AUGUST 7, 2024

Hello!

In today’s edition:

• Dispatch from Shanghai on how Chinese solar firms are (still) pursuing Western markets despite hurdles.
• Voices article on how to make food without farms.
• Energy storage is rising in our latest Data Dive by Anca.

Was this email forwarded to you? Sign up here.

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

Solar panel products displayed at the Clenergy Technology Co. booth at the International Photovoltaic Power Generation and Smart Energy Expo in Shanghai, China, on Thursday, June 13, 2024. Photo credit: Qilai Shen/Bloomberg via Getty Images.

Chinese solar firms pursue U.S., Europe markets despite obstacles

BY: XIAOYING YOU

Xiaoying 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.

SHANGHAI — In an enormous exhibition center almost as big as the Pentagon, more than 3,500 solar companies gathered here earlier this summer to showcase their latest innovations and discuss the future of the Chinese solar industry.

At the conference, “going overseas” — or in Mandarin, “chu hai” — was the phrase on everyone’s lips, despite the many hurdles.

Chinese solar panel manufacturers aim to surmount the unprecedented trade restrictions they face in the United States and Europe using three key strategies: building factories directly in the U.S., building factories in new third-party markets and continuing direct exports where it makes financial sense to do so.

Read the full article here.

Highlights here:

Target market: Some Chinese firms have chosen to set up shop directly in the U.S. — a move that would allow them to bypass tariffs, while receiving subsidies from the 2022 Inflation Reduction Act, the country’s signature climate law.

By 2026, Chinese investors are projected to beat their U.S. counterparts in planning solar panel production capacity on American soil, according to the Institute for Energy Economics and Financial Analysis, a global think tank.

Leaning on intermediaries: Some analysts predict Chinese firms will be able to continue profitably operating in Southeast Asia, even with new restrictions imposed by the U.S. and European Union on solar firms operating in these countries. But others believe Chinese companies must switch strategies.

Instead, some companies are building factories in emerging economies that have local demand, boast good ties with Beijing and can act as springboards to the U.S. The Middle East is leading the pack.

Direct exports: While the EU is ramping up its efforts to investigate Chinese cleantech firms and build its own cleantech manufacturing base, many Chinese firms still see the bloc as ripe for direct exports.

“Pursuing fierce domestic competition will only make the situation worse,” Zhu Gongshan, a veteran Chinese solar entrepreneur and chairman of Hong Kong-based GCL Holdings Co. Ltd., said in a keynote speech at the conference. “Only by going overseas can we find opportunities.”

Read the full article on Cipher’s website.

Lunchtime Reads and Hot Takes

Walz’s Minnesota record ties clean energy to economic growth — POLITICO Pro (subscription)
Amena’s take: Tim Walz, Kamala Harris’s VP pick, helped Minnesota Democrats pass a law that mandates 100% carbon-free electricity by 2040. More recently, he signed permitting reform legislation into law.

Offsets Market Faces Upheaval as Third of All Credits Fail Test — Bloomberg
Bill’s take: This decision is the most recent, and biggest, criticism of the existing carbon credit market. It all but invalidates a huge chunk of existing credits — in the name of more valid ones going forward.

IPCC’s input into key UN climate review at risk as countries clash over timeline — Climate Home News
Anca’s take: With attention shifting to the upcoming COP29, I like that this article from Climate Home News puts the focus on these more technical meetings that are key in deciding how to monitor progress.

A $1 Trillion Time Bomb Is Ticking in the Housing Market — Bloomberg
Bill’s take: Insurers are raising prices and cutting coverage quickly in response to rising levels of climate damage. Yet they’re still far behind the curve of what is likely coming homeowners’ way.

Memo to the Supreme Court: Clean Air Act Targeted CO2 as Climate Pollutant, Study Says — Inside Climate News
Amena’s take: This study has implications for any forthcoming challenges related to a recent U.S. Supreme Court ruling that questioned lawmakers' original intent to regulate CO2 emissions.

Agency Votes to Replace Official Accused of Rushing Start of Seabed Mining — The New York Times
Cat’s take: The new leader of the International Seabed Authority does not support a moratorium on seabed mining, but she also says commercial mining should not start until environmental regulations are set and that could take several years.

How the landmark climate law hobbled Joe Manchin — E&E News (subscription)
Amy’s take: Notable cross-cutting dynamics at play. Manchin and the state's Republicans support specific projects the law supports, just not necessarily the overall law.

Why Africa is on the brink of solar power revolution — The Telegraph
Anca’s take: I would have liked to see a better distinction between on- and off-grid solutions, especially for a continent like Africa, where more than half a billion people have zero access to electricity.

At a Mountain Retreat, Wine, Lamb Kebabs and Lots of Climate Talk — The New York Times
Bill’s take: Who will pay for climate damage, and, especially, how much, will be the main topic of debate at the biggest climate gathering of the year this fall. Even modest agreement will be hard to achieve.

Midwestern Farmers Who Say Yes to Solar Power Face Neighbors’ Wrath — Bloomberg
Amena’s take: Renewable developers already face an uphill battle with permits and grid hookups. Community resistance won't help the country or the states reach clean energy goals.

Climate Cash Pivots to New Reality of a Hotter, Wetter Planet — The Wall Street Journal
Cat’s take: Key quote: “Adaptation has been the unpopular kid at the party for a long time. That is starting to change,” said an executive at one of the few investment firms with an adaptation-focused fund.

Four in Ten German Manufacturers Eye Move Abroad on Energy Costs — Bloomberg
Anca’s take: Interesting chart in the article, showing companies' sentiment toward the German energy transition hovered on the positive side only briefly between 2016 and 2017.

This Scientist Has a Risky Plan to Cool Earth. There’s Growing Interest. — The New York Times

Cat’s take: Opponents to solar geoengineering told the NYT the idea of spraying particles into the stratosphere is "arrogant and simplistic." David Keith says the benefits outweigh the risks.

More of what we're reading:

• Exclusive: US EPA says it is auditing biofuel producers' used cooking oil supply — Reuters

• Time to Retire ‘Hard to Abate’ as Climate Solutions Become More Affordable — Bloomberg
• Armed With Saran Wrap, She Sinks in the Muck to Save the Planet — The New York Times

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!

To save the climate, let’s consider making food without farms

Illustration by Nadya Nickels.

BY: STEVEN J. DAVIS & IAN MCKAY

Davis is a professor of Earth system science at the University of California, Irvine. McKay is the founder of Orca Sciences, an applied science group hosted by Gates Ventures, and a visiting scholar at the department of global ecology, Carnegie Institution for Science at Stanford University, California. You can reach them at imckay@carnegiescience.edu and sjdavis@uci.edu.

People often tell a simple story about where our food comes from. Plants use sunlight to turn atmospheric carbon into sugars. Animals eat the plants, and humans eat both animals and plants. As we exhale, carbon re-enters the atmosphere to balance the cycle. A pleasing story: wholesome, sustainable — and wrong.

The average meal on a Westerner's plate took more fossil fuel energy to produce than it yields as edible calories. Fossil fuels, fertilizer runoff and deforestation are behind almost every morsel we consume. Food production takes up nearly half the habitable land on Earth, demands roughly 80% of all the water humans use and, worst of all, accounts for about a third of all greenhouse gas emissions. This reality does not match the storybook understanding.

Over the last decade, hundreds of research and development projects and startup companies have sought to reduce the environmental impacts of food production. Plant-based meat, cultivated meat, plant-milks, feed supplements and new ways of making fertilizer and tilling fields — these efforts invariably represent cleaner or more efficient ways of turning plant-based energy into tasty foods we want to eat.

But all these innovations operate within the same basic paradigm: sunlight, plants, food. And sadly, even if these projects reach their wildest potential, they will never take us to a truly net-zero food system.

Read the full article on Cipher’s website.

Energy storage on the rise as world bets on wind and solar

Source: Wood Mackenzie • Energy storage capacity excludes pumped hydro, but includes all other storage technology types, including long duration energy storage.

BY: ANCA GURZU

Energy storage is set to become one of the fastest growing markets in the global power industry over the next decade to support the continued steep rise of wind and solar, according to an analysis by consultancy Wood Mackenzie.

Global storage capacity will grow more than 600% over current levels, reaching almost 1 terawatt (TW) by 2033, the analysis finds. The growth in storage is expected alongside a steep rise in solar and wind capacity in the coming years.

Increased energy storage — in the form of batteries, long-duration energy storage technologies and more — helps compensate for the variability of wind and solar power. Solar panels and wind turbines only generate energy when the sun is shining and the wind is blowing; batteries and other storage technologies can save some of that energy for later.

The world already more than doubled global energy storage deployment in 2023 compared to 2022, a record, Wood Mackenzie found.

China remains the global leader of the energy storage market, complementing its booming solar market.

AND FINALLY...
Scenic trash

Cipher reader Amy Bann took this photo of a trash barge full of what looked like old, compacted cars in Puget Sound motoring in front of Mt. Rainier. A scenic reminder that at the end of their useful lives, products like cars must be moved around and disposed of — all things that require energy.

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.