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13 April 2022

The world of renewables this week

1110Japan has joined the EU and G7 in banning coal imports from Russia – in the first unified attack on the country’s energy sector amid its ongoing invasion of Ukraine. Japan is the world’s third-largest coal importer after India and China, with Russia counting for around 10% of its imports.

A study released by the UK Government has highlighted that hydrogen gas could be twice as powerful as a greenhouse gas as previously thought. In a 75-page report, entitled Atmospheric Implications of Increased Hydrogen Use, it estimated that global warming potential of one ton of hydrogen over 100 years was equivalent to between 6 tons and 16 tons of CO2, where previous figures were given as 5.8 tons. While the output from most hydrogen applications is water vapor, which is then added into the water cycle, the study highlights the importance of preventing leakage from future upstream hydrogen infrastructure.

Volkswagen-owned truck maker Scania has made a surprising pivot in its view on hydrogen. Having dismissed the fuel as a way of decarbonizing heavy duty transport in statements as recent as last year, the company announced it would develop “an initial 20 fuel-cell electric trucks” with US-based fuel-cell and electrolyzer manufacturer Cummins as part of the Air Liquide-led HyTrucks project. In contrast to the company’s sole “commitment to battery electric vehicles,” the project aims to put 1,000 hydrogen trucks on the roads in Belgium, the Netherlands and western Germany by 2025, along with the required refueling infrastructure.

The OPEC cartel has cut its forecast global demand for oil in 2022. In its monthly report for April, the group said that demand would rise by an average of 3.67 million barrels per day in 2022, down 480,000 from its previous forecast. It has cited Russia’s invasion of Ukraine for the decision, along with rising inflation and the resurgence of the Omicron coronavirus variant in China – the world’ second largest consumer of oil. OPEC maintains its expectations that demand will surpass the 100 million barrels per day mark in the Q3. The report also outlines how underinvestment in oilfields in some OPEC members – partly due to pandemic disruption – continues to mean that the group cannot fully deliver on its promised output increases – a key factor in the rising price of oil. OPEC’s report showed OPEC output in March rose by just 57,000 bpd to 28.56 million bpd, lagging the 253,000 bpd rise that OPEC is allowed under the OPEC+ deal.

The global production capacity for of electrolyzers to produce green hydrogen will reach more than 100 GW per year by 2031, according to a report from Guidehouse Insights. This will mark an increase of almost 8,000%, with current production capacity sitting at just 1.3 GW.

The UK will finalize a plan to subsidize the production of low-carbon hydrogen by the end of this year, according to announcements made this week, with the first support contracts for projects scheduled in 2023. This will mark the first national subsidy scheme for hydrogen across the globe, allowing green hydrogen to compete on price with grey hydrogen made from natural gas. The deal would include a “contractual mechanism to incentivize the producer to increase the sales price and thereby reduce the subsidy” and would provide “volume support via a sliding scale in which the strike price is higher on a per-unit basis if hydrogen offtake falls.”

Chinese solar module exports have more than doubled year-on-year in the months of January and February, with the dollar value up 136.8% to $6.89 billion, and the wattage up 123.8% to 26.8 GW. The three biggest destinations, constituting 61.2% of the total, were $1.91 billion to India, $1.31 billion to the Netherlands (for distribution from its ports to Europe at large), and $1 billion to Brazil. These figures from China’s General Administration of Customs also state that India imported 7.4 GW in these two months ahead of the raising of its 40% Basic Customs Duty.

Ningbo Municipality in China’s Zhejiang Province has drawn up plans for 90% of all new buildings to come with rooftop solar installed. In Lujiang County, Anhui Province, the plan is to reach 50% coverage for all party and government buildings by 2023, and 40% for public buildings in general.

Pandemic lockdowns in Shanghai have seen the city’s economic activity drop by 40% in March, and while the port itself is unaffected, 170 Yangtze Delta region expressway exits have been closed – ad that region supplies most of the solar products to be exported overseas from Shanghai. These products are being sent through other ports such as Ningbo and Lianyuang, but this is a limited and more costly alternative. Another alternative, rail transport through Kazakhstan and Russia into Europe, is currently blocked by the war in the Ukraine: while rail routes from Kazakhstan to Turkey or the Georgian port of Poti are limited in capacity.

The lowest investment cost seen for offshore wind in China so far this year has been $470 per kW, far below the average $1,100 per kW in 2020, with subsidies having ended in the country for the offshore category in 2021. The recent tender for the Jinshan Offshore Wind Project Phase 1 was announced with an electricity price of $47.43 per MWh. Offshore turbine prices have halved, with remaining costs mostly owed to large components which cannot easily be further cheapened.


Nissan has just unveiled a prototype solid-state battery, which it plans to bring to the car market in volume by 2028. That feels very late, and we’re sure this will be upgraded soon. It is all part of the Nissan 2030 plan, and it hopes that a special EV design will come with the volume manufacture. A first pilot production line will be built at its Yokohama Plant in 2024. Nissan claims it can reach $75 per kWh in manufacturing cost by 2028 and not stop there. It believes that its EVs will be the same price as internal combustion engine cars by then – again way too late.

In Germany the plug-in EV portion of the car market has moved up slightly to a 25.6% share during March. Throughout last year it was on the verge of 20% rising to 24% at its height. However the entire car market remains down 31% from its 2019 peak, and down by 17% on last year, which was not a good year. BEVs made up 14.3% (34,500) and PHEVs some 11.3% (27,000). About another 20% are mild hybrids with no plugs.

This week the US Department of Energy’s National Renewable Energy Laboratory (NREL) put out a report on the massive potential for clean energy development in Mexico saying it has strong solar (24.9 GW) and wind (3.7 GW) resources untapped, as well as geothermal (2.5 GW) and hydropower (1.2 GW). We agree, it has climate advantages to make it a clean energy powerhouse, but NREL should have checked in with the geopolitical framework before starting the work – while Andrés Manuel López Obrador (AMLO) remains in power there, he will push for renewables to remain at a financial disadvantage to government owned oil and coal. NREL concluded that to realize this potential it will require energy policies that facilitate private investment and support joint efforts on clean energy, climate, and supply chains. Not before the 2024 election though.

The Rainforest Action Network has put out a new report this week entitled “Banking on Chaos; Fossil fuel climate report 2022,” which shockingly shows that Canadian banks have increased investments in Tar Sands oil, by 51% over 2020/21, up to $23.3 billion. Most of this came from Canadian banks Royal Bank of Canada and TD Canada Trust. It also points fingers at JPMorgan Chase, SMBC Group and Intesa Sanpaolo for investing in Arctic oil and gas last year. Some banks will be left with those assets on their hands, and lose tons of money, but we bet the bankers won’t lose any bonuses over it. Fracking took $61 billion in funding last year led by Wells Fargo, and LNG got a boost from Morgan Stanley, RBC, and Goldman Sachs. Many of these banks have promised to support the climate – some people must have not got the memo.

Liquid air energy storage company, Highview Power, has swapped CEO’s and changed what was thought to be a careful succession plan – always a suggestion that things are not all OK in the state of Denmark – bouncing the new CEO designate Adrian Katzew, who never took up the post in January this year. Previous CEO Javier Cavada turned up at Mitsubishi  Power as CEO Europe, and taking over is Rupert Pearce, fresh from turning around long term satellite basket case Inmarsat. There has been little product news or design wins from Highview, and no press releases for almost a year. This looks like the last chance saloon.