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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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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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. 

Sublime Systems Lands $87 Million Funding from DOE for Low-Carbon Cement

Jennifer L
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Sublime Systems Lands $87 Million Funding from DOE for Low-Carbon Cement

Sublime Systems, a startup pioneering a revolutionary method of producing fossil-fuel-free cement, has been chosen by the U.S. Department of Energy’s Office of Clean Energy Demonstrations (OCED) to start negotiations for up to $87 million in funding under the Bipartisan Infrastructure Law and Inflation Reduction Act. 

The funding, part of the Industrial Demonstrations Program, aims to support projects like Sublime’s First Commercial Electrochemical Cement Manufacturing initiative. Selected among 33 projects spanning over 20 states, these initiatives collectively receive up to $6 billion to showcase their commercial-scale decarbonization solutions. 

These efforts are crucial for transitioning energy-intensive industries towards net zero emissions. They can also help bolster local economies, generate high-quality jobs, and mitigate harmful emissions detrimental to public health. 

Cement’s Carbon Challenge

To understand the innovative strides of Sublime Systems, it’s crucial to grasp the conventional cement-making process and its environmental hurdles.

Cement, when mixed with water, sand, and gravel, constitutes concrete, the second most consumed substance globally after water. This process has remained largely unaltered for centuries. 

Unfortunately, producing traditional cement contributes significantly to carbon emissions, accounting for about 8% of the world’s total emissions. That’s because using ordinary Portland cement (OPC) process to manufacture traditional cement relies on fossil-fueled kilns operating at extreme temperatures. 

This is what Sublime Systems will try to address. Founded in 2020, the Massachusetts-based company works with a clear mission – to revolutionize cement production and mitigate its environmental impact. Here’s the Sublime process of cement manufacturing:

Sublime Systems green cement production

Through innovative electrochemical processes, Sublime has scaled up its cement manufacturing to a pilot capacity of 250 metric tons per year (TPY). The forthcoming commercial facility in Holyoke will be capable of producing up to 30,000 TPY of Sublime Cement™. It’s slated to open as early as 2026, boasting significant reductions in fossil fuel pollution typically associated with industrial growth.

Sublime Systems’ approach hinges on two primary innovations: electrochemical reactions and renewable energy integration. 

Instead of traditional methods that rely on high temperatures, Sublime employs electrochemical reactions to produce cement. This revolutionary approach eliminates the need for burning fossil fuels, thereby significantly reducing carbon emissions.

Then by using electricity to power these reactions, Sublime’s plants have the potential to integrate renewable energy sources such as solar and wind. This strategic shift reduces emissions and aligns with renewable energy goals, contributing to a more sustainable future.

Other companies are creating innovative ways to capture carbon dioxide to make it as an ingredient in its cement-free, carbon-negative concrete.

Sublime Systems’ Path to Sustainable Cement Production

Dr. Leah Ellis, CEO and Co-Founder of Sublime Systems highlighted the biggest hurdle hindering this kind of breakthrough innovation in fighting climate change, saying:

“Access to sufficient capital for industrial-scale demonstrations is the single biggest obstacle preventing breakthrough innovations from reaching the scale humanity needs to combat the climate crisis.”

Ellis praised the Department of Energy for addressing this obstacle through funding from OCED’s Industrial Demonstrations Program (IDP). She expressed excitement about collaborating with the department on funding their first commercial manufacturing scale-up. It would be able to produce clean cement while fostering economic opportunities for the surrounding community.

Furthermore, OCED applicants, including Sublime Systems, were mandated by the DOE to submit Community Benefits Plans (CBPs). These plans outline strategies to engage communities, create high-quality jobs, and prioritize economic and environmental justice for disadvantaged groups. 

In Sublime’s case, their decision to establish their first commercial manufacturing facility in Holyoke, Massachusetts was guided by screening tools developed by Justice 40. The startup anticipates the creation of hundreds of jobs during the construction phase of the project. 

The company has forged a strategic partnership agreement with the United Steelworkers (USW), representing approximately half of unionized cement workers in the U.S., focusing on operational roles in the Holyoke plant. Additionally, Sublime has entered into a Memoranda of Understanding to negotiate project labor agreements with building trade unions in the region for the construction phase.

Sublime Systems’ Holistic Approach

Augmenting Sublime’s Community Benefits Plan is a collaboration with the Smithsonian Science Education Center (SSEC). The OCED selection includes funding to leverage SSEC’s educational programming resources to support this objective.

U.S. Secretary of Energy Jennifer M. Granholm emphasized the critical role of advancing decarbonization technologies in pivotal industries such as steel, paper, concrete, and glass. She underscored the significance of President Biden’s industrial strategy, facilitating the Department of Energy’s (DOE) historic investment in industrial decarbonization. 

Granholm highlighted the aim to substantially reduce emissions from hard-to-decarbonize sectors, ensuring that American businesses and workers remain competitive on the global stage.

Sublime has already secured reservations for over 45,000 tons of Sublime Cement™, demonstrating strong demand for their sustainable cement.

Sublime Systems’ selection for funding under the U.S. Department of Energy’s IDP marks a significant step towards revolutionizing cement production. With innovative electrochemical processes and a commitment to community engagement, Sublime is poised to lead the way in decarbonizing the cement industry, fostering economic growth, and advancing environmental sustainability.

Singapore’s CRX Partners with Malaysian University for Carbon Projects

Saptakee S
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Singapore’s CRX Partners with Malaysian University for Carbon Projects

In the latest developments in the carbon market, Malaysian University – Universiti Teknologi Malaysia (UTM) and Singapore-based Climate Resources Exchange International (CRX) have collaborated by signing a Memorandum of Understanding (MoU) to spearhead carbon-related projects in Malaysia. This alliance is poised to help both countries leverage their expertise to address the pressing climate challenges.

Unlocking Advantages of the CRX-UTM Partnership in Malaysia

Singapore-based CRX is a carbon management consultancy firm dealing with renewable projects, carbon profiling, carbon offsetting, and carbon trading.

The MoU was signed by the UTM Vice-Chancellor, Professor. Datuk Fauzi and the CEO of CRX, Mr. Vinod Kesava towards the end of March. This collaboration is expected to change the carbon economy of Malaysia.

Mr. Vinod Kesava has highly applauded the partnership and has said,

 “It is our great privilege and honor to collaborate with UTM in addressing the climate emergency and provide credible and pragmatic solutions for climate change mitigation and adaptation. Carbon finance is a critical element in developing robust projects with clear and transparent methodologies for monitoring, reporting, and verification. This cooperation paves the roadmap forward for accelerating initiatives created by putting our heads together and working as one.”

We note them down below:

Fulfill Commitments to the Paris Agreement

One key goal of this partnership is to produce carbon credits in Malaysia, aligning with the nation’s Paris Agreement commitments and net-zero targets. These credits will flow through Malaysia’s voluntary carbon market (VCM) exchange- the Bursa Carbon Exchange (BCX).

(BCX is a shariah-compliant multi-environmental product exchange that facilitates the trading of high-quality carbon credits via standardized carbon contracts.)

Introducing Climate-Friendly Solutions

Both organizations will primarily focus on climate-friendly solutions like:

  • Harnessing blue carbon from oceanic areas
  • Building large-scale afforestation projects
  • Inducting technology in agricultural activities- For example, producing biochar from agricultural waste via controlled pyrolysis.

Malaysia’s forests play a crucial role in reducing climate impact by sequestering approximately 259 MtCO2e annually. This is achieved legally by conserving the forests and demarking protected areas for national parks and wildlife sanctuaries.

Paving the road for EVs.

With the EV revolution happening globally, CRX plans to ramp from EV infrastructure in Malaysia through its registered Electric Vehicle Accelerator (EVA) Grouped Project Activity. Malaysian EV operators will join EVA and generate revenue from carbon credits through their involvement.

Forging a Joint Effort Towards Carbon Credit Development

    • According to McKinsey Nature Analytics, the country has a carbon crediting potential of up to 40 MT of CO2 annually through Nature-based solutions (NBS) projects. This is equivalent to 3% of the global NBS potential.

The collective expertise and resources of academia and industry have the potential to pave the way for a more sustainable future. CRX and the Malaysian university will pool their resources to create premium carbon credits. They would adhere to both compliance and voluntary market regulations through the procurement of carbon finance.

Late last year the organizations had agreed to bolster collaboration in renewable energy. Well, this partnership is an extension of the previous agreement that promised proper carbon capture, utilization, and storage. The expected output would be the generation of high-quality carbon credits in the Malaysian economy.

The CRX-UTM Collaboration: Powering Malaysia’s Net-Zero Drive

Malaysia strongly believes in robust collaboration between government, businesses, academia, and society to propel its net-zero ambition. UTM has supported the Malaysian government’s vision and has established an innovative sustainability agenda known as the UTM Sustainability Blueprint. It serves as a roadmap for sustainable practices within the university.

Professor Datuk Fauzi, Vice-Chancellor of UTM has noted,

“The partnership with CRX is a testament to unwavering commitment to tackling climate change and achieving net-zero emissions. Together, we are creating an unstoppable force that will drive global and local efforts to combat this urgent threat and shape a sustainable future for our planet.”

Furthermore, joining forces with a global brand renders significant recognition for the Malaysian University. CRX’s extensive expertise in international carbon trading offers UTM vast opportunities to engage in carbon credit projects. It will further give the institution exposure to industry stakeholders and governmental agencies in Malaysia.

As discussed by eminent leaders in academia, the collaborative activities between UTM and CRX will facilitate the exchange of knowledge, expertise, and research aimed at effectively addressing the impact of climate change.

The innovative carbon projects will catalyze the emergence of new industries and business opportunities. This, in turn, could contribute to job creation and economic diversification, positioning both Singapore and Malaysia as leaders in the global transition to a low-carbon economy.

All in all, these collaborative activities will bolster Malaysia’s ambition to become a net-zero country by 2050.

Emissions Futures Rally by Over 25%: Insights from Xpansiv’s CBL Platform

Jennifer L
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Emissions Futures Rally by Over 25%: Insights from Xpansiv’s CBL Platform

Explore the latest trends and developments in emissions futures trading, powered by data from Xpansiv Data and Analytics. Dive into the significant rally witnessed in CME Group’s CBL emissions futures, along with the surge in trading activity for lithium contracts.

Xpansiv offers robust market data from CBL, the world’s largest spot environmental commodity exchange, including daily and historical bids, offers, and transaction data for various environmental commodities traded on the CBL platform. 

This spot data is supplemented by forward prices from premier market intermediaries and aggregated registry statistics and ratings from leading providers.

Emissions Futures Surge at CME Group’s CBL Platform

CME Group’s CBL emissions futures experienced a significant rally of over 25% for December CBL N-GEO and CBL GEO futures prices. These contracts settled at $1.16 and $0.62, respectively, marking notable increases of 26.5% and 27.5% compared to the previous week. 

emissions futures Xpansiv CBL
Source: Xpansiv

The surge was particularly noticeable with CBL N-GEO futures jumping 12.0% on substantial volume, reaching nearly 2.2 million metric tons. However, spot prices remained relatively stable, with N-GEO closing at $0.49 (down 2.0% for the week) and GEO ending unchanged at $0.66.

Spot trading activity remained subdued, with a notable block of new vintage India solar credits settling at $1.90. Offers on the CBL central limit order book included various renewable credits from different regions. These include the following offers: 

  • vintage 2021 VCS 2250 Pakistan Delta Blue credits, 
  • vintage 2020 VCS 3279 Bangladesh cookstoves, and 
  • vintage 2022 VCS 2604 China Waste Handling Credits, among others.

The total trading volume for CBL emissions futures reached 3.1 million tons, with the spot exchange adding 84,722 tons. Three-quarters of these were settled through the mart’s portfolio of Global Emissions Offset™ contracts.

In the REC market, activity primarily centered around PJM markets, with Pennsylvania tier 1 v2024 is experiencing the most volume. Other notable trades included Maryland solar v2024 and Virginia solar v2023 credits as seen below.

REC activity Xpansiv CBLThe majority of the week’s total REC volume (87%) comprised bilateral trades settled through CBL’s same-day settlement infrastructure.

On the CBL screen, New Jersey solar credits stood out with over 6,000 credits matched in numerous transactions at $208. Additionally, the California Low Carbon Fuels Standard (LCFS) contract saw 15,000 credits settled, and 1,500 Regional Greenhouse Gas Initiative (RGGI) allowance contracts were exchanged.

Lithium CME Trading Boom

Another rising commodity witnessing a trading surge in the CME Group is lithium. 

Despite declining battery metal prices, trading of lithium in CME’s trading platform draws increased attention from funds. 

Open interest in the contract reached a record high of 24,328 contracts in the first quarter. This uptick shows increased liquidity within the contract and suggests a maturing market for the lithium industry.

CME lithium trading price

The growth in open interest follows a robust year in 2023, driven by arbitrage trading between China and the US. China’s introduction of its lithium carbonate contract on the Guangzhou Futures Exchange further contributed to trading activity. This underscores the growing importance of lithium derivatives markets for industry participants to manage price risks.

Despite challenges in the industry, such as an over 80% decline in lithium prices from their record high in November 2022, the surge in open interest provides assurance to funds and financial participants. It gives them confidence in trading the contract, enabling them to enter and exit positions as needed, even in the face of adverse price movements.

Moreover, the growing interest from Asia-based funds reflects the increasing appeal of lithium as an investment opportunity.

As emissions futures experience notable price movements and trading volumes, stakeholders navigate dynamic markets with insights from comprehensive spot firm data provided by Xpansiv. Meanwhile, the surge in open interest for lithium contracts signals growing investor interest and maturity in the lithium market, despite price challenges.

NetZero Raises Over $19M for Biochar Expansion in Brazil

Jennifer L
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NetZero Raises Over $19M for Biochar Expansion in Brazil

French carbon removal company NetZero has secured €18 million ($19.5 million) in new funding from government-backed impact investor STOA Infra & Energy. The capital infusion aims to support NetZero’s expansion by establishing new biochar plants in Brazil and other tropical regions. 

The announcement coincides with French President Emmanuel Macron’s state visit to Brazil and follows NetZero’s previous €11 million Series A funding round. The transaction marks the first investment of STOA’s carbon strategy and is significant as one of the largest deals in the biochar sector. It also represents the first major initiative aimed at scaling carbon removal efforts in emerging countries.

NetZero’s Vision for Climate, Agriculture, and Society

NetZero focuses on scaling up biochar in tropical regions, aiming to benefit both the climate and local communities.

Biochar, derived from plant residues and stored in soil, serves as an effective method for permanently removing carbon from the atmosphere while simultaneously enhancing soil quality. This results in increased agricultural productivity, reduced fertilizer usage, and higher crop yields.

NetZero’s innovative biochar technology addresses 3 significant challenges simultaneously:

  • Climate change: By producing biochar, NetZero removes atmospheric carbon for millennia, contributing to long-term carbon sequestration.
  • Sustainable agriculture: The use of biochar as a soil amendment improves soil quality and crop productivity, promoting sustainable farming practices.
  • Social impact: NetZero’s initiatives enhance farmers’ livelihoods and create well-paid industrial jobs in rural areas of developing countries, thereby fostering economic development and social equity.

 

NetZero’s unique approach to leveraging biochar allows for high-permanence carbon removal from the atmosphere. The company’s model aligns with the Intergovernmental Panel on Climate Change (IPCC) and the European Union’s recognition of atmospheric carbon removal as crucial for achieving net zero emissions globally. 

Among the IPCC’s validated technical solutions, biochar stands out for its proven ability to remove carbon from the atmosphere and store it in soils for extended periods.

What is Biochar? Harnessing Nature’s Power

The carbon removal company uses agricultural residues exclusively as feedstock for producing biochar. These residues include coffee or cocoa husks and shells, sugarcane bagasse, coconut shells and fibers, peanut/cashew shells, and more.

Through a process called pyrolysis, these organic materials undergo intense heating in the absence of oxygen. This results in the breakdown of complex molecular chains and the formation of a solid, stable product known as biochar.

biochar from biomass residues

While biochar can serve various purposes, NetZero’s primary focus lies in its agricultural application, where it is mixed with topsoil to enhance soil quality and fertility.

During the production process, substantial amounts of renewable energy in the form of gases and heat are generated. The startup then harnesses this energy, using a portion for its own operations while supplying the rest to local partners as electricity or heat. 

Biochar has gained attention for its ability to sequester carbon dioxide when introduced into the soil. 

The biochar carbon credit market, although still in its early stages, is rapidly expanding, with prices showing a bullish trend. Over the past year, deals for smaller volumes of credits have closed above $500/mt, per DGB Group report. Other deals have begun to clear below $100/mt. 

Recent bids for biochar credits ranged from $134/mt to $145/mt, indicating growing interest and potential in this sector, with matching offers between $152/mt to $167/mt.

Scaling Up for Impact

The $19.5 million capital raise will enable NetZero to scale up its technology and deploy production sites at a larger scale in tropical regions. The company aims to remove over 5 million tonnes of CO2 from the atmosphere by 2030.

STOA’s investment in NetZero represents a significant milestone in the biochar space. STOA, established in 2017, focuses on infrastructure and energy investments in developing countries. 

Currently, NetZero operates two commercial-scale biochar plants in Cameroon and Brazil. Last month, it partnered with Swiss commodities trader Ecom Agroindustrial Corp. to produce biochar from coffee husks in Brazil, with an expected annual production of over 4,000 metric tons.

In Mexico, another biochar startup, The Next 150, is ramping up its production, aiming to capture 150,000 tons of CO2 equivalent. If that happens, it would be the largest biochar initiative in Mexico.

Global biochar production reaches at least 350,000 metric tonnes annually, representing a remarkable 91% growth rate over 2021 production levels. 

From an economic standpoint, revenues generated by biochar and equipment manufacturers surpassed $600 million in 2023. This shows a substantial growth rate of 97% between 2021 and 2023. More notably, projections indicate further revenue growth, expected to reach over $3 billion by 2025.

In terms of market size, a research shows that biochar could reach over $1,540 million in 2031 as seen below.

global biochar market size 2024-2031

NetZero has been recognized for its achievements. For instance, it won the Milestone Award in the XPRIZE Carbon Removal competition sponsored by the Musk Foundation. The startup was also certified as a carbon-removal project under the Puro Standard. 

The company’s biochar plants contribute to carbon removal efforts and have already supplied carbon removal credits to companies like Boston Consulting Group, though specific volumes and prices were not disclosed.

With Brazil being one of the world’s largest agricultural countries and committed to decarbonization, it represents a strategic market for NetZero and the company’s goal of leading the biochar carbon removal revolution. 

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