Greenify #69: Batteries’ subsidies and lithium production!
June 30, 2023
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📌 Fact of the week
The European Commission on Wednesday called for international talks on the dangers and governance of geoengineering, saying such interventions to alter the climate pose "unacceptable" risks 😬
Hottest news of the week…
Regulation 🗃 – India accelerating on batteries
What happened: According to the FT, the Indian government is preparing a new multi-billion dollar subsidy scheme for companies making electricity grid batteries in India: the scheme’s leaked draft suggests c.$2.6bn will be given in subsidies to companies setting up manufacturing capacity of 50 gigawatt hours between now and 2030. The proposal is driven by two main reasons: 1) Seeking alternatives to coal; 2) Reducing dependence on battery imports from China. 🔋
Zoom out: India is the third largest emitter of CO2 in the world, with a 7% global share on total emissions behind China and the U.S. Coal, the dirtiest fossil fuel, accounts for more than 70% of India’s power mix. Additionally, the economy is still a developing one rather than a developed one, reason for which the country is currently targeting to become net-zero by 2070 vs. 2050 for most developed countries. Seeing favourable subsidies in place in such a crucial country when it comes to the planet’s net zero ambitions fills us with hope.🤞
Business 💰 – What’s going on in wind? 🌬️
What happened: Last week, Siemens Energy withdrew its 2023 profit guidance and cited a number of problems occurring at its onshore wind business. Among these problems, the company mentioned product quality issues and associated failures in some of the turbine components. Management estimated the costs to fix these issues could be in excess of 1bn Euros.🫰
Zoom out: What happened at Siemens Energy should not be taken in isolation; the entire wind industry is facing several issues which have been going on for more than three years now. Over the last 10/15 years, renewable technologies such as wind and solar became very cheap, boosted by a large demand uptake, higher volumes and increased scalability. However, supply chain disruptions caused by the global pandemic and the war in Ukraine have caused some wind developers to actually cancel/postpone projects; certain government schemes are also fading away and financing is becoming increasingly a challenge.⛔
Innovation 💡 - Electrifying steam and decarbonizing beer 🍻
What happened: AtmosZero, a Colorado-based start-up which just exited “stealth mode”, is trying to decarbonize industrial heat generation! They have an innovative technology, but what really captured people’s attention is their first partner: a brewery company! In fact, the first pilot project for the modular 650-kW boiler will be at Belgium Brewering, a famous beer producer in Colorado. The start-up uses heat pump technology, increasing energy efficiency and decreasing costs. Read the MIT article to have a better understanding of the technology 🤓
Zoom out: Industrial heat generation accounts for ~10% of global emissions, and the overall energy consumption in industry/manufacturing accounts for ~25% of global emissions. Hence, although it is less sexy than electric vehicles, it is a crucial sector to decarbonize! On top of being less sexy, the other major problem slowing down innovations in the space is the difficulty to create efficient solutions! In fact, while the electrification of vehicles is proving to be very efficient, electrification of industrial heating is not. That is also why half of the world is looking at other technologies like green hydrogen! 💪
Deep dives of the week…
Chart of the week - Where can I find lithium?
Lithium, the most crucial material in current batteries, is mainly produced in just 3 countries at the moment: Australia, Chile and China. The three account for more than 90% of total production. 😮
The situation may not remain like this forever, as huge lithium reserves are estimated in countries like Bolivia, Argentina and the U.S.! However, it should be noted that lithium reserves estimations are very approximative.😬
One thing is certain, for all production steps occurring after the extraction phase (processing, refining, etc.), China is the undisputed leader!
Company of the week - Watershed, counting emissions 👀
Watershed, Californian start-up founded in 2019, created a software which allows corporations to measure their carbon footprint and subsequently prepare and file required climate disclosures. CO2 accounting has been a booming area over the past three years, with many start-ups venturing in the space, such as Connect Earth, which we previously discussed on this newsletter.🔢
Deal of the week - We have a new “Unicorn” in Europe!
1KOMMA5, a German solar panel system start-up, has just raised €430 million in a Series B round, making the start-up a unicorn (companies with a $1 billion valuation) in less than 2 years! Their growth strategy has mainly focused on M&A, acquiring various small players around Europe. The new financing won’t change the strategy, rather it is needed to continue it, as the company aims to expand vertically across the value chain (i.e. not buying competitors, but rather suppliers and producers of complementary services)! The mission of the company is to create a world where everyone can live on wind and solar.🦄
👋 See you next Friday, for the best sum up of this coming week!
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