrogen will also benefit significantly from CCUS.

Click here to know what 2024 looks like for CCUS, as per Wood Mac.

Wood Mackenziesource: Wood Mackenzie

CCUS Future: Challenges Amid Opportunities

Wood Mac has also outlined some of the challenges of CCUS. The team analyzed that despite progress, CCUS uptake remains limited. Fauzi Said, senior research analyst at Wood Mackenzie, has developed one solution focusing on hub-based storage ecosystems. He said,

“With storage capacities more concentrated than the spread-out capture capacities, hub-based storage ecosystems will evolve especially in Europe and APAC.”

CO2 sequestering costs are high compared to current carbon prices and practically no revenue is in it. Successful projects have managed costs with incentives, but future success relies on effective policies and well-structured carbon pricing schemes. Furthermore, amine-based processes dominate CCUS, which is not enough. They need more advanced technology to capture CO2 cheaply and with scarce carbon concentration. Another challenge is carbon dioxide’s corrosive nature which makes transportation costly and storage challenging. Thus, cost is a significant factor driving the process.

CCUS Wood Mackenzie

source: Wood Mackenzie

However, in last month’s Wood Mac’s report, we discovered that ExxonMobil has established a strong position in the US CCUS. Wood Mackenzie made a detailed study that figured out, “The company’s US portfolio achieves a weighted average return of 20% in their base case. Some projects yield even higher returns.”

We hope Wood Mackenzie will come up with more updates on global CCUS status and developments very soon.

Silver Lining: Soaring Demand Outstrips Supply, Pushing Prices to The Roof

Jennifer L
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Silver Lining: Soaring Demand Outstrips Supply, Pushing Prices to The Roof

Silver is at the heart of the clean energy transition, essential for solar cells and electric vehicles (EVs) due to its unmatched conductivity. As demand from the photovoltaic industry surges, outpacing supply, silver’s pivotal role highlights both the opportunities and challenges in achieving a sustainable future.

Silver experts highlighted significant challenges in meeting global demand despite robust price signals favoring increased metal production amid the expanding energy transition. This metal plays a critical role in EVs and solar cells, with demand surpassing supply in recent years, leading to depleted inventories. 

According to the Silver Institute, photovoltaics alone are projected to account for 19% of global silver demand in 2024, equivalent to 232 million ounces. This represents almost a 20% increase from 2023 and a substantial 96% surge from 2022 levels.

Anticipating a deficit of 215.3 million ounces in 2024, the Silver Institute forecasts that industrial applications will drive 58.3% of the world’s total demand of 1.2 billion ounces. However, global silver supply primarily results from byproduct production associated with other metals. Moreover, despite high prices, there’s limited incentive for new production.

silver deficit

Shining Spotlight on Silver

Adrian Day from Adrian Day Asset Management emphasized the severity of the silver deficit, attributing it to surging demand from sectors like solar panels and EVs, which have seen demand triple in 3 years. He noted that inventories are critically low with no substantial stockpiles available to mitigate the shortage.

Day further underscored that only about 30% of silver production comes from primary silver mines, with the majority being sourced as a byproduct. This setup means that the supply of newly mined silver does not respond proportionately to price fluctuations. As a result, this could lead to heightened price volatility.

Silver prices have surged significantly this year, prompting speculation about their potential peak in the remaining 6 months. A crucial element to monitor is the supply and demand dynamics, as silver demand consistently exceeds supply.

Historically, silver demand was evenly split between industrial use and investment. However, industrial demand has surged recently, now accounting for 64% of global silver demand, a 19% increase from the previous year.

The World Silver Survey reports that 2024 marks the 5th consecutive year of a silver shortage. In 2023, demand exceeded supply, resulting in a market deficit of over 142 million ounces. This shortfall is projected to nearly double to 265 million ounces by the end of 2024 due to rising industrial demand.

This upward trend is expected to continue, driven primarily by the Green Energy Transition, especially solar energy. 

Photovoltaic Surge: Solar Energy’s Growing Appetite for Silver

A growing solar power industry is fueling up the surge in the demand for silver, essential for manufacturing photovoltaic (PV) panels. Due to its high electrical conductivity, thermal efficiency, and optical reflectivity, silver is integral to solar PV production. Consequently, mining companies are aiming to boost output as silver prices climb to decade highs.

silver price in Trading View

Global investment in solar PV manufacturing more than doubled last year to around $80 billion, accounting for 40% of global investment in clean-technology manufacturing, according to the International Energy Agency (IEA). China significantly increased its investment in solar PV manufacturing between 2022 and 2023.

Global renewable capacity increased by 50% to nearly 510 gigawatts last year—the fastest growth rate in 3 decades. Three-quarters of this growth came from solar PV energy, as reported by the IEA.

Demand for silver from solar PV panel manufacturers, especially in China, is forecast to increase by almost 170% by 2030. The amount could reach about 273 million ounces, which would constitute about one-fifth of total silver demand, according to investment manager Sprott.

Coeur Mining is expanding to meet the rising silver demand, completing a significant expansion of a mine in Nevada, which will become the largest source of domestically produced silver in the U.S.

London-based Hochschild Mining is also expanding its silver operations, aiming to secure permits for a silver project in southern Peru later this year. Scheduled to start production in 2027, the project is expected to add 50 million ounces of silver annually.

Some experts noted that given the underlying industrial demand dynamics and existing supply constraints, the industry may be seeing the start of a silver bull market.

Silver’s New Gold Rush

The boom in demand has led to soaring silver prices, reaching $31.3/oz as of writing. This price surge has bolstered the share prices of silver miners. 

However, rising silver prices might force solar PV panel manufacturers to increase their prices later this year.

Paul Wong, a market strategist at Sprott, predicts that silver could see a rise similar to gold, which hit eight straight sessions of record highs in April. Despite trailing gold’s popularity with central banks and sovereign institutions, silver maintains a strong correlation with gold. Wong expects substantial buying from the photovoltaic industry to drive further silver demand, noting that:

“Similar to how gold bullion has soared due to a new wave of major purchasers among central banks and sovereign entities, silver has and will likely see even more substantial buying from the photovoltaic industry.”

Discussing government influence on silver mining, industry leaders highlighted regulatory policies in major jurisdictions like Mexico. The South American nation can either stimulate or deter investment in silver projects due to lengthy permitting processes. 

As silver demand continues to soar, driven by its critical role in solar power and the clean energy transition, the industry faces significant challenges in meeting global needs. Despite robust price signals and increased production efforts, the supply constraints highlight the urgency for innovative solutions and strategic investments to sustain this pivotal resource’s future.

Brick by Brick: Lego Builds a Net Zero Future With Stricter Carbon Reductions for Suppliers

Jennifer L
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Brick by Brick: Lego Builds a Net Zero Future With Stricter Carbon Reductions for Suppliers

Lego, the world’s leading toy manufacturer, is taking significant steps to meet its net zero goals by mandating that its suppliers set near-term emissions reduction targets by 2026 under its new Supplier Sustainability Program. This initiative is crucial for Lego to stay on track with its commitment to reducing its carbon footprint by 37% by 2032 and achieving net zero by 2050. 

Carsten Rasmussen, Lego’s Chief Operations Officer, emphasized the importance of sustainability in business operations and supplier selection. He stated, 

“Sustainability is a license to operate and a requirement of how we do business, including how we select our suppliers. We have ideas and we have a pathway; we cannot do it alone.”

Lego’s Colorful Path to Net Zero 

The toy industry produces an estimated 26 million metric tons of greenhouse gas (GHG) emissions annually. But the industry rarely makes public commitments regarding supplier emissions, making Lego stand out with this announcement. 

The Danish toy maker’s initiative builds on a 2014 program aimed at measuring and mitigating the environmental impact of its close partners, involving 158 suppliers as of December’s sustainability progress report.

The Lego Group’s 2050 net zero emissions pledge includes Scope 1, 2, and 3 emissions. Notably, 99% of Lego’s emissions stem from Scope 3 activities, which include the entire supply chain. 

Lego greenhouse gas emissions or carbon footprint by category
Source from Lego’s website

Setting a long-term goal helps ensure the company achieves its climate targets, with the immediate priority of meeting its 2032 carbon reduction goals. The toy manufacturer employs various initiatives to reach those goals and has increased spending on climate actions by 60% in 2023 versus 2022. 

Their major initiatives include the following and their sustainability 2023 progress:

Increasing capacity and production of renewable energy at sites:

  • Reduced absolute emissions across manufacturing sites, stores, and offices.
  • Increased production of renewable energy in factories and purchased renewable energy for factories, offices, and stores.
  • Commenced construction of a new factory in Vietnam and broke ground on a new factory near Richmond, Virginia, USA, both with solar facilities to match total annual energy requirements.
  • Increased solar capacity investments by adding 2.2 MWp, bringing peak capacity to 15.6 MWp across production sites in Denmark, the Czech Republic, Hungary, Mexico, and China (16% increase from 2022).
  • Planning to build a solar park in Billund, Denmark, to cover energy requirements of offices and sites in the town, expected to be operational in 2027.

Taking CO2 emissions into account across all business decisions:

  • Implemented shadow carbon pricing on key investments to encourage low-carbon initiatives.
  • Ensured emissions related to new investments are considered before financial decisions.
  • Established responsible travel guidelines to reduce employee travel, particularly international air travel, by 50% by 2032 compared to 2019.

Joining forces with suppliers to collectively reduce environmental impact:

  • Continued collaboration with suppliers through the Engage-to-Reduce program (established in 2014).
  • Engaged 158 suppliers in 2023, up from 138 in 2022, marking a 14.5% increase.

An Expensive Climate Commitment

Lego GHG emission reduction target
Source from Lego’s website

Lego also plans to triple its investment in environmental sustainability over the next 3 years, spending over $1.4 billion. 

This investment will support designing carbon-neutral factories and buildings, increasing renewable energy production and acquisition at its plants, offices, and stores, and incorporating carbon dioxide emissions into all corporate decisions. 

This move places the company alongside industry rivals Hasbro and Mattel, who have made similar environmental pledges. In 2022, Hasbro set goals to reduce greenhouse gases by 40% by 2030 and achieve net zero emissions by 2050. Mattel committed to reducing plastic packaging by 25% per product by 2030.

One of the toy industry’s biggest challenges is plastic use; it uses nearly 1% of global plastic production.

Lego’s total footprint for 2022 was about 1.6 million metric tons, up from 1.5 million metric tons in 2021. Finding alternatives to plastic is a top priority for the company, though reducing plastics and cutting emissions don’t always align. 

In September, Lego backed away from a commitment to make its bricks entirely from recycled plastic as it wouldn’t significantly reduce emissions. 

To date, Lego has tested over 600 materials, including bio-polyethylene, used in botanical elements and Minifigure accessories. In 2023, 18% of the resin purchased for bricks was from renewable or recycled sources mixed with virgin materials.

From Playtime to Planet-Saving Actions

Additionally, Lego will invest in global carbon reduction initiatives, such as supporting carbon capture programs like that of Climeworks. In 2023, Lego entered an agreement with Climeworks, investing US$2.4 million in their carbon capture and storage services. 

Climeworks specializes in removing historic and unavoidable CO2 emissions from the atmosphere through direct air capture and storage facilities. The process involves drawing air into large collector containers, capturing the CO2 on a filter, and then storing the collected CO2 deep underground in Iceland with Climeworks’ storage partner, Carbfix. This CO2 is eventually transformed into stone through an accelerated natural process.

This initiative reflects Lego’s commitment to addressing both current and historical carbon emissions, further enhancing its efforts to achieve net zero emissions by 2050.

By implementing these measures, Lego is taking a leadership role in sustainability within the toy industry, pushing for broader environmental responsibility and innovation among its suppliers and beyond.

Rimba Raya Resumes Operations in Borneo with Epic Legal Victory

Saptakee S
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Rimba Raya Resumes Operations in Borneo with Epic Legal Victory

Rimba Raya, the world’s largest carbon offset REDD+ project developer, has won a legal victory in Indonesia. This win is a significant step towards resuming operations at their expansive site in Borneo. As reported by Bloomberg on July 11, the Jakarta State Administrative Court overturned Indonesia’s Ministry of Environment and Forestry’s decision, thereby restoring the license for the Rimba Raya Conservation project.

Rimba Raya: Absorbing Carbon Emissions and Generating Carbon Credits

The Rimba Raya project in Indonesian Borneo generates carbon credits by conserving a forest area nearly the size of Las Vegas. These credits mainly come from its High Conservation Value (HCV) peat swamp forest, making it one of the world’s largest REDD+ projects. This unique area separates oil palm plantations from Tanjung Puting National Park, which hosts a vast orangutan sanctuary and has a rich biodiversity. This makes Rimba Raya an excellent conservation project.

Another notable feature of Rimba Raya is its extensive coastal tropical heath and peat swamp forest, which once blanketed much of southern Borneo. This vast swamp area actively removes approximately 130 million tonnes of carbon emissions.

Rimba Raya project was the first REDD+ initiative to be validated under the Verified Carbon Standard (VCS) and achieved triple-gold validation from the Climate Community and Biodiversity Alliance Standard (CCBA).

CarbonPlan, the climate data provider has reported that Rimba Raya has issued more than 30 million credits since 2013 and more than 25 million of those have been retired. This makes it the world’s largest single source of offsetting.

The Epic Legal Victory Fuels Rimba Raya’s Revival

The legal case continued for almost a year, after which the Jakarta State Administrative Court gave its ruling in favor of Rimba Raya. From various credible media resources, we discovered that Rimba Raya can now operate across 36,000 hectares of tropical peat swamp forest in Central Kalimantan, the largest Indonesian province by area.

Rusmin Widjaja, President of The Board of Directors at PT Rimba Raya Conservation

Rimba Raya Conservation will now focus on rebuilding its capacity and is also working to resolve a separate dispute with its partner, Hong Kong-based InfiniteEARTH Ltd.

Rimba Raya

Going Back in Time of License Revocation and Legal Battle

In April carboncredits.com reported that The Indonesian Ministry of Environment and Forestry cited three main violations by PT Rimba Raya Conservation: The main allegation was the unauthorized transfer of the permit to a third party without approval from the Minister of Environment and Forestry. The second accusation was conducting carbon trading transactions beyond its licensed area, violating its agreement with Tanjung Puting National Park. The company also faced criticism for failing to pay Non-Tax State Revenue (PNBP) as required by the law.

According to Bloomberg, this decision had put the future of the Rimba Raya project at risk. It was significantly worrisome for prominent carbon traders like InfiniteEARTH Ltd and Carbon Streaming Corps who have heavily invested in Rimba Raya’s credits. The situation showcased how complex supply chains and uncertain regulations pose challenges, even though carbon offsets are crucial for projects like Rimba Raya.

The Future of Rimba Raya: A Bloomberg Analysis

However, the recent court ruling lets Rimba Raya restart activities, rebuild capacity, and resolve disputes with InfiniteEARTH. How will this decision affect the Indonesian carbon credit market and Rimba Raya’s investors? Let’s read the Bloomberg analysis.

Will carbon credit demand rise?

BloombergNEF predicts that demand for these credits could rise sharply, possibly reaching a market value of $1 trillion by 2050. Despite turbulence and differing opinions on credibility, the demand for carbon offset credits is expected to increase in the future. Analysts at BloombergNEF (BNEF) foresee a significant expansion in VCMs, even as companies like Alphabet Inc., Google’s parent company, reassess their involvement.

Bloomberg tried to reach the Indonesian government and the CEO of PT Rimba Raya Conservation for their views but in vain.

Impact on partners and investors

The uncertainty around Rimba Raya’s future has impacted its partners and investors. Verra has temporarily suspended InfiniteEARTH’s account while clarifying its role with PT Rimba Raya. This consequently affected the fair value of the Rimba Raya stream, nullifying it to zero on March 2024.

On May 31, 2024, the company announced major management and board changes. Christian Milau, the former CEO of Equinox Gold, has been appointed as the new interim CEO, with Olivier Garrett taking on the role of board chairman.

However, on a positive note, Carbon Streaming, which has an agreement with InfiniteEARTH for Rimba Raya credits, is evaluating the situation. They are communicating with partners and considering the legal options to protect their investment. The company promised to continue the project, despite unclear regulations in Indonesia, as noted in its Annual Information Form on the SEDAR+ platform. Meanwhile, InfiniteEARTH argued that Indonesia’s legal framework for carbon projects lacks clarity and denied any wrongdoing.

Indonesia plans to lift its ban on overseas credit sales to boost revenue, ensuring compliance with carbon trading rules and the Paris Agreement. All in all, this epic ruling on Rimba Raya is going to etch a history in Indonesia’s carbon credit market.

Disclaimer: Data and facts have been collected primarily from Bloomberg.

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