Toyota announced that it will focus on rolling out hydrogen-powered vehicles in Europe and China with the aim of selling 200,000 units by 2030.
This move is a shift in Toyota’s focus, which revealed its plans to commercialize its revolutionary solid-state battery by 2027.
Toyota’s Hydrogen Fuel-Cell vs. Solid-State Battery
The Japanese carmaker unveiled last month that they’re determined to be a world leader in battery EV energy consumption. And then they presented their solid-state battery breakthrough just last week. This announcement stole the show as the company gave a sneak peek into its next-gen battery technology.
But Toyota’s latest plan on selling hydrogen fuel-cell vehicles outside its home market is yet another revelation.
The largest carmaker by sales has long placed a huge bet on hydrogen fuel cells as an alternative to fossil fuels. A fuel cell vehicle is also using an electric motor like an EV but it gets power from a fuel stack where hydrogen is stored.
However, Toyota sales of its hydrogen-powered vehicles weren’t a big hit. Since it launched its fuel-cell Mirai in 2014, the company has only sold less than 22,000 hydrogen cars.
The automaker also sold only over 3,900 fuel cell vehicles in 2022, which is so insignificant in relation to its 9.5 million vehicles in global sales. That’s mainly because of the expensive cost of hydrogen and the lack of infrastructure, particularly the hydrogen fueling stations.
So to bring down the costs of fuel-cell vehicles, Toyota will focus on Europe and China markets where hydrogen demand and production is much higher than Japan. By selling more volume, it can cut down costs by almost half, the company said.
Europe and the US have plans to supply 25 million tons of hydrogen annually by the end of the decade. China aims to produce much more, 40 million tons while Japan targets only 3 million tons by 2030.
Government subsidy programs announced this year will help ensure that the hydrogen industry will become a large-scale renewable power source.
While Toyota seeks to increase sales of its fuel cell vehicles outside Japan, the giant carmaker can still work with the Japanese government which highly considers hydrogen as an energy-security alternative. The company can supply local governments fuel cell ambulances, delivery and garbage trucks.
Toyota says fuel cells are better for longer-range, heavy-use vehicles because of their higher energy density. They predict that the global market for fuel cells will increase 15x from 2020 levels to $35 billion by 2030.
The automaker has set up a dedicated hydrogen-focused division, the Hydrogen Factory, to expand the application of fuel cell technology. It started operation with more than 1,300 staff.
They will help Toyota forge more partnerships on hydrogen technology such as its deal with Daimler Truck Holding to merge their truck businesses. Other automakers also plan to sell tens of thousands of hydrogen-powered transports.
Honda Motor aims annual sales of 60,000 fuel cell vehicles in collaboration with General Motors in 2030.
For Toyota, its decades-old knowledge in developing fuel cell technology is an edge but it can’t ignore China’s big potential for producing hydrogen-powered vehicles, too.
Still, tapping opportunities abroad brings confidence to the company as asserted by its Chief Technology Officer, Hiroki Nakajima, remarking that:
“This may be a strange way of putting it, but 200,000 is not a big number… We believe this number and more can be achieved.”
Tesla has signed a contract worth $413 million to install its Megapack battery energy storage in two facilities in Massachusetts for a total capacity of 800 MWh.
Megapack is a large-scale, lithium-based battery energy storage designed by Tesla to boost the stability of power grids and avoid outages. Each unit boasts a storage capacity of over 3 MWh, enough to power 3,600 homes for an hour.
Tesla’s Battery Energy Storage Systems
Though Tesla’s energy storage segment is much smaller than its automotive business, it has been growing massively. After sustaining consistent growth, it has significantly accelerated and expanded rapidly.
According to Tesla, its energy generation and storage revenues went up 148% year-over-year to $1.5 billion in Q1 2023, representing 6.6% of the company’s total revenues. The company also reported that its battery energy storage systems (BESS) deployment was up 360% year-over-year for the same period. It hit a new quarterly record of 3,889 MWh or almost 4 GWh.
BESS includes Powerwall (residential), Powerpack (businesses), and Megapack (large-scale commercial and utilities projects) deployment. All three energy storage systems use lithium-ion batteries.
Tesla Battery Energy Storage Deployed (in MWh)
Source: INSIDEEVs (https://insideevs.com)
Such tremendous growth has been particularly attributed to ramping up Tesla’s Megapack production capacity in its recently built 40 GWh Megafactory in California. The company aims to produce 10,000 Megapacks each year in this factory.
Earlier this year, Tesla also revealed plans to construct another 40 GWh Megafactory in Shanghai, China to meet the robust demand for its energy storage systems. Construction will start later this year.
The demand in the U.S. alone has been rising sharply, with the most recent deal with Massachusetts.
Under the contract approved by the Massachusetts Energy Siting Facilities Board, the Megapacks will power two battery energy storage facilities in the state with 218 units. The decision will allow the state to meet 80% of its 1 GWh energy storage deployment target by 2025. The two facilities under the Massachusetts contract are as follows:
Cranberry Point Energy Storage (developed and owned by Plus Power) – 150 MW/300 MWh BESS, with ancillary facilities in Carver, will serve the New England region.
Medway Grid – 140 Tesla Megapacks on site, with a substation including a 300 MVA transformer.
Megapack was launched in 2019 and first used in California with PG&E’s Moss Landing project. The agreement included over 400 Tesla lithium-ion Megapack batteries for a massive energy storage system of up to 1.2 GWh.
Large-Scale Renewable Energy Solutions
The smaller BESS, Powerpacks, was first deployed on the small island of Nantucket in 2019. The island is about 30 miles off the coast of Massachusetts. Tesla built a 6 MW/48 MWh battery energy storage system in Nantucket with 234 Powerpacks.
The Powerpack storage can power half the homes on the island for up to 8 hours. To date, Tesla has deployed Powerwalls and Powerpacks at more than 50,000 sites worldwide.
The recent $413 million contract with Massachusetts is by far the largest Megapack project of Tesla, delivering a total of 800 MWh energy storage capacity. The previous large Megapack project was the Victoria Big Battery, a 212-unit, 350 MW system.
More Than Just an Electric Carmaker
The rising demand for Tesla’s Megapacks signals that there’s a big market for grid-scale battery energy storage solutions. In fact, this market is expected to grow at over 24% rate through 2027.
According to research, the market will grow to over $15 billion in 2027 as shown below.
What drives this growth in grid-scale energy storage systems is the transition away from fossil fuels to renewable energy sources. Power from renewable sources is attached to microgrids and this stored energy will be provided later to homes, businesses, and utilities.
The surge in the use and future demand for renewable energy will further lead to global grid-scale BESS market growth. As per the International Energy Agency’s estimates, renewables will account for over 90% of global electricity capacity expansion from 2022-2027.
With that, growth in energy storage systems should be quicker in areas where renewables are also growing faster than average. For Tesla Energy, that means its battery energy storage solutions like Megapack have a big room for growth.
This business, along with its solar panel installations, is part of Tesla’s quest for sustainability. All of these operations, including manufacturing EVs, generate carbon credits by avoiding carbon emissions. Selling these credits provided Tesla with billions of dollars in revenue.
In its recent Q2 2023 financial results, the giant automaker reported $282 million in carbon credit sales, with total revenue beating expectations at almost $25 billion, 50% higher than year-ago sales of around $17 billion.
The company’s clean energy segment, though it’s not comparable yet with its electric car production, will be one of its large revenue streams.
Megapack, in particular, offers a powerful grid-scale energy storage capacity that can be recharged using clean and renewable energy sources. It helps stabilize the local grid, promote sustainable energy infrastructure, and create a source of power that’s safe for the people and the planet.
In a significant development for the renewable energy sector, Fervo Energy, a Houston-based startup, has announced a breakthrough in enhanced geothermal system.
The company has successfully demonstrated the commercial viability of its enhanced geothermal system (EGS) pilot, Project Red. This marks a major stride towards the realization of dependable, carbon-free energy sources.
Fervo Energy’s EGS expands the range of sites that can be tapped for geothermal energy. This expansion has been a long-standing goal for the renewable energy industry, with efforts dating back to the 1970s.
The successful demonstration by Fervo Energy is the first instance of EGS being implemented on a commercial scale.
The company recently completed a full-scale, 30-day well test at its Project Red site in northern Nevada. The project was able to generate 3.5 megawatts of electricity, enough to power approximately 2,625 homes simultaneously.
Project Red is set to connect to the grid later this year, supplying power to Google’s data centers and infrastructure throughout Nevada. This initiative is part of a corporate agreement between Fervo Energy and Google signed in 2021 to develop enhanced geothermal systems.
Fervo and Google Team Up for 24/7 Carbon-Free Energy
Back in 2021, Google and clean-energy startup Fervo signed the world’s first corporate agreement to develop a next-generation geothermal power project. This is part of Google’s earlier commitment to use 100% carbon-free energy 24/7 by 2030. This groundbreaking initiative aims to provide an “always-on” carbon-free resource that can reduce the hourly reliance on fossil fuels.
Traditional geothermal already provides carbon-free baseload energy to several power grids. However, due to cost and location constraints, it accounts for a very small percentage of global clean energy production.
This is where the new approach comes in. By using advanced drilling, AI, fiber-optic sensing, and analytics techniques, next-generation geothermal can unlock an entirely new class of resource.
The U.S. Department of Energy has found that with advancements in policy, technology, and procurement, geothermal energy could provide up to 120 GW of generation capacity in the U.S. by 2050.
As part of their agreement, Google is partnering with Fervo to develop AI and machine learning that could boost the productivity of next-generation geothermal and make it more effective at responding to demand.
Google geothermal energy use potential 2030 Source: Google.com
The project brings Google’s data centers in Nevada closer to round-the-clock clean energy. It also acts as a proof-of-concept to show how firm clean energy sources such as next-generation geothermal could eventually help replace carbon-emitting power sources around the world.
The Potential of Enhanced Geothermal Systems
Geothermal energy, often referred to as the “heat beneath our feet”, currently provides 3.7 gigawatts of electricity in the United States, enough to power over 2.7 million homes. However, this is just a fraction of the vast, nearly inexhaustible potential of this resource.
A significant amount of geothermal energy remains inaccessible with current technology, leaving a wealth of energy untapped beneath the earth’s surface.
The development and implementation of EGS could unlock these resources, putting new, clean, and dispatchable electricity on the grid.
EGS uses man-made reservoirs to facilitate the fluid flow necessary to bring hot water to the surface for electricity production. The technical EGS potential in the United States is sufficient to meet the electricity needs of the entire world.
Even capturing a small fraction of this resource through commercial-scale deployment could affordably power 40+ million American homes and businesses.
Investments in EGS will also exponentially increase opportunities for geothermal heating and cooling solutions nationwide.
A Powerhouse for Growth
The geothermal industry can potentially become a powerhouse of U.S. economic growth, with particular benefits for rural communities. Geothermal jobs, especially in construction—which currently makes up 57% of the geothermal workforce—cannot be outsourced.
Furthermore, the similarities between the geothermal and oil and gas industries present an opportunity to transition a skilled workforce. The same goes for the tools and best practices in sourcing fossil fuels; they’re useful in producing geothermal energy.
Expanding geothermal energy can also help communities negatively impacted by fossil fuel use and production shift to clean energy.
Achieving the Enhanced Geothermal Shot, a target to reduce the cost of EGS by 90% to $45 per megawatt hour by 2035, will go a long way toward achieving President Biden’s goals of 100% carbon-pollution-free electricity by 2035 and net zero emissions across the U.S. economy by 2050.
EGS has the potential to power over 65 million American homes, according to the Energy Department.
Results from Project Red support the findings of the DOE’s Enhanced Geothermal Earthshot. They also show that geothermal energy could supply over 20% of U.S. power needs, while complementing other renewable energy sources to reach a fully decarbonized grid.
The breakthrough by Fervo Energy is a significant step towards a sustainable future. With the successful demonstration of EGS, the company has shown that geothermal energy isn’t just a resource for the future. It is a viable solution for today’s energy needs, powering millions of homes and businesses.
Sylvera, a leading carbon data provider, has secured $57 million in Series B funding round to incentivize companies to invest in real climate impact with carbon credits and expand in the U.S.
Balderton Capital led the round along with other new investors Bain & Company, Fidelity Strategic Ventures and 9Yards Capital, with participation from existing investors Index Ventures, Insight Partners, Salesforce Ventures, Speedinvest, Seedcamp, and LocalGlobe.
Achieving Net Zero Goals with Confidence
Meeting the net zero by 2050 goal is critical if the world has to prevent catastrophic climate-related disasters. But without ramping up emissions reduction efforts, at least doubling the pace by 2030, achieving net zero targets is impossible.
The world also has to remove about 10 Gigatonnes of CO2 from the atmosphere annually by 2050. Reaching net zero calls for capital investment of about $3.5 trillion each year over the next 3 decades. This funding is necessary to build infrastructure and scale up technologies crucial for a zero-carbon economy, including carbon credits.
High-quality credits are important in keeping projects around the world running, such as reforestation and renewable energy deployment. The credits offer one of the most scalable ways to drive climate finance where it’s most needed.
Unfortunately, both climate actions and funding aren’t enough to keep pace with the net zero deadline. What more, tracking progress against climate targets and measuring the climate impact of investments are difficult because of insufficient data.
This is what Sylvera is changing, for the better, as asserted by the company’s CEO and co-founder, Allister Furey, saying:
“Our technology ensures funding is going to the projects, companies, and countries having maximum climate impact to get the world on track for net zero. In time, this data will create much-needed financial incentives, such as higher share prices and cheaper borrowing, for organisations taking serious net zero action.”
The London-based carbon rating agency is helping companies and governments to invest in carbon credits and confidently report on their impact since 2020. With its cutting-edge technology and carbon measurement methodologies, Sylvera assesses climate action investments, including carbon credits, and rates them.
Sylvera’s data infrastructure and carbon intelligence enables companies to confidently reach their net zero goals and deliver global net zero.
Last week, the carbon credit rating firm, along with Pachama, published their carbon market trend report. It sums up the most significant trends that experts foresee shaping the carbon market landscape in 2023 and beyond.
Funding Sylvera’s Growth and Building Its Platform
Sylvera builds software to impartially and accurately assess carbon projects that capture, remove, or avoid emissions to help organizations ensure that they’re investing effectively in real climate impact.
The carbon ratings company uses technology and climate science to develop and test rigorous methodologies to rate projects and produce data. Its unique platform that leverages machine learning facilitates the creation of new sustainable investment products while educating investors about the quality of carbon credits.
Highlighting the role of Sylvera and its innovative carbon rating, Daniel Waterhouse, Partner, Balderton Capital, noted that:
“Sylvera has proven to be the market leader in this emerging field and we are excited to be joining them on the next phase of the journey and their work in accelerating the roll-out of data, tools and software in order to steer a path to reducing damaging climate change.”
Moody’s ratings are to bond credits, Sylvera’s ratings are to carbon credits. Its rating is a combination of these core scoring pillars – carbon, additionality, permanence, and co-benefits. The carbon rating process takes between 60-120 hours, but it depends on the complexity of the project.
Generally, it involves the following steps:
The $57 million investment will help Sylvera further develop its platform and technology to produce the most robust data crucial in climate action investment decisions. The funding will also help the company scale its teams and product offerings as it expands into the US.
Having a new office in New York, a global hub for financial services, will help Sylvera grow its network. The company has 12 new employees in the U.S. right now and will double this team by year-end.
Since its Series A announcement in January last year, Sylvera’s customer base has grown 7x, adding more Fortune 500 clients. This Series B round brings its total fundraising to over $96 million.
Sylvera is serving major financial services providers, governments, and infrastructure suppliers while partnering with large companies like S&P Global.
Once considered as a niche segment of the clean energy industry, the renewable energy sector has now become a significant source of power in the U.S. and around the world.
As companies strive to achieve Net Zero by transitioning away from fossil fuels, they’re relying more on renewable energy sources. Renewable energy plays a crucial role in US, Europe and other wealthy nations’ energy security and sustainability pathways.
It is, therefore, not surprising that businesses and governments are incorporating renewables in their environmental or climate change strategies.
So, why are entities intensifying efforts and investing heavily on renewables in their quest to a cleaner and greener future?
This article will explain everything you need to know about renewable energy, what are its benefits and major sources or technologies. It will also identify the top companies dominating the sector and their renewable energy technologies propelling the net zero transition.
What is Renewable Energy and Why Is It Important?
Renewable energy is energy from natural sources that replenish more than they’re consumed. Solar and wind are the common sources of renewable energy; they’re abundant and are present around us.
On the other hand, non-renewable energy like fossil fuels are finite and takes millions of years to replenish. Coal, oil, and gas are non-renewable sources of energy that once burned, generate large amounts of planet-warming greenhouse gas emissions.
These GHG blankets the planet and trap the sun’s heat, heating up the Earth.
Producing renewable energy releases far lower emissions than burning fossil fuels. Moving away from fossil fuels, which currently account for the lion’s share of emissions, to renewable energy is key to addressing the climate crisis.
This sustainable energy also helps companies reduce reliance on fossil fuels and thus, cut carbon emissions significantly.
So, to avoid the worst effects of climate change, the world has to drastically reduce its GHG emissions. Clean and renewable energy can help us get us there… and it comes with plenty of benefits.
Benefits of Using Renewable and Sustainable Energy
Powering up with renewables brings a range of benefits, the major one is providing a freely available source of power.
As the sector continues to grow, it also creates a surge in job opportunities in developing and installing renewable technologies. Plus, renewables offer better and more affordable access to energy in emerging economies. Renewables are now cheaper in most countries and generate 3x more jobs than fossil fuels.
And of course, one of the biggest benefits of sourcing energy from renewables is the fact that they’re mostly clean and sustainable.
The diagram shows the major difference between renewables and fossil fuels in key aspects, including carbon content, cost, and supply. Moreover, rain or shine, the most abundant of renewable resources – solar energy – can be harnessed even in cloudy weather.
And did you know that the rate at which solar energy strikes the Earth is 10,000x more than the rate at which humans consume energy? That means it’s impossible for us to exhaust the energy that the sun provides.
It’s just that the world must invest $4 trillion annually in renewable energy by 2030 to reach net zero emissions by 2050. Still, the return on this investment will be more than 6-fold – $26 trillion!
In sum, here are the environmental and economic benefits of using renewable energy:
Producing energy that releases less or no GHG emissions from fossil fuels and reduces air pollution
Diversifying the energy mix and cutting reliance on imported fuels
Creating more jobs in manufacturing, installation, maintenance, etc.
However, these benefits are not only possible with renewable sources. Nuclear power, too, is dubbed as a clean, zero-carbon energy source; it emits much lower carbon. Some favor nuclear over renewables like solar and wind because it’s a stable source that doesn’t rely on weather conditions.
Still, the pros of renewable and sustainable power sources outweigh their cons and their consumption will continue to increase sharply.
So, what are the common renewable energy sources or technologies available right now? Let’s talk about the top five ones.
What Are the Main Sources of Renewable Energy?
There are different technologies that can be used to generate renewable power but the most common ones are the following.
Solar Energy
Rain or shine, solar energy remains the single most abundant source of renewable power. It can be harvested during cloudy weather.
Moreover, the cost of producing solar panels has gone down substantially in the last 10 years. This makes renewable energy from the sun both affordable and often the cheapest. Not to mention that solar panels can stay up to about 30 years.
That could be longer as better materials and technologies are becoming available that make them even 1,000x more powerful. This breakthrough is courtesy of the researchers at Martin Luther University Halle-Wittenberg (MLU).
Solar technologies convert sunlight into electrical energy through photovoltaic (PV) panels or mirrors that concentrate solar radiation. While not all nations have equal access to sunlight, a considerable share to the energy mix from solar is still possible for every country.
Wind Energy
This type of renewable energy is infinite as long as the air moves that turns the large wind turbines. It has been around for thousands or even millions of years, even longer than solar energy.
But it has evolved and improved in generating electricity with both onshore and offshore wind energy technologies getting better. Their turbines become taller and the rotor turns bigger.
And like solar, the potential to generate power through the wind goes far more than the world’s demand for electricity. Most regions of the world are capable of deploying renewable wind energy, with offshore capacity offering huge potential.
Hydropower
You might be surprised to know that power from water is the largest share of renewable energy in the power sector. Hydropower can be produced either from running rivers or reservoirs of stored water.
Reservoirs of hydropower also provide drinking water, irrigation, navigation, drought control, and more. But it depends largely on stable rainfall patterns, so climate-related events like droughts can negatively impact its power generation. Small-scale hydropower is best in remote communities.
Geothermal/Hydrothermal Energy
Another renewable source of power comes from the inner part of the Earth – heat or geothermal reservoirs. It can be harnessed through wells or any other means.
Two kinds of this energy reservoirs are available: hydrothermal, naturally hot enough to create power, and geothermal, hot but needs improvement using hydraulic stimulation. Hot fluids that get on the surface are useful in producing power.
Generating electricity from hydrothermal reservoirs has been going on for over a century.
Bioenergy
This technology is quite different because it needs more processing to convert to energy. It can be produced from various organic materials known as biomass such as agricultural waste, wood, charcoal, and animal manure.
Compared to burning fossil fuels, burning biomass releases lower GHG levels. However, bioenergy won’t be good for most energy applications because large-scale use may involve significant land-use changes like deforestation. Popular applications would be in aviation as green fuels.
Current State and Outlook for Renewables
As we scramble on our feet to decarbonize the global economy, we need a new energy system that does away with fossil fuels. And clean, sustainable, and renewable sources are the key to it.
The current state of renewables tells us that this new energy is our future. In fact, renewables will account for 90%+ of global electricity capacity expansion from 2022-2027, according to the International Energy Agency.
The global energy crisis is pushing the accelerator on this renewable energy expansion. The Russian-Ukraine conflict has particularly sparked great momentum for renewables.
Moreover, disruptions in fossil fuel supply underlined the benefits of generating domestic energy from renewable sources. It alleviates energy security issues many countries face in relying on fossil fuels. Thus, national governments have and are strengthening policies that boost renewable energy like the case of China, India, the U.S., and the EU.
Higher fossil fuel prices also bolster the competitiveness of renewables, especially solar PVs and wind power against other fuels.
All these factors drive the growth in renewable energy capacity additions as seen in the chart below. Historical data shows rising new renewables capacity from 2017 to 2024.
Net RE Capacity Additions by Technology, 2017-2024
Recently, the United Arab Emirates (UAE) revealed plans to invest $54 billion in renewables over the next 7 years. The largest oil-producing country hopes to achieve 14GW capacity of clean energy by 2030.
Earlier this year, the retail giant Amazon received a go signal from Indian authorities to start trading renewable energy sources in the country. The company has signed a total of 720 MW worth of energy purchasing agreements in India from different renewable sources, solar and wind.
These supports for clean and sustainable sources could be driven by the promising outlook for renewables. The IEA projections show continuous growth for this clean energy sector.
The agency estimated that renewables will become the biggest source of global electricity generation by early 2025, exceeding coal. Annual renewable capacity additions are forecast to increase continuously, hitting a record 460 GW in 2027. In an accelerated case, this capacity goes up to almost 600 GW in the same year as shown below.
In Europe, which is the second largest market after China, renewable electricity expansion will double by 2027 as energy security issues become part of the bloc’s climate ambitions.
The same trend is forecasted in other developed regions and this seems to be the way forward as the world decarbonizes even more. So, who are the major players in this sector?
Four names stand out in the list of top renewable energy companies.
What Are the Top Renewable Energy Companies?
1. General Electric Co. (GE)
As a Fortune 500 company and one of the largest American corporations with an $89 billion market cap, General Electric (GE) is widely recognized for its innovations in power and renewable energy. The company has made huge strides in developing green energy solutions and became a key player in the industry.
GE has been at the forefront of wind energy technology, consistently enhancing turbine designs and improving efficiency. Here is GE in numbers when it comes to its wind energy solutions.
As one of the world’s leading wind turbine suppliers, GE has installed over 49,000 units that generate wind electricity across the globe.
In addition to wind power, GE has also invested in other renewable energy technologies, such as solar power, hydroelectricity, and hybrid.
More remarkably, the top renewable energy company offers data-driven insights, expert recommendations, and advanced field services – all integrated into a single software platform. This capacity drives more revenue up, costs down, and risks lower in providing wind energy systems.
2. NextEra Energy, Inc.
Making it to the second spot is Florida-based energy solution provider NextEra Energy.
Running with a whopping $147 billion market cap, NextEra has been investing billions in developing renewable energy sources. As one of the largest renewable energy producers in the world, the company leads the charge in solar and wind energy production.
NextEra currently generates a capacity of about 30,000 megawatts from both sources. Its clients are retail and municipal electricity providers, industrial companies, and power cooperatives. With $135 billion in total assets, NextEra is indeed a leader in electricity generated from wind and solar with this coverage.
Map represents areas where NextEra Energy has a presence, operations or development projects. Locations with more than one facility are illustrated with a single dot. Data as of December 2021.
The company aims to invest up to $95 billion in American renewable energy infrastructure through 2025. It’s the same year that the firm plans to reduce its own CO2 emissions by 67% from 2005 levels.
With the slogan “a real plan for a real zero”, NextEra is helping ensure that the next energy to bring America to net zero will be clean, renewable energy.
3. Iberdrola SA
With a market cap of over $72 billion, Spain-based multinational electric utility company Iberdrola SA has more than 170 years of history. The company is a global leader in the generation, distribution, and trading of clean energy.
Iberdrola specializes in onshore and offshore wind, hydro, solar PV, and battery storage solutions. Aside from Spain, it also operates in the U.S., U.K., Mexico, Brazil, and many more countries, over 40 countries, in fact.
Its huge global operations footprint makes it one of the largest renewable energy providers worldwide. The company also covers other clean energy sources like nuclear and natural gas, boasting a diverse energy portfolio.
4. Orsted A/S
Renewable energy company Orsted A/S excels in developing, building, and operation of offshore wind farms. The Danish firm currently owns the prestigious title of being the world’s biggest offshore wind power developer, with a total capacity of over 7.5 GW.
Standing tall at a $36 billion market cap, Orsted A/S has established offshore wind farms in different countries, including the UK, the US, Germany, and Taiwan.
The top renewable energy company visualizes a world that runs entirely on green and renewable energy to limit climate change and power the world sustainably. With that, the company aims to achieve a 99% renewable share of its energy production by 2025.
Renewable Energy Share of Power Production
Overall, it aims is to build 50GW of energy generation capacity across all green energy technologies by 2030. 30 GW is for offshore wind capacity.
The Future Lies in Clean and Renewable Energy
Renewable energy will continue to rise unstoppably, slashing greenhouse gas emissions as it edges out fossil fuels.
Now is the pivotal time for cleaner, greener, and renewable sources of energy. Renewables are at the heart of transformations happening in the global energy system. Their growing deployment is vital for efforts to fight climate change, bring down global temperatures, and save our only planet.
The voluntary carbon market is gaining momentum in Africa, with Tanzania revealing that it will receive over $20 billion investment in carbon offset credits from more than 20 companies
Dr. Selemani Jafo, Minister of State in the Vice President’s Office, Union and Environment, emphasized that the adoption of legislation on carbon trading in the African nation last year brought in over $1 billion investment. This money will be used to fund carbon trading activities across Tanzania.
Dr. Jafo further noted that carbon credit trading will help the country’s Nationally Determined Contributions (NDCs). The nation aims to cut GHG emissions by 30% -35 % by 2030. The minister said that:
“We need to establish further cooperation between Tanzania and carbon credit investors and partners for our economy and future generations…We are committed to supporting all investors and stakeholders in carbon trading in our country.”
Investing in Forest Carbon Credits in Tanzania
Carbon credits are market-based financial instruments that represent a reduction in carbon emissions certified by independent international bodies or governments. As businesses and organizations look for viable ways to curb their CO2 emissions, carbon credit markets become their turn-to solution.
The credits are from various projects or initiatives that reduce greenhouse gas emissions. In Tanzania, carbon credits play a crucial role in preserving forests and protecting the way of life of local communities.
The carbon market presents an opportunity for the country to generate funds and address deforestation and forest degradation. The East African nation has 48 million hectares of reserved forests, which offers significant opportunities for carbon trading.
With the $20+ billion investment, the carbon market in Tanzania will experience a revolution. Each credit is equal to one metric ton of CO2, or its equivalent, reduction or removal.
The 20 companies that committed to investing in carbon credit projects in the country are from the U.S., Canada, Switzerland, Russia, Italy, Singapore, Estonia, UAE, and Kenya. Their applications were received by different agencies and institutions in Tanzania. Their investment will protect reserve forests and village forests, as well as game reserves and community-based wildlife management areas.
The country is also working on the biggest carbon credit project in Africa. It’s under the partnership of the Tanzania Wildlife Management Authority and GreenCop Development PTE, a Singapore-based company. Their collaboration seeks to develop carbon projects in Tanzania.
The Increasing Value of Carbon Credits in Africa
Africa has been grabbing the spotlight in the carbon credit market. Last May, the 3rd-largest credit producer in the continent accounting for 13% of Africa’s total revenue, Zimbabwe, required that half of the sales go to the nation’s treasury. Zambia, the 5th biggest producer of carbon credits, also has plans to do the same.
Recently, the former South African president, Jacob Zuma, unveiled that the Belarus African Foreign Trade Association will list the first carbon credits on a newly created exchange in Zimbabwe. He further stated that 2 million credits will begin to trade on the African voluntary carbon market.
Meanwhile, Africa’s largest supplier of carbon credits, Kenya, is in the process of regulating its carbon market. Malawi has also formed a dedicated agency to take on this matter.
Apparently, governments in African developing nations are positioning themselves strategically in the emerging carbon markets. They are developing mechanisms and frameworks to ensure that carbon credit projects in their respective territories are reliable in attracting investors and innovating nature-based solutions to climate change.
ExxonMobil buys Denbury Resources for ~$5 billion to boost its carbon capture, utilization, and storage (CCUS) capacity and ramp up its low-carbon energy strategy.
Denbury Resources is an oil and gas producer, specializing in running an extensive CO2 pipeline transport network. It runs across the U.S. Gulf Coast, which includes major oil extraction facilities in Texas, Louisiana, and Mississippi.
Why Exxon Buys a Small-Scale Oil Business?
It’s all about carbon.
The major oil company’s move to acquire Denbury for $5 billion is for its existing CCUS infrastructure.
Carbon capture and storage is a booming industry that’s becoming more important in the US. Thanks to President Biden’s Inflation Reduction Act which provides tax credits for companies that operate it.
The infrastructure needed for CCUS on a large scale is expensive while building new pipelines is often opposed.
Thus, Denbury’s existing pipeline infrastructure stretching 1,300 miles is highly valuable. The small oil company has been using CO2 for enhanced oil recovery (EOR). This process injects the gas into oilfields to boost oil production.
Denbury is using carbon captured from industrial sources and injects 4 million tons of CO2 every year.
By buying Denbury, Exxon will own the largest operating carbon pipeline network in the country. The Gulf Coast region, in particular, is one of the biggest markets for CCUS in the U.S. Denbury also runs 10 onshore carbon sequestration sites represented in the following map.
Source: ExxonMobil
Boosting Low-Carbon Energy Strategy
Exxon believes that its acquisition of Denbury will help in its lower-carbon energy strategy through a cost-effective CCUS system that it can integrate with its existing carbon solutions.
As shown in the map, the combined Exxon-Denbury system can potentially reduce CO2 emissions in the region by over 100 million metric tons per year.
The oil major considers CCUS a significant business, estimating that it will be a $4 trillion global market by 2050. This presents a multibillion-dollar income opportunity for Exxon and a revenue stream that will be more valuable and stable than oil and gas.
This strategy builds on the foundation of long-term contracts that can provide Exxon with a more predictable cash flow stream. The oil company had inked commercial deals to capture and sequester CO2 from various industrial polluters underpinning sequestration hubs it’s building on the Gulf Coast.
Over the past months, Exxon has partnered with fertilizer company CF Industries, steel manufacturer Nucor and gas producer Linde to capture CO2 from their factories, and transport and store it.
Integrating Denbury’s infrastructure will strengthen Exxon’s ability to capture more CCUS opportunities plus carbon credits.
Carbon capture and carbon credits have been the craze recently in an emerging carbon market. More and more companies are showing huge interest in the market as legislation accelerates worldwide.
Betting on the Carbon Credit Market
Buying Denbury will allow Exxon not only to deliver on its various CCUS deals but gives it a great potential revenue source as the carbon credit market matures.
While still in its early market stage, carbon credits enable companies and industries that can’t easily cut their carbon pollution to offset their carbon emissions.
Heavy emitters that have no viable alternatives to significantly reduce reliance on fossil fuels turn to carbon offset credits. The cash from the credits will fund or technically support carbon reduction projects and initiatives.
Each credit equals one tonne of carbon reduced or removed (with CCUS) from the atmosphere.
It’s not only Exxon that’s betting on carbon capture and the credits it generates. Other big oil companies are also putting their money into it such as Occidental, Chevron, and Shell.
There are also other carbon capture approaches designed to draw CO2 directly from the air instead of industrial plants. The captured CO2 is also transported toward its destination, either deep underground or for further application.
The CCUS, same with other carbon market segments, also comes with critics. Some think that the sector won’t be feasible while others believe it doesn’t cut dependence on fossil fuels.
Still, the upward trend and positive outlook of the market show that carbon credits serve a significant purpose in cutting down carbon emissions. Be it for providing alternatives to fossil fuel reliance or promoting sustainable business practices, the carbon credit market is projected to grow strongly.
Exxon’s $5 billion purchase of Denbury sees them placing a flag in the carbon market space. The strategic acquisition will allow the oil producer to scale up its low-carbon business. Their deal will close in the fourth quarter of this year.
Overall, Exxon plans to invest a total of $17 billion on low-carbon projects and cutting down its own carbon emissions.
The U.S. Department of Agriculture (USDA) announced that it will invest $300 million to improve the measurement and reporting of greenhouse gas emissions and carbon sequestration by the country’s agriculture and forestry sectors.
The fund will be from the country’s climate law, the Inflation Reduction Act (IRA). The Act provided about $20 billion in total investments to boost climate-smart agriculture and forestry practices.
The money will be used for creating a rigorous research system for monitoring carbon levels in soil – a key to understanding how CO2 is stored in the ground. It will further help the department in enhancing its data management capacity and improving the methods it uses in quantifying and analyzing GHGs.
Slashing Carbon Emissions and Earning From It
As per the Environmental Protection Agency, agriculture is responsible for emitting 10% of the country’s GHG in 2021. With that, the USDA’s $300 million investment will give farmers and ranchers opportunities to earn more by adopting climate-friendly practices.
There are various carbon emission reduction strategies that farmers can employ and earn more from doing them.
Common examples are no-till agriculture and planting cover crops, which both can make the soil healthier and less erosive. These and more practices are often called regenerative farming.
More importantly, the soil may be able to capture and store more carbon dioxide than conventional farming practices. If farmers can quantify and monitor how much their new practice sequesters CO2 in the soil, they become eligible for earning carbon credits.
One credit represents one tonne of carbon reduced or removed from the atmosphere.
When it comes to their potential to help soil capture more CO2, here’s how different carbon farming practices could slash agriculture’s emissions by 2050.
Better Data for a Robust Carbon Market
While soil carbon storage has been around for a long time, scientists warn that there are uncertainties on the exact amount of carbon emission reduction it delivers.
Last month, a team of researchers found that carbon stocks stored underground in soil forests are vulnerable to global warming. More heating of the earth causes significant loss in carbon stored in deep soils, at over 30cm depth (12 inches).
Their findings pose challenges to how the sector used to measure carbon stored in soil and its climate impact. Add to this the fact that the process of measuring CO2 deep underground is highly technical and time-consuming.
And switching to new carbon farming techniques may not be convincing for some farmers, especially if it means more expenses.
This is why the Agriculture Department will heavily invest in finding more and better data on carbon sequestration. Better monitoring and reporting on soil carbon capture and storage data is crucial for a more robust carbon market. These markets can help incentivize farmers and ranchers to engage in carbon reducing practices.
Remarking on this matter, John Podesta, Senior Advisor to the President for Clean Energy Innovation and Implementation said that:
“One of the big remaining technological challenges for tackling the climate crisis is ensuring that natural solutions in agriculture and forestry are working well… Today’s USDA announcement of $300 million from the Inflation Reduction Act to measure and verify emissions from those sectors is a big step in the right direction.”
The ultimate goal is to bring confidence in farmers and foresters to embrace climate-friendly practices, compensating their efforts while protecting them from any risks that may come in shifting to new technologies. Making this a national concern through a policy is indeed a good thing, both for America and the planet.
USDA is engaging with stakeholders and technical experts to help inform its effort in finalizing the strategy. The Department will hold a webinar for those interested to learn more about it or contribute insights on July 21.
L.A.-based carbon capture startup Avnos signed strategic investment deals worth over $80 million with big oil companies, Shell and ConocoPhillips, and JetBlue to ramp up commercialization of its novel Hybrid Direct Air Capture (HDAC) technology.
Founded in 2020, Avnos focuses on developing and deploying scalable, flexible, and cost-effective technology in the DAC market.
The company has been awarded multi-million-dollar projects from the U.S. Department of Energy to demonstrate its HDAC solution. It also got awards from the U.S. Office of Naval Research to pilot carbon capture and e-fuel production.
Avnos’ Hybrid DAC Technology is a “Twofer”
Global greenhouse gas emissions hit record high in 2021 and projection shows the figures will continue to increase without rapid climate actions done. This year’s record-breaking wildfires, storms, floods, and heat events are the proofs.
To prevent those disasters from getting worse, reducing carbon emissions and removing what’s already in the air are critical. Climate experts highlighted the need for billions of tons of annual CO2 removal (CDR) capacity to significantly reduce emissions.
That gave rise to the birth of different startups with the aim to remove carbon dioxide. Popular existing DAC companies include Climeworks, Global Thermostat, Charm Industrial, and Equatic among others. They’re taking different approaches to directly removing CO2 from the air and water.
But what Avnos is offering to the market is unique and innovative: capturing carbon and producing water anywhere there’s air.
The carbon capture company said that its novel HDAC tech is a “twofer” for tackling the climate crises. Its pioneering moisture-responsive carbon adsorbent tech directly sucks in CO2 from the air and produces water as a byproduct.
In a sense, it’s addressing global warming and water scarcity. Plus, it doesn’t use heat as an input but employs a moisture swing adsorbent instead, which significantly lowers energy consumption.
In comparison, existing DAC approaches consume large quantities of water while Avnos HDAC produces water. The water byproduct is then used to drive the company’s carbon capture operations.
According to the startup, its HDAC performs best in four major areas versus other DAC systems in place. These include total energy use, thermal energy use, water consumption/production, and costs. The video shows how Avnos hybrid direct air capture technology works.
Last week, a similar carbon capture technology by another California-based startup, Capture6, secured a grant of over $8 million from the California Energy Commission. The company also produces freshwater in removing carbon but uses brine, a byproduct of water treatment facilities, to produce a solvent that captures CO2.
Removing Carbon and Selling Credits
Avnos HDAC system uses modules about the size of a 20-foot shipping container. It pulls in air and runs it in a series of filters and condensed water is then collected, pumped out, and stored. The captured carbon goes into the storage tank.
The company said there’s a 5-to-1 ratio of water produced for each ton of captured CO2. This water may create more revenue streams for Avnos while the big oil backers can convert the CO2 into e-fuels.
The $80+ million investment is a huge bet on engineered or technological solutions for mitigating climate change.
ConocoPhillips finds Avnos carbon capture technology a promising solution that “reduces carbon emissions crucial to enable an orderly energy transition”.
What captures Shell Ventures’ interest is the “potential of Avnos’ technology to reduce energy demand in capturing CO2”. JetBlue believes that the HDAC system plays an important role in e-fuels production.
Remarking on their strategic partnerships, Will Kain, CEO of Avnos, said:
“Adding blue-chip strategic partners such as ConocoPhillips, JetBlue Ventures, and Shell provides us with an incredible opportunity to access more resources, know-how, and global reach to meaningfully accelerate our deployment schedule. Ultimately, we will be able to remove more atmospheric carbon, faster, and at lower costs than we would have been able to on our own.”
The amount of carbon removed by Avnos generates corresponding carbon credits that it can use to offset its own emissions. Each credit equals one tonne of carbon removal. Or the startup can turn it into an income source by selling them to other companies looking for carbon offsets.
A pilot version of the Avnos HDAC facility will open later this year in Bakersfield, California. It can remove 30 tons of CO2a year and produce 150 tons of water.
A bigger, commercial-grade system can increase this capacity by 100x – 300 tons of carbon and 1,500 tons of water. The modules are stackable to increase the capacity even more but would need larger renewable power installations.
Avnos will use the funding to supply commercial-ready HDAC systems by the end of 2025.
At the recent Carbon Markets Summit, research firm Sylvera along with Pachama convened a global assembly of thought leaders to delve into the present complexities and future potential of the carbon market.
This comprehensive guide, a collaborative effort between Sylvera and Pachama, sums up the ten most significant trends that these experts foresee shaping the carbon market landscape in 2023 and beyond.
One of the key areas where this is happening is in the carbon credit market. It is where accurate and in-depth ratings and analytics are essential for effective decision-making.
Five Key Points from the Pachama and Sylvera Report
Delving into the report, five key points emerge that summarize the current state and future trajectory of this critical sector.
Market in Flux: The voluntary carbon market is undergoing significant changes due to new climate disclosure regulations, guidance from market bodies, and increased media attention. This has caused some confusion and hesitation among potential buyers. Still, the need for carbon project funding is more critical than ever.
Flight to Quality: Corporate buyers are participating in a ‘flight to quality‘. They are becoming involved earlier in projects and focusing on contribution over ‘offsetting’. This trend will continue in 2023 and beyond.
Technology and High-Quality Projects: Technology is unlocking greater supplies of high-quality projects. Companies like Sylvera and Pachama are using data and artificial intelligence to help companies invest confidently in high-quality carbon credits.
Carbon Credits – ‘Last, but not Later’: The mitigation hierarchy encourages emission reductions first and carbon credits last. However, ‘last’ does not have to mean ‘later’. Companies can purchase carbon credits throughout their decarbonization journeys, as long as these purchases do not replace actual emissions reductions across the value chain.
Voluntary Carbon Market Growth: Despite challenges with legacy credits, limited high-quality supply, and ongoing work on official guidance, the corporate demand for carbon credits is strong. The voluntary carbon market is still growing, and the overall trajectory for the VCM looks positive.
Voluntary credit retirements remained strong in 2022 at 184 million and are on track to beat records in 2023.
These insights paint a vivid picture of the market’s present dynamics and future potential. The report underscores the pivotal role of carbon credits in steering corporate strategies towards decarbonization.
It also champions the cause of investing in high-quality projects, a move that promises both environmental and economic dividends. It also highlights the ongoing growth and evolution of the voluntary carbon market.
A lot of insights on carbon market trend were shared during the summit, but here are the ones that are worth sharing.
3 Meaningful Insights That Stand Out…
1. “Companies leading on climate are demonstrating the difference between hierarchy and chronology: ‘last’ does not have to mean ‘later’.”
While carbon credits are often seen as the last step in a company’s decarbonization journey, they don’t have to be the final action taken. Companies can and should invest in carbon credits throughout their decarbonization process. But as long as these purchases are not used as a substitute for actual emissions reductions.
The report warns that critical carbon sinks, such as the Amazon Rainforest, are reaching a tipping point. Also, the need for funding for conservation and reforestation efforts is critical.
Companies are encouraged to invest in carbon credits as soon as they set science-based targets with clear plans for achieving them, not just once they have reached their decarbonization targets.
2. “Organizations that invest in carbon credits are cutting emissions at twice the rate of their non-credit-buying peers.”
3. “We’re seeing more and more people move upstream to secure these future optics of quality credits that they can’t find on the spot market today. So really, quality is front of mind, even in the upstream space.”
This highlights a trend in the carbon market where corporate buyers are moving upstream. It means they’re investing in early-stage carbon projects to secure future supplies of high-quality credits.
This shift is driven by the understanding that investing early not only shows commitment to the market but also allows for some control over the project’s development.
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