Biden sets 2035 floating wind farm goal
President Joe Biden's administration will push the offshore wind sector into deeper waters, establishing a new goal for projects using floating turbines over the next 13 years.
The US by 2035 will strive to add 15,000MW of floating offshore wind capacity, enough to power more than 5mn households, the US Department of the Interior said today.
Reaching the milestone would avoid around 26mn metric tonnes/yr of CO2 emissions, according to Interior's estimates.
The US Bureau of Ocean Energy Management will advance wind lease areas for projects in deeper waters to fulfill the objective, beginning with a previously announced auction for territory off the California coast before the end of the year.
The new target expands on Biden's existing goal for 30,000MW of offshore wind by 2030. The 2030 goal will rely mostly on projects with fixed-bottom turbines suitable for relatively shallow waters. In contrast, developers are depending on floating turbines to establish projects in areas with deeper waters, which includes the US west coast.
While California, Oregon and Washington have all committed to 100pc carbon-free electricity by 2045 at the latest, offshore wind has less of a foothold on the west coast as a result of engineering challenges and cost concerns. Projects in the northeastern US account for most of the country's offshore wind pipeline because they rely on the fixed turbines, rather than the more expensive, floating turbines needed in the Pacific's deeper waters.
US Interior Secretary Deb Haaland said her department has "a leasing strategy" but declined to elaborate on areas other than the west coast and Gulf of Maine — regions already highlighted by BOEM — that regulators could ultimately target for leases.
The administration will support the 15,000MW aspiration from several angles. The first is an extension of the US Department of Energy's (DOE) "Energy Earthshot" program, designed to advance newer clean technologies — including hydrogen, long-duration energy storage, geothermal and carbon capture and sequestration — by breaking down technology and cost barriers.
Through that initiative, the administration endeavors to cut costs for floating turbine technology by over 70pc by 2035, bringing it down to $45/MWh, through a combination of research, demonstration projects and technology improvements, as well as building out domestic supply chain and transmission infrastructure.
The floating wind "earthshot" will be a cross-sector collaboration between DOE, Interior, the US Department of Commerce and US Department of Transportation.
DOE will also invest $50mn into research, development and demonstration projects, with portions of the funding from last year's infrastructure bill. That research will touch on various aspects of the industry, ranging from utility-scale projects to port upgrades to wildlife protection measures.
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Brazil allocates R514mn to combat fires: Correction
Brazil allocates R514mn to combat fires: Correction
Corrects value of funding in headline and lead. Sao Paulo, 18 September (Argus) — Brazil will allocate R514mn ($94.3mn) to combat fires spreading across the country, presidential chief of staff Rui Costa and environment minister Marina Silva said this week. The funds are considered "extraordinary" and not a part of the country's overall budget because they are part of a special budget authorized by the supreme court to tackle climate change. Brazil is facing severe drought in all states but two, leading to fires in several regions. The flames are likely to cut the country's 2024-25 sugarcane output , while low river levels have roiled logistics . Part of the funds will be allocated to the environment ministry to reinforce monitoring and combating fires, Costa said. The federal police and the national public security force will also receive extra resources to reinforce investigations and battle environmental crimes. The armed forces will also receive some funds to support operations to extinguish the flames. Another portion will be earmarked to buy food for families in the north that are affected by the low water levels caused by droughts. The government will also issue another provisional measure this week to ease the release of resources from the Amazon Fund, Costa said. President Luiz Inacio Lula da Silva, supreme court chief justice Luis Roberto Barroso, head of the senate Rodrigo Pacheco and lower house speaker Arthur Lira all attended the announcement as a show of unity among the branches. Brazil is also considering increasing penalties for environmental crimes, which Silva considers to be "too low" at the moment. "The sentence of two to four years in prison is light," she said. "And some judges go further and completely relax this sentence." Brazil — which is trying to bolster its image as a climate leader — is also considering creating a climate authority and technical-scientific committee to "support and coordinate the federal government's actions to combat climate change." By Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Hoekstra to face 'tough' EU parliamentary hearings
Hoekstra to face 'tough' EU parliamentary hearings
Brussels, 18 September (Argus) — EU climate commissioner Wopke Hoekstra, who has been nominated again for the role, is expected to face "tough" hearings in the European Parliament, according to a senior European official. The official told Argus that Hoekstra might have a "slight" advantage, as he underwent parliamentary hearings in 2023 when he took over fellow Dutchman Frans Timmermans' climate portfolio. At the time, Hoekstra was questioned extensively about past work with Shell and on climate issues. European Commission president Ursula von der Leyen put forward new commissioner candidates on 17 September, assigning Hoekstra the climate, net-zero, and clean growth portfolio. All candidates will undergo hearings before the EU parliament votes on the new commission line-up. Hoekstra has said he is "honoured and humbled", but formal appointment depends on how he performs during the hearings before the European Parliament's energy, environment and other committees. Hoekstra's mandate would include drafting legislation to enshrine a 90pc cut in greenhouse gas (GHG) emissions by 2040, from 1990 levels, into European law. The commission's 2040 target, revealed in February, referred to a "net GHG emissions reduction of 90pc". Hoekstra last year made a "personal" commitment to defend a "minimum target of at least 90pc" net GHG cuts. Von der Leyen has tasked Hoekstra with designing climate policies for the post-2030 period and developing an Industrial Decarbonisation Accelerator Act. Other key objectives include channelling investment toward net-zero infrastructure and ensuring revenues from the EU's emissions trading system (ETS) are used "effectively" to drive decarbonisation. Hoekstra's responsibilities extend to advancing a single market for CO2, boosting carbon removals for hard-to-abate sectors, and phasing out fossil fuel subsidies. Hoekstra would work closely with former Danish climate minister Dan Jorgensen, who is nominated for the energy and housing portfolio, if both are appointed. Jorgensen will be responsible for advancing the Electrification Action Plan for industrial transition and overseeing a roadmap to phase out Russian energy imports. He is tasked with ensuring the "full use" of joint procurement mechanisms, with a mandate to extend the current aggregated demand system from gas to include hydrogen and potentially other commodities. Supervising both Hoekstra and Jorgensen, in addition to von der Leyen, will be Teresa Ribera, Spain's former climate minister. Ribera has been nominated as executive vice-president for a clean, just and competitive transition. European Parliament officials expect to receive financial declarations and other procedural documents in the coming days. That will allow parliamentary committees to send written questions to Hoekstra and other nominated commissioners, officially kicking off the hearing process. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU needs future power grids task force: Ember
EU needs future power grids task force: Ember
London, 18 September (Argus) — The EU must put in place a future grid task force to bring together scattered legislation and directives, so the bloc can better implement its power grid roadmap and integrate renewable capacity, according to UK-based think-tank Ember. Integrating intermittent renewables into the power grid adequately will require substantial upgrades to the power network across the continent. This is a political priority for the EU but responsibility is shared across a number of European governmental bodies, Ember said. Most of the 80 action points laid out in EU policy and legislation are the European Commission's responsibility, but some objectives are overseen by EU distribution system body DSO Entity, European grid operators association Entso-E, energy regulators' agency Acer, the EU's High-Level Forum on European Standardisation, and individual member states. The policy framework is a "positive step", Ember said. But significant grid work and modernisation are needed, which would be best met through a single body that can ensure "timely and effective" delivery, according to Ember. A dedicated task force would centralise policy support and monitoring through a single channel, provide access to financing from the European Investment Bank and European Bank for Reconstruction and Development, and develop a clear roadmap for all actions that are currently in the commission's remit. The need for a roadmap is significant as several of the commission's targets do not have scheduled completion dates, Ember said. The EU must centralise funding access for member states and grid operators to ensure stakeholders can use as much of the funding available to them as possible, according to Ember. Funding is currently underutilised and spread across several financial instruments. In addition to uniting these instruments, the access mechanisms should be streamlined and administrative burdens reduced so that stakeholders of varying sizes can utilise these funds. The EU should provide targeted funding for pilot projects on grid digitalisation, and then create a "technical toolbox" to support the digitalisation of distribution grids. The toolbox would detail best practice approaches, standardisation guidelines and interoperability technologies to ease digitalising the power network. These innovative grid technologies (IGTs) or grid-enhancing technologies (GETs) use existing infrastructure to improve renewable integration while reducing overall investment needs. IGT and GET technologies could improve renewable integration with costly network upgrades by as much as 40pc, according to a study by Latvian grid operator AST. By Daniel Craig Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Asia-Pacific faces $815bn/yr green financing shortfall
Asia-Pacific faces $815bn/yr green financing shortfall
Singapore, 18 September (Argus) — Asia-Pacific holds significant investment opportunities in the energy transition, but obstacles such as insufficient public funding, lack of regulation and investment risks have resulted in a financing shortfall in the region. The Asia-Pacific region needs at least $1.1 trillion/yr in climate financing, but actual investment falls short by at least $815bn/yr, said Singapore's ambassador for climate action Ravi Menon at a conference in Singapore last week, referencing data from the International Monetary Fund (IMF). There is existing green funding in the region such as from the Asian Development Bank (ADB), which estimated its investments amounted to $10.7bn in 2023, and bilateral arrangements like the $600mn India-Japan fund, established by India's National Investment and Infrastructure Fund and Japan Bank for International Co-operation in October 2023. But this is insufficient, especially as the region's energy demand is only set to rise further. Energy demand in Asia is growing by 2.9pc/yr, the highest of any region in the world, said Menon. Renewables such as solar and wind are now more cost-competitive than fossil fuels, but the region needs more grid connectivity and capacity to make renewable energy a viable option. Building transmission lines and energy storage in the region alone will cost about $2.4 trillion over the next 10 years, added Menon. Obstacles to capital flows Total energy investment worldwide is expected to exceed $3 trillion in 2024, with about $2 trillion going to clean technologies and slightly over $1 trillion toward fossil fuels, according to the IEA's World Energy Investment 2024 report. Fossil fuel financing by the world's 60 largest banks rose to $705bn in 2023 , up by 4.8pc from $673bn in 2022, with the rise largely driven by LNG financing. The continued investments in fossil fuels and fossil fuel-based technologies will lead to more carbon-intensive infrastructure, divert capital from clean energy alternatives and undermine climate targets, derailing Asia-Pacific from its energy transition goals. Emerging economies typically have "many developmental needs" to take care of, hence public financing in these countries cannot shoulder the overall trajectory of growth of energy transition financing, said the Institute for Energy Economics and Financial Analysis' (IEEFA) sustainable finance and climate risk research lead Shantanu Srivastava at the IEEFA Energy Finance 2024 conference earlier this month. Many smaller economies rely on financing from multilateral development banks (MDBs), but this comes in "bits and pieces" and with many strings attached, he added. It is hence essential to bring in private capital, but the region faces challenges in attracting private investments. The lack of a sound climate information architecture hampers accurate assessment and tracking of climate risks, which impedes investors' ability to make decisions and prevents the scale-up of climate finance, according to the IMF. Other measurable risks — such as political risk, credit risk, and foreign exchange risk — often significantly raise the risk premium of investments into the region. Investors tend to expect higher returns on investments with higher risk premiums, but there are limited investment opportunities available which would provide such returns and this prevents foreign capital from scaling, according to Srivastava. Insufficient regulatory and government measures in the region as well as the inconsistency of existing ones also deter private investors, as these increase project execution risks. Policy continuity and long-term visibility of what the country is going to do is essential as a "policy flip-flop" deters investor confidence, Srivastava said. Tools to attract more climate finance Blended finance is necessary to mobilise private capital for Asia's energy transition, according to Menon. Governments and development finance institutions could provide concessional or risk capital in the form of grants and limited guarantees, while MDBs can provide technical assistance in the form of development expertise, capacity building and institutional support, he said. Finance can also be encouraged through sovereign sustainable bonds, which can stimulate local sustainable bond markets by setting long-term price benchmarks, boosting liquidity, and serving as models for private issuers, according to IEEFA. The issuance of these bonds also signal a dedicated government commitment to sustainability goals and can drive the development of a robust and transparent regulatory environment, IEEFA added. This is crucial for the long-term growth and stability of the region's sustainable bond markets, which is essential for boosting investors' confidence. Another method is through revenue generation tools, such as carbon pricing and carbon taxes, according to the Financing Just Transition Through Emission Trading Systems report released earlier this month by think-tank Asia Society Policy Institute (ASPI). Carbon pricing sends a strong signal to reduce greenhouse gas emissions and indicates the government's intent to intensify efforts related to energy transition, which encourages private capital flow, stated the ASPI report. Carbon pricing also has the potential to generate substantial revenue, which can be allocated to climate funds to support low-carbon technology innovation and aid enterprises in making green investments, to aid low-carbon transition efforts, the ASPI report added. By Joey Chan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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