SEPTEMBER 18, 2024

Hello!

The Cipher team will be in NYC much of next week for Climate Week and our annual team meeting. Will you be there? Get in touch if so!

In this week’s edition:

• China met its renewable energy goal six years early; now it must figure out how to use all that energy.
• A Voices author writes about the importance of renewable hydrogen to the U.S. steel industry.
• Regardless of the U.S. election’s outcome, Republican states are expected to continue leading in cleantech installations through 2030.

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Send your energy photos, story tips and more to news@ciphernews.com.

Ships tow the OceanX twin wind turbine platform from the Chinese city of Guangzhou out to a wind farm in the South China Sea in August 2024. Photo credit: Ming Yang Smart Energy Group Limited.

China hit its wind and solar goal six years early

Now, it has to figure out how to use all that power.

BY: XIAOYING YOU

You is an award-winning freelance journalist based in London. She writes and reports about climate change and the energy transition. You can reach her at tracyyou.sh@gmail.com.

One morning in August, residents of the southern coastal Chinese city of Guangzhou woke up to an extraordinary sight: two enormous wind turbines atop one floating platform, like twin heads on the same neck, being towed out to sea.

The turbines, dubbed OceanX by their manufacturer Ming Yang Smart Energy Group Limited, is the latest example of China’s determination to deploy massive amounts of renewable energy thanks to ambitious government support. Despite that backing, China is facing a challenge familiar to many other countries — how to upgrade the country’s infrastructure so it can actually use all that renewable capacity.

“The situation has led to more and more wind and solar power being curtailed in areas that have many mega wind and solar bases,” Yu Aiqun, a research analyst at Global Energy Monitor, a San Francisco-based nonprofit organization, told Cipher.

Read the full article here on Cipher’s website.

Highlights:

China’s wind and solar capacity ballooned after 2009, when the country started building its first solar farms. Thanks to consistent and ambitious government policies for more than a decade, the country hit its 2030 target of installing 1,200 gigawatts (GW) of wind and solar power in July, more than six years ahead of schedule.

Exploding energy demand over the last 20 years led the Chinese central government to enact sweeping policies to promote renewable energy. Beijing also regarded the renewable industry as an opportunity to leapfrog its economy, launching a series of industrial policies to support wind and solar equipment manufacturing.

Regional governments have expedited approval times for renewables projects and private money has flowed into the industry as well.

Despite these successes, China’s energy transition is facing headwinds, especially when it comes to putting all its installed wind and solar fleets to work generating electricity for homes, businesses and factories.

While wind and solar farms accounted for 36% of China’s total power capacity at the end of 2023, their generation only accounted for 15.5% of the country’s total power last year, per the China Electricity Council. Around 60% of China’s power still comes from coal plants.

The gap is caused by a mix of factors. For one, wind and solar energy is often most abundant when demand for electricity is low, such as in the afternoon. Wind and solar farms must find ways to store or transmit their extra electricity or curtail their output by letting turbines and panels stay idle.

One solution is to use batteries — something the Chinese government has been pushing, said Yang Muyi, a senior electricity policy analyst with London-based think tank Ember.

China has also been planning and building ultra-high-voltage power lines to send wind and solar power from the north and the northwest to its major cities hundreds of miles away. But the government hasn’t planned enough lines and is building them too slowly, according to a recent report by Global Energy Monitor.

Even for China, there is no quick fix to solve the curtailment issue, said Yang. “A variety of measures are needed, from upgrading the grid to improving the power-trading market.”

Read the full article on Cipher’s website.

Lunchtime Reads and Hot Takes

GOP House Speaker Johnson backs keeping some of Biden’s clean energy tax credits — CNBC
Amena’s take: GOP lawmakers voted en masse against the IRA. Data now shows GOP states benefiting from the tax credits, posing a dilemma for the leadership who would like to repeal the law.

Why EV investors are tracking Taylor Swift and swing state polls — Financial Times (subscription)

Bill’s take: Whether it’s a Taylor Swift endorsement or an assassination attempt, events in U.S. elections are reverberating over to EV stock prices in Asia.

The false dichotomy of systemic and individual behaviour change — Sustainability by numbers

Amy’s take: This is so well written and worth reading through to the end. I particularly liked where she talks about the actions you can take, calling it your handprint, a counter to your carbon footprint.

Von der Leyen names new European Commission with focus on security, growth, climate change — Reuters

Anca’s take: The proposed commissioners will be grilled by the members of the European Parliament, who have to give the team the green light. Climate change "is the major backdrop of all what we are doing," von der Leyen said.

U.K. to Fund ‘Small-Scale’ Outdoor Geoengineering Tests — The New York Times

Cat’s take: Geographically limited outdoor tests will only be permitted after indoor tests and computer modeling have been completed and if deemed necessary.

Big steelmaker weighs abandoning $500M Biden climate grant — POLITICO

Amena’s take: It's not enough to have the technology in hand. Manufacturers need to find buyers or off-takers at the higher prices that cleaner projects command.

The Hague becomes world’s first city to pass law banning fossil fuel-related ads — The Guardian

Anca’s take: The decision follows a call by United Nations chief António Guterres earlier this year to enact such bans, as they have done with tobacco. It will be interesting to see the effect it will have on these sectors.

Three-Quarters of Ford’s EV ‘Skunkworks’ Are Tesla, Apple and Rivian Alums — The Information (subscription)

Bill’s take: Ford’s most recent EV offerings, including a much-touted pickup truck, have largely flopped. But the CEO has said he’s not giving up, and indeed has “bet the company” on the success of EVs.

Is Inequality the Key to the Climate Change Debate? — The New York Times

Cat’s take: “There’s no way we can preserve the planetary habitability in the long run if we don’t address our inequality challenge at the same time,” said well-known economist Thomas Piketty. A critical and under-discussed point.

More of what we're reading:

• Meta closes deal to buy up to 3.9 mln carbon credits in Latin America – Reuters

• Wabash Valley Resources receives conditional loan commitment of $1.5 billion — Tribune-Star
• Shortfall in Young Engineers Threatens Nuclear Renaissance — The Wall Street Journal
• The disaster no major U.S. city is prepared for — The Washington Post

We denote ‘(subscription)’ when publications don’t provide any complimentary articles, but many others may ultimately allow you to read only a limited number each month before subscribing. We encourage those who can afford it to support the journalism you love most!

Renewable hydrogen can unlock green steel promise

Illustration by Nadya Nickels.

BY: HILARY LEWIS

Lewis is the steel director at Industrious Labs, an organization focused on scaling campaigns and building a movement to clean up heavy industry. You can reach her at Hilary@industriouslabs.org.

Steel mills have long been the backbone of economic power in America's manufacturing heartland. They've forged the skyscrapers we admire, the cars we drive and the modern middle class. But there’s a dark side to this industrial might: climate and health-harming air pollution.

Amidst these challenges, clean hydrogen made with renewable energy is a potential game-changer for the steel industry. This colorless, odorless gas has the potential to slash toxic emissions while reducing greenhouse gases by over 90%.

Recent federal investments, including the United States Energy Department’s Hydrogen Hubs program and significant tax incentives from the 2022 Inflation Reduction Act, could position the U.S. globally to lead in clean hydrogen production. However, to realize the economic, health and climate benefits of sustainable steelmaking, the government must commit to investing in hydrogen produced from renewable energy.

Read the full article on Cipher’s website.

GOP states won't abandon cleantech if Trump wins, report predicts

Source: Rystad Energy's Energy Scenarios Solution, August 2024 • Rystad analyzed project rollouts across the value chain in each U.S. state. Swing states are designated as those where the electorate has voted with either Democrats or Republicans in past elections.

BY: AMENA H. SAIYID

Republican-leaning states are unlikely to abandon clean energy projects and jobs if former President Donald Trump is re-elected president of the United States this November, according to the latest analysis by Oslo-based think tank Rystad Energy.

In the months leading up to the election, former President Donald Trump has repeatedly threatened to terminate the “Green New Scam,” the name he has given to climate initiatives under the Biden administration. Biden’s signature climate law, the 2022 Inflation Reduction Act, is responsible for ushering nearly half a trillion dollars of investment into clean energy.

“If the Republican party wins the 2024 presidential election, the incoming administration will inherit the IRA and numerous pre-approved clean energy projects, making it unlikely that these initiatives would be abandoned,” Rystad wrote in its analysis.

Rystad reached its conclusions after analyzing where four types of clean energy technologies are being made and installed from 2024 to 2030 across the U.S. They then broke the data down by how each state is expected to vote.

By 2030, Rystad projects GOP-led states such as Oklahoma, Indiana, Florida and Texas will account for:

• 57% of all U.S. battery cell manufacturing
• 59% of solar cell and module production
• 95% of hydrogen production
• 83% of carbon capture installations.

“The red states are basically receiving the lion’s share of investments,” Lars Nitter Havro, head of Rystad’s Energy Macro Research, told Cipher.

Swing states like Arizona and Georgia are equally unlikely to give up making batteries and solar energy parts or the accompanying job growth that has resulted from IRA dollars, Havro said.

If Republicans win the U.S. Senate in November and Democrats take over the U.S. House of Representatives, Rystad said chances of Republicans repealing the IRA are low. But that doesn’t mean there won’t be any adverse impacts. Competing priorities among the two political parties may lead to legislative gridlock, affecting projects and driving states to craft a patchwork of their own policies that may protect either their clean energy or fossil fuel interests.

Rystad’s analysis of the U.S. election reflects the global importance of the outcome: To what degree the U.S. keeps moving full steam ahead on the energy transition is likely to affect the pace in other countries.

AND FINALLY...
Carbon capture art

Artist and climate tech entrepreneur Svenja Telle's debut exhibited artwork "Ke pō, ke ao" (The night, the dawn) reimagines the native Hawaiian creation story using the world’s first ink made from carbon pulled from the air via direct air capture technology. Telle brings sky-born carbon to canvas, depicting a pregnant woman’s silhouette resembling Mauna Loa's summit crater, surrounded by traditional Hawaiian designs and Kumulipo verses, merging climate solutions with indigenous cosmology.

Each week, we feature a photo that is somehow related to energy, the thing we all need but don’t notice until it’s expensive or gone. Email your ideas and photos to news@ciphernews.com.

Editor’s note: In addition to supporting Cipher, Breakthrough Energy also supports and partners with a range of entities working to tackle climate change, including nonprofits, corporations, startups and research firms. For more information on Cipher’s editorial policy, click here.