Greenify #76: Coal Round Up & Sailing Innovation
August 25, 2023
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📌 Fact of the week
According to the IEA, Asian countries will increase coal consumption for electricity generation in 2023 and 2024, but a decline in consumption in Europe and the US over the same period will be enough to offset the growth.
Hottest news of the week…
Regulation 🗃 – Kerry calling for a stop in coal
What happened: U.S. climate envoy John Kerry has called on countries to take a more drastic approach in getting rid of coal-fired power. Ahead of COP28 climate talks, which will be held in November in Dubai, coal takes centre stage again. Coal is the “dirtiest” fossil fuels of all: electricity generation is responsible for 42.5% of global CO2 emissions. Of this, 73% can be attributed to coal-fired power plants, which emit 950 grams of CO2 for every kilowatt-hour of electricity they generate, compared with 350 grams for gas-fired plants. 👿
Zoom out: Coal is far from done, particularly in developing countries. China, despite having agreed with the U.S. a couple of months ago on a ban of foreign financing for coal-fired plants, has seen an acceleration in new coal power projects approval this year vs last year. Although China has pledged to reduce coal consumption starting in 2026, this does not look like the smartest reduction technique. 🙄
Business 💰 – The largest floating wind farm is operational!
What Happened: The largest floating wind farm is now fully operational. Developed by power giant Equinor, the farm is located ~140km off the coast of Norway in depths ranging from 260 to 300 meters. It consists of eleven 280-mt turbines, each generating 8.6MW. Weirdly enough, the electricity generated will be used to power 35% of the energy needed by 5 large offshore Oil&Gas platforms. Although this seems like a major incoherence, the Norwegian government has declared it has no intention to give up fossil fuels exploration in the near term, hence powering exploration and drilling with clean energy is still better than nothing. In fact, by powering the platforms, the wind farm will reduce their emissions by ~200K tons per year, equivalent to the emissions of 100K vehicles. 🚗
Zoom out: The fact that ~95MW of electricity are not enough to power the operations of 5 Oil&Gas platforms gives us an idea of how energy intensive is fossil fuel extraction… Norway, which is highly dependent on Oil&Gas, accounting for 40% of its exports and 14% of its GDP, can exploit its geographical characteristics to invest in offshore wind farms and reduce the share of fossil fuels. Norway should keep investing in floating turbines in particular, as they can be placed in areas with high sea depths where winds are usually stronger, therefore leading to higher efficiency.🔋
Innovation 💡 - Back to the origin, with sailing cargoes!
What happened: Cargill, a major commodity trader, tested the first “wind assisted propulsion” merchant ship (i.e. a cargo ship with both engine and sails)! The test will tell if combining a standard engine with ~40mt tall sails is an efficient way to save fuel. The president of Cargill’s ocean transport division assured that unless they will have some very negative surprise from the test, they will scale the technology sooner or later. 🚢
Zoom out: The maritime industry accounts for ~3% of global emissions, a pretty significant chunk for a single mode of transportation. Hence it is under pressure to reduce its emissions. As electrification seems almost impossible due to the long range needed and the large weight of ships, e-fuels are being widely testes. It will be interesting to see if the oldest mode of marine transportation will be more helpful than some of the most researched and developed e-fuels in decarbonizing the shipping industry. Potentially a combination of e-fuels and sails could be the solution, to compensate for the lower energy efficiency of e-fuels compared to standard ones. 👍
Deep dives of the week…
Chart of the week - How does coal consumption look in the U.S.?💡
In our regulation news, we discuss the U.S. stance towards burning coal. The good news is the U.S. is keeping its word on coal consumption. Looking at the data, the downfall is quite evident. After reaching a peak in 2008, coal consumption in the U.S. is now back to 1980s levels. Encouraging. 💪
Source: EIA
Deal of the week - Northvolt raising money again!
European leader in lithium-ion batteries, Northvolt, has obtained about €1.1 billion in financing from investors such as BlackRock and Canadian pension funds. The company intends to establish new production plants in Europe and North America, supplementing its existing operations in Sweden. The expansion into North America is strategically aligned with President Joe Biden's Inflation Reduction Act (IRA), which provides incentives for electric vehicle battery manufacturing. This move is aligned with a growing trend among carmakers and battery producers exploiting governmental benefits and environmental regulations by establishing facilities in the US and Canada. The recent €1.1 billion funding round, involving prominent investors including BlackRock and Volkswagen, elevates Northvolt's total funding to $9 billion since 2017. There are speculations that the company might eventually pursue an Initial Public Offering (IPO) valued at $20 billion!💸
👋 See you next Friday, for the best sum up of this coming week!
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