News round-up, April, 25, 2023
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The Climate Solutions We Can’t Live Without
The climate crisis is full of interconnected problems—but some are more connected than others. A former energy secretary, New Mexico Governor Bill Richardson, lamented at the time, "We are a major superpower with a third-world electrical grid."
NEW YORKER By Daniel A. Gross, April 24, 2023Geopolitical tensions are a new obstacle to restructuring the debt of poor countries
China has become the largest creditor for low-income countries. Finding agreements to reduce the debts of nations in severe difficulty requires a consensus among creditors – but they all have different strategies.
Le Monde by Julien Bouissou Published yesterday at 7:06 pm (Paris)Floating wind power gains traction but can it set sail?
In 2023 will determine just how successful this is if the next decade is to see the acceptance of floating offshore wind and its rise into a leading market.
REUTERS By Nina Chestney and Susanna TwidaleArgentina's lithium pipeline promises 'white gold' boom as Chile tightens control
According to Benjamin Gedan, head of the Latin America program at The Wilson Center, "Argentina's lithium sector has grown through a decentralized, pro-market strategy." In contrast, Bolivia's lithium sector "repeatedly stopped as a result of heavy governmental control."
Reuters By Lucila Sigal, TodayPutin ally: We are probably on verge of a new world war
MOSCOW, April 25 (Reuters) - An ally of Russian President Vladimir Putin said on Tuesday that the world was probably on the verge of a new world war and the risks of a nuclear confrontation were rising.
ReutersAmerican takeover of French nuclear firm raises concerns in Paris
French government looks to prevent France-based Segault from falling under US ownership via a takeover deal.
POLITICO. EU BY GIORGIO LEALI, APRIL 21, 2023
Andrés Gluski, CEO of energy and utility AES CorpHow can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…
The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.
Today's events
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Today's events 〰️
Image: Germán & Co by ShutterstockThe Climate Solutions We Can’t Live Without
The climate crisis is full of interconnected problems—but some are more connected than others. A former energy secretary, New Mexico Governor Bill Richardson, lamented at the time, "We are a major superpower with a third-world electrical grid."
NEW YORKER By Daniel A. Gross, April 24, 2023The biggest blackout in U.S. history began on a warm Thursday afternoon in August, 2003. In the span of seven minutes, it spread to at least eight states and the Canadian province of Ontario, an area in which some fifty million people lived. In New York City, elevators froze between floors. One woman in midtown walked down eighteen flights of stairs, collapsed, and could not be resuscitated. Transit workers hustled thousands of panicked passengers out of dark subway tunnels. That evening, the city’s skyline was dark; in satellite photographs, a shadow appeared to have fallen across swaths of the Northeast.
Immediately, people theorized about the origins of the breakdown. Canadian officials blamed power plants in New York State; New York officials argued that the blackout had begun somewhere west of the Ontario power system. But neither of these hypotheses could fully explain why thousands of miles of electrical wires had suddenly gone dark. “We are a major superpower with a third-world electrical grid,” Governor Bill Richardson of New Mexico, a former energy secretary, complained at the time. Representatives for utility companies pointed specifically to overtaxed transmission lines, which carried power between different parts of North America. “If there had been more lines available at the time that this event occurred, it’s possible they could have absorbed the load and kept the failure from spreading,” one observed.
“We’ve got excess power in upstate New York, but there’s no way to get it to New York City because of the bottlenecks,” another said.
A joint U.S.-Canada report ultimately concluded that the outage had likely originated with some overgrown trees in northern Ohio. On warm days, the metal in wires tends to heat up and expand, and, that afternoon, a warm line sagged into a tree branch. This tripped the line and caused a short circuit to ground; the local utility company wasn’t alerted because its alarm system was broken. So many other power lines were close enough to capacity that the rerouted electricity overloaded and tripped them, and, by 4:06 p.m., power could no longer flow to the south of the state. Instead, it went northwest, to Michigan, where it overloaded more lines; to the east, a cascade of failures extended all the way to Massachusetts and New York. By 4:13 p.m., hundreds of power plants were shutting down. The blackout inflicted billions of dollars in economic damage, and a study later found that it contributed to about a hundred excess deaths.
In any complex system, there are points of special weakness. Problems in those places cause many more problems. Those weaknesses, however, can also present opportunities: strengthen the right spots, and everything gets easier. More than a year before the blackout, a Department of Energy report addressed to President George W. Bush had identified fifty places in the eastern U.S. where a power surge could overwhelm overtaxed lines. “These bottlenecks,” the authors wrote, “increase the risk of blackouts.” The upside was that power companies and government agencies could focus their efforts on the weakest links. But the report also described the obstacles to this rational course. A decade earlier, utilities had proposed adding a power line between West Virginia and Virginia—a connection that could make a “cascading outage” across the eastern U.S. less likely. At the time, the project was still waiting for final approval from state regulators and the U.S. Forest Service. (It was approved several months later, and then it took an additional three years to construct.)
The 2003 Northeast Blackout has something to teach us about the challenge of climate change. Right now, the planet is getting warmer, and unprecedented heat waves, floods, and fires are claiming lives and livelihoods. There’s hardly any time left to pivot away from fossil fuels and toward clean power sources like wind and solar. And, in this effort, there are weak points—problems that are causing many more problems.
One such area is the grid itself. There still aren’t enough lines connecting windy, sunny places to locales that need the most electricity; meanwhile, the grid is so delicately balanced that many clean-energy projects now wait about four years, in an “interconnection queue,” simply to be plugged in. The grid has become a bottleneck in the fight to protect the climate. Other bottlenecks can be found in our daily lives and our global economy. We will need to swap out our dirty stoves and heaters for cleaner ones—but we can’t make these kinds of upgrades without training more electricians and plumbers. We will need to drive more electric cars—but we can’t power them until we can responsibly mine and recycle enough lithium for the batteries. We need to get our methane emissions under control—but it’s difficult to plug the leaks without new tools to show us where the gas is coming from. There’s a general principle at work here: if we’re quick to find and fix the bottlenecks, progress is possible. If we can’t fix them, we face a breakdown.
Afew years ago, a report funded by the U.S. Department of Transportation investigated the prototypical bottleneck: the traffic jam. Historically, Americans have blamed traffic on a lack of capacity—“not enough lanes” or “too many cars.” As a result, the authors argued, we have often tried to “build our way out” by widening entire highways at enormous expense. But bad traffic often starts with a local logjam—for example, at a single place where three lanes narrow into two—and then cascades across the system. This means that the government doesn’t need to spend hundreds of millions of dollars on major highway projects. Instead, it can spend, perhaps, a million dollars to widen a bottleneck with an additional lane. Better yet, it can do what the Texas Department of Transportation did to a bottleneck on U.S. Route 183, in North Austin: spend fifty-five thousand dollars to restripe the road, so that two lanes become three. “If it was this easy and this cheap, what took you so long?” one local asked, when the traffic dissipated.
Bottlenecks, according to the report, are often the places where targeted efforts can make the most difference. Turn this lens onto the energy system and new insights may come into view. In many parts of the U.S., it’s clear from the line to join the grid that there’s an abundance of wind and solar and battery projects. For that reason, a million dollars might be better spent on electrical-system upgrades than on new subsidies to incentivize clean-energy projects. A subsidy primarily benefits the project that receives it, but even a small improvement in the interconnection queue could benefit all the projects that are waiting in line. Likewise, if you’re in the mood to badger your lawmakers about something, consider badgering them about whichever government agencies are standing in the way of new transmission lines. On a national level, the Biden Administration could staff up federal agencies that review permits, such as the Bureau of Indian Affairs and the U.S. Forest Service; the Federal Energy Regulatory Commission, which already approves regional natural-gas pipelines, could be empowered to approve regional transmission lines. It’s also possible to find routes around the bottlenecks: it’s sometimes argued that clean-energy projects shouldn’t pool their electricity on a rickety grid in the first place, and should instead power local microgrids, such as university campuses or apartment complexes.
The theory of bottlenecks could amount to a hopeful strategy for supercharging the fight against climate change. The basic principle is to look for the sources of gridlock in the system, and to focus on restoring flow before worrying about individual cars. A functional citywide composting system is worth far more than a few isolated piles of food scraps; similarly, a new car-charging station, in a neighborhood where it’s hard to find one, could cut emissions more than any one person’s pledge to drive less. These structural changes will not come easily, but they can help us focus our efforts. A city or state that wants to spur rooftop solar should look for where the longest lines are forming: if solar panels are piling up in warehouses because customers can’t afford them, subsidies might help; if those who’ve bought panels are waiting months for an someone to hook them up, the government could consider launching a free certification program for solar installers, or a clean-energy vocational scholarship through a local trade school. And, if the longest lines are for permits at city hall, then maybe it’s time to hire more office workers. “An hour lost at a bottleneck is an hour lost for the entire system,” Eliyahu M. Goldratt, a business consultant and process theorist who authored several novels about management—among them “It’s Not Luck,” “Necessary but Not Sufficient,” and “Isn’t It Obvious?”—once wrote.
Over time, if clean-energy investments are successful, the bottlenecks will move. After America has trained a million new tradespeople, we might find ourselves waiting on solar companies to build new factories. When the interconnection queue shrinks to one year, it might be time to badger your legislators about wind and solar projects, not wires. The same logic can also be applied to fossil-fuel infrastructure, but in the opposite direction. One argument for protesting against oil and gas pipelines is that they’re bottlenecks. This is also why climate activists were so disappointed when the Biden Administration approved ConocoPhillips’s sprawling Willow oil project, in Alaska: red tape might have been enough to keep that oil in the ground.
Other breakthroughs have the potential to cascade across large sectors of the economy. If shipping companies succeed in decarbonizing cargo ships, some of the dirtiest vehicles on earth will get a little less dirty, and the carbon footprint of virtually every consumer will go down. A small advance in cooling technology, like a cheaper heat pump or a superefficient air-conditioner, will be multiplied by the billions of people who will need one as the planet warms. And, given that many machines, from heat pumps to cars, will be in service for decades to come, a dollar spent on research and development is probably worth a lot more today than years from now. Of course, pessimistic scenarios flow from these same principles, too: even a step in the right direction may be meaningless if a bottleneck later stops you in your tracks. “An hour saved at a non-bottleneck is a mirage,” Goldratt warns.
Not so long ago, coverage of the climate focussed on the small signs that big changes were coming. The trees were blooming a few weeks early; the butterflies had moved north; the sand on the beach was washing away. These stories were necessary but not sufficient. Nowadays, we are more likely to report that the trees are burning and the butterflies are dead. When the crisis is in the present tense, as it is now, and the window for halting it is slamming shut, all we can aim for is action. If this decade is our last best chance to avert the worst consequences of climate change, how should we spend it?
In this week’s digital issue, inventive and passionate people try to solve a hard problem—maybe the hardest problem—in surprising ways. They look for bottlenecks and try to alleviate them. Because the fight against climate pollution is hamstrung by the difficulty of detecting emissions, they set out to launch a satellite that can essentially catch polluters red-handed. Because enormous solar farms often can’t be constructed without the buy-in of local people, they imagine new models that can win community support. Because the melting of certain ice sheets will have outsized consequences, they try to figure out if it’s possible to save some. These stories don’t aim to bear witness or raise awareness. They start from the premise that the planet does not care whether we care—only whether we act, and act quickly, in useful places.
The interventions considered in these stories reveal something about the architecture of our global problem. Here’s how the pipes and walls and wires fit together; here are the doorways you can walk through; here are the places that can catch fire, and the extinguishers that can put those fires out—and the exits, when all else fails. If a building’s weakest link is its single exit, it’s unwise to begin by widening the upstairs hallway. We can build a second exit. We can look for better ways to wire, and for materials that will not burn, and for walls that could become doorways. We can find the fixes that make other fixes possible.
Seaboard: pioneers in power generation in the country
…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.
More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.
Image: Germán & Co by ShuttersstockGeopolitical tensions are a new obstacle to restructuring the debt of poor countries
China has become the largest creditor for low-income countries. Finding agreements to reduce the debts of nations in severe difficulty requires a consensus among creditors – but they all have different strategies.
Le Monde by Julien Bouissou Published yesterday at 7:06 pm (Paris)The debt that most threatens rich countries is not so much theirs as that of poor countries. At least 54 countries are over-indebted or nearly over-indebted. If nothing is done to lighten their burden, the situation could deteriorate and resemble that of the 1980s and 1990s. The consequences are well known: rampant inflation, riots, political instability and stunted development. The widening gap between rich and poor could add to geopolitical tensions in an already unstable world.
Debt is not just an abstract, painless string of numbers. It is because of debt that subsidies on food purchases in Pakistan have been removed, that the Laos health budget has been cut, and that 56,000 Sri Lankan children suffer from severe malnutrition. The United Nations Development Programme has calculated that the 25 most indebted countries now allocate 20% of their tax revenues to debt repayment.
The new context of geopolitical fragmentation complicates debt restructuring. The profile of creditors has changed in recent decades. The members of the Paris Club (22 countries, including the United States, France and the United Kingdom) held 39% of the debts of low-income countries in 1996, whereas they hold only 11% of the total today. New countries have emerged, primarily China, which has become the largest creditor for half of the low-income nations. According to the AidData lab at the US University of William & Mary, it has lent $843 billion (€770 billion) in the past 20 years. This reconfiguration "adds to debt restructuring difficulties," reads an International Monetary Fund (IMF) study published in April, as "non-Paris Club creditors have often provided debt treatment to debtor nations on a case-by-case basis."
Fragmentation
China's debt is no longer just a problem for poor countries but for the whole world. For restructuring to take place, all creditors must agree. This is where the difficulties begin. As Kristalina Georgieva, the head of the IMF, explained in early April, geopolitical fragmentation "will make it harder to resolve sovereign debt crises, especially if key official creditors are divided along geopolitical lines."
Western countries, especially the United States, accuse Beijing of slowing down negotiations. In February, at a meeting of G20 finance ministers in Bengaluru, India, US Treasury Secretary Janet Yellen called on China to participate more fully "in meaningful debt treatments for developing countries and emerging markets in distress." Among the points of disagreement, Beijing is said to require that international financial institutions, like the IMF and the World Bank, participate in restructuring efforts by waiving part of their debts and renouncing their status of "preferred creditor" which allows them to be repaid before others.
But Western countries are opposed to this, arguing that the World Bank could see its rating downgraded and no longer be able to lend to countries at low rates. Beijing adds that it is being asked to apply rules that were put in place without it 30 years ago, and points the finger at the responsibility of private creditors. This is not wrong: the latter hold 19% of the outstanding debt of poor countries, compared to 8% 25 years ago. It is no longer a few banks that only needed to be brought together to obtain an agreement on a restructuring plan, but much more numerous bondholders who are reluctant to make concessions.
Survival
The IMF adds that "new debt instruments used by low-income countries tend to be increasingly risky and difficult to restructure," especially when they are not reflected in public accounts or are backed by commodities or infrastructure. A common restructuring framework was put in place by the G20, in order for China and the Paris Club to find an agreement, but without success. As economist Brad Setser wrote in a blog post published by the US think tank Council on Foreign Relations, "no framework for coordination among official creditors can work if official creditors don't have enough in common to work together."
While creditors are negotiating, countries that are close to or already in default, such as Tunisia, Ghana and Egypt, are fighting for their survival. Zambia has been negotiating a deal on its debt for two and a half years now. Restructuring forces countries to cut spending and resort to emergency loans at high rates. "I don't think we'll have many defaults, because it's very expensive for governments," said Masood Ahmed, president of the US-based think tank Center for Global Development, in January.
A payment default risks downgrading the sovereign rating and increasing the cost of borrowing on the markets for governments. "The payment of unsustainable debt service will lead to development crises rather than debt crises," concluded Ahmed. In other words, a deep crisis that will result from cuts in social and infrastructure spending by governments. If they don't come to an agreement as soon as possible, China, the United States and Europe will bear a heavy responsibility for the delay in development in countries that are home to one-fifth of the world's inhabitants.
Image: Hywind Tampen floating wind farm structures are being assembled at the Wergeland Base in Gulen, Norway, June 7, 2022. Ole Jorgen Bratland – Equinor/Handout via REUTERS/ Editing by Germán & CoFloating wind power gains traction but can it set sail?
In 2023 will determine just how successful this is if the next decade is to see the acceptance of floating offshore wind and its rise into a leading market.
REUTERS By Nina Chestney and Susanna TwidaleLONDON, April 24 (Reuters) - After a bumper year for floating offshore wind farm tenders, the nascent industry is poised for explosive growth in the coming decade as countries strive to cut their carbon emissions.
But it's unlikely to be all plain sailing.
Rising costs and supply chain bottlenecks have hit some projects and without investment in infrastructure to launch the vast turbines and tow them to sea, hopes of harnessing the full power of the ocean's winds to hit climate targets could be dashed, industry experts say.
"If the next decade is to see the adoption of floating offshore wind, and its growth into a leading market, the work that we do in 2023 will dictate just how successful this is," said Felipe Cornago, commercial director offshore wind at BayWa (BYWGnx.DE), which is developing a wind farm off Scotland.
About 80% of the world's offshore wind power potential lies in waters deeper than 60 metres, according to the Global Wind Energy Council (GWEC), meaning floating turbines will be vital for some countries with little space left on land and steep coastal shelves to decarbonise their power sectors.
Winds are stronger and more continuous further out to sea so floating turbines can generate more power than those fixed to the seabed near to shore - and they less visible from the coast, reducing the risk of resistance from local communities.
By the end of 2022, plans for about 48 gigawatts (GW) of floating wind capacity around the world were in place, nearly double the amount in the first quarter last year, according to Fitch Solutions, with European companies driving the expansion.
Since then, new tenders have been launched in Norway and more are planned this year - but so far there are only just over 120 megawatts (MW) in operation worldwide.
Consultancy DNV forecasts that about 300 GW will be installed by 2050, representing 15% of all offshore wind capacity, but wind turbine makers are already struggling to meet rising demand due to rising inflation and raw material costs.
BOTTLENECKS AND COSTS
The largest project to date, the 88 MW Hywind Tampen project being developed by oil and gas company Equinor (EQNR.OL) off Norway, was meant to be fully commissioned in 2022 but delays due to some steel parts not being of sufficient quality for four of the towers has pushed the start to later this year.
Last year, oil company Shell (SHEL.L) and state-owned Chinese energy company CGN dropped a plan for a floating wind project off France's Brittany coast, citing inflation and supply chain problems among other reasons.
GWEC said supply bottlenecks for turbines and components could continue or even be compounded by incentives in the United States for low-carbon energy deployment, as well as increased demand in China, Europe and emerging markets.
As most commercial-scale floating wind farms are only expected to be up and running from 2030, there could be time for such problems to be resolved, said Francesco Cacciabue, partner and CFO at renewable energy investor Glennmont Partners.
At the moment, technology costs for floating wind are far higher than for fixed turbines but companies hope to reduce those costs sharply as larger projects come on stream.
According to DNV, the average levelized cost of energy (LCOE) - which compares the total lifetime cost of building and running a power plant to its lifetime output - for floating wind was about 250 euros per megawatt hour (MWh) in 2020, compared with around 50 euros/MWh for fixed turbines.
But by 2035, the LCOE for floating wind is expected to fall to about 60 euros/MWh.
"For floating, the expectation is that it will sell power at a higher price than fixed-foundation offshore wind for several years while it industrialises and gets to a point where it can compete on a like-for-like basis," said Jonathan Cole, chief executive of Corio Generation, part of Macquarie's (MQG.AX) Green Investment Group.
OFFSHORE PLANS
Norway's Equinor kick-started the floating wind industry after two of its oil and gas engineers saw a marker buoy they thought could be a structure to hold a floating turbine.
The company installed a pilot floating turbine in 2009 and has seen costs fall by 70% from the demonstration project to its 30 MW Hywind Scotland project. It expects a further 40% cost reduction for Hywind Tampen.
"It's about having larger turbines which are more efficient offshore," said Steinar Berge, head of floating wind at Equinor.
"The journey going forward is more reliant upon putting full-scale projects into action because then you will see much more innovation and investments in the supply chain which will drive costs further down," he said.
Still, higher costs in the medium term haven't dulled investor appetite for tenders. For some countries, floating wind might be the best option due to their seabed conditions, such as Japan, South Korea and the west coast of the United States.
"These are huge areas with the energy demands to match their huge populations, and they have a mandate to decarbonise as quickly as possible," said Cacciabue at Glennmont Partners.
The United States wants to develop 15 GW of floating offshore wind capacity by 2035 and its Wind Shot research and development programme hopes to cut the cost to $45/MWh by 2035.
Japan wants to install up to 10 GW of offshore wind capacity by 2030, and up to 45 GW by 2040, including floating. It plans to set a specific target for floating wind this year. South Korea, meanwhile, is aiming for 9 GW of floating wind by 2030.
Several countries in Europe have also set targets such as Spain which is seeking up to 3 GW of floating capacity by 2030.
PORTS AND SHIPS
Floating offshore wind farms are made up of huge turbines installed on floating platforms anchored to the seabed with flexible anchors, chains or steel cables.
But at the moment, there are at least 50 designs under development, so narrowing down the concepts is important for standardisation and enabling mass production, experts say.
They believe that can be achieved, as many oil companies have significant expertise operating in deep waters such as Shell, Equinor, BP (BP.L) and Aker Solutions (AKSOA.OL) - and some are teaming up with renewable developers to bid in floating wind tenders.
For now, Equinor's Berge said one of the biggest challenges was having enough large ports to assemble the turbines and move them out to sea. Many of his peers agree.
According to a DNV survey of 244 experts, the biggest supply chain risk they identified was having enough suitable ports, followed by the availability of installation vessels.
Ports where towers measuring more than 150 m to the centre of the rotor and their giant floating bases can be manufactured and assembled are ideal - and they will also need enough access channels, berths, land areas and storage space for handling large, heavy structures, experts say.
But in many countries, such ports are sorely lacking.
Britain aims to have 5 GW of floating wind installed by 2030 but a report by the UK Floating Wind Offshore Wind Taskforce, said 34 GW could be installed by 2040 if ports were upgraded.
It said up to 11 ports will need to be transformed into hubs to enable the roll-out of floating offshore wind at scale - along with investment of at least 4 billion pounds ($5 billion).
Britain's Crown Estate will launch a tender for 4 GW of floating wind in the Celtic Sea off Wales this year but said the area had the potential to produce more than 20 GW.
While Britain wants to lead the world on floating wind, some experts say South Korea could be the real winner given its existing ports and large-scale engineering capacity.
"South Korea will be commercial the quickest," said Cole at Corio Generation, which has 1.5 GW of floating wind under development there. "People want to buy low-carbon products so how South Korea produces its electricity and how it will decarbonise is a really important thing for the entire economy."
Another issue is the lack of vessels needed to tow structures to their offshore sites, install them and connect the turbines to the onshore power grid.
"Even the largest vessels from the oil and gas industry have limited capacity for efficient installation of the latest floating wind farms," said DNV.
Reporting by Nina Chestney and Susanna Twidale; Additional reporting by Charlie Devreux in Madrid, Yuka Obayashi in Tokyo, Heekyong Yang in Seoul, Nichola Groom in Los Angeles; Editing by Veronica Brown and David Clarke
Image: A brine pool used to extract lithium is seen at a salt flat of Cauchari Olaroz, near Susques, Argentina, November 8, 2017. REUTERS/Juliana Castilla/ Editing by Germán & CoArgentina's lithium pipeline promises 'white gold' boom as Chile tightens control
According to Benjamin Gedan, head of the Latin America program at The Wilson Center, "Argentina's lithium sector has grown through a decentralized, pro-market strategy." In contrast, Bolivia's lithium sector "repeatedly stopped as a result of heavy governmental control."
Reuters By Lucila Sigal, TodayBUENOS AIRES, April 24 (Reuters) - In Argentina's mountainous north, a strong pipeline of lithium projects close to coming online looks set to unlock a wave of production that could see its output of the key electric vehicle battery metal as much as triple within the next two years.
The world’s fourth largest producer of the silvery-white metal sits within the so-called "lithium triangle" and has been luring investment from Canadian to Chinese mining firms with a regional and market-led model, even as a wave of resource nationalism has spread in the region.
Neighboring Chile, the region's top lithium producer, last week unveiled plans for a state-led public-private model, spooking investors. Bolivia has long maintained strict control over its huge though largely untapped resources, while Mexico nationalized its lithium deposits last year.
In Argentina, despite state energy firm YPF (YPFD.BA) starting to explore for lithium last year, the sector has largely been driven by private enterprise and regular approvals of new projects as the government has looked to bring in more export dollars through mining, a rare bright spot amid economic turmoil.
"Argentina has granted concessions to projects for the last 10 years," said Franco Mignacco, president of Argentina's Chamber of Mining Business. "That's why today we have this level of lithium investment and development and the chance of growth."
Mignacco estimated that Argentina's current 40,000 tonnes of lithium carbonate production could triple by 2024-2025 to 120,000 tonnes, which could take it past China and closer to Chile which currently produces some 180,000 tonnes per year.
That would be driven by new projects coming online on top of the two currently in production. The country has six lithium projects under construction and 15 in the advanced exploration or feasibility stage, Mignacco said.
That contrasts with Chile, where the industry is dominated by established players SQM (SQMA.SN) and Albemarle (ALB.N), with few new projects underway. In Bolivia the government only recently okayed a new project by a Chinese consortium.
Argentina's production boost would come from the expansion of the only two producing operations - U.S. firm Livent's Fénix project in Catamarca and Australian Allkem Ltd's (AKE.AX) Salar de Olaroz mine in Jujuy - both expected to double output to 42,500 tonnes in the years ahead.
These would be joined by the Cauchari-Olaroz project, owned by China's Ganfeng Lithium Co (002460.SZ) and Canada's Lithium Americas Corp (LAC.TO), which in the second half of 2023 is set to begin production with capacity for 40,000 tonnes of lithium carbonate.
'PRO-MARKET STRATEGY'
Argentina, Bolivia and Chile together sit atop half of the world's resources of the mineral under otherworldly salt flats in the high-altitude Andean plains.
But strategies for developing it are diverging.
"Argentina's lithium sector has thrived through a decentralized, pro-market strategy," said Benjamin Gedan, director of the Latin America program at The Wilson Center, adding in contrast Bolivia's lithium sector had "repeatedly stalled as a result of excessive state control."
Chile, he said, may have found a "savvy middle ground" with its public-private model, which would hand the state majority control over all new lithium projects in a nationalist shift, but would still give private enterprise a key role to play.
The wave of resource nationalism had prompted some talk amongst officials of a potential OPEC-style lithium cartel in the region, though analysts see it as unrealistic given the diverse industry models and levels of development.
Argentina, meanwhile, faces challenges including economic turmoil with high inflation and capital controls which complicate business, while the country is headed for general elections in October creating political uncertainty.
Its lithium pipeline, though, may keep the sector bubbling and even gaining ground on rivals. Overtaking neighbor Chile would be highly unlikely but some analysts were aiming high.
"Chile today produces and exports much more lithium than Argentina," said Natacha Izquierdo, analyst at consultancy ABCEB. "But if the projects we have here today come to fruition, Argentina could overtake it."
Reporting by Lucila Sigal; Additional reporting by Rodrigo Campos; Editing by Adam Jourdan and Marguerita Choy
Image: Germán & CoCooperate with objective and ethical thinking…
Image: Deputy head of Russia's Security Council Dmitry Medvedev listens during an interview with Russian media at a residence outside Moscow, Russia, March 23, 2023. Sputnik/Yekaterina Shtukina/Pool via REUTERSPutin ally: We are probably on verge of a new world war
ReutersMOSCOW, April 25 (Reuters) - An ally of Russian President Vladimir Putin said on Tuesday that the world was probably on the verge of a new world war and the risks of a nuclear confrontation were rising.
"The world is sick and quite probably is on the verge of a new world war," Dmitry Medvedev, deputy chairman of Putin's powerful security council, told a conference in Moscow.
He said such a new world war was not inevitable but the risks of a nuclear confrontation were growing and more serious than concerns about climate change.
Putin says the world faces the most dangerous decade since World War Two. He casts the war in Ukraine as an existential battle with an aggressive and arrogant West, and has said that Russia will use all available means to protect itself against any aggressor.
The United States and its allies have condemned Russia's invasion of Ukraine as an imperial land grab. Ukraine has vowed to fight until all Russian troops withdraw from its territory, and says Russian rhetoric on nuclear war is intended to intimidate the West into curbing military aid.
Reporting by Guy Faulconbridge; Editing by Alison Williams
Image: Bruno Le Maire's quest for a French buyer might be a tough mission to accomplish | Teresa Suarez/EPA-EFE/ Editing by Germán & CoAmerican takeover of French nuclear firm raises concerns in Paris
French government looks to prevent France-based Segault from falling under US ownership via a takeover deal.
POLITICO. EU BY GIORGIO LEALI, APRIL 21, 2023PARIS — France's feisty Economy Minister Bruno Le Maire has another opportunity to pick a fight with Washington as a sensitive investment screening case is about to land on his desk.
The French government wants to prevent nuclear-submarine parts supplier Segault from falling into American hands just as France and the U.S. are experiencing new tensions over the Inflation Reduction Act, a $369 billion package of green subsidies and tax breaks that Paris and Brussels slammed as a protectionist move in breach of global trade rules.
The two countries have seen an ebb and flow in tensions in recent years that reached worrying levels back in 2021, when the U.S. infuriated France by snatching away a multibillion-euro submarine contract Paris had signed with Canberra.
Now, the American takeover of the small France-based company with less than 100 employees, which was virtually unknown to most French people until a few weeks ago, is turning into a test of France's industrial sovereignty ambitions.
Segault's current owner, Canada’s industrial valves group Velan, is being bought by American industrial machinery giant Flowserve in a takeover deal announced earlier this year. Segault supplies components for nuclear-propelled submarines built by state-owned shipbuilder Naval Group and also makes industrial valves that are used on France’s flagship Charles de Gaulle aircraft carrier. If the deal goes through, Segault would become American-controlled, raising concerns in Paris' halls of power that Washington would then have access to strategic French technology.
The deal has become a hot political issue in recent weeks, with right-wing MPs urging Le Maire to block the American buyer, and with a surprise left-wing candidate emerging as a bidder.
The government is currently “looking for a French buyer,” according to a spokesperson for France’s defense ministry, who declined to comment on offers received so far, noting that the French economy ministry has the final word on it.
Under French law, the economy ministry must be informed of the takeover of companies in strategic sectors in order to green-light or veto deals. The government confirmed that Segault's takeover falls within the scope of France’s investment screening powers and will be examined as soon as it is officially notified to French authorities.
Investment screening decisions are first assessed at the technical level within France’s powerful economy ministry, known as Bercy, but they also have a political dimension as they are ultimately taken by the economy minister himself via a decree. In the past, Le Maire has not hesitated to use his veto powers for politically sensitive cases, turning investment screening cases into political battles. In a bid to cast himself as a defender of French industrial jewels, Le Maire widened the scope of investment screening powers in 2019, during his first term.
As in many other EU countries, the scope of France's veto powers was further extended during the coronavirus pandemic, to prevent the risk that companies weakened by the crisis could be bought by foreign investors. Those new powers, which were meant to be temporary, have been repeatedly extended amid the economic crisis linked to Russia's full-scale invasion of Ukraine.
The Segault case is also seen as an opportunity for Paris to show its muscle.
For socialist Michel Sapin, who served several times as France’s finance and economy minister, the deal gives the government an opportunity to present itself as a defender of national gems by taking “a braggart position on re-industrialization and industrial sovereignty” that, according to him, has not been backed up by action so far.
“We can’t deny that we have some irritants with Americans, especially the IRA in this phase,” said Macron’s ally Marie-Pierre Vedrenne, vice chair of the European Parliament’s trade committee, while noting that France’s investment screening won’t discriminate against U.S. buyers.
But Macron's allies were also quick to insist that Paris’ efforts to take Segault away from its American buyer was not a protectionist attempt to block a U.S. investment.
“The criteria won’t be friendship or mistrust toward Washington,” said a French minister, who was not authorized to speak publicly on the matter, adding that “the context” should not prevent Paris from “controlling some sovereignty aspects” of the deal.
For Vedrenne, Macron's ally in the European Parliament, "the Americans are first of all in a mindset of prior defense of their interests and we see it with this case … sovereignty is at stake so we have to be vigilant whatever the nationality [of the buyer] is, even if it is an ally, because the defense of the French interests must be examined above all.”
Despite some displays of friendship, tensions between Paris and Washington have risen at a steady pace over recent months and increased after French President Emmanuel Macron told POLITICO that Europe should not be “America’s followers” when it comes to China policy.
Le Maire has also been particularly harsh with the U.S., accusing Washington of using Russia’s war in Ukraine to establish “economic domination” and of breaching WTO rules with its massive subsidy package, the Inflation Reduction Act. Earlier this month, he said that Europe should, much like the the U.S. and China, put first its own industrial interests and stop obeying the free-trade dogma.
Earlier in the month, as he visited Washington, he accused "some" in the U.S. of applying double standards when it comes to trade with China. "I see that the volume of trade between China and the United States has never been so high ... we are asking Europe to give up trade that has increased between the United States and China. We don't want to be the village idiots, who get screwed and let other powers trade with China while we would no longer have the right to do so," the minister said.
Should France decide to veto the deal, Segault could be carved out from Flowserve's acquisition of Velan. However it is unclear whether the American buyer would still be interested in buying Velan without Segault.
Le Maire's quest for a French buyer might be a tough mission to accomplish.
Another former economy minister and “Made in France” champion, socialist Arnaud Montebourg urged Le Maire to block the deal earlier this month and offered to buy Segault together with the help of Pierre-Edouard Stérin, a businessman who in the past has been close to far-right former presidential candidate Eric Zemmour.
A person with direct knowledge of the file but who was not authorized to speak publicly said that it is unlikely Le Maire would back Montebourg's offer.
Elisa Braun contributed reporting.