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European EV makers are overtaking Tesla - but weak consumer demand is a drag

“Volkswagen sold more electric cars than Tesla in Europe last year in a key sign legacy carmakers have caught up on the California firm's head start - but Joachim Klement of Liberum Capital told Reuters margins are being squeezed across the industry.

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Big Oil Mulls a Slippery Future

Ask energy executives how much oil the world will need by 2050 and you will get very different opinions

NYT By Carol Ryan, June 29, 2023 

China on course to hit wind and solar power target five years ahead of time

Beijing bolstering position as global renewables leader with solar capacity more than rest of world combined

The Guardian, Amy Hawkins and Rachel Cheung, 29 Jun 2023

Explainer: Why the wind power industry has hit turbulence

Is more than evident how unforeseen events can quickly disrupt promising positive trends. The wind power sector is going through a —-perfect storm—- has been significantly impacted by the COVID-19 pandemic, resulting in disruptions to the supply chain and project construction delays. Additionally, certain companies have lost government support or subsidies because they failed to meet policy deadlines. This has further complicated the already challenging financing environment. Factors such as increasing energy prices, inflation, and rising interest rates have made securing funding for these projects harder.

REUTERS By Nina Chestney/Editing by Germán & Co, June 26, 2023

Wagner shot down 'special' Russian aircraft. 

With only 12 planes in its fleet, the Russian military may have to decrease its tasking levels to ensure the remaining aircraft's safety. In high-tempo operations, this loss may affect Russia's ability to coordinate and command its forces.

The Telegrpah / Editing by Germán & Co, NOW

Humans have sucked so much water out of the ground that the Earth has tipped

Pumping excessive amounts of water for farming over two decades has caused the planet to tilt more to the east, study says

The Telegraph By Nick Allen, US EDITOR 28 June 2023

Big Oil Mulls a Slippery Future

Ask energy executives how much oil the world will need by 2050 and you will get very different opinions

NYT By Carol Ryan, June 29, 2023 

Some people in the oil business insist that demand for the fuel will stay steady for decades. PHOTO: ELI HARTMAN/ASSOCIATED PRESS

When is it game over for oil? Don’t expect a clear answer from the people with the most to lose from a shift to cleaner fuels.

Within energy circles, estimates of how much oil will be needed in 2050 range anywhere from 80% less than today to business as usual. Investors have the difficult job of betting which companies are on the wrong side of the most important trend for the sector in decades. 

At an energy conference this week, Haitham al-Ghais, secretary-general of the Organization of the Petroleum Exporting Countries, repeated the cartel’s view that global demand for oil will hit 110 million barrels a day by 2045—as far out as OPEC currently projects. This is roughly a 10% increase from current rates. Natural gas, renewable power and hydrogen will all play bigger roles, but oil will remain center stage.

If OPEC is right, it is bad news for efforts to limit climate change. For the world to reach its net-zero target and restrict global warming to 1.5 degrees Celsius above preindustrial levels, demand must fall below 30 million barrels a day by 2050, according to the International Energy Agency. 

Most U.S. majors are also in the “high demand” camp, according to Alexander Schay, managing director at the energy consulting firm WK Associates and co-author of a Securities and Exchange Commission comment that compiled 2050 oil forecasts. 

Exxon Mobil said in a recent filing that the chances of the world getting to net zero are low because of the drop in living standards it would cause. The company expects global oil demand to still be roughly 100 million barrels a day by 2050 and is betting that technologies such as carbon capture and storage, as well as methane abatement, will allow the world to use fossil fuels for decades to come.  

European oil producers are considering the possibility that events move faster. Shell’s latest energy security report looks at two scenarios. Even with no new climate policies, it thinks demand for oil will fall around 10% by the middle of the century. And it sees a plunge if the world gets really serious about reducing emissions. 

BP has looked at two “what if” scenarios in addition to the most aggressive net-zero one. It estimates that oil production will decline by roughly 25% based on trends it is already seeing in the market, or close to 60% in its “accelerated” scenario in which climate regulations get tighter. 

But neither European company is seriously preparing for these challenging outcomes yet. Both Shell and BP recently reversed plans to cut oil production aggressively this decade, indicating that they will reduce supply once demand from customers tails off.

With demand for oil still growing, higher projections do look more realistic right now. The risk for executives hoping this won’t change is that they are wrong-footed by harsher regulations, wild-card technologies or a surge in destructive weather events that hammers home the need to cut emissions fast.

All of this underlines the intense uncertainty that energy bosses face, even looking a few years ahead. At Shell’s investor day this month, Chief Executive Wael Sawan told shareholders, “I would be lying to you if I pretended to know where various markets that we’re looking at are going to go in the 2026, 2027, 2028 period.”

One important swing factor that investors can watch is how fast oil demand for road transportation falls. This will depend on how fuel-efficient gas-engined cars become and how many drivers buy electric vehicles. EVs currently make up 16% of passenger-car sales globally. The data provider EV-volumes.com expects this share to rise rapidly to 68% by 2035.

Adoption will take longer if electric cars remain unaffordable for many consumers, which depends in part on supplies of battery materials such as lithium. It is also unclear whether creaking electricity infrastructure can cope with the level of electrification needed to wean the world off fossil fuels. Bottlenecks in supply chains and permitting are delaying installments of new wind and solar power capacity, especially in Europe.

Another trend to watch is whether rising demand for energy in emerging markets can be offset with efficiency measures, such as LED lighting or more efficient air conditioners. And it isn’t just energy: As the middle classes swell, consumers are likely to spend more on packaged goods. That will send demand for oil-based inputs to make virgin plastic soaring, barring better recycling rates or bans on single-use plastic.

Shareholders don’t look convinced by arguments that oil still has a long road ahead. According to the investment research firm New Constructs, the share prices of Shell, BP, Exxon Mobil and Chevron all imply that the companies’ profits will permanently decline from today’s levels.

The overall impression is of an oil industry in limbo, waiting to see what happens next.

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Senior Vice President, Chief Strategy and Commercial Officer and President, New Energy Technologies SBU

China on course to hit wind and solar power target five years ahead of time

Beijing bolstering position as global renewables leader with solar capacity more than rest of world combined

The Guardian, Amy Hawkins and Rachel Cheung, 29 Jun 2023

China is shoring up its position as the world leader in renewable power and potentially outpacing its own ambitious energy targets, a report has found.

China is set to double its capacity and produce 1,200 gigawatts of energy through wind and solar power by 2025, reaching its 2030 goal five years ahead of time, according to the report by Global Energy Monitor, a San Francisco-based NGO that tracks operating utility-scale wind and solar farms as well as future projects in the country.

It says that as of the first quarter of the year, China’s utility-scale solar capacity has reached 228GW, more than that of the rest of the world combined. The installations are concentrated in the country’s north and north-west provinces, such as Shanxi, Xinjiang and Hebei.

‘Insanely cheap energy’: how solar power continues to shock the world

In addition, the group identified solar farms under construction that could add another 379GW in prospective capacity, triple that of the US and nearly double that of Europe.

China has also made huge strides in wind capacity: its combined onshore and offshore capacity now surpasses 310GW, double its 2017 level and roughly equivalent to the next top seven countries combined. With new projects in Inner Mongolia, Xinjiang, Gansu and along coastal areas, China is on course to add another 371GW before 2025, increasing the global wind fleet by nearly half.

“This new data provides unrivalled granularity about China’s jaw-dropping surge in solar and wind capacity,” said Dorothy Mei, a project manager at Global Energy Monitor. “As we closely monitor the implementation of prospective projects, this detailed information becomes indispensable in navigating the country’s energy landscape.”

The findings are in line with previous reports and government data released this year, which predicted that China could easily surpass its target of supplying a third of its power consumption through renewable sources by 2030.

China’s green energy drive is part of its effort to meet dual carbon goals set out in 2020. As the world’s second largest economy, it is the biggest emitter of greenhouse gases and accounts for half of the world’s coal consumption. The Chinese president, Xi Jinping, pledged in 2020 to achieve peak CO2 emissions before 2030 and carbon neutrality by 2060.

A coal-fired power plant in Shanghai. China approved more coal power in the first three months of 2023 than in the whole of 2021. Photograph: Aly Song/Reuters

The report attributed China’s remarkable progress in expanding its non-fossil energy sources to the range of policies its government has implemented, including generous subsidies to incentivise developers as well as regulations to put pressure on provincial governments and generating companies.

China began operating the world’s largest hybrid solar-hydro power plant in the Tibetan plateau on Sunday. Named Kela, the plant can produce 2bn kW hours of electricity annually, equal to the energy consumption of more than 700,000 households.

It is only the first phase of a massive clean energy project in the Yalong River basin. The installation has a 20GW capacity now and is expected to reach about 50GW by 2030.

Despite China’s careful planning, its energy transition is not without its challenges. In recent years, record heatwaves and drought crippled hydropower stations, resulting in power crunches that brought factories to a halt. An outdated electricity grid and inflexibility in transferring energy between regions add to the uncertainty.

The Kela plant is located in the sparsely populated west of the country, where more than three-quarters of coal, wind and solar power is generated. But the vast majority of energy consumption happens in the east. Transporting energy thousands of miles across the country results in inefficiencies.

The way China’s grid is organised can incentivise building coal plants around renewable generators. Much of the new renewable capacity is not connected to the local energy supply and often bundled with coal power to be transmitted to areas of higher demand.

More coal power was approved in the first three months of 2023 than in the whole of 2021.

“China is making strides,” said Martin Weil, a researcher at Global Energy Monitor and an author of the report. “But with coal still holding sway as the dominant power source, the country needs bolder advancements in energy storage and green technologies for a secure energy future.”

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Explainer: Why the wind power industry has hit turbulence

Is more than evident how unforeseen events can quickly disrupt promising positive trends. The wind power sector is going through a —-perfect storm—- has been significantly impacted by the COVID-19 pandemic, resulting in disruptions to the supply chain and project construction delays. Additionally, certain companies have lost government support or subsidies because they failed to meet policy deadlines. This has further complicated the already challenging financing environment. Factors such as increasing energy prices, inflation, and rising interest rates have made securing funding for these projects harder.

REUTERS By Nina Chestney/Editing by Germán & Co, June 26, 2023

LONDON, June 26 (Reuters) - Problems in Siemens Energy's (ENR1n.DE) wind turbine division that could cost more than a billion euros ($1.09 billion) to fix have shaken investor confidence in the wider industry and last week prompted a sell-off in wind companies' shares.

Over the last two decades, the industry has grown fast, lowered technology costs to on a par or even cheaper than fossil fuels in some parts of the world and increased efficiency through bigger and bigger turbines.

According to the Statistical Review of World Energy report on Monday, global wind and solar power grew to a record share of 12% of power generation last year, surpassing nuclear.

The Global Wind Energy Council said earlier this year that a record 680 gigawatts (GW) of wind energy capacity is expected to be installed by 2027.

But the industry has had a tough few years.

SUPPLY CHAIN

The COVID-19 pandemic from 2020 led to lockdowns, decreased industrial activity and reduced global energy demand.

In the wind sector, as in other industries, restrictions on movement triggered supply chain disruption and delays in project construction.

Limits on the number of workers allowed on site and delays in components from China and elsewhere meant that some wind developers had to delay or even cancel projects.

Some firms also missed policy deadlines that meant that they lost out on government support or subsidies for which they previously qualified, the International Energy Agency said.

The war in Ukraine has also created logistics and supply chain issues, aggravated in some cases by the impact of sanctions.

ECONOMICS

Despite mounting pressure to combat climate change by moving to renewable sources, financing projects has been a challenge.

The war in Ukraine last year led to higher energy prices and this fuelled rises in inflation and interest rates.

But the expected revenues of those planning to build wind turbines have not risen in tandem. Many governments index the prices paid for wind energy, usually through auctions, which are often too low, analysts at Wood Mackenzie said.

The rise in commodity prices, such as steel, also increased the price of wind turbines by up to 40% over the last two years, industry body WindEurope said earlier this year.

Wind turbine manufacturers - unable to pass on higher costs to customers who placed orders two or three years ago - have tried to mitigate the impact of higher inflation and pressure on profit margins by raising prices.

COMPETITION

As more governments have announced ambitious climate targets, pressure on companies to increase renewables development has increased.

Established wind manufacturers, already competing with each other to drive down component and technology costs and increase wind farms' efficiency with huge turbines, also face new entrants.

Traditional wind project developers, such as utilities, increasingly face competition from oil and gas majors seeking to diversify their portfolios, who have often outbid them in wind tenders and auctions.

Some oil and gas companies, however, are also struggling with poor returns from renewables while oil and gas profits have hit record levels in response to high energy prices.

COMPONENTS

Among the issues which arise from operating wind turbines, wear and tear on turbine blades over time can lead to erosion.

The increasing size of blades on turbines also raises the risk of lightning strikes and repairs.

For offshore wind, harsh weather conditions can also result in corrosion of foundations or of the turbine.

Leading wind turbine maker Vestas flagged quality issues with turbine blades in their onshore fleet in 2020 and provided an extra 600 million euros to fix them. Its shares fell more than 6% on Friday, while shares in Siemens Energy, the second biggest wind turbine maker, sank 37%.

Most of the problems of Siemens Energy's wind unit Siemens Gamesa concern its onshore turbine fleet, where the group has discovered quality issues in certain components, including rotor blades and bearings.

Siemens Energy said that 15%-30% of the fleet could be affected by the problems, which were exposed during a review that noted "abnormal vibration behaviour of some components" and unspecified problems around product design.

Dealing with issues could cost more than 1 billion euros, it said.

Seaboard: pioneers in power generation in the country…

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Wagner shot down 'special' Russian aircraft. 

With only 12 planes in its fleet, the Russian military may have to decrease its tasking levels to ensure the remaining aircraft's safety. In high-tempo operations, this loss may affect Russia's ability to coordinate and command its forces.

The Telegrpah / Editing by Germán & Co, NOW

According to an exclusive note, post of “The Telegraph” 29 minutes ago, the British Ministry of Defence has said that one of the Russian warplanes reportedly shot down during the Wagner rebellion was a "special mission aircraft" with a critical role in Russia's war in Ukraine, 

In its latest intelligence update, the defence ministry said that on Saturday, air defence forces of the Wagner group had reportedly shot down an II-22M aircraft, part of a relatively small fleet of 12 "heavily utilised for airborne command and control, and radio relay tasks.

The ministry warned that the loss of the craft could have a longer-term impact on Russia's air capability, as "there is a possibility that current tasking levels may have to be reduced to safely manage the remaining fleet."

"This will likely undermine Russia's ability to command and coordinate its forces, particularly during periods of high tempo operations."

Humans have sucked so much water out of the ground that the Earth has tipped

Pumping excessive amounts of water for farming over two decades has caused the planet to tilt more to the east, study says

The Telegraph By Nick Allen, US EDITOR 28 June 2023

The tilt of the Earth has shifted because of the vast quantity of groundwater humans have sucked out of it over the past two decades, according to scientists.

Pumping water out of the ground for drinking and farming redistributed such a large mass that the Earth’s tilt moved by 31.5 inches to the east, toward Iceland, between 1993 and 2010.

According to the study, published in the Geophysical Research Letters journal, the planet’s north-south axis has been tipping at a rate of about 1.7 inches per year.

Scientists described the redistribution of water on the planet as “like adding a tiny bit of weight to a spinning top – the Earth spins a little differently as water is moved around”.

Prof Ki-Weon Seo, a geophysicist at Seoul National University who led the study, said: “Earth’s rotational pole actually changes a lot. Our study shows that among climate-related causes, the redistribution of groundwater actually has the largest impact on the drift of the rotational pole. 

“We have affected Earth systems in various ways. People need to be aware of that.

“I’m very glad to find the unexplained cause of the rotation pole drift. On the other hand, as a resident of Earth and a father, I’m concerned and surprised to see that pumping groundwater is another source of sea-level rise.”

Why the Earth’s axis has shifted

Sum of observed polar motion excitation trend contributors…

*Estimated polar motion excitation without groundwater storage changes

*Observed trend of polar motion excitation

*Estimated polar motion excitation with groundwater storage changes

Between 1993 and 2010, about 2,150 gigatons of groundwater was extracted from aquifers below the surface, enough to fill Lake Victoria in Africa.

The Earth spins at about 1,000 mph and the largest contributor to the movement of the axis is flow in convection movements in the molten rock, well below the surface.

However, the new study showed that the removal of groundwater was the second largest contributor.

The fact that water removal could change the rotation of the planet was first discovered seven years ago, but has now been measured.

Surendra Adhikari, a research scientist at Nasa’s Jet Propulsion Laboratory, who published a 2016 paper on water redistribution impacting rotational drift, said: “They’ve quantified the role of groundwater pumping on polar motion, and it’s pretty significant.”

In the new study, researchers created models of changes in the wobble of the Earth’s rotational pole and the movement of water.

To begin with, they looked at only the movement of ice sheets and glaciers, before adding in different scenarios of groundwater redistribution.

The model only matched the observed polar drift once the researchers included the 2,150 gigatons of groundwater redistribution.

They also found the location of the groundwater contributes to how much it could change polar drift.

The fact that water removal could change the rotation of the planet was first discovered seven years ago CREDIT: Smith Collection/Gado/Getty Images

Redistributing water from the mid-latitudes has a larger impact on the movement of the rotational pole.

Water being redistributed in western North America and northwestern India, both at mid-latitudes, had a significant impact.

Prof Seo said that attempts to slow the extraction of groundwater depletion in those regions could theoretically alter the drift of the rotational pole, but only if such conservation approaches were sustained for decades.

The rotational pole usually changes by several metres a year owing to other factors including the mantle flow.

That means changes due to the pumping of groundwater would not lead to a shifting of the seasons.

However, when looked at on geologic time scales, polar drift could have an impact on the climate, the scientists said.

They will continue to look into previous decades to see how much groundwater extraction has affected the Earth’s rotation over a longer period.

Prof Seo said: “Polar motion data are available from as early as the late 19th century.”