Daily Update: Tracking the Transition at the Oscars of Energy
Today is?Thursday, March 14, 2024, and here’s your?curated selection of essential intelligence on financial markets and the global economy?from?S&P Global.?Subscribe?to be notified of each new?Daily?Update.?
Beginning Monday, the energy industry will descend on Houston for the annual CERAWeek conference. Global leaders, policymakers and executives from more than 1,800 companies across the energy spectrum will gather to listen to panels and interviews, watch presentations, and engage in discussions that will inform energy markets for years to come. The challenge for the industry in this period of accelerating climate change is to identify what the future will look like for an industry and a global economy that is dependent on fossil fuels.?
In anticipation of CERAWeek, researchers and energy analysts at S&P Global have collaborated to create a wide-ranging report on the multidimensional transition confronting the energy sector. The report covers different aspects of the energy transition including the ongoing role of natural gas, energy security and geopolitics, hydrogen, carbon markets, and more.?
While these issues are familiar to anyone associated with energy markets, the attendees at CERAWeek will be intimately involved in determining how to build, fund and sell the energy of the future. In a recent episode of S&P Global’s "The Essential Podcast," Atul Arya of S&P Global Commodity Insights discussed the challenges of funding.
“Investment will remain a big theme,” Arya said. “The general feeling is that there isn't enough money going into an energy transition and particularly not enough money going into the Global South, which needs a lot more money than developing countries.”
In addition, the Inflation Reduction Act (IRA), signed into law by President Joe Biden in 2022, contained billions of dollars in incentives for renewable energy.?
“As part of the IRA, there were certain technologies which were targeted — carbon capture, hydrogen, storage, EVs,” Arya said. “So, we're going to have a lot of in-depth discussion around how are these technologies progressing.”
While North America and Europe are responsible for huge amounts of energy infrastructure and investment, the countries of the Global South have a different energy journey. The term "Global South” broadly refers to Latin America and the Caribbean, Africa, and Asia-Pacific, except for Israel, Japan, South Korea, Australia and New Zealand, as defined by the UN’s Conference on Trade and Development. The developing world’s energy journey is focused on growth, affordability and security of supply.?
“In Asia, access and affordability are very important, besides transition,” Arya said. “Many of these countries are at the forefront of climate change, but they also need to grow their economy. At CERAWeek, we are very consciously going to focus on this whole idea that there is a different pace for different countries, different needs, different pathways, different technologies.”
Today is Thursday, March 14, 2024, and here is today's essential intelligence.
Written by Nathan Hunt.
Economy
US Wage Inflation Moderates, Boosting The Odds Of A Soft Landing
US wages grew at the slowest pace in two years in a sign that the US could avoid the recession for which economists have long been bracing. The average US worker earned $34.57 an hour in February, up just 5 cents from January, the US Bureau of Labor Statistics reported March 8. The gain is the smallest since the 2-cents-per-hour rise in February 2022 from a month earlier.
—Read the article from S&P Global Market Intelligence
Capital Markets
Global Private Equity Entry Value Jumps In February
The aggregate value of global private equity and venture capital entries surged in February even as the number of deals declined. February saw announcements of transactions with a total value of $59.59 billion, up 125.7% from January and 114.3% from February 2023. Deal volume stood at 852, down 17.4% from the previous month and declining 15.8% from February 2023, according to S&P Global Market Intelligence data.
—Read the article from S&P Global Market Intelligence
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Global Trade
US Packaged Food Companies Seek More-Normal Trends In 2024, Though A Delayed Volume Recovery Weighs On The Industry's Outlook
While the US has averted a recession so far, slower economic growth has not translated into volume gains for US packaged food companies. The sector had a negative bias in 2023, with downgrades outpacing upgrades 1.3 to 1. However, this represents an improvement relative to the 1.9 to 1 ratio in 2022. While S&P Global Ratings expect generally stable ratings trends for investment-grade packaged food companies, several speculative-grade issuers experienced profit erosion and tighter liquidity.
—Read the article from S&P Global Ratings
Sustainability
China's Compliance Carbon Market Price Hits Record High Of $11.74/Mtco2e
The price of China's compliance emission allowances, or CEAs, in the national carbon market hit a record high of Yuan 83.33/mtCO2e ($11.74/mtCO2e) on March 8, as companies rushed to meet a deadline for non-compliance and amid broader signals of tighter emissions regulations from the government. This was the highest carbon price since China's national emissions trading scheme was launched in July 2021 with an opening CEA price of Yuan 51.23/mtCO2e or $7.22/mtCO2e, according to data from the Shanghai Environment and Energy Exchange.
—Read the article from S&P Global Commodity Insights
Energy & Commodities
Thai Refiners Expect Oil Product Demand To Pick Up Further, Refining Margins To Narrow In 2024
Thai refiners expect domestic oil product demand to pick up further this year amid aviation and tourism recovery, after earnings took a hit in 2023 from lower crack spreads due to weakened global demand, industry and company sources told S&P Global Commodity Insights over March 6-11. Thaioil — which owns the largest share of refining output in the country — said in its annual report released last week that overall consumption of petroleum products is expected to increase by 2.8% this year, with jet fuel consumption climbing 24.2% on the year.
—Read the article from S&P Global Commodity Insights
Technology & Media
Listen: Next In Tech Episode 155: Mobile World Congress Preview
What has been the premier telecom conference has expanded to be a technology showcase for everything from IoT to AR/VR. Lynnette Luna, Julber Osio and Mohammed Hamza, part of the analyst team braving the 100,000 or so attendees converging on Barcelona, join host Eric Hanselman to discuss what they’ll be looking for. Will satellite have an impact on fixed wireless access? Could spectrum allocations shift focus to the Chinese consumer markets? There’s a lot to digest ahead of this massive event.
—Listen and subscribe to Next in Tech, a podcast from S&P Global Market Intelligence
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1 年What an insightful update by S&P Global! It's encouraging to see the industry coming together to address the challenges of transitioning to a more sustainable future. Your curated essential intelligence selection is valuable in understanding the evolving energy landscape.