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Bloomberg writes, energy startups have overtaken the makers of EVs and batteries as the top global climate tech investment for the first time since 2020. They've done so as the growing demand for artificial intelligence has driven interest in technologies that can power data centers with less emissions. Venture funding for global energy startups totaled $9.4 B last year, representing an increase of 12% from 2023 levels. Among them, funding for geothermal startups nearly tripled to $558 MM, while nuclear investment almost doubled to $1.9 B. This comes as overall climate tech investment dipped in 2024, as venture capitalists remain cautious amid political uncertainty in the US, tough business environment and corporations weakening commitments to cut carbon. While global climate tech startups attracted a total of $30 B in investment last year, that was 14% below 2023 levels. That follows a 24% drop in 2023. Analysts expect venture funding to remain at lower levels rather than increasing exponentially, which could endanger the world's ability to reach net zero. However, “the dramatic drop in funding in 2023 won't be repeated as the industry settles into a new normal" the researchers said. Startups in greener transportation, a group that ranked first in climate tech investment from 2020 to 2023 saw investments drop more than one-third year over year to $7.7 B, as high-profile failures such as the bankruptcy of battery maker Northvolt hampered investors' confidence. Meanwhile, energy is slated to be a continued hot investment area in 2025 thanks to AI. Tech companies have made major commitments to purchase power generated by geothermal and nuclear fission in a bid to provide energy data centers. They've also bet on more speculative technology, such as nuclear fusion. ♻️💲👀 #energytransition #cleantech #geothermal

The FT Lex column writes, definitions of long duration energy storage (LDES) can vary but typically it is any technology that can store electricity for periods ranging from eight hours to weeks and months. This capability has long existed through pumped storage hydro plants or water batteries which use power at times of excess production to push water uphill, from one reservoir to a second. The water is then released from the upper reservoir through turbines to generate electricity when there is a need. But the geographic limitations of water batteries are driving interest in other LDES technologies. Enter liquid air energy storage, which has no such geographic restrictions. This works by using electricity during periods of abundant wind and solar generation to clean, dry and refrigerate air until it liquefies. The liquid air is then stored in insulated tanks. When electricity is required, it is pumped at high pressure, reheated and expanded to produce a high pressure gas that powers a turbine. The UK government-owned National Wealth Fund and FTSE 100 power company Centrica this summer participated in a £300mn fundraising to help build a liquid air energy plant near Manchester in the north-west of England that is planned to open in 2026. When complete, the plant is expected to be one of storage capacity of 300 MWhr and private company Highview Power also includes the largest facilities of its kind globally with a power output of 50 megawatts. The syndicate backing the project—under development by private company Highview Power—also includes Rio Tinto and Goldman Sachs Power Trading. Highview is also planning a further four, bigger liquid air plants, including one in Scotland. Broadly speaking, for a first-of-a-kind project storage costs might be about £500 per kilowatt hour, versus about £300/KWh for a lithium ion battery. In the UK, the government has proposed a "cap and floor" revenue mechanism for plants once they are operational to incentivise more facilities. LDES developers had long been campaigning for this. But the pressure will still be on to reduce costs significantly if liquid air energy storage is to move into the mainstream. 🔋⚡ 👀 #batteries #energystorage #energy

Wells Fargo is leaving the world's biggest climate alliance for banks, in the latest sigm that Wall Street is breaking away from such groups. The company says it ended its membership in the Net-Zero Banking Alliance. Wells Fargo's departure follows Goldman Sachs, which announced earlier this month that it was quitting NZBA. Financial companies have been under increasing pressure from GOP lawmakers, which have launched investigations and filed lawsuits related to the industry's efforts to address climate change. The House Judiciary Committee, said last week that it's found "substantial evidence of collusion and anticompetitive behavior" by financial companies. In a report, the committee specifically criticized financial environmental alliances, saying they have created what it calls climate cartel. NZBA is part of the Glasgow Financial Alliance for Net Zero (GFANZ) Net Zero, which was launched ahead of a key climate summit in Scotland in 2021. Back then, the world's biggest lenders, including JPMorganChase and Citi joined the coalition. Wells Fargo's decision was based on the company's internal analysis, said a person familiar with the matter who declined to be identified. Wells Fargo is one of the largest financiers for the fossil-fuel industry. It ranks as the second-leading arranger of bonds and loans for oil, gas and coal companies since the start of the decade. JPMorgan is frst. Banks and money managers have been defecting from other climate groups in increasing numbers. This month, Franklin Templeton said it was leaving Climate Action 100+, which was created to press high-polluting companies to curb their emissions. The investment firm two years ago hired Anne Simpson, who was the first chair of CA100+, as its global head of sustainability. ♻️💲👀 #esg #capitalmarkets #climatechange

The FT Lex column writes, companies often make statements they later wish they could erase. Take bp. Four years ago it declared that the “attractive” returns from offshore wind power would endure “for decades to come.” Now it seems the European oil major cannot eat its words fast enough. BP now says it was putting its offshore wind assets into a jointly-owned business with Japan’s biggest power generation company, Jera. Its British rival Shell has also said it will not initiate any new offshore wind schemes, as the sector struggles to recover from a crisis that has ravaged returns. Embarrassing as the retreat may be, for BP the move is a good first step in tackling an identity crisis that has been building since 2020, when former CEO Bernard Looney set out a grand energy transition plan. First and foremost, the move eases concerns about how much capital expenditure BP will have to commit to offshore wind during the remainder of the decade. Investors had been braced for that number to reach one-third of BP’s $30bn renewables and hydrogen capex budget over that time. But BP will contribute a maximum of $3.25bn in capex to the joint business. Given its spend in 2023 and 2024 on offshore wind has been under $2bn, its overall outlay will be some $5bn lighter than investors had feared. Another attraction is that the joint business—which will own a more appealing mix of assets than BP did alone—would be in effect pre-packaged for a sale if and when the renewables market improves. Italy’s Eni has already had some success in selling stakes in its energy transition “satellite businesses” at attractive valuations. But for BP’s current CEO Murray Auchincloss, this only scratches the surface. Investors remain fixated on BP’s borrowings—unsurprisingly, since it is expected to end the year as the most highly indebted European oil major—and the extent to which it can sustain share buybacks. Bottom Line: Four years ago, BP might have hoped its strategy would go down in corporate history as a blueprint for navigating the energy transition. Instead, it’ll be lucky if in years to come no one can remember it. ♻️🛢️🤔 #energytransition #renewables

Bloomberg writes, startup Planted Solar is building a fleet of robots it says can revolutionize how the world builds solar farms. Its robots dispense steel rods that solar panels sit on with high precision at a speed no human can match. They run on AI software that allows them to work on varied terrain, saving even more time and money by reducing the need to grade land. Planted is one of a growing number of startups and solar developers turning to robots to quickly get more steel in the ground. The need for speed couldn't be more vital. The world is facing a solar bottleneck—though it almost doubled the amount of capacity installed from 2022 to 2023, that's still too slow for some. There are headwinds to reaching that milestone, particularly around labor. While the US solar industry last year expanded at a record pace to add more than 15,000 jobs, nearly 30% of solar companies said that it remains “very difficult" to hire skilled workers. For Planted, robotics and Al-assisted design offer a way forward. The latter allows customers to streamline solar array creation, cutting the number of components needed for construction, says CEO Eric Brown. Once a project's digital blueprint is ready, Planted Solar sends construction commands to robots that work around the clock in the field. The result, according to Brown, is about a two-thirds reduction in construction time. He says it typically takes a year to manually build a 100-megawatt solar project, which can generate enough electricity to power about 20,000 American homes. By contrast, Planted expects to complete the same task within four months. For now, the company has only deployed its technology on small pilot projects, with its first megawatt-scale one scheduled to begin next year. Unlike conventional solar farms that require around five acres of land to produce a megawatt of power, Brown says their robotic-assisted construction can do the same with two acres. That's an appealing perk for developers who, in recent years, have grappled with local opposition to obtaining more land for new solar projects. The reduction in land usage, combined with saved construction materials and manpower, can lower energy generation costs by as much as 30%, Planted estimates. Planted Solar raised $20 million in Series A funding from Bill Gates' Breakthrough Energy Ventures and Khosla Ventures. #renewables #solar #energytransition

Reuters writes, Denmark's latest offshore wind farm tender in the North Sea has failed to attract any bids in a further setback for the industry. After a year of challenges, the global offshore wind industry no longer has much prospect of hitting the lofty targets set by governments in the US, Europe and elsewhere, hindering efforts to fight climate change. "This is a very disappointing result," energy and climate minister Lars Aagard said in a written statement. "The circumstances for offshore wind in Europe have changed significantly in a relatively short time, including large price and interest rate increases," Aagard added. The Danish Energy Agency said it would start a dialogue with market participants to identify reasons for the lack of bids, adding that a number of companies had expressed interest during the initial market dialogue. Danish offshore wind farm developer Ørsted said it had opted not to bid due to an unfavourable risk-reward balance and acknowledged the changing industry factors such as higher inflation, rising interest rates and supply chain bottlenecks. "To mitigate the impact of this and support the ongoing expansion of offshore wind energy, industry and policymakers should work together to create the necessary conditions for a sustainable future for offshore wind," Ørsted's Chief Commercial Officer Rasmus Errboe said in a written comment. Denmark had in April launched its biggest offshore wind tender to date, offering no subsidies to companies competing for the right to erect turbines on six sites with a combined capacity of up to 10 GW. The deadline for bids for three sites in the North Sea was on Thursday, while the deadline for an additional three sites in the Baltic Sea and Kattegat is on April 1, 2025. No subsidies were offered in the tender. Shell, one of the major energy companies which have touted offshore wind as a key market they can invest in as part of the world's energy transition, on Wednesday said it was stepping back from new offshore wind investments in a move mirrored by others. Denmark, also home to turbine maker Vestas has been a pioneer in both onshore and offshore wind, thanks also to its favourable wind speeds. #windenergy #renewables #energy

Reuters writes, Shell is stepping back from new offshore wind investments and is splitting its power division following an extensive review of the business that was once seen as a key driver of the company's energy transition strategy. The changes are part of a company-wide review launched in 2023 aimed at reducing costs as CEO Wael Sawan focuses on activities with the highest returns. In many cases that has meant reducing spending on low-carbon and renewable businesses and increasing the focus on oil, gas and biofuels. “While we will not lead new offshore wind developments, we remain interested in offtakes where commercial terms are acceptable and are cautiously open to equity positions, if there is a compelling investment case,” a company spokesperson said in a statement. Shell and other major energy companies have in the past touted offshore wind as a key market they can invest in as part of the world's energy transition, drawing on their decades-long experience in offshore oil and gas production. But the sector has been hit in recent years by soaring costs, supply chain issues and rising interest rates, leading companies to review investments as profit margins narrowed. Shell's retreat mirrors moves by rivals BP and Equinor that have slowed investments in renewables and low-carbon business as they face investor pressure to boost returns and maintain large shareholder payouts. Their change of direction reflects two major developments—the energy shock from Russia’s invasion of Ukraine and a drop in profitability for many renewables projects. Shell will continue to develop offshore wind projects already underway, it said. The company in recent months has retreated from several offshore wind projects, including in South Korea and the United States. As part of Sawan's strategy, Shell plans to grow its liquefied natural gas division and steady its oil production by the end of the decade. The company, one of the world's largest energy traders, will also focus on selling power to customers and developing battery storage sites. "In selected markets, we see increasing value in using batteries and flexible gas-fired power plants to manage intermittency and help us to meet our customers’ needs as renewables play increasing roles in power markets," it said. #energy #energystorage ##oilandgas

Bloomberg writes, banks are gearing up for US oil prices to fall below $60 a barrel by the middle of Trump's new term in office, according toa survey from law firm Haynes Boone. West Texas Intermediate, the US benchmark, expected to drop to $58.62 a barrel by 2027, the mean estimate of 26 banks participating in the survey. WTI settled at $69.94 yesterday. Trump has said he'll push shale producers to ramp up output, telling supporters pump prices will fall even if it means operators "drill themselves out of business." Crude prices in the US have dropped modestly this year amid concerns about a looming global surplus. While shale producers have pledged to slow growth, efficiencies are allowing them to produce more while spending less. "If prices drop further, our experts wouldn't be surprised if producers start paring 2025 budgets to curb drilling," Alex Ljubojevic, director of Enverus Intelligence Research, said in a report this week. Operators in the Permian Basin of West Texas and New Mexico could cut drilling rigs by roughly 10% next year to keep output flat in the world's busiest shale patch, Enverus said. 🛢️🛢️🛢️👀 #oilfield #crude #shale

Bloomberg writes, Canada's electric truck and bus manufacturer Lion Electric is up against a deadline this weekend to find new investors amid a cash crunch and an EV market that's in turmoil. The Quebec-based company said on Nov 18 it had received a two-week extension of its credit agreement with three lenders, as well as temporary relief on the conditions of a loan provided by the Caisse de Depot et Placement du Quebec and Finalta Capital. The deadline to meet its obligations to these creditors is Saturday. But Lion Electric hasn't been able to find additional funding yet, according to Quebec's economy minister, raising the odds it will seek creditor protection. The Quebec gov't has supported the firm with committed investments totaling $137 million, and has said it's willing to do more to save the firm, but only if other private investors also participate. "We won't go alone," Economy Minister Christine Frechette said. CEO Marc Bedard acknowledged on a Nov. 6 conference call that the ability to continue was in doubt if it couldn't raise more money. The company didn't respond to a request for comment Friday. Shares are down by almost 90% since the beginning of the year, trading at less than 20 cents in New York. Lion Electric's largest shareholder is Powercorp of Canada, the holding company controlled by the billionaire Desmarais family, with a 34% stake. Supply chain disruptions, urgent financing needs, scaling issues and a dispute with a battery supplier were among the company's problems after it went public by merging with a special purpose acquisition company in 2021. Since then, the company has also deployed close to $250 million in capex as it multiplied new models, and built electric bus manufacturing plant in Illinois, and a battery pack assembly plant in Mirabel, Quebec. Meanwhile, revernue and deliveries have been under pressure, partly due to delays in subsidy and incentive programs in Canada and the US, as well as slower electric vehicle adoption. In the quarter ended Sept. 30, the company reported sales of $31 million, down from $80 million a year ago. Deliveries dropped by 64%. The manufacturer, which had as many as 1,400 employees at the start of 2023, has since reduced its workforce by almost half. 🚛 🚌⚡👀 #evs #automakers #canada

WSJ Heard on the Street column wrong, Trump's Treasury Secretary pick, Scott Bessent, has a gov't deficit-reduction plan, neatly packaged as 3-3-3, which includes the US producing an additional 3 million barrels of oil-equivalent a day. Not only does that energy plan seem impossible to implement, it makes little sense. First of all, convincing oil-and-gas companies to produce more—the equivalent of overall fifth of total US oil production today—will be a near-impossible task. The industry was scarred by years of overproduction during the shale boom, and investors no longer tolerate wildcatter behavior. They would rather see cash returns over excessive fracking. Trump's major oil and gas donors have already signaled that they don't want to “drill, baby, drill." US energy companies on average say they need WTI Crude prices to be at least $65 a barrel for drilling to be profitable and $89 a barrel for them to increase drilling substantially, according to the latest survey by the Kansas City Federal Reserve. With prices today below $70 a barrel, there is scant incentive for drillers to increase production. Trump could, of course, lower costs and barriers for oil and gas producers, such as by rolling back methane emissions regulation and making it easier to get permits to drill on federal lands. Such moves could help reduce break-even prices, but not by enough to make a big difference in US production. The idea of driving prices down and encouraging more production at the same time is seems an oxymoron. Moreover, there is only much pipeline capacity and so much LNG export capacity. While the new admin and GOP Congress can try to ease the infrastructure-permitting process, companies probably won't build pipelines without attractive, long-term contracts. There are other risks that come with such a dramatic increase in fossil fuel production. For one, US shale producers are already running out of their best wells. Depleting the cheapest sources of production quickly means that production costs rise for US producers over the long term, counter to the "energy independence" thesis. Secondly, if the US floods the market with so much oil, it could anger Saudi Arabia enough to initiate a price war—something that happened in 2014. Bottom Line: The 3-3-3 policy certainly rolls off the tongue, but at least one of those threes doesn't quite square with reality. 🛢️🛢️🛢️👀 #energy #oilfield #crudeoil