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Good morning and happy Friday,
Hurricane Helene is predicted to be catastrophic and could create storm surges that are unsurvivable in the southeastern U.S. – a grim backdrop as Climate Week 2024 is in full swing in New York City, in conjunction with the United Nations General Assembly, where world leaders called for investment in clean energy.
At a related climate event, President Biden touted his climate legacy, giving a speech centered on “a comprehensive list of his climate and clean energy accomplishments,” not least of which is the IRA, which Biden called “the most significant climate law ever passed in the history of the world.”
Surges also came up in the context of renewable energy shares after the Federal Reserve cut interest rates last week – although analysts said “the sudden bump could be offset by other headwinds,” including the results of November’s election; and the ninth annual Clean Jobs America report from E2, which found Southern states are leading the surge in clean energy jobs.
Read on for more.
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Tricky Tea Leaves
There’s more hand-wringing than usual over this year’s presidential election, and that’s particularly true among clean energy advocates. Former President Trump has vowed to dismantle the IRA, and “claw back unspent funding” if he wins. Last week we explored whether Congress would have the appetite to repeal the tax credits that are the core of the IRA. So what exactly could a Trump administration do on its own? A new report from the Sabin Center provides several insights:
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The Sabin researchers think already-awarded funds are probably safe, because attempts to take them back would likely fail in court. Of course, that doesn’t mean there won’t be attempts to claw back funds, which could hinder awardees’ ability to move forward.
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Unused IRA funds could be “reprogrammed,” but no more than 10% can be transferred to another program. Even if only a small percentage of funds are unused, however, that could still mean billions of dollars.
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Another risk is that “a Trump administration might just sit on its hands and decide not to hand out any money.” The IRA funds remain available through September 30, 2031, and challenges regarding “the failure to spend” couldn’t be brought until then.
⚡️ The Takeaway
No U-turns. Not gonna happen, says Ali Zaidi, national climate adviser to President Biden. The current administration has been hustling to get dollars out the door; Zaidi notes that “we’re north of 85% of grant dollars being either awarded or well under competition.” And Republican members of Congress want to protect the jobs and investment in their districts. But, “clawing back unspent dollars…might be ‘very appealing to swing voters’ who ‘know we’ve overspent in lots of areas,’” which could explain the messaging.
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Surging Demand
Electricity demand is surging, driven by data centers, cryptocurrency, and expanded use of AI. Back in May, EPRI forecast that “data centers could consume 9% of U.S. electricity generation by 2030 – double the amount consumed today.” This has created a challenge for tech companies, the majority of which have pledged to slash carbon emissions. Here are some points to consider:
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Many tech companies are scrambling to power AI’s insatiable appetite, looking to sources of abundant clean power, including geothermal, modular nuclear reactors, and long-duration energy storage, in addition to carbon capture technologies.
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Indeed, this was “a hot topic at Climate Week,” not least because Microsoft announced it had signed a 20-year deal to purchase nuclear power from Three Mile Island, fueling speculation about the carbon-free energy source’s comeback – supported by IRA tax credits.
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“We got this,” says the CEO of EPRI, who argues that the urgency of the tech companies’ need means they will collaborate with the energy industry and “actually accelerate the clean energy transition in the long run because they’re sharing the financial risk.”
⚡️ The Takeaway
Sticker shock. In Georgia, nuclear power has “flipped” the state’s power mix such that for the first time, more electricity is generated from zero-emission power sources than from fossil fuels. The price tag, however, is staggering: the Vogtle reactors cost nearly $37 billion, or $10,784 per kW – compare that to the capital cost of utility-scale wind and solar, which Lazard estimates come in around $1,300-$1,900 and $850-$1,300 per kW, respectively – making it "the most expensive electricity in the world."
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Tantalizing Two-fer
Last week, we told you about a company seeking to achieve a win:win by pulling carbon from the atmosphere and turning it into fuel. This week, we have another tantalizing two-fer: a startup called Equatic has achieved a breakthrough that enables it to produce hydrogen and sequester carbon.
The secret lies in the planet’s “vast, briny” oceans, which hold an “endless supply” of hydrogen. While it’s easy enough to pull hydrogen out of H2O using electrolysis, doing so with seawater has an unfortunate side effect: the reaction turns the salt in the water into chlorine gas, which is toxic and corrosive.
Equatic’s innovative alchemy “exploits another aspect of the electrolytic reaction:” it separates the seawater into two streams. One is very acidic; the other is very alkaline, which means it can easily absorb CO2. The acid stream is “neutralized with crushed rock to avoid ocean acidification” and ultimately discharged back into the ocean for permanent sequestration.
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The company has received $3 million in funding from ARPA-E and has plans to build test facilities in Singapore and Quebec. In addition, it’s signed an agreement with Boeing to provide hydrogen and sequester CO2 for the aerospace giant. Suddenly, “that sinking feeling” doesn’t sound so bad!
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