Energy Transition Digest: 20-26 May 2024

1. EU Offers Support for Metals Value Chain

France, Germany, and Italy will allocate €2.5bn in public funding to develop a critical raw materials value chain in the EU.

So what? As the energy transition drives up the demand for critical minerals, the EU wants to increase self-sufficiency by supporting domestic production. The problem is the long lead time – any investments today will take years to materialize in significant capacity additions.

Details:

• The three countries announced the national investment plans at the EIT Raw Materials summit in Brussels.
• The funds will be available before the summer and focus on critical minerals as per the EU Critical Raw Materials Act, e.g., lithium, copper, and rare earths.
• EU Critical Raw Materials Act entered into force on 23 May 2024. It sets non-binding capacity targets for the EU, support mechanisms for capital investments, and risk assessment procedures.

2. Holcim Invests in Net Zero Cement

拉法基 started the construction of a net-zero cement plant in Belgium.

So what? Cement production is a major contributor to global GHG emissions. Innovative projects like this are essential to test low-carbon technologies that can be later implemented at scale to decarbonize the industry.

Details:

• The plant will produce 2 million tons of net-zero cement annually by 2029.
• The project will cover 95% of the plant’s energy requirements from alternative sources, use partially decarbonized raw materials, and deploy CCS technology to capture CO2 emissions and store it under the North Sea.
• The budget exceeds €500 million, of which €230 million will be provided as a grant from the EU Innovation Fund (financed from the EU ETS revenues).

3. KSA Announces Cheapest Wind PPA

Principal Buyer | Saudi Power Procurement Company claims to have signed the world’s lowest-cost wind power PPA for a 600 MW AlGhat project in the Kingdom.

So what? Price level of $16/MWh is truly impressive for a wind power project. While no details are disclosed, the secret sauce seems to be the low cost of capital coupled with optimized project CAPEX thanks to using wind turbines from a Chinese OEM.

Details:

• The 600 MW “AlGhat” onshore wind project is developed by Marubeni Corporation and will be completed in 2026.
• Saudi Arabia will provide wind speed data and a land plot, support permitting, and guarantee power offtake for the project.
• Marubeni is developing another project in Saudi Arabia – a 500 MW “Wa’ad Alshamal” wind park, for which a PPA has been signed at $17/MWh.

4. Data Centers Will Support District Heating

谷歌 and Haminan Energia Oy will partner to recover heat from Google’s data center in Finland and use it in the local heating network.

So what? Great example of improving energy efficiency and innovation at the intersection of technology and heating. In the future, maybe Gemini will not only help you with your work but also heat your home.

Details:

• The project is a pilot for Google and concerns the data center in Hamina, Finland.
• Google will provide waste heat free of charge, and it’s expected to cover 80% of the annual district heating demand.
• Hamina data center runs on carbon-free electricity 97% of the time. Google aims to achieve real-time 24/7 matching of its data center electricity demand with clean energy supply worldwide by 2030.