Greenify #93: Europe is defending its gigafactories!
January 13, 2024
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📌 Fact of the week
According to the IEA, the world is relatively on track to achieve the goal of tripling renewable capacity by 2030! This ambitious objective was set by governments at COP28 in December.
Hottest news of the week…
Regulation 🗃 – Germany protecting its battery gigafactory!
What happened: Northvolt, the largest European battery manufacturer, received a crucial €700 million grant and a €200 million guarantee from the German government to develop a gigafactory in the north of the country. The gigafactory aims to achieve an annual supply of 1 million electric vehicles by 2029. Northvolt considered closing its facility in Germany due to more attractive subsidies offered under President Joe Biden's Inflation Reduction Act in the United States. 😬
Zoom out: The EU approved the funding using a novel mechanism, enabling governments to allocate additional funds to strategic companies that have been offered higher subsidies elsewhere. In this case it was the US, who offered Northvolt substantial subsidies to build the gigafactory there. According to the EU, the justification for this subsidy approval stems from the project's integral role in the green transition, benefiting a disadvantaged region in Germany. We could not agree more! 💪
Business 💰 – Vinfast to enter the booming Indian EVs market!
What happened: Vietnam's electric car manufacturer, VinFast, famous for the stellar market capitalization reached last August, is now set to invest ~$2 billion in establishing a facility in India. The investment aims to create 3,000–3,500 job opportunities, with an annual production capacity of 150,000 units. This represents ~4x the total number of vehicles sold by Vinfast in 2023. 📈
Zoom out: India emerges as an appealing market for global electric vehicle players, driven by the government's goal of achieving 30% electrification by 2030 and offering incentives for EV adoption. Despite financial challenges and criticism for quality and safety concerns, VinFast seeks to expand its market presence globally. This particoar move underscores its vision for a zero-emission transportation future in India and the wider region. 🌏
Innovation 💡 - Enhanced Geothermal Systems
What happened: To celebrate the new year, the MIT Download has come out with a list of 10 potential breakthrough technologies for 2024. One of them is enhanced geothermal systems. Extracting geothermal heat (heat from the Earth’s surface) requires specific geological conditions, namely permeable rocks with water sources. With enhanced geothermal systems, hydraulic techniques are being used to crack open rocks at significant depths, inject water into these rocks to generate steam and produce electricity. ✊
Zoom out: Geothermal’s dependency on favourable geological conditions has historically limited its share of renewable energy production. Compared to more popular sources like wind or solar, geothermal only accounts for less than 1% of global renewable capacity. Although enhanced geothermal systems look promising, there exist still some risks associated to a potential increase in the risk of seismic activity.⛔
Deep dives of the week…
Chart of the week - Geothermal’s popularity
Forecasts by Fitch see geothermal energy capacity additions in the next decade to be driven by Asia. However, these forecasts date back to a couple of years ago; the hope going forward is that the contraction expected in markets like Europe and North America will not materialize as developments of new technologies in the space, like enhanced geothermal systems, will be supportive of geothermal’s adoption.
Source: Fitch
Deal of the week - Starting 2024 with an ambitious deal!
This week there has been a big deal announced in Europe regarding the holy grail of energy: nuclear fusion. Tokamak Energy, a UK nuclear fusion startup raised almost €50 million in a Series C round.
Tokamak aims to develop commercial fusion technology utilizing high-temperature superconducting (HTS) magnets in devices known as "tokamaks." These devices induce a nuclear fusion reaction by employing a magnetic field to contain plasma in a circular shape while passing an electrical current through it.
However, until 2030s, when nuclear fusion power should be market ready according to Tokamak, the company plans to commercialize its HTS magnet technology for various other applications, targeting sectors like renewable energy, scientific research, medicine, industry, and marine propulsion. 🙌🏻
👋 See you next Friday, for the best sum up of this coming week!
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