Solar's cloudy future

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MORNING ENERGY NEWS | 06/09/2021

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If China can't make the prices work with slave labor, what chance does solar have on an open market?

Reuters (6/9/21) reports: "Global solar power developers are slowing down project installations because of a surge in costs for components, labor, and freight as the world economy bounces back from the coronavirus pandemic, according to industry executives and analysts interviewed by Reuters. The situation suggests slower growth for the zero-emissions solar energy industry at a time world governments are trying to ramp up their efforts to fight climate change, and marks a reversal for the sector after a decade of falling costs. It also reflects yet another industry shaken up by the supply chain bottlenecks that have developed in the recovery from the coronavirus health crisis, which has businesses from electronics manufacturers to home improvement retailers experiencing huge delays in shipping along with soaring costs. 'The narrative is shifting,' S&P Global Platts clean energy analyst Bruno Brunetti said in an interview, citing the costs inflation. Among the biggest headwinds for solar is a tripling in prices for steel, a key component in racks that hold solar panels, and polysilicon, the raw material used in panels. Soaring shipping freight rates along with higher costs for fuel, copper and labor are also pinching project costs, company executives said."

"The Democratic politicians in the U.S. are so arrogant that they think they can push water uphill. American 'clean power' grifters are happy to take their handouts of taxpayer money by the boatload and snicker at the pols behind their backs."

– Francis Menton,
Manhattan Contrarian

Climate mercantilism is here.

Bloomberg (6/3/21) reports: "The European Union is planning to slap an import levy on steel, cement and aluminum produced in countries with lower environmental standards, as it seeks to become a world leader on climate without harming domestic producers. In a move no other country in the world has taken, the European Commission wants to introduce a system imposing a penalty for bringing into the bloc emissions embedded in goods, according to a person familiar with the proposals due to be unveiled next month. The levy will be based on carbon costs domestic producers already face, and will also affect fertilizers and electricity. Importers will have to buy special certificates at a price linked to the EU Emissions Trading System, the person said, asking not to be named commenting on private discussions. Carbon prices in that market have soared to records this year. The planned measure is part of a broader package to be put forward on July 14, in a bid to align the EU economy with stricter emissions-reduction targets for 2030. The 27-nation bloc is tightening its environmental rules in an overhaul that will affect all areas from transport to energy production and trade. The overarching goal of the Green Deal is for Europe to become the world’s first climate-neutral continent by the middle of the century."

Subsidies to make, subsidies to sell, soon they'll be asking for tax dollars to help get rid of them.

Financial Times (6/9/21) reports: "Some of the world’s biggest carmakers risk creating a waste problem for the future by using cheaper electric car batteries made in China, according to Europe’s largest battery materials company Umicore. Tesla, Volkswagen and Ford have all said they will use lithium batteries that contain abundant iron rather than more valuable metals such as nickel and cobalt in some of their electric cars in order to make them less expensive. But Marc Grynberg, chief executive of Umicore, warned that they would have to pay more to have the batteries recycled once they reached the end of their lives. The cost may be borne by manufacturers if vehicles are within warranty. 'The recycling will come at a different cost which is not being factored into the equation so far,' said Grynberg. 'The lower the metal value, the higher the net cost you have to incur to get the material recycled.' The transition to electric cars is expected to create a large amount of waste batteries over the next two decades. Electric vehicle batteries will last an average of about 15 years, according to consultancy Circular Energy Storage, after which they can be reused in other applications or recycled."

Look, folks, here's the deal: Joe is all talk and no action. He can approve three mines today if he really thought climate change was an existential threat to humanity.

Washington Examiner (6/8/21) reports: "The Biden administration is tentatively backing domestic mining to help meet the growing demand for critical minerals that will be created by aggressive adoption of electric vehicles and renewable energy. In a report on supply chain vulnerabilities released this morning, the Biden administration doesn’t rule out bolstering the domestic mining sector, as previous reports had suggested it might due to environmental concerns. The issue is tricky for President Joe Biden. Meeting his ambitious climate plans will undoubtedly prompt significant growth in the demand for critical minerals...The Biden administration’s report doesn’t include many recommendations that would help push pending critical minerals projects across the finish line more quickly. For example, while the report acknowledges that mining projects in the United States often take 10 years or more to build, the administration doesn’t say whether it will work to speed up permitting for mining efforts, as industry groups and Republican lawmakers have encouraged. Instead, the Biden administration is calling for the development of 'sustainability' standards for critical minerals mining, to ensure any new domestic production meets strong environmental requirements."

Energy Markets

WTI Crude Oil: ↑ $70.22
Natural Gas: ↑ $3.16
Gasoline: ↑ $3.06

Diesel: ~ $3.20
Heating Oil: ↑ $214.34
Brent Crude Oil: ↑ $72.60
US Rig Count: ↑ 527

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