China's stock rally draws focus on renewables push overseas
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China’s stock market is closed this week for a national holiday but that hasn’t stopped investors from leaping on any ideas tied to the remarkable surge in the past week after Xi Jinping’s government fired the economic stimulus bazooka, including Chinese ETFs and renewable plays.
While politicians in North America and Europe have been erecting trade barriers to try to block the expansion of Chinese electric vehicles and solar panels, a lot of the market interest has been muted recently as the country has suffered an economic slump going all the way back to Covid.
But the stimulus and subsequent rally has gained worldwide attention. If it indeed marks a turning point, as some say, then it’s time to analyze China’s clean energy ambitions once more. While it still burns more coal and oil than almost any other country, its renewable energy growth has been booming. Solar and wind energy are expected to pass coal capacity this year and represent almost 40% of the country’s electricity.
China is exporting that energy and its investment in renewable products at a furious pace — even during its economic downturn — and raised concerns it will soon control the global supply chain of clean energy products.
This came up briefly in the vice-presidential debate on Tuesday night, but otherwise has not been a significant part of the presidential election campaigns, largely because both parties agree on the China threat.
But as interest rates fall and investor interest in renewable energy markets heats up again, we expect much more focus on China and its competitive threat in international markets, and not just a little friction at upcoming climate summits.
Don’t forget to contact me directly if you have suggestions or ideas dcallaway@callawayclimateinsights.com.
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The track record of government climate policies is worse than you think
. . . . It’s fashionable in climate diplomatic circles to claim that effective climate technology must be accompanied by strong government policies to make a difference, but a new study from Oxford University shreds that idea, writes Mark Hulbert (who studied at Oxford University). The study of some 1,500 policies in 41 countries over the past 25 years reveals that 96% of them failed, in particular outright bans on certain polluting practices and many carbon prices and energy taxes. Hulbert said the 4% of policies that did work often varied from country to country but usually involved subsidies of some sort, or a mix of tax and incentives policies, according to the study. Something to remember as we gear up for COP29 next month in Azerbaijan.
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Britain’s coal addiction ends after 142 years
. . . . Britain, where coal power was born 142 years ago with a coal plant built by Thomas Edison to light the streets of London, formally severed its addiction to coal this week with the closing of the country’s last remaining coal plant in Ratcliffe-on-Soar in Nottingham in the East Midlands.
The dirty energy that powered the Industrial Revolution, created the infamous London smog a century ago, and was the backdrop for some of the country’s worst union disputes in history in the 1980s between coal miners and former Prime Minister Margaret Thatcher, is now part of the UK’s past.
In closing the last plant, Britain becomes first major economy to turn its back completely on coal in favor of renewable energy, setting an example for the rest of Europe, China, and the U.S. It also marked a feather in the cap of the new Labour government, which has pledged a major expansion in renewables under a new entity called the Great British Energy Company.
What’s even more interesting than the final abandonment of coal is the speed of the transition from which the UK moved away from it. As recently as a decade ago, the UK still derived almost 40% of its electricity from coal power.
As renewable energy surges in the U.S. and Europe and around the world, political leaders still want to hang on to fossil fuels to make sure there are never any shortages. But at some point, perhaps sooner than we think, it will become abundant enough for more leaders to make the decision to close plants and wells.
For clean tech investors, as we watch the impact of global warming daily and voice frustration with the pace of the transition, it’s worth reflecting that often it’s happening right under our noses, at some of the very companies and countries we’re focused on.
Editor’s picks: Climate tipping point? Plus, grid-scale energy storage grows
Watch the video: Is the climate crisis at risk of spinning out of control? Even among scientists, there is considerable disagreement about what near-term changes may be coming. Can we count on linear modeling of climate change, or do we need to prepare for a radically different future for the planet? David Wallace-Wells, opinion writer and columnist for The New York Times Magazine, talks with Michael Oppenheimer, professor of geosciences and international affairs at Princeton University, and Stefan Rahmstorf, professor of physics of the oceans at Potsdam University.
Report: U.S. grid-scale energy storage installations surge
The U.S. energy storage market experienced significant growth in the second quarter, with the grid-scale segment leading the way at 2,773 MW and 9,982 MWh deployed. According to the American Clean Power Association’s and Wood Mackenzie’s latest U.S. Energy Storage Monitor report released Tuesday, every segment of the market experienced growth in the second quarter, compared to year-ago figures, with the community segment increasing 61% to 87 MWh and residential increasing 12% to 423 MWh. In total, the market saw 3,011 MW and 10,492 MWh deployed, the second-highest quarter on record behind Q4 2023 at 13,437 MWh. California, Arizona, and Texas were responsible for 85% of installations.
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China’s coming coal transition
Pressures to address climate change are eroding the privileged role coal has held in China throughout its modernization, says the author of this 21st Century China Center Research Paper titled Managing the Decline of Coal in a Decarbonizing China. Phasing down coal requires a suite of supply- and demand-side tools to both reduce production (and therefore, maintain sufficiently high prices) and shift to coal alternatives across diverse consumption sectors. This review outlines contours of the coming coal transition by documenting coal’s rise in modern China, its status in key debates of today’s energy system, and the range of modeling scenarios of coal’s future to midcentury. In addition, through an analysis of current efforts and impacts in four transition policy areas — supply-side, demand-side, employment and social impacts, and stranded assets and fiscal revenues — it identifies gaps and future recommendations. Author: Michael R. Davidson, UC San Diego School of Global Policy and Strategy.
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Words to live by . . . .
“We do not inherit the earth from our ancestors, we borrow it from our children.” — Native American proverb.