MAY 8, 2024

Good morning!

As you may have noticed by now, we’ve adjusted our newsletters to get you caught up fast (I was previously at Axios, which infused a sense of brevity in me!).

We're providing more digestible doses of our deep reporting in our newsletter, and you can check out our (free!) website for the full rundowns.

I'd love to know what you think: Reach me directly at amy@ciphernews.com.

In today’s edition (which, like most editions, should take you five minutes or less to read!):

• Amena dives deep into the energy ambitions of and challenges facing Latin American and Caribbean nations.
• In our latest Data Dive, Anca charts China’s greening power investments.

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Illustration by Nadya Nickels.

Latin America and the Caribbean are at an energy crossroads

BY: AMENA H. SAIYID

Latin American and Caribbean nations are poised to embrace cleaner energy but stiff competition from the United States and Europe could hamper that ambition.

What’s more, many nations in the region could potentially become major clean energy players — but may rely on fossil fuel revenues to do so.

Read part one of Amena’s article about Latin America’s cleantech ambitions here and check out part two diving into three examples — Guyana, Brazil and Trinidad and Tobago  — here.

The highlights:

New U.S. laws pouring billions in clean-energy subsidies and a forthcoming border tax from the European Union on carbon-intensive goods (layered on top of China’s decades-long dominance in this space) are impeding Latin American and Caribbean countries from developing their own cleantech industries and competing in the global marketplace, two leaders from the region told Cipher in exclusive interviews.

“What happens to the rest of us who are now competing to try and get the limited, literally limited, supply of renewable infrastructure?” Trinidad and Tobago’s minister of energy and energy industries Stuart Young told Cipher on the sidelines of the global energy conference CERAWeek by S&P Global in Houston in March.

The region holds immense potential for clean energy development, with one-fifth of the world's rainforests and abundant wind and solar resources. It also possesses significant reserves of copper, lithium and other minerals crucial for clean technologies. Despite these advantages, Latin American and Caribbean nations are struggling to develop their clean energy industries.

At this year’s Group of 20 countries (G20) meeting in July, which Brazil is hosting, Brazil’s president Luiz Inácio Lula da Silva intends to call out the EU and the U.S. to make it clear that “excessive protectionism and trade barriers” are not conducive to a global energy transition, Brazil’s energy minister Alexandre Silveira told Cipher at CERAWeek.

Some experts argue the region isn’t actually disadvantaged by the EU’s border carbon taxes or by U.S. subsidies, however.

A look at how decarbonization is unfolding in three countries reveals how mixed the energy transition picture is in this part of the world.

Guyana is rapidly expanding its oil and gas production but aims to use revenue from fossil fuels to fund its transition to cleaner energy, including investments in solar and hydroelectric power, its ambassador to the U.S. told Cipher last week.

Brazil, as the largest economy in Latin America, is well-positioned to benefit from climate action with its diverse energy matrix, including hydropower and biofuels. However, concerns about the environmental impacts of mining, especially in the Amazon rainforest, persist.

Trinidad and Tobago heavily relies on natural gas but is exploring ways to diversify its energy mix with wind and solar energy.

Check out part 1: Global cleantech competition threatens Latin American and Caribbean ambitions

Check out part 2: Latin American energy spotlight: Guyana, Brazil, Trinidad and Tobago

This summary was written in part with the help of ChatGPT.

Lunchtime Reads and Hot Takes

Here’s where the Biden admin wants to build new power lines — ASAP — Canary Media

Amena’s take: These projects, which will be eligible for $2 billion in federal loans after undergoing environmental review, are aimed at complementing separate but related rules expected out of the Federal Energy Regulatory Commission next week.

The $9tn question: how to pay for the green transition — Financial Times (subscription)

Cat’s take: Notable from an energy strategist: “This is a false problem,” he says. “The sums involved are actually quite limited and it’s absolutely solvable." But they will require bold, strategic regulation.

Giant Batteries Are Transforming the Way the U.S. Uses Electricity — The New York Times

Amy’s take: Good graphics and overview. No mention of pumped hydro though, and the story only hints at longer duration energy storage at the end.

Here’s why so many Republicans won’t buy EVs — The Washington Post

Amena’s take: Saving money on gasoline while protecting the environment could be seen as a plus; instead, it has become a culture war issue.

Tesla won the EV charging race. So why’s it gutting its Supercharger team? — Canary Media

Amy’s take: It was eye-opening to learn about the degree to which electric vehicle charging stations may or may not be profitable, despite their core role in facilitating more EVs.

A Billionaire Wanted to Save 1 Trillion Trees by 2030. It’s Not Going Great. — Bloomberg

Cat’s take: The number of trees pledged to the effort is less than 15% of the goal and 2.6 billion trees, less than 0.3% of what's needed, have been planted or conserved, according to admittedly imperfect records.

Can Forests Be More Profitable Than Beef? — The New York Times

Bill’s take: Carbon offsets have proved controversial, but this story shows why many — certainly including the carbon credit industry itself — have not given up on them as a way to address climate change.

Spain, Portugal take home most of €720m EU hydrogen award — Euractiv

Anca’s take: The results were impressive, with all bids calculating they can produce hydrogen below €0.5 per kilogram. This is ten times lower than the €4.5 per kg of hydrogen the state support was capped at.

‘Everything’s on fire’: Inside the US failure to safeguard pipelines — E&E News (subscription)

Cat’s take: This excellent reporting exposing a "potentially deadly gap in the regulatory apparatus" is especially critical, reporter Mike Soraghan points out, because we're going to need lots more pipelines.

This bank is turning Africa into a climate investment opportunity — Bloomberg

Bill’s take: Africa has the world’s youngest population, and long term there’s no solving the climate crisis without this huge continent on board, the sooner the better.

Microsoft to power data centres with big Brookfield renewables deal — Financial Times (subscription)

Cat’s take: The ginormous deal is a sign of how tech giants like Microsoft both demand huge quantities of new energy to drive AI data centers and at the same time are looking to meet clean power commitments.

More of what we're reading:

• Amazon, BP Counter Push to Repeal Washington Climate Law — Bloomberg
• Wind and solar are ‘fastest-growing electricity sources in history’ — CarbonBrief
• After Vogtle, what’s next for nuclear? — E&E News (subscription)
• Good COP, bad COP: Azerbaijan’s climate charm offensive is backfiring — POLITICO

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!

How China's clean power investments are growing

Source: DNV • "Other renewables" includes hydropower, geothermal and biomass-fired generation. “Fossil fuels” is largely coal. Investments include both state and private investments.

BY: ANCA GURZU

China’s investments in renewable and low-carbon electricity sources are set to overshadow its investments in coal power over the next few decades.

That’s according to a China-focused energy transition outlook recently released by Oslo-based consultancy DNV, which found China will invest more than $150 billion in renewables each year by 2030 and will invest around $250 billion a year by 2050.

By the end of this decade, China will account for 35% of global investments in solar photovoltaics, 27% of investments in wind power and 40% of investments in nuclear, totaling about $1.3 trillion in just these three sectors.

China will still be responsible for a third of global coal investments over the next decade, the forecast also found. China is currently the largest consumer and producer of coal and the world’s top carbon polluter. Its approval for new coal-fired power plants rose in 2023.

But coal use in the country’s power sector will likely peak before 2030 and then decline steadily, found a recent report from Australia-based think tank Climate Energy Finance.

And, as the chart above shows, the country’s decarbonization efforts are picking up pace. (To be clear, this doesn’t represent China’s current electricity mix, which is still nearly two-thirds coal).

Already a leader in renewable energy investments, China will more than quintuple renewable energy installations by 2050, DNV found. By midcentury, the consultancy determined China “will comfortably be the world’s largest wind market.”

AND FINALLY...
Electric food bank

Cipher reader and vice president of development at the Interstate Renewable Energy council Leslie Graham snapped this photo of electric vehicles owned by the local food bank in her hometown of Broken Arrow, Oklahoma. The food bank, Broken Arrow Neighbors, says they are saving $500/week by going electric. Graham snapped this picture in front of the Hard Rock Casino, located in Cherokee Nation. There aren't tons of chargers in the area, but Cherokee Nation's are free, Graham says.

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.