OCTOBER 30, 2024

Greetings from Chicago! I’m here to moderate some panels today at the University of Chicago’s launch event for its new institute focused on climate and energy.

In this week's edition:

• Amena H. Saiyid delves into why cleantech is booming in GOP-led states.
• Xiaoying You reports on how Chinese hydrogen companies are moving into Spain.
• She also shares a Reporter’s Notebook dispatch from a major hydrogen conference in Shanghai.
• Anca Gurzu has a Data Dive on the global electricity sector’s future.

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

Illustration by Nadya Nickels.

Why cleantech is booming in GOP-led states

BY: AMENA H. SAIYID

There is some irony in how the landmark 2022 Inflation Reduction Act is playing out across the country.

No Republicans voted for the law, aimed at boosting clean technology investments in the United States. Yet clean technology developers and manufacturers are flocking to states that voted for Trump in 2020.

Check out Amena’s full article diving into this dynamic here.

Highlights here:

Republican-led states have reaped over half of the $387.8 billion of announced investments in clean energy technologies since the IRA passed, shows a Cipher analysis of data from the Clean Investment Monitor, a joint project led by research firm Rhodium Group and the Massachusetts Institute of Technology’s Center for Energy and Environmental Policy Research.

Whether it’s storing carbon dioxide, making wind turbines, installing solar panels or producing electric vehicles, Republican-leaning states are outpacing their Democratic counterparts in drawing coveted investment dollars.

A number of recent headlines have pointed out this irony, but Cipher set out to determine why this is happening by interviewing analysts, economists, developers and lawyers involved in the clean energy space.

They all agreed Republican states like Oklahoma tend to be sunny, windy and have plenty of land to spare for sprawling solar parks and wind farms. States like Texas have an inherent advantage with their existing ports, heavy industries and infrastructure.

Red states also tend to pride themselves on being ‘business-friendly,’ and are generally faster at issuing permits and have lower labor costs than their Democratic counterparts. They also tend to have attractive tax laws and incentives.

These criteria give many GOP-led states “the competitive edge,” especially when IRA credits are factored in, said Peter Gardett, head of research at Karbone, a New York-based firm specializing in decarbonization and renewable markets.

In other words, development goes where the economics make sense — even if the politics don’t.

Read the full article on Cipher’s website.

Lunchtime Reads and Hot Takes

Future of UN climate dialogue threatened by budget shortfall — Reuters
Anca’s take: Japan and Germany have exceeded their payment obligations, but others — notably the U.S. and China, the world's two biggest economies and the top emitters of greenhouse gases — have not met theirs.

Silicon Valley’s Elite Pour Money Into Blotting Out the Sun — Bloomberg
Amy’s take: This story focused almost exclusively on the funding sources and potential risks of the new tech, whereas I wish it would have also emphasized the risks global warming itself currently poses.

Nuclear Startup Pacific Fusion Nabs $900 Million in Funding — Bloomberg
Cat’s take: Pacific Fusion is building on science developed at Sandia National Laboratories and Lawrence Livermore National Laboratory. Pacific Fusion's chief technology officer worked at LLNL previously.

Amid elusive reconstruction, flood survivors home in on ‘straws’ of hope — Geo TV
Amena’s take: After two years, 300,000 homes have been rebuilt out of the 2.1 million destroyed. The slow pace is disheartening as flooding has turned into a frequent event since that year.

Planet-warming pollution is growing at the fastest rate in history, scientists say — The Washington Post
Bill’s take: A combination of record fossil fuel combustion and, likely, the Earth’s waning ability to absorb the pollutants, is behind the rise.

Nevada lithium mine wins final approval despite potential harm to endangered wildflower — AP News
Amena’s take: Technology comes with a price, and more often than not at the expense of environmental considerations. In this instance, the administration's goal to gain mineral security is at stake.

Europe struggling to meet offshore wind targets, industry heads and lawmakers say — Reuters
Anca’s take: Finding financing for projects has become a main challenge. A separate article from this conference highlighted the threat from China, which has built momentum to come in with cheaper turbines.

U.N. says only a ‘quantum leap’ can keep global climate goals within reach — The Washington Post
Cat’s take: Current trajectories have us on a path of an estimated 2.6 degrees Celsius (4.7 degrees Fahrenheit) in global warming by the end of the century. This is why younger generations are scared and angry.

More of what we're reading:

• World Bank doubles agribusiness investment to $9B in strategy shift — Devex
• US Treasury allows miners to access clean energy manufacturing subsidy — Reuters
• So: China is still adding very large amounts of both clean energy and coal power capacity. — Lauri Myllyvirta on LinkedIn

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Chinese companies’ European hydrogen gambit

A miniature model is displayed by Trina Green Hydrogen to showcase its vision for a renewable hydrogen industrial park at the 2024 SNEC International Hydrogen and Fuel Cell Technology, Equipment and Application Conference and Exhibition in Shanghai, China, on September 26, 2024. Photo by: Xiaoying You.

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.

SHANGHAI — In a display case the size of a ping pong table, a model miniature solar and wind farm, equipped with toy batteries to store excess electricity output, powers four tiny cylinder-shaped machines that produce hydrogen by extracting it from water, a process called electrolysis.

Trina Green Hydrogen, sister company of the Chinese solar-panel giant Trina Solar, presented the model all-in-one hydrogen industrial park at a trade conference in Shanghai in September. The impressive demo represents the company’s vision for renewable hydrogen both at home and abroad in Europe.

Trina Group is among several top Chinese manufacturers that have announced plans to build renewable hydrogen factories in Spain over the past year.

The trend is partly driven by the ambitious goals the European Union (EU) has set for this emerging clean energy source, which would require the bloc to rapidly build out a renewable hydrogen industry this decade. It is also a strategic move on the part of Chinese manufacturers to bypass restrictions and tariffs imposed by the EU on hydrogen-making machines — called electrolyzers — produced in China.

“The battle for green hydrogen is still wide open,” Alicia García Herrero, a senior fellow at the Brussels-based think tank Bruegel, told Cipher, using a nickname for renewable hydrogen.

For Chinese companies looking to move into the EU, Spain, with its abundant sunshine, is an obvious choice. The southern European nation also has its own targets and a subsidy scheme to boost renewable hydrogen. Madrid also has a stable diplomatic relationship with Beijing.

But it may be harder for Chinese companies to gain as big of an advantage in hydrogen as they have in solar. The EU has set strict criteria for renewable hydrogen, such as how, when and where it should be produced.

Read the full article on Cipher’s website.

In China, packed ballrooms, big ambition and parties for hydrogen

Illustration by Nadya Nickels.

BY: XIAOYING YOU

SHANGHAI — When I signed up to attend a hydrogen and fuel-cell trade show in Shanghai in September, I expected it to be a relatively dry affair. What I didn’t expect was the palpable enthusiasm about this highly technical topic.

Read Xiaoying’s full Reporter’s Notebook here.

Shift to clean energy will transform how the global power system works

Source: DNV Energy Transition Outlook • 'Fossil fuel' generation includes oil, gas and coal. 'Solar' also includes solar plus storage. 'Other renewables' includes geothermal and bioenergy. One petawatt hour is 1,000 terawatt hours.

BY: ANCA GURZU

The rise of renewable energy sources like wind and solar will push traditional fossil fuel power plants into new roles as the global power system realigns, according to the annual energy transition report Oslo-based consulting group DNV released this month.

Most notably, fossil-fuel based electricity generation is set to plummet by 65% by mid-century as the world turns toward clean energy. Most of the conventional fossil fuel infrastructure will remain intact, however, with only a 12% reduction in capacity, the report found.

In their new subordinate roles, fossil fuel plants will mostly serve as the grid’s safety net, providing backup power when needed and operating much less frequently, DNV wrote.

Renewable-energy generation is expected to more than double by 2035 compared to last year.

However, this surge in clean energy won’t immediately translate into a reduction of fossil fuel use because the world’s electricity demand is also rising rapidly. As a result, much of the newly added renewable capacity will be used up by growing power demand.

That balance will begin to shift in the late 2030s as clean energy starts to outpace demand, setting the stage for fossil fuel’s decline.

Solar power will dominate the grid, with a 44% share by 2050, the report forecasts, while wind power will supply 27% of global electricity.

Despite these global trends, the situation will vary across regions. For example, India and Southeast Asia are likely to rely more on coal than some other regions beyond 2050, while the Middle East and North Africa will almost certainly continue to use relatively more natural gas.

AND FINALLY...
Southern aurora

Physics teacher Esther Johnson shared this photo of an Aurora Borealis over Leesburg, Virginia last week. Auroras, as Johnson wrote in an email to Cipher, are caused by ionized solar particles getting caught in Earth’s magnetic field and colliding with molecules in our atmosphere. The phenomenon usually occurs near the north and south poles.

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.