MAY 1, 2024

Good morning,

Today’s edition:

• We have a Voices article decrying the electrician shortage.
• Anca traveled to Strasbourg, France, to report on Europe’s new cleantech manufacturing law.
• In our latest Data Dive, Bill charts energy price changes in Asia.

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

Illustration by Nadya Nickels.

How we can fix the electrician shortage

BY: TRACY K. PRICE

Price is the founder and CEO of Qmerit, a strategic partner to Schneider Electric. Qmerit delivers installation and integration solutions for energy transition technologies. You can reach Tracy at samantha.graham@qmerit.com.

Not all superheroes wear capes, as the saying goes, and that’s certainly true of electricians. Rather belatedly, society is realizing this profession is indispensable to energy resilience and saving the planet in the new electrification age. For the energy transition, we need electricians, and lots of them.

Yet early Baby Boomer retirements and a lack of interest in the building trades among young people over the past few decades are contributing to a dwindling electrician labor pool. This workforce challenge poses a big and, I’d argue, under-acknowledged threat to the United States reaching its clean energy goals.

If you’re an electrician, it’s both the best and the worst of times. There’s no shortage of work, yet the demand can be overwhelming. In California, for example, there’s one certified electrician for every 478 households. The 2022 Inflation Reduction Act’s (IRA) electric vehicle (EV) tax credit and $9 billion for home electrification technologies, like EV charging, solar panels, battery storage and heat pumps, are generating a tsunami of demand. Meanwhile, automakers are cranking out new EV models coming to market at more affordable prices.

And if you think it’s hard to hire a certified electrician now, just wait.

The electrical workforce could shrink 14% by 2030, while demand could increase by as much as 25% over the same period, according to recent data from Associated Builders and Contractors and the National Electrical Contractors Association.

By no means is this a hopeless situation. There are solutions I believe will help the U.S. develop a new generation of mission-inspired electricians.

Click here to read about those solutions.

Lunchtime Reads and Hot Takes

G7 to sign exit from coal by 2035, but may offer leeway, sources say — Reuters

Anca’s take: The flexibility is for Germany and Japan, which might rely on coal for longer. Supporters celebrated the move as a historic moment, while some non-profits said it was too little too late.

Startups want to cool Earth by reflecting sunlight. There are few rules and big risks — NPR

Amy’s take: This startup is getting a lot of attention for its rather rogue ways, but other efforts are underway to more methodically and thoughtfully study the benefits and risks.

Department of Energy dives into promises and perils of AI — Axios

Cat’s take: The Energy Department announced an investment in using AI to improve permitting and highlighted funding opportunities for AI tools that could address the backlog of projects waiting to be connected to the grid.

POWER SHIFT: Staggering rise of renewables positions China to end new coal power before 2030 — Climate Energy Finance

Bill’s take: While this report is 100 pages long, this is nonetheless the most accessible overview of China’s complex power sector transformation I’ve seen. It concludes China’s energy transition is gaining momentum.

In the Heart of a Global Methane Hotspot, Signs of Progress — Bloomberg

Amena’s take: Satellite data show a 50% decrease since August. That is a sign of progress considering this crater was deliberately set on fire half a century ago.

Major US solar manufacturers call for strict new solar-panel tariffs — Canary Media

Amy’s take: The carrots versus sticks discussion toward the end of the article is interesting. The impact of the Inflation Reduction Act carrots has been large!

Mercedes-Benz CEO Ola Källenius explains why EVs are still the future — but Apple’s next-gen CarPlay isn’t — Decoder

Bill’s take: Yes, EV adoption and “system” changes like charging are coming a bit slower than expected. But they’re still happening fast, and the “destination” — an all-EV product line-up — remains unquestioned.

Rising Copper Demand Spurs Search for Alternative Climate Solutions — Bloomberg

Cat’s take: This insightful piece shines a spotlight on copper's vital role in the energy transition, a forthcoming supply crunch and ways to recycle and/or use less copper and improve refining.

COP29 host Azerbaijan defends role of oil and gas in climate change talks — Financial Times (subscription)

Anca’s take: It's true Europe is hungry for Azeri gas in its efforts to diversify from Russia. In fact, Norway offers a similar discourse for its increased production. But can these arguments hold at the climate conference?

One French Company’s Lonely Struggle to Survive Fierce Competition From China — The Wall Street Journal

Bill’s take: Another reminder, if one is needed, that competing with Chinese companies on high performance, core clean technologies will be very challenging, even with very high tariffs.

More of what we're reading:

• EU, watchdogs start action against airlines over greenwashing — Reuters

• The ambitions of China’s BYD stretch well beyond electric vehicles — Financial Times (subscription)
  
  

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Europe passes cleantech law everyone agrees is not enough

The main entrance of the European Parliament in Strasbourg, France in April 2024. Photo credit: Anca Gurzu.

BY: ANCA GURZU

STRASBOURG, France — It was the last big hurrah before the upcoming European elections and a timid first hurrah for Europe’s cleantech manufacturing ambitions.

Members of the European Parliament (MEPs) gathered last week on the outskirts of this iconic French city in a modern building architecturally inspired by a Roman amphitheater for one final plenary seating before the end of their five-year political term. Amid a flurry of a record-number of scheduled votes, members gave the green light to a new law intended to help establish the European Union as a cleantech manufacturing powerhouse.

Read Anca’s full article about the new law here.

Supporters say it’s a good step forward, easing business decisions and showing Europe is acting. Critics say it’s a missed opportunity because the law is not targeted, comes with many opt-outs and lacks financial firepower.

Everyone agrees it’s not enough.

The Net-Zero Industry Act (NZIA) is seen as the EU’s key response to the United States’ 2022 Inflation Reduction Act, a law that provides hundreds of billions of dollars in subsidies and tax credits to encourage cleantech companies to do business on American soil.

Europe’s new law is meant to make it easier to get a manufacturing hub off the ground for key clean technologies by easing permitting procedures, making access to financing easier and introducing a set of sustainability criteria aimed at favoring domestic European production.

If anything, the law represents a much bigger debate dominating the political discourse ahead of the European election in June on how the 27-member bloc can get its industrial groove back to boost its massive European Green Deal climate policy initiatives. The bloc’s goal is to remain competitive amid an intensifying global cleantech race with the U.S. and China, while priorities shift more toward defense spending as Russia’s war in Ukraine drags on next door.

Click here for Anca’s dispatch from the ground, which includes quick coffee breaks with MEPs and a step into the buzzing last plenary session of the Parliament. 

Renewable energy is now cheaper than fossil fuels in Asia

Source: Wood Mackenzie • Average Levelized Cost of Energy comparison for power generation in Asia Pacific countries. Years 2024-2030 are forecasts.

BY: BILL SPINDLE

The average cost of renewable energy, especially solar, plunged below the average cost of fossil fuels in the Asia Pacific region last year — and the gap will continue to widen, according to energy consultancy Wood Mackenzie.

Solar is now the least expensive source of power in the region and will grow even less expensive over the coming decades while fossil fuels grow more expensive, the consultancy says.

The calculations reflect what’s known as the levelized cost of energy, or LCOE, which calculates the cost of producing electricity over the entire life of a project. The method allows apples-to-apples comparisons between renewables such as solar and wind — which require large upfront spending to build but then run on free fuel — with coal and gas generation projects that may cost less to build but need fuels with costs that vary with global markets and incur delivery costs.

Wood Mackenzie says China’s manufacture of solar modules and wind turbines has boomed, overwhelming demand at home and even abroad. That’s driving down renewable costs across the region after lingering supply bottlenecks and shortages from manufacturing shutdowns during the Covid-19 pandemic, which pushed prices 18% higher in 2022.

China’s renewables push, along with additional manufacturing elsewhere and technological advances in both wind and solar, will carry on forcefully enough to keep prices for renewables lower for decades to come, Wood Mackenzie says.

Meanwhile, the consultancy expects the cost of coal and natural gas to rise as countries step up taxation on the carbon emissions that come with burning fossil fuels.

By 2030, the consultancy says renewables will be about one-third cheaper than fossil fuels.

To be sure, the LCOE model doesn’t incorporate all aspects of electricity generation, such as the system changes needed to accommodate for variable wind and solar energy (to dive more into these caveats, check out this explainer from nonprofit World Resources Institute).

AND FINALLY...
Japanese solar field

Bill snapped this photo of a solar panel array in Fukugami, Japan during a recent trip. Bill is in the middle of a months-long reporting trip across Asia and looking into the energy transition across the region.

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.