Las Bambas mine suspends operations following protest

Reuters | April 18, 2022

Las Bambas open pit. (Image courtesy of MMG).

MMG Ltd said on Monday its Las Bambas copper mine in Peru will suspend operations from April 20 after residents of a community nearby entered the property as part of a protest.


Las Bambas accounts for 2% of the global copper supply and is a subject of recurring disruptions from impoverished local communities demanding higher financial contributions from the mine. Earlier this year, the mine were forced to slow down operations due to a road blockade.

MMG said the Fuerabamba community’s members had entered Las Bambas on April 14 to protest the company’s alleged failure to comply with its social investment commitments, allegations which MMG rejects. Members of the Huancuire community had also joined the protests.

The minerals exploration company also said a meeting was conducted on April 16, which included Peru’s Minister of Mines and Energy, members of the Fuerabamba community and Las Bambas, but the parties could not arrive at a resolution.

Further meetings led by the Prime Minister’s Office are scheduled over the coming days, MMG said.

Reuters could not reach a representative of the Fuerabamba community for comment. Fuerabamba is an indigenous quechua-speaking community that was resettled a few years ago to make way for Las Bambas in Peru’s Apurimac region.

Las Bambas is a member of the SNMPE, which represents the country’s large mines, and Peru is the world’s No. 2 copper producer.

MMG said Las Bambas will be unable to continue copper production from April 20, clarifying a statement made earlier in the day by Raul Jacob, the president of local mining chamber SNMPE, that operations had already ceased.

“Last week, 130 people from the Fuerabamba community invaded Las Bambas,” Jacob had told reporters earlier in the day. “This invasion has caused the suspension of operations.”

The latest conflict at Las Bambas comes as Southern Copper Corp’s Cuajone mine has kept operations suspended since late-February after residents of nearby communities shut down the company’s water supply.

Jacob, who is also Southern Copper’s Chief Financial Officer, said the stoppage at both mines shows that the government is dragging its feet at solving mining conflicts.

(By Marcelo Rochabrun and Harish Sridharan; Editing by Nick Macfie and Uttaresh.V)

Denarii silver content reveals new facts about Roman financial crisis

Valentina Ruiz Leotaud | April 17, 2022 

Silver denarius. (Image courtesy of the University of Warwick).

The silver content of Roman denarii has shed new light on the financial crisis briefly mentioned by the Roman statesman and writer Marcus Tullius Cicero in his essay on moral leadership, De Officiis.


According to researchers at the University of Warwick and the University of Liverpool who analyzed coins of the period, the debasement of the currency was far greater than historians had thought, with coins that had been pure silver before 90 BC cut with up to 10% copper five years later.

“The Romans had been used to extremely fine silver coinage, so they may well have lost confidence in the denarius when it ceased to be pure,” Matthew Ponting, one of the archaeologists involved in the research, said in a media statement.

“The precise level of debasement might have been less important to contemporaries than the mere realization that the coin was adulterated and no longer made of true ‘silver.’”

Pointing explained that using a minimally invasive sampling technique to take samples from important coins, he and his colleagues were able to identify a significant decline in the value of the denarius—from being a pure silver coin, the denarius first dropped to under 95% fine, and then it fell again to 90%, with some coins as low as 86%. This would suggest a severe currency crisis.

In the words of Cicero

For the group, the discovery of this significant decrease in the value of the denarius brings some clarity to Cicero’s 86 BC quote that read: “The coinage was being tossed around so that no one was able to know what he had.”

The reference is part of an anecdote describing self-serving behaviour by Marius Gratidianus, who took credit for a proposal for currency reform worked out jointly by the tribunes and the college of praetors and became hugely popular with the public as a result.

“In the years after 91 BC, the Roman state was in danger of becoming bankrupt. The Romans were at war with their own allies in Italy, and by the conclusion of the war, in 89 BC, there was a debt crisis,” researcher Kevin Butcher said. “By 86 BC there appears to have been a crisis of confidence in the currency, too. Cicero related how the Roman tribunes approached the college of praetors to resolve the crisis before Gratidianus claimed sole credit for the collective effort.”

Butcher pointed out that one theory is that Gratidianus fixed the exchange rate between the silver denarius and the bronze, which had only recently been reduced in weight. Another proposition states that he published a method for detecting fake denarii and so restored faith in the coinage.

“Unfortunately, Cicero’s choice of words is too obscure for historians to determine exactly what was going on,” the expert said. “His purpose in writing about it wasn’t to illuminate monetary history; he was just using the incident as an illustration of a Roman magistrate behaving badly by taking credit for the work of others.”

Silver content declined in two stages

The results of the metallurgical analysis suggest that the financial difficulties experienced by Rome in these years led to a relaxation of standards at the mint in 90 BC, with the result that the silver content of the coinage declined in two stages so that by 87 BC the coinage was deliberately alloyed with 5–10% copper.

“This could be the meaning of Cicero’s words: that the value of the coinage was ‘tossed about’ because nobody could be certain whether the denarii they had were pure or not,” Butcher said. “It is all the more noteworthy that around the time Gratidianus published his edict, the standard of fineness rose sharply, reversing the debasement and restoring the denarius to a high-quality currency.”

For the archaeologist, although the precise chronology remains uncertain, the new scientific data suggest that it could have been the main aim of Gratidianus’ edict, rather than something to do with exchange rates between silver and bronze or detecting forgeries.

In the decades that followed, the Romans avoided debasing the denarius again, until the state once again faced huge expenses during the civil war between Pompey and Julius Caesar. Even then, the Roman mint did not go as far as it had in the time of Gratidianus.

Hundreds protest in Spain against redevelopment of Roman-era gold mine

Staff Writer | April 17, 2022 |

Protesters in Tapia de Casariego.

 (Image by Oro No – Ana Asturnatura, Facebook).

Hundreds of people gathered in the municipality of Tapia de Casariego, northern Spain, to protest against the exploitation of the nearby Salave gold deposit, local media reported.


The ancient mine, initially discovered and exploited by the Romans in the 1st century and now considered one of the largest unexplored gold deposits in Europe, is being prospected by Exploraciones Mineras del Cantábrico (EMC), a Spanish company backed by both local and international capital.

Their endeavour, however, is facing opposition from the activist group Oro No, which has joined forces with other environmental initiatives as well as with professional and community organizations, fishing groups, tourism associations, farming cooperatives, and honey producers, among others.

Using the slogan “no to gold,” the protesters expressed concern about the impacts that a mining operation would have on their way of life, the environment and the traditional economic activities of the area. They also asked the local government to oppose the project.

Salave, however, also has backers.

Prior to the protest action, the Association for the Re-industrialization of Western Asturias (IDOA) issued a communiqué presenting 607 signatures of people who support the mining project.

In the statement, Salave is presented as a project that would boost the region’s economy.

Ancient history

After the initial open-pit extraction by the Romans, extractive work was resumed at Salave in the mid-20th Century but it was mainly aimed at obtaining molybdenum in small local veins in a rather superficial manner.

Although the mineralization includes other minerals and metals in different concentrations, EMC says that due to its abundance, gold is what has gained significant interest from a technical and economic point of view.

It is estimated that, in the Roman era, between 2 and 6 million tons of rock were extracted at Salave, recovering between 5,000 and 7,000 kilograms of gold.

According to EMC, for reasons that are not known exactly, but probably due to the difficulties of controlling the water flow when they reached a certain depth in their workings, the Romans abandoned the extraction of Salave.

Since then, there wasn’t any documented mining activity in the area until the 1940s, when certain minerals such as molybdenum were extracted for the manufacture of steel.

In the 1960s, several companies specializing in mining research and development showed interest in developing and verifying the mineralized continuity at depth which the Romans exploited at the surface.

Using geochemical, geophysical and direct prospecting techniques, the Salave mineralization model was reconstructed. Thus, its morphological, proximal, technical, environmental and economic viability has been assessed.

Beyond the preliminary geochemical and geophysical studies, since the 1970s, nearly 500 drill holes of varying lengths and inclinations have been conducted in the Salave area, for a total of 65,000 meters.

The last survey was carried out by Exploraciones Mineras del Cantábrico in 2018. Just over 2,000 meters were drilled, with the goal of finalizing previous surveys, confirming their results and facilitating the preparation of a feasibility study.

A coal tycoon is making billions in a world aiming to go green

Bloomberg News | April 18, 2022 

Credit: PT Bayan Resources

Before the pandemic began, Low Tuck Kwong tried — and failed — to sell a stake in his Indonesian mining company. Unable to find the right buyer, he decided to double down, adding shares instead of paring them.


The bet paid off: PT Bayan Resources’ stock has more than doubled since, making Low one of the wealthiest people in the industry, according to the Bloomberg Billionaires Index. His stake, now at 61%, is worth $6.1 billion.

“It’s very simple: If I can’t sell part of my shares, I better buy more,” Low said in a rare interview from Jakarta in March, the month he added another 199 million shares.

Coal producers have been on a tear recently, an unexpected development for the industry most responsible for carbon emissions. At last year’s COP26 climate summit in Glasgow, more than 40 countries pledged to shift away from the fuel. Indonesia, its largest exporter, has boosted regulation to safeguard natural resources.

Yet burning coal is still common, generating about 35% of the world’s electricity and twice as much in Indonesia. Post-pandemic economic activity has increased demand, as has the war in Ukraine. Nations including Japan have banned Russian fuel imports, further tightening supply and pushing prices even higher.

For Bayan Resources, where Low serves as president, it’s been a boon. Shares are trading near a record high. Revenue more than doubled to $2.9 billion last year, and the company repaid all of its debt. Now the miner is building new infrastructure to boost its production capacity to as much as 60 million tons by 2026 from 37.6 million tons in 2021, according to Chief Financial Officer Alastair McLeod.

“There’s still a very balanced, if not undersupplied market,” McLeod said in the March interview. “Obviously we will still face a variety of challenges. But from the market price perspective, there’s a demand for coal. We would anticipate healthy margins in 2022.”

Shares of coal miners have surged across the board, boosting the fortunes of other Indonesian tycoons. PT Adaro Minerals Indonesia, controlled by billionaire Garibaldi Thohir’s PT Adaro Energy Indonesia, has shot up almost 2,800% since its public debut in January. The 175% jump in PT Harum Energy over the past year has sent the value of its founder’s stake to $2 billion.

Environmental concerns have yet to tamp the world’s demand for coal, said Shirley Zhang, principal analyst for Asia Pacific coal market at energy consultancy Wood Mackenzie. Even if the Russian-Ukraine conflict subsides, she said, “coal will still be needed by most of the Asian countries by 2050, and lack of financing at coal mines will provide price support.”

Bayan Resources has installed solar panels and solar-powered lighting at its projects, and its Tabang mine, which contributes to more than 80% of its production, generates lower levels of sulphur, nitrogen and ash when it burns coal, according to a company presentation. But the limitations are obvious, McLeod said: “Inherently there’s only a certain amount we can do if we still sell coal.”

Low moved to Indonesia more than five decades ago, ready to tap opportunities in Southeast Asia’s biggest economy. Initially, the Singapore native went into construction — his first project was to build a facility to store ice cream. But the sector was a constant hustle.

“You still had to look for another project for our people to work on,” he said.

Mining looked more stable, and in the late 1980s and 90s, the construction company built its coal business. Bayan Resources was created in 2004, and Low also became the controlling shareholder of Singaporean coal shipper Manhattan Resources Ltd.

Low says he’s an animal lover, and he spends his free time strolling in the zoo and fruit plantations he established on the island of Borneo, near the site of his Tabang mine. He invested some $4 million in the park, which is open to the public free of charge.

(By Yoojung Lee and Fathiya Dahrul, with assistance from Pei Yi Mak and Yudith Ho)

Australia begins long road to retraining thousands of coal workers for clean energy roles
Bloomberg News | April 18, 2022 

Waubra Wind Farm, Victoria, Australia. Credit: Wikipedia

The sudden speed of the shift to clean power is forcing Australia, a global champion of coal and gas, to confront one of the energy industry’s biggest challenges — how to transition millions of fossil fuel workers to new roles in wind and solar.


Clean energy could create more than 38 million jobs worldwide by the end of the decade and meeting that demand without a labor shortage requires accelerating efforts to not only lure new entrants, but also to create a clearer plan to retrain the industry’s veteran workforce as traditional fuel sources decline.

That’s a task getting underway in Australia, where coal’s supremacy is finally under threat from cheap clean power, and with lawmakers who once defended fossil fuels now trading promises over green jobs in campaigning ahead of a May national election.

“The light is just going on across governments and industry” that more investment in training is needed, with a lack of skilled workers already emerging for some existing projects and challenging plans to add more clean energy to help nations meet climate commitments, said Chris Briggs, research director at the University of Technology Sydney’s Institute for Sustainable Futures.

In the southeastern city of Ballarat, a key 19th Century gold mining hub, companies including Vestas Wind Systems A/S — the world’s biggest turbine manufacturer — have funded the country’s first wind power training tower, where students and ex-coal workers can use a 23-meter-high platform to acquire the expertise needed for roles in renewables.

“At the moment, with these skills, you have to fly them in from outside, or send Australians overseas,” said Duncan Bentley, a vice chancellor at Federation University, which hosts the site. The facility is the first local training institution that can provide a key safety qualification needed to work in the wind industry.

Renewables accounted for almost a third of the country’s electricity generation in 2021, double the share four years earlier, and utilities are bringing forward plans to retire coal-fired power stations years ahead of schedule.

About 10,000 coal jobs in Australian mines and power plants related to domestic electricity generation will be lost by 2036, according to Chris Briggs, research director at the University of Technology Sydney’s Institute for Sustainable Futures. More will surely also exit as coal exporters eventually shutter.

In the same period, around 20,000 to 25,000 new jobs will appear in the construction, maintenance and operation of renewable power, Briggs said.

Legislators, too, are starting to adapt. Australia’s Prime Minister Scott Morrison won a 2019 election in part because his defense of fossil fuel jobs helped secure decisive support in coal communities. Ahead of May’s election — with his government trailing the opposition Labor Party in opinion surveys — he’s still supporting coal, but also touting prospects for workers to win new roles in clean hydrogen.

There is a catch in the rush to new sectors. Most roles in solar and wind power promise only a fraction of the salaries in the minerals industry. Mining is in the blood in Australia, fostering almost every economic boom since the gold rushes of the 19th century.

“As a young fellow it made sense to go straight to the mines, trying to chase money,” said Dan Carey, who spent 12 years working in the remote iron ore hub of Port Hedland as well as the oil and gas town of Karratha in Western Australia.

In January, in search of a better lifestyle, he became a service technician at a wind farm in Warradarge, a three-hour drive north of Perth. Now “it’s about enjoying the work,” Carey said. “In the mining world, everyone does sort of live for the money.”

For example, the starting salary for an operator at AGL Energy Ltd.’s Loy Yang A coal power station in Victoria is about A$164,500 ($122,000) while a technician for wind turbine builder Suzlon would earn between A$100,000 and A$120,000, according to recent Fair Work Commission enterprise agreements.

In mining there are also a raft of perks, that could include 6 weeks paid leave, subsidized housing and utilities, free vacation air tickets and big bonuses. “It’s definitely going to be hard to retain people that have come from that world,” Carey said.

Also, while mining and coal power have provided work for generations of Australians, many new jobs in renewables are temporary.

“The challenge is that there are hundreds of jobs in construction and only a handful of jobs in operations and maintenance,” said Anita Talberg, director of workplace development at the Clean Energy Council, an industry group. And some of the highest-skilled jobs in fossil fuels have no direct equivalent in renewables, she said.

Yet the sheer size of the energy transition will mean construction of large new solar and wind farms will continue for decades, steadily increasing the number of ongoing positions as the new plants come online.

Fossil fuel veterans are well positioned to prosper, according to the International Renewable Energy Agency. Staff on gas platforms typically have expertise suitable for offshore wind, while coal workers have been recruited into solar and oil reservoir engineers can use their knowhow for geothermal power.

Australia’s first offshore wind farm, the Star of the South, is scheduled to open in 2028 in the Bass Strait, off the country’s southern coast. At about the same time, Hong Kong-based CLP Holdings Ltd. will close the aging Yallourn coal-fired plant nearby after more than 100 years of operation.

The wind project is aiming to capitalize on the pool of potential workers, and has sought talks about retraining opportunities. “You’ve got the workers with the skill sets,” said Erin Coldham, Star of the South’s chief development officer.

(By Georgina McKay, with assistance from Matthew Burgess)

CLEAN COAL

Black lung cases increasing among US coal miners

Staff Writer | April 20, 2022 

(Image courtesy of the American Thoracic Society).

An international team of researchers from the US, Canada and South Africa found higher levels of silica dust in the lung tissue of contemporary coal miners working in central Appalachia compared to the lung tissue of previous generations of coal miners.


In a paper published in the Annals of the American Thoracic Society, the scientists explain that even though silica is safe in rock formations, breathing in silica dust is highly toxic and prolonged exposure to silica dust can lead to severe lung disease.



The study points out that from 1970 to 2005, the rate of black lung cases among coal miners had been declining, largely due to improved occupational health practices required by federal regulations. However, since 2005, black lung cases, in general, have seen a three-fold increase and long-term coal miners have seen a 10-fold increase in the number of people affected by the disease.

When comparing the lung tissue of the current generation of coal miners to lung tissue collected from miners from previous generations, silica seemed to be the common denominator that explains the previously unexplained rise in black lung cases.

“Mineralogic analysis showed the percentage (26.1% vs. 17.8%, p<0.01) and concentration (47.3 x 108 vs. 25.8 X 108 particles/cm3, p=0.036) of silica particles was significantly greater in specimens from contemporary miners compared to their historical counterparts,” the study reads.

The change in silica exposure among coal miners is likely explained by changing mining practices initially adopted in the 1950s, as the coal industry started using mechanized coal extraction devices. The powerful machinery enabled companies to extract large swaths of rock above and below the coal seams, which is much easier than mining focused on narrow veins of coal. This resulted in the generation of more silica dust.

In addition to providing an explanation, the study helps mine companies and federal regulators to better understand the steps that must be taken to prevent future cases of black lung.

“Reducing coal miner exposure to silica dust is essential to prevent further black lung cases,” Robert Cohen, lead author of the paper, said in a media statement. “This study provides clear, actionable evidence for the Mine Safety and Health Administration (MSHA) to establish specific silica dust exposure limits to protect coal miners from the known dangers of black lung disease.”

Cohen mentioned that the current MSHA silica standard of 100 ug/m3 was established in 1969 and has not been revised since. By contrast, the Occupational Safety and Health Administration has established a much more protective silica exposure limit of 50 ug/m3 for other non-mining occupations. 

De Beers back to search for diamonds in Angola
Cecilia Jamasmie | April 20, 2022 

Angola’s Catoca is the world’s fourth biggest diamond mine. (Image courtesy of Endiama.)

De Beers, the world’s largest diamond miner by value, has inked two mineral investment deals with the Angolan government granting the company exploration rights for 35 years in the country’s northeast.


Each concession area will be held by a separate new joint venture between De Beers Group and Endiama, Angola’s state-owned diamond company, the parties said.

De Beers, a unit of Anglo American (LON: AAL), will hold a “substantial” majority of the new joint ventures, it said, without specifying a percentage. Endiama will be able to increase its equity share over time.

The contracts come after years of negotiations that led the company to apply for exploration licences in December, following substantive reforms in the country’s diamond sector.

“Angola has worked hard in recent years to create a stable and attractive investment environment and we are pleased to be returning to active exploration in the country,” De Beers chief executive Bruce Cleaver said in the ­statement.

This is not the first time De Beers has ventured into Angola. Between 2005 and 2012 it carried out exploration activities without finding an economically viable project.
Growth plan

The nation’s diamond industry, which began a century ago under Portuguese colonial rule, is successfully emerging from a long period of difficulty because of a civil war that ended in 2002.

The country has plans to boost diamond mining and open a new large operation in the east, aiming to produce 5.7 million carats there in 2023, or more than half of its total output in 2020.

Angola – the world’s seventh-largest diamond producer according to Kimberley Process statistics – generated 9.3 million carats in 2021, up from the 8 million carats mined in 2020.

For this year, it plans to ramp up production to 10.3 million carats, a revised forecast from an initial target of 13.8 million carats. In Africa, De Beers also owns diamonds mines in Botswana and Namibia.

Mexico’s lower house backs lithium nationalization plans

Cecilia Jamasmie | April 19, 2022

Bacanora Lithium says Sonora project is so-far safe from Mexico planned reforms. (Image courtesy of Bacanora Lithium.)

Mexican President Andrés Manuel López Obrador (AMLO) said on Tuesday that all lithium contracts would be reviewed, partially contradicting previous comments in which he promised not touch licenses already granted to private companies, provided exploration work has already begun and all license requirements have been met.


López Obrador’s comments come after the country’s lower house of Congress passed an amendment to mining legislation that paves the way for the state to nationalize the country’s lithium reserves.

AMLO’s proposal was part of a constitutional energy overhaul rejected by lawmakers on Sunday. The amendment sought to tighten control of energy production by guaranteeing state-owned utility Comisión Federal de Electricidad, or CFE, 54% of the market.

López Obrador moved on Monday to introduce the proposal to nationalize the country’s lithium directly to Congress, using a presidential prerogative to send a limited number of bills directly to the floor, bypassing the involvement of committees.

“I make a respectful call to the legislators so that … we protect lithium and lay out the structure for a company, such as CFE, that will handle everything related to lithium, backed by the support of research facilities in the country and the experience learned from other countries,” he said in a press conference.

The bill was approved on Monday by the lower house, only 24 hours after the same lawmakers had rejected the controversial reform of the energy sector.

The proposed law, now in the hands of the Senate, bans all private participation in the exploration and mining of lithium, which elevates to the category of “strategic mineral”.

The initiative has triggered worries among companies that already have lithium concessions in Mexico, including the one held by Bacanora Lithium (LON: BCN) in the country’s northwest. The company, owned by China’s Genfeng Lithium, is developing the giant Sonora project, which is slated to produce 35,000 tonnes of the metal per year starting in 2023.

Trade worries

The proposed law has also driven trade concerns, as it would violate the United States-Mexico-Canada Agreement (USMCA), Kenneth Smith Ramos, who headed technical negotiations for the now defunct North American Free Trade Agreement (NAFTA), told local media.

Smith said declaring lithium a strategic mineral, like certain radioactive minerals, either directly or indirectly, would breach the terms of the USMA as the battery metal was not listed as a strategic mineral when signed.

Most of the world’s current lithium output is locked away in long term deals as downstream chemicals producers, battery makers and electric vehicles makers are frantically trying to secure future supply.

Mexico’s reserves of the sought-after metal could position it among the world’s top producers if extracted, data from the US Geological Survey shows.

In terms of reserves, Bolivia ranks first with 21 million tonnes, followed by Argentina (19 million tonnes) and Chile (9.8 million). Mexico holds 1.7 million tonnes of lithium reserves.

Outdated Energy Grid Poses Existential Threat To The Renewable Revolution

By Irina Slav - Apr 18, 2022

• Wind and solar energy are booming in the United States.
• The country’s power grid, however, may not be ready for the transition.
• America’s dated electric grid is in desperate need of upgrades to support new renewable energy operations.

Wind and solar energy in Texas are increasing rapidly and could soon replace coal pretty entirely, Fortune reported last month. There is only one catch, the article said: the grid isn’t ready for so much renewable energy.

A similar message came from the solar industry association recently. Developers were ready to start work on the massive buildup of renewable energy capacity required for the Biden administration’s goal of 100-percent net-zero electricity by 2035, the industry said. The grid, however, wasn’t ready to take it in.

“Quarter after quarter, our industry continues to break records with respect to diversifying our fuel supply and allowing our country to be energy-independent through renewables, but, unfortunately, the regulatory process and framework has not caught up,” the senior director of regulatory affairs and counsel at the Solar Energy Industries Association said in March.

The electric grid was developed for an energy system supplied predominantly by fossil fuel sources. The coal or gas-fired power plants generate electricity, which is then transmitted via transmission lines and substations to the end consumer. However, wind and solar installations do not work this way, Solar Power World noted in a report on the grid problems of America’s transition.

Wind and solar power installations do not produce power continuously, so it is difficult to maintain a constant flow of electricity across the grid with a lot of output from wind and solar farms—at least as it is designed now. This means that grid operators will need to upgrade. And this will cost a lot.

California, for instance, recently approved $3 billion in financing for a total of 23 projects targeting upgrades and expansion of the grid over the next ten years as the state’s renewable energy output grows. And that’s just one state.

Utilities in the United States are set to spend some $140 billion this year and next on reducing carbon emissions and upgrading the grid, the Wall Street Journal reported last week, citing research from the Edison Electric Institute. These investments are urgent, as the national grid becoming increasingly unreliable under the twin weight of aging infrastructure and the influx of wind and solar electricity.

Related: 2 ETFs To Bet On Amid Wild Uncertainty And Volatility

According to industry executives who talked to the WSJ, climate change is also adding urgency to the grid upgrade as extreme weather events, according to scientists, become more frequent and the grid is vulnerable to them.

“We have entered a historic period of transformation in the energy industry, especially in the electric industry,” the CEO of DTE Energy Co., Jerry Norcia, told the WSJ. “When we weigh the pace of investment, both in the transformation of our generation fleet as well as the investments we’re making in our grid, we’re looking very closely at how we finance that.”

The problem for the end consumer is that no matter how utilities finance the massive grid upgrade needed to make it more resilient and more accommodative of wind and solar, electricity bills are set to rise. And this is happening amid inflation rates last seen in the early 80s.

The scale of the challenge is truly stunning, and Texas is a prime example. Per the Fortune article, renewable power installations in different parts of the Lone Star State can generate power at different times. For instance, in the western part of the state, the wind is strongest during the night, while in the southern coastal area, it is strongest in the afternoon. To make the best of these resources, the state needs a grid that connects these parts directly.

This is the challenge that all other states face, too, and not only on a state level. California, for example, is a major importer of electricity, so the grid upgrade would need to be a national endeavor. President Biden’s infrastructure bill envisages $15 billion in spending on the upgrade of existing transmission lines and building new ones to accommodate wind and solar. Against the background of utilities’ forecast spending plans of over $100 billion annually, that amount looks minuscule.

The bill for the grid upgrade, then, would have to be footed by taxpayers. Utilities can only absorb so much additional cost, especially now when inflation, supply chain snags, and shortages of various kinds are already squeezing the business. What this means is that higher energy costs may be about to become a fixture of everyday life.

The pipeline of wind and solar projects in the U.S. is massive, per the Biden Administration’s energy transition plans. Some of these projects have had to be shelved due to the rising costs of raw materials but some will go through—especially with the current rates of government support. Things may change after the November elections, but until then, renewables remain a priority.

The higher costs of power generation from renewables will likely combine with the additional—and sizeable—spending that utilities are planning to make the grid more renewable-friendly to push electricity bills higher. Fossil fuel power generation won’t help balance bills, either. Gas and coal prices are through the roof amid a sharp increase in demand. However we look at it, electricity is going to get more expensive.

By Irina Slav for Oilprice.com

Wind passed coal, nuclear power in US for first time on record

Bloomberg News | April 15, 2022 

Stock image.

Wind turbines in the U.S. produced more electricity than coal or nuclear plants on March 29 for the first time on record, the U.S. Energy Information Administration said Thursday. That made wind the second-biggest source of electricity that day, behind only natural gas and narrowly ahead of nuclear.


Wind farm capacity has increased rapidly in the U.S. over the past 15 years and is widely seen as an important weapon in the push to decarbonize the power grid and the fight against climate change.

However, due to the natural variation in wind speeds leading to different amounts of power generation, the EIA doesn’t expect wind to surpass coal or nuclear for an entire month in 2022 or 2023.

The EIA data go back to 2018 and don’t include Alaska or Hawaii.

(By Josh Saul)