Rough quarter for renewables as energy inflation weighs
Rough quarter for renewables as energy inflation weighs
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Climate risk is investment risk, as the saying goes. But don’t forget inflation risk.
Energy inflation, not just oil but electricity prices, is contributing mightily to the stubbornness of headline inflation to fall in recent months, as seen by the painful consumer price numbers earlier this week that caused a market selloff.
While renewable energy sources such as solar and wind promise to be cheaper than fossil fuels, the production tools behind them are subject to price and supply chain pressure. Add increased demand from large AI data centers for electricity and you have a recipe for the higher prices we’ve seen so far this year.
The impact is being felt in the clean energy securities markets. Renewable energy funds suffered outflows of $4.8 billion in the first quarter, as high prices and the specter of a Trump presidency weighed on optimism for the sector, according to Reuters. And electric vehicle stocks, including Tesla TSLA 0.00%↑, which reports earnings later this month, are also suffering. Rivian RIVN 0.00%↑ and Lucid LCID 0.00%↑ are at new lows, also hit by price wars in EVs.
In short, potential escalation of war in the Middle East, the U.S. presidential election, and persistent energy inflation are keeping smart investors on the sidelines when it comes to the clean energy sector. All three could still play out in favor of a powerful rally at some point, but it’s hard to see it short term.
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Want to see Chinese EVs? Check out the pickleball courts
. . . . While the battle over Chinese EVs rages in global political capitals, there’s no controversy on the golf courses and pickleball courts of U.S. retirement communities, where an arm’s race in electric golf carts features some impressive new Chinese innovations, writes Bill Sternberg from Florida. Progress in the particular low-speed brands favored by the retirement crowd, especially with parts that are shipped to the U.S. for assembly, are giving both Chinese and Korean companies a foothold. No word on whether the carts are spying on our golf games. . . .
Thursday’s subscriber insights
More efficient lines could flip the power demand game
. . . . With concerns growing that the U.S. power sector won’t be able to satisfy demand for electricity, a savior — partial at least — may be in sight with the development of cables that can deliver much more than current tech. And there are other tricks. Read more here. . . .
Dark news about coal use
. . . . What’s the world’s dirtiest fuel? Yes, coal. And what is the easiest way to cut emissions? Close coal-fired power plants. And that’s happening in many places, but not in Asia, with China accounting for two-thirds of new coal generators and leading to a 2% growth in the sector. Can it be stopped? Read more here. . . .
Editor’s picks: From Sea Wolf to eWolf; plus, firefighters wanted
First all-electric tugboat ‘eWolf’ comes to San Diego
The first all-electric, ship-assist harbor tugboat in the U.S., named the eWolf, has arrived for duty at its new home in the port of San Diego. The 82-foot vessel was designed by the engineering services team from Crowley, a privately held, U.S.-owned and -operated maritime, energy and logistics solutions company. Crowley took delivery of the tug earlier this year. It was constructed by Master Boat Builders at its shipyard in Coden, Ala. Crowley says eWolf will operate with zero emissions while providing the complete performance capabilities of a traditional tug. The eWolf project, including the vessel and charging system, received nearly $14 million in local and federal grant funding, the bulk of which came from the San Diego County Air Pollution Control District, according to a report from Canary Media. The vessel was christened eWolf in honor of Crowley’s first tug, the Seawolf, used in the early 1900s.
Wanted: More firefighters
It’s going to be a long, hot summer. Texas already has notched its largest fire in recorded history and now firefighters are hard at work on wildfires in Virginia. In the first quarter of 2024 more than 2,670 square miles burned in the U.S. – more than half of last year's total. It’s not just the burned acreage that’s growing. So is the nation’s army of firefighters. A report from The Associated Press notes the Forest Service plans to hire about 11,300 firefighters this year. Longer fire seasons also have changed the composition of seasonal fire crews and permanent positions. The AP quotes Jeff Rupert, director of the U.S. Interior Department’s Office of Wildland Fire, who said that in years past, more than one-third of the workforce consisted of seasonal crew members. That number is growing. An annual wildfire training academy in Prescott, Ariz. marked a record-setting year, with more than 1,000 people turning out in March for a week of classroom time and work in the field.
Latest findings: New research, studies and projects
Welcome to the Anthropocene Epoch
“Ongoing intensification of human-forced climate change began in the mid-20th century, with steepening increases in greenhouse gases, ocean acidification, global temperature and sea level, along with the restructuring of Earth’s biota. The resulting distinction between relatively stable Holocene conditions and those of the proposed Anthropocene epoch is substantial, irreversible, and likely to persist indefinitely.” So say the authors of new research titled The Duration of the Anthropocene Epoch: A Synthesis. “Even if net zero were achieved immediately, elevated global temperatures would persist for at least several tens of millennia,” the authors write in the abstract. The evidence and conditions are … “sufficient to justify the Anthropocene as an epoch terminating the Holocene Epoch; the wider effects of climate change in driving further, mostly irreversible, restructuring of the biosphere amplifies this distinction.” Authors: Colin Peter Summerhayes, University of Cambridge; Jan Zalasiewicz, University of Leicester; Martin Head, Brock University; et al.
More of the latest research:
Words to live by . . . .
“The miracle is not to fly in the air or to walk on water, but to walk on the earth.” — Chinese proverb.