China Is Leading the Global Nuclear Power Build Out

By Tsvetana Paraskova - Apr 15, 2024

China is currently constructing a total of 26 nuclear power units with a combined capacity of 30.3 gigawatts (GW), the highest in the world, according to a report by the China Nuclear Energy Association (CNEA) cited by local media.

Last year, China approved the development of five new nuclear power projects and began construction of five units, the report found.

Air pollution from coal-fired power plants is a major impetus for China to expand its nuclear generation fleet, according to the World Nuclear Association

China is not giving up coal, but it is betting on nuclear, too, to meet its rising power demand with cleaner energy sources. 

Many countries in the West, with the notable exception of Germany, have also recognized that nuclear power generation would help them achieve net-zero emission goals.

At the COP28 climate summit in Dubai at the end of last year, the United States and 21 other countries pledged to triple nuclear energy capacity by 2050, saying incorporating more nuclear power in their energy mix is critical for achieving their net zero goals in the coming decades.   

The United States, alongside Britain, France, Canada, Sweden, South Korea, Ghana, and the United Arab Emirates (UAE), among others, signed the declaration at the COP28 climate summit.

China is not a signatory to that declaration, but it aims to develop more nuclear energy capacities to reduce emissions as its demand for electricity rises.

As of September 2023, China had 55 nuclear power units in operation with a combined installed capacity of 57 GW, and 24 units under construction with a total installed capacity of 27.8 GW, Xinhua quoted CNEA official Wang Binghua as saying. By 2060, that capacity is expected to jump to 400 GW, the official said.

China is also expected to approve six to eight nuclear power units each year “within the foreseeable future.”

By Tsvetana Paraskova for Oilprice.com

 

Banks Unwilling To Finance $5 Trillion Global Nuclear Development

By Alex Kimani - Apr 14, 2024

• Nuclear energy is enjoying a renaissance in the U.S. and many Western countries thanks to the global energy crisis.
• 
  
• Bankers appear unwilling to finance the $5 trillion the IAEA estimates the global nuclear industry needs for development until 2050.
• 
  
• Over the past several years, billions of federal dollars have gone into the development and demonstration of next-generation small modular reactors (SMRs) and advanced fuel cycle reactors.
• 
  

After decades of being treated as the black sheep of the energy universe, nuclear energy is enjoying a renaissance in the U.S. and many Western countries thanks to the global energy crisis. Back in December, at the COP28 summit, 22 countries including the US, Canada, the UK, and France pledged to triple nuclear power capacity by 2050 (from 2020 levels). Last month, 34 nations, including the United States, China, France, Britain, and Saudi Arabia, committed “to work to fully unlock the potential of nuclear energy by taking measures such as enabling conditions to support and competitively finance the lifetime extension of existing nuclear reactors, the construction of new nuclear power plants and the early deployment of advanced reactors.” 

The world is begrudgingly beginning to accept that technological bottlenecks limit solar and wind energy as large-scale substitutes for fossil fuel energy. Further, we are unable to develop clean energy resources fast enough to meet the world’s climate goals while the war in Ukraine has laid bare Europe’s dependence on Russian energy.

But nuclear’s revival might be dead in the water with lenders balking at financing what they consider a high-risk sector. Last month, the International Atomic Energy Agency convened the first ever nuclear summit in Brussels. Unfortunately, bankers appeared unwilling to finance the $5 trillion the IAEA estimates the global nuclear industry needs for development until 2050.

“If the bankers are uniformly pessimistic, it’s a self-fulfilling prophecy,” former U.S. Energy Secretary Ernest Moniz said after listening to a panel of international lenders.

“The project risks, as we have seen in reality, seem to be very high,” said European Investment Bank Vice President Thomas Ostros, adding that countries need to focus more on renewables and energy efficiency. Ines Rocha, a director at the European Bank of Reconstruction and Development, and Fernando Cubillos, a banker at the Development Bank of Latin America, concurred, saying their lending priorities lean toward renewables and transmission grids. “Nuclear comes last,” Cubillos said.

“We need state involvement, I don’t see any other model. Probably we need quite heavy state involvement to make projects bankable,” Ostros said.

State Involvement

As Ostros has noted, at this juncture, the nuclear sector probably requires considerable government support if it’s to really take off. In the past, the U.S. government has been involved in nuclear energy mainly through safety and environmental regulations as well as R&D funding in enrichment of uranium projects like HALEU. However, lately, the federal government is becoming more heavily involved in the nuclear energy sector.

Over the past several years, billions of federal dollars have gone into the development and demonstration of next-generation small modular reactors (SMRs) and advanced fuel cycle reactors. U.S. EXIM has been providing financing for overseas nuclear projects for more than a half-century. EXIM has issued Letters of Interest for up to $3 billion for nuclear exports to Poland and Romania. Established in 1934, the Export-Import Bank of the United States (Ex-Im Bank), operates as an independent agency of the U.S. Government under the authority of the Export-Import Bank Act of 1945. Similarly, USTDA has committed funding for the export of nuclear power technologies to Poland and Romania, Ukraine and Indonesia. Much of the funding is for technical activities, and includes a significant focus on the potential export of small modular reactors.

Last month, the U.S. federal government agreed to provide a $1.5 billion loan to restart a nuclear power plant in southwestern Michigan, abandoning earlier plans to decommission it. The Michigan plant will become the first ever nuclear plant in the U.S. to be revived after abandonment. Privately-owned Holtec International acquired the 800-megawatt Palisades plant in 2022 with plans to dismantle it. But now the plant will be able to contribute to Michigan’s power grid if it’s able to pass inspections and testing by the U.S. Nuclear Regulatory Commission, known as the NRC.

Michigan governor Gretchen Whitmer has welcomed the move. 

“Nuclear power is our single largest source of carbon-free electricity, directly supporting 100,000 jobs across the country and hundreds of thousands more indirectly,” Energy Secretary Jennifer Granholm, a former Michigan governor, has said.

“The repowering of Palisades will restore safe, around-the-clock generation to hundreds of thousands of households, businesses and manufacturers,” Kris Singh, Holtec president and chief executive, has declared.

Meanwhile, California regulators have given the greenlight for the Diablo Canyon plant to operate through 2030 instead of 2025 as the state transitions toward renewable power sources. Pacific Gas & Electric, the plant's owner, says it has received assistance from the federal government to repay a state loan.

By Alex Kimani for Oilprice.com

Small Banks Significantly Boost Loans to Oil And Gas Firms

By Tsvetana Paraskova - Apr 15, 2024

• Regional banks BOK Financial, Citizens Financial, Truist Securities, Fifth Third Securities, and US Bancorp have seen their combined loans to the fossil fuel industry jump by over 70%.
• 
  
• European banks are re-evaluating their funding for oil and gas, and energy-rich U.S. states are leading an anti-ESG drive to blacklist major financial corporations and asset managers.
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• BOK Financial now sees “much more opportunities” in the oil and gas industry.

While major European banks are competing to announce new policies limiting funding to oil and gas projects, smaller regional U.S. banks have boosted significantly their lending to oil and gas firms over the past two years.

Regional banks BOK Financial, Citizens Financial, Truist Securities, Fifth Third Securities, and US Bancorp have seen their combined loans to the fossil fuel industry jump by over 70% on an average annualized basis since the beginning of 2022, compared to the previous six years, according to data compiled by Bloomberg.

These five banks are now among the world’s top 35 banks in terms of the number of deals they have signed with the fossil fuel industry, Bloomberg’s data showed.   

Total global financing for fossil fuels since the Paris Agreement has been led by the biggest U.S. banks, with JP Morgan Chase, Citi, Wells Fargo, and Bank of America placing #1 through #4, respectively, with billions of U.S. dollars of financing for oil and gas between 2016 and 2022, according to research by environmental campaigners.

Regional U.S. banks are also seeing a growing pool of customers in the fossil fuel industry. This comes as European banks are re-evaluating their funding for oil and gas, and energy-rich U.S. states are leading an anti-ESG drive to blacklist major financial corporations and asset managers, which they believe are discriminating against the oil and gas industry.

U.S. states with large fossil fuel industries, such as Texas, West Virginia, Louisiana, Montana, and Oklahoma, have blacklisted funds managed by the world’s biggest asset manager BlackRock and other major banks and financial institutions, which, the states say, are boycotting the oil and gas industry.   

In Oklahoma, under the Oklahoma Energy Discrimination Elimination Act, Oklahoma State Treasurer Todd Russ published last year a so-called Restricted Financial Companies List, which included BlackRock, Wells Fargo, JP Morgan, Bank of America, State Street Corp, and Climate First Bank.

Oklahoma’s local bank, BOK Financial, has taken advantage of more opportunities to finance oil and gas in the state.

BOK Financial now sees “much more opportunities” in the oil and gas industry, Marisol Salazar, the bank’s senior vice president and manager for energy banking, told Bloomberg.

Apart from U.S. regional banks, commodity traders and alternative investment groups are also picking up the financing ditched by many European banks, industry officials tell Bloomberg.

These developments suggest that there are still ways for fossil fuel projects to get funding and fossil fuel companies to receive loans despite European banks limiting their exposure to oil and gas.

Under pressure from ESG trends and shareholders, major European banks have announced tougher rules on financing fossil fuels over the past two years.

ING, for example, is further restricting financing to the oil and gas industry, reducing the volume of traded oil and gas it finances and no longer financing midstream infrastructure for new oil and gas fields, the Netherlands-based bank said earlier this month. In 2022, ING said it would aim to grow new financing of renewable energy by 50% by year-end 2025 and would no longer provide dedicated finance to new oil and gas fields.

UK’s HSBC said at the end of 2022 that it would stop funding new oil and gas field developments and related infrastructure as part of a policy to support and finance a net-zero transition.

France’s biggest bank, BNP Paribas, said in May 2023 that it would no longer provide any financing for developing new oil and gas fields, regardless of the financing methods. The bank also pledged to reduce its oil exploration and production financing by 80% by 2030 as part of its energy transition goals.

Earlier this year, Barclays—Europe’s biggest lender to fossil fuel projects—said that it would drop direct funding for new oil and gas projects, joining other major European banks in halting the financing of fossil fuel expansion.

Campaigners, however, say that Barclays could have gone further in its commitments and that the announcement of the UK banking giant now puts pressure on the U.S. banks, which are the top lenders to the fossil fuel industry, including JP Morgan, Bank of America, and Citi.

By Tsvetana Paraskova for Oilprice.com

BP Cuts Jobs as Supermajor Scales Back EV Charging Unit

By Charles Kennedy - Apr 15, 2024

BP has cut over a tenth of its workforce in its EV charging business, BP Pulse, as the supermajor is downsizing the division and retreating from several countries to focus on just four key markets, Reuters reported on Monday, quoting sources at the company.        

BP has cut more than 100 out of BP Pulse’s 900 jobs, but many of the people have been transferred to other divisions and only a handful have left the supermajor, according to Reuters’ sources.   

BP Pulse is the electric vehicle (EV) charging business of BP, which has rapid and ultra-fast public EV charging networks in the UK and operates the largest number of sites with ultra-fast charging in Germany. BP considers its EV charging business a key element of its ambition to be a net-zero energy company by 2050.

However, BP has now scaled down some of the BP Pulse business and is focused its efforts on four key markets—the U.S., the UK, Germany, and China, the company told Reuters.

BP’s stock suffered early this decade when the company announced its net-zero strategy.

In early 2023, investors cheered BP’s reversal of some goals and its commitment to invest more in resilient oil and gas projects than previously planned and pump more hydrocarbons for longer to meet the world’s needs.

BP said in February 2023 it would be producing more oil and gas for longer and increase investment into oil and gas projects by an average of up to $1 billion a year until 2030. 

The move to scale back BP Pulse is also the result of slower-than-expected commercial EV fleet growth, as BP’s chief executive Murray Auchincloss told analysts at the latest earnings call in February.  

“We thought we'd be doing fleets as we started this. It's actually drifted more towards individual as opposed to fleets,” Auchincloss said.

By Charles Kennedy for Oilprice.com

Tesla to Lay Off Over 10% of Global Workforce

By ZeroHedge - Apr 15, 2024

• Tesla will lay off over 10% of its global workforce, affecting up to 14,000 employees.
• 
  
• The layoffs are part of the company's efforts to reduce costs and increase productivity.
• 
  
• Tesla's layoffs reflect the challenges facing the EV industry due to slowing demand.
• 
  

Shares of Tesla Motors are muted in the early premarket trading hours in New York after a report from the EV blog Electrek cited an "internal company-wide email" detailing layoffs at the EV company amounting to more than 10% of its global workforce. 

Electrek alleges that Elon Musk sent an email to staff explaining a "duplication of roles and job functions in certain areas" as the main reason for the layoffs, which could affect as many as 14,000 employees. 

Here's the full text of the email (courtesy of Electrek): 

Over the years, we have grown rapidly with multiple factories scaling around the globe. With this rapid growth there has been duplication of roles and job functions in certain areas. As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity. 

As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle.

I would like to thank everyone who is departing Tesla for their hard work over the years. I'm deeply grateful for your many contributions to our mission and we wish you well in your future opportunities. It is very difficult to say goodbye.

For those remaining, I would like to thank you in advance for the difficult job that remains ahead. We are developing some of the most revolutionary technologies in auto, energy and artificial intelligence. As we prepare the company for the next phase of growth, your resolve will make a huge difference in getting us there.

Thanks,

Elon

The latest data from Bloomberg shows that Tesla has around 140,000 employees, nearly double the 2020 level. 

Electrek noted, "We don't know which specific teams will be most or least affected by Tesla's layoffs." 

The alleged layoffs come after the company recorded its first quarterly decline in four years and delivered 386,810 vehicles in the first quarter, far below the Bloomberg consensus of 449,000. 

Slowing EV demand has weighed on Tesla shares this year, down 31%, and one of the worst performers in the S&P 500 Index. 

As Bloomberg notes, the EV slowdown has hit other automakers: 

The EV slowdown Tesla has felt of late has been widespread. China's BYD Co. delivered just 300,114 battery-electric vehicles in the first quarter, down 43% from the final three months of last year, when it briefly pulled ahead as the world's top EV seller. Manufacturers including Volkswagen AG, General Motors Co. and Ford Motor Co. have delayed, dialed back or altogether scrapped EV projects as consumers balk at still-high prices and a dearth of charging stations.

On Tesla's most recent earnings call, Chief Financial Officer Vaibhav Taneja said, "We just have to chase down every penny possible." 

Tesla will report next Tuesday, April 23. Wall Street analysts expect the company to turn a profit of about 50 cents a share, down from around 85 cents a share in the first quarter of 2023. 

If Electrek's report is correct, Elon appears to be tightening Tesla's belt, suggesting broader troubles are ahead for the US economy. 

By Zerohedge.com

 

Scientists Warn Gulf Stream Slowdown Could Begin as Early as 2025

By Kurt Cobb - Apr 15, 2024, 

• India's heatwave criteria do not consider humidity, leading to an underestimation of heat danger.
• 
  
• Deadly wet-bulb temperatures, where perspiration does not evaporate, are occurring more frequently.
• 
  
• Potential slowdown or collapse of the Gulf Stream could plunge Northern Europe into a colder climate.

There were two pieces of recent news which highlight why what was once most often referred to as global warming is now called climate change. Yes, the globe is heating up. But effects vary depending on where you live for various reasons.

First, a report from India calls out problems with the criteria used by the India Meteorological Department (IMD) to issue a heatwave warning: The criteria do NOT consider humidity, only temperature. Anyone who lives in a hot climate or any climate that includes hot summer days knows that humidity can make a huge difference in whether one can stay cool in hot weather. It turns out that the IMD criteria fail to recognize that temperatures below what is considered a heatwave may be just as dangerous to human health when humidity is high and even be downright life-threatening. In short, India is already experiencing conditions that at times are at or near the limits of human suvivability.

The vast majority of humans—even with an unlimited supply of water—would likely die after a few hours in conditions that exceed 95 degrees in very high humidity, what is called wet-bulb temperatures because they represent a wet towel around the bulb of a thermometer.  This web-bulb temperature is supposed to mimic the way that humans cool themselves through perspiration. At very high humidity, it becomes hard to get perspiration on the skin to evaporate which is what allows for cooling of the body. It's why a handheld or electric fan helps cool the body because it speeds up evaporation.

Scientists have previously believed such extreme conditions currently occur very infrequently anywhere on Earth. Recent studies suggest that 40 years ago such extremes occurred once or twice a year somewhere on the planet. Now models suggest they are occurring 25 to 30 times per year. Without dramatic reductions in greenhouse gases, these extremes will become increasingly common. "Such conditions are unbearable without technology like air conditioning and make outdoor labor near impossible," according to the ScienceNews article linked above.

A second story this week warns temperatures might go in the opposite direction in one area of the globe as a direct result of the warming of the Greenland ice sheet, increased rainfall attributed to climate change, and dropping salinity in the tropical waters where the Gulf Stream arises.

The Gulf Stream, also known as the Atlantic Meridional Overturning Circulation (AMOC), moves heat from the tropics, along the U.S. coast, then across the Atlantic to the British Isles and turns back and north to Iceland and Greenland. There, having lost much of its heat, it turns downward into the Atlantic depths to between 6,000 to 9,000 feet and begins a journey back to the equator and along South America.

Just how much heat does the Gulf Stream move? Some 50 times the energy used by all of human civilization. This explains why Northern Europe—a branch of the AMOC flows toward Scandanavia as well—and Iceland are much warmer than their high latitudes would suggest. If the energy transfer were to slow dramatically or stop, it would almost certainly plunge these areas into a much colder climate regime, one for which they are not currently prepared.

The basic idea was illustrated in an exaggerated way in the film "The Day After Tomorrow". The speed of the transformation from moderate climate into frozen wasteland takes one week in the film. It should be concerning, however, that past collapses of the AMOC have taken place in a decade.

Scientists have been tracking the AMOC since 2004 and believe it is slowing. When researchers discovered in their calculations and modeling that the AMOC might start its next collapse as early as 2025, they couldn't believe it. They rechecked the results, and the conclusion was confirmed. Their model suggests that the current could begin collapsing anywhere from 2025 to 2095. (Some scientists pointed out the considerable uncertainties in the model, a legitimate criticism. My response: Shall those in the path of potential destruction simply wait and do nothing until the model can be better confirmed? If so, how long should they wait?)

The range cited above is not that wide even from a human perspective. And, it suggests once again that the catastrophic effects of climate change aren't merely going to be someone else's problem in the distant future. In the coming decades humans could be migrating away from catastrophes which either make life too hot to be bearable...or too cold—both due to climate change.

By Kurt Cobb by Resource Insight

 

Canada's Hydro-Heavy Decarbonization Strategy in Jeopardy

By Haley Zaremba - Apr 15, 2024

• Canada's hydropower production has decreased due to drought, prompting a shift towards fossil fuels and discouraging investment in new projects.
• 
  
• Climate change has intensified drought cycles in Canada, affecting energy security and return on investment in hydropower.
• 
  
• Quebec, once aspiring to become the "battery of the U.S. northeast," now faces challenges in meeting its own clean energy needs and fulfilling export contracts.
• 
  

Canada has spent a lot of time and money building itself up to be one of the biggest global producers of hydropower electricity. The country is second only to China in hydroelectricity production, and has planned to vastly expand its infrastructure to become a hydro superpower capable of supplying a good portion of its own energy needs through hydroelectricity as well as export clean energy and offer considerable energy storage capacity to the Northeastern United States. But those plans have turned out to have some considerable insecurities as recent drought conditions have decreased hydropower output across the country, leaving Canadian provinces scrambling to diversify their energy portfolios. 

Canada is not alone. Worldwide hydropower generation experienced a record decline in production levels in 2023. This marks a worrying turnaround for a sector that was quite recently one of the most – if not the most – reliable forms of renewable energy production. In 2021, the global hydropower sector was solely responsible for 16% of the world’s electricity generation. That’s more than every other form of renewable energy combined. But a record-bad summer in 2022, characterized by heat waves and punishing drought, caused an unprecedented and unforeseen drop in that output. 

One of the results of that decline is that countries around the world ramped up consumption of fossil fuels to fill the gap. Due to unusually high natural gas prices over the same period, much of that consumption was represented by coal, the dirtiest fossil fuel. Another critical result of hydropower's historic slump is that investors are shying away from new projects. As a result, hydrogen production and especially the addition of new hydro projects have been in decline since 2020. 

All of this indicates that Canada will likely have to perform a massive pivot in its hydro-heavy decarbonization strategy. According to data from the Government of Canada collected at the end of January, about 70% of the country was abnormally dry or in moderate to exceptional drought. Drought is not unprecedented in Canada, and is generally part of climate cycles in the region. But while drought cycles used to be pretty predictable, that’s no longer the case as climate change intensifies. And unpredictable drought does not bode well for energy security or return on investment in a hydro-heavy energy sector.

“Canada has historically been seen as a hydroelectricity superpower, but this narrative has shifted,” John Pomeroy, a director at the University of Saskatchewan’s Centre for Hydrology, which studies water flows and climate change, was recently quoted by the Wall Street Journal. “In parts of the country, conditions are truly disastrous.”

This represents a huge loss of current and future export revenues for Canada, which already has long-term contracts with the states of Massachusetts and New York to provide roughly 20 terawatt hours of power. Those contracts were only supposed to be the beginning of a long and lucrative trade relationship with the United States. The northeastern U.S. presents a huge market with considerable and increasing demand for clean energy as well as energy storage options. Quebec had hoped to leverage its hydropower capacity to become the “battery of the U.S. northeast”. Now that’s looking increasingly unlikely.

However, some experts say that with or without the drought conditions, Canada has never had enough hydropower production capacity to support its own clean energy ambitions as well as those of the northeastern United States. “Many people in New England have lived with a myth that Quebec has so much power that it doesn’t know what to do with it all,” a group of legislators from Maine said in a joint statement last year. But the reality is that Quebec no longer has enough hydropower to meet its own current and future clean energy needs, much less those of its neighbors to the south. Over the next decade, the province plans to invest over $80 billion in a diverse array of sustainable power sources and infrastructure to expand its grid while staying on track to fulfill its promise of becoming net-zero by 2050. 

By Haley Zaremba for Oilprice.com