From Miners To Big Oil, The Great Commodity Cash Machine is Back, Energy & Commodities

JUST over five years ago, Anglo American was in deep trouble. The natural resources giant, beset by a collapse in commodity prices, scrapped its dividend and announced plans to close mines and cut thousands of workers. Amid talk of an emergency capital raise, its market value fell to less than US$3 billion.

Last week, the trials of 2016 probably seemed like a parallel universe to its chief executive officer Mark Cutifani.

Fuelled by a rally in iron ore and other commodity prices, he announced record first-half earnings and billions in dividends. Anyone who took a punt on Anglo’s shares when they reached their nadir, would have seen a 14-fold increase as the market capitalization soared to US$55 billion.

“High commodity prices have been very important to us,” Mr Cutifani told investors last week. “We don’t think this is as good as it gets.”

Anglo American is one of many. With raw materials prices surging, the whole natural resources sector is showering shareholders with special dividends and buybacks as miners, oil drillers, trading houses, steelmakers and farmers reap billions in windfall profits.

The sector, marked down by investors because of its contribution to climate change and a reputation of squandering money on mega projects, is again a great cash machine.

The economic rebound from last year’s Covid slump has powered an explosive rally in commodity prices as consumers forgo vacations and dining out and spend their money loading up on physical goods instead: everything from patio heaters to start-of-the-art TVs. Politicians are helping, too, lavishing hundreds of billions on resource-heavy infrastructure projects.

The Bloomberg Commodity Spot Index, a basket of nearly two dozen raw materials, surged to a 10-year high last week and is rapidly closing in on the record set in 2011.

Brent crude, the global oil benchmark, has again surged above US$75 a barrel, copper is headed back towards US$10,000 a tonne, European natural gas is at its highest ever for the summer season, and steel is changing hands at unprecedented levels. Agricultural commodities such as corn, soya beans and wheat are also expensive.

“Demand continues to improve with increasing global vaccinations,” Joe Gorder, the chief executive of Valero Energy, one of the world’s largest oil refiners, said last week.

Even commodities long left for dead, like thermal coal, are enjoying a new life in 2021. Coal, burned in power stations to produce electricity, together with huge volumes of carbon emissions, is trading at a 10-year high.

While commodities prices are the main reason behind the turnaround, there are structural factors at play as well.

Miners and oil companies have cut spending in new projects savagely, creating a supply shortfall. The miners were first, as they curbed investment from 2015 to 2016 as investors demanded more discipline; oil companies followed up last year and some major energy companies last week announced further cuts in spending for 2021.

The result is that while demand is surging, supply is not – at least for now. The oil majors are benefiting too from the work of the Organization of the Petroleum Exporting Countries alliance of oil producers, which is still holding back a large share of output.

Anglo American, which announced US$4 billion in dividends, is probably the most remarkable turnaround story in the natural resources sector, but its profits were still dwarfed by its bigger rivals. Rio Tinto and Vale, the world’s two leading iron ore miners, together vowed to hand back more than US$17 billion in dividends recently. There is still more to come for investors, with both BHP, the world’s biggest miner, and Glencore, another big miner and commodity trader, yet to report.

And for once, the world’s biggest steelmakers were not only able to absorb the costs, but pass them on. An industry that has spent much of the last decade in crisis is now also able to reward long-suffering shareholders.

The world’s largest steelmaker outside China, ArcelorMittal, that was forced to sell shares and scrap its dividend just five years ago, posted its best results since 2008 last week and announced a US$2.2 billion share buyback programme.

The miners have stolen the spotlight from the energy industry, traditionally the biggest dividend payer in the natural resources industry.

Still, Big Oil recovered from the historic price collapse of 2020, when a vicious Saudi-Russian price war and the Covid-19 pandemic briefly sent the value of West Texas Intermediate, the US oil benchmark, below zero. Supported by rising oil, natural gas, and, above all, the chemicals that go into plastics, Exxon Mobil, Chevron, Royal Dutch Shell, and TotalEnergies delivered profits that went to pre-covid levels.

With cash flow surging, Shell, which last year cut its dividend for the first time since World War II, was able to hike it nearly 40 per cent, and announced an additional US$2 billion in buybacks. “We wanted to signal to the market the confidence that we have in cash flows,” Shell CEO Ben van Beurden said.

Chevron and Total also announced they will buy shares. Exxon, though, is still licking its wounds and focused on paying down debt.

The more opaque world of commodity trading has also cashed in. Glencore said last week that it was expecting bigger trading profits than forecast, with rivals Vitol and Trafigura, two of the world’s largest oil traders, also benefiting from lucrative opportunities created by rocketing prices.

The agricultural traders have cashed on higher prices and unusually strong demand from China.

Bunge, a trader that is the world’s largest crusher of soya beans, told investors it expected to deliver its best earnings-per-share since its initial public offer two decades ago. Archer-Daniels-Midland Co, another big American grain trader and processor, also flagged strong earnings. And Cargill, the world’s largest agricultural trader, is heading towards record earnings in its 2021 fiscal year.

Whether the natural resources boom can last is hotly contested. Many investors worry climate change makes the long-term future of the industry hard to read and they also fret about the tendency of executives to approve expensive projects at the peak of the cycle.

Mining executives fear Chinese demand will slow down at some point, hitting iron ore in particular. But the current lack of investments may support other commodities, like copper and oil.

But Shell’s Mr van Beurden summed up the bullish case last week: “Supply is going to be constrained, and demand is actually quite strong”. BLOOMBERG

Source: From miners to Big Oil, the great commodity cash machine is back, Energy & Commodities – THE BUSINESS TIMES


More Contents:

Brokers’ take: DBS cuts target for China Aviation Oil after profits fall short

BP boosts dividend, buybacks as profit soars

Gold falls as investors await US jobs data

Citi, HSBC, Prudential hatch plan for Asian coal-fired closures: sources

Solar Power Is Dirt-Cheap and About to Get Even More Powerful

After focusing for decades on cutting costs, the solar industry is shifting attention to making new advances in technology. The solar industry has spent decades slashing the cost of generating electricity direct from the sun. Now it’s focusing on making panels even more powerful.

With savings in equipment manufacturing hitting a plateau, and more recently pressured by rising prices of raw materials, producers are stepping up work on advances in technology — building better components and employing increasingly sophisticated designs to generate more electricity from the same-sized solar farms.

“The first 20 years in the 21st century saw huge reductions in module prices, but the speed of the reduction started to level off noticeably in the past two years,” said Xiaojing Sun, global solar research leader at Wood Mackenzie Ltd. “Fortunately, new technologies will create further cost-of-electricity reductions.”

A push for more powerful solar equipment underscores how further cost reductions remain essential to advance the shift away from fossil fuels. While grid-sized solar farms are now typically cheaper than even the most advanced coal or gas-fired plants, additional savings will be required to pair clean energy sources with the expensive storage technology that’s needed for around-the-clock carbon-free power.

Bigger factories, the use of automation and more efficient production methods have delivered economies of scale, lower labor costs and less material waste for the solar sector. The average cost of a solar panel dropped by 90% from 2010 to 2020.

Boosting power generation per panel means developers can deliver the same amount of electricity from a smaller-sized operation. That’s potentially crucial as costs of land, construction, engineering and other equipment haven’t fallen in the same way as panel prices.

It can even make sense to pay a premium for more advanced technology. “We’re seeing people willing to pay a higher price for a higher wattage module that lets them produce more power and make more money off their land,” said Jenny Chase, lead solar researcher at BloombergNEF.

Higher-powered systems are already arriving. Through much of the past decade, most solar panels produced a maximum of about 400 watts of electricity. In early 2020, companies began selling 500-watt panels, and in June, China-based Risen Energy Co. introduced a 700-watt model.

Here are some of the ways that solar companies are super-charging panels:

While many current developments involve tweaks to existing technologies, perovskite promises a genuine breakthrough. Thinner and more transparent than polysilicon, the material that’s traditionally used, perovskite could eventually be layered on top of existing solar panels to boost efficiency, or be integrated with glass to make building windows that also generate power.

“We will be able to take solar power to the next level,” said Kim Dohyung, principal researcher on a perovskite project team at Korea Electric Power Corp., one of several companies experimenting with the material. “Ultimately, this new technology will enable us to make a huge contribution in lowering greenhouse gas emissions.”

Adoption of perovskite has previously been challenged by costs and technical issues that prevented commercial-scale production. There are now signs that’s changing: Wuxi UtmoLight Technology Co. in May announced plans to start a pilot line by October with mass production beginning in 2023.

Solar panels typically get their power from the side that faces the sun, but can also make use of the small amount of light that reflects back off the ground. Bi-facial panels started to gain in popularity in 2019, with producers seeking to capture the extra increments of electricity by replacing opaque backing material with specialist glass. They were also temporarily boosted by a since-closed loophole in U.S. law that exempted them from tariffs on Chinese products.

The trend caught solar glass suppliers off-guard and briefly caused prices for the material to soar. Late last year, China loosened regulations around glass manufacturing capacity, and that should prepare the ground for more widespread adoption of the two-sided solar technology.

Another change that can deliver an increase in power is shifting from positively charged silicon material for solar panels to negatively charged, or n-type, products.

N-type material is made by doping polysilicon with a small amount of an element with an extra electron like phosphorous. It’s more expensive, but can be as much as 3.5% more powerful than the material that currently dominates. The products are expected to begin taking market share in 2024 and be the dominant material by 2028, according to PV-Tech.

In the solar supply chain, ultra-refined polysilicon is shaped into rectangular ingots, which are in turn sliced into ultra-thin squares known as wafers. Those wafers are wired into cells and pieced together to form solar panels.

For most of the 2010s, the standard solar wafer was a 156-millimeter (6.14 inches) square of polysilicon, about the size of the front of a CD case. Now, companies are making the squares bigger to boost efficiency and reduce manufacturing costs. Producers are pushing 182- and 210-millimeter wafers, and the larger sizes will grow from about 19% of the market share this year to more than half by 2023, according to Wood Mackenzie’s Sun.

The factories that wire wafers into cells — which convert electrons excited by photons of light into electricity — are adding new capacity for designs like heterojunction or tunnel‐oxide passivated contact cells. While more expensive to make, those structures allow the electrons to keep bouncing around for longer, increasing the amount of power they generate.

— With assistance by Heesu Lee


Source: Solar Power Is Dirt-Cheap and About to Get Even More Powerful – Bloomberg



Solar power is the conversion of energy from sunlight into electricity, either directly using photovoltaics (PV), indirectly using concentrated solar power, or a combination. Concentrated solar power systems use lenses or mirrors and solar tracking systems to focus a large area of sunlight into a small beam. Photovoltaic cells convert light into an electric current using the photovoltaic effect.

Photovoltaics were initially solely used as a source of electricity for small and medium-sized applications, from the calculator powered by a single solar cell to remote homes powered by an off-grid rooftop PV system. Commercial concentrated solar power plants were first developed in the 1980s.

As the cost of solar electricity has fallen, the number of grid-connected solar PV systems has grown into the millions and gigawatt-scale photovoltaic power stations are being built. Solar PV is rapidly becoming an inexpensive, low-carbon technology to harness renewable energy from the Sun. The current largest photovoltaic power station in the world is the Pavagada Solar Park, Karnataka, India with a generation capacity of 2050 MW.

The International Energy Agency projected in 2014 that under its “high renewables” scenario, by 2050, solar photovoltaics and concentrated solar power would contribute about 16 and 11 percent, respectively, of worldwide electricity consumption, and solar would be the world’s largest source of electricity. Most solar installations would be in China and India.[3] In 2019, solar power generated 2.7% of the world’s electricity, growing over 24% from the previous year. As of October 2020, the unsubsidised levelised cost of electricity for utility-scale solar power is around $36/MWh.

One issue that has often raised concerns is the use of cadmium (Cd), a toxic heavy metal that has the tendency to accumulate in ecological food chains. It is used as semiconductor component in CdTe solar cells and as a buffer layer for certain CIGS cells in the form of cadmium sulfide. The amount of cadmium used in thin-film solar cells is relatively small (5–10 g/m2) and with proper recycling and emission control techniques in place the cadmium emissions from module production can be almost zero.

Current PV technologies lead to cadmium emissions of 0.3–0.9 microgram/kWh over the whole life-cycle.[136] Most of these emissions arise through the use of coal power for the manufacturing of the modules, and coal and lignite combustion leads to much higher emissions of cadmium. Life-cycle cadmium emissions from coal is 3.1 microgram/kWh, lignite 6.2, and natural gas 0.2 microgram/kWh.





7 Types of Renewable Energy: The Future of Energy

Renewable Energy Types | The future of eco-friendlier energy

What Is Renewable Energy?

Renewable energy is energy that has been derived from earth’s natural resources that are not finite or exhaustible, such as wind and sunlight. Renewable energy is an alternative to the traditional energy that relies on fossil fuels, and it tends to be much  less harmful to the environment.

7 Types of Renewable Energy


Solar energy is derived by capturing radiant energy from sunlight and converting it into heat, electricity, or hot water. Photovoltaic (PV) systems can convert direct sunlight into electricity through the use of solar cells.


One of the benefits of solar energy is that sunlight is functionally endless. With the technology to harvest it, there is a limitless supply of solar energy, meaning it could render fossil fuels obsolete. Relying on solar energy rather than fossil fuels also helps us improve public health and environmental conditions. In the long term, solar energy could also eliminate energy costs, and in the short term, reduce your energy bills. Many federal local, state, and federal governments also incentivize the investment in solar energy by providing rebates or tax credits.

Current Limitations

Although solar energy will save you money in the long run, it tends to be a significant upfront cost and is an unrealistic expenses for most households. For personal homes, homeowners also need to have the ample sunlight and space to arrange their solar panels, which limits who can realistically adopt this technology at the individual level.


Wind farms capture the energy of wind flow by using turbines and converting it into electricity. There are several forms of systems used to convert wind energy and each vary. Commercial grade wind-powered generating systems can power many different organizations, while single-wind turbines are used to help supplement pre-existing energy organizations. Another form is utility-scale wind farms, which are purchased by contract or wholesale. Technically, wind energy is a form of solar energy. The phenomenon we call “wind” is caused by the differences in temperature in the atmosphere combined with the rotation of Earth and the geography of the planet.



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Wind energy is a clean energy source, which means that it doesn’t pollute the air like other forms of energy. Wind energy doesn’t produce carbon dioxide, or release any harmful products that can cause environmental degradation or negatively affect human health like smog, acid rain, or other heat-trapping gases.[2] Investment in wind energy technology can also open up new avenues for jobs and job training, as the turbines on farms need to be serviced and maintained to keep running.

Take the next step by selecting the best energy plan for your home!

Current Limitations

Since wind farms tend to be built in rural or remote areas, they are usually far from bustling cities where the electricity is needed most. Wind energy must be transported via transition lines, leading to higher costs. Although wind turbines produce very little pollution, some cities oppose them since they dominate skylines and generate noise. Wind turbines also threaten local wildlife like birds, which are sometimes killed by striking the arms of the turbine while flying.


Dams are what people most associate when it comes to hydroelectric power. Water flows through the dam’s turbines to produce electricity, known as pumped-storage hydropower. Run-of-river hydropower uses a channel to funnel water through rather than powering it through a dam.


Hydroelectric power is very versatile and can be generated using both large scale projects, like the Hoover Dam, and small scale projects like underwater turbines and lower dams on small rivers and streams. Hydroelectric power does not generate pollution, and therefore is a much more environmentally-friendly energy option for our environment.

Current Limitations

Most U.S. hydroelectricity facilities use more energy than they are able to produce for consumption. The storage systems may need to use fossil fuel to pump water.[3]  Although hydroelectric power does not pollute the air, it disrupts waterways and negatively affects the animals that live in them, changing water levels, currents, and migration paths for many fish and other freshwater ecosystems.


Geothermal heat is heat that is trapped beneath the earth’s crust from the formation of the Earth 4.5 billion years ago and from radioactive decay. Sometimes large amounts of this heat escapes naturally, but all at once, resulting in familiar occurrences, such as volcanic eruptions and geysers. This heat can be captured and used to produce geothermal energy by using steam that comes from the heated water pumping below the surface, which then rises to the top and can be used to operate a turbine.


Geothermal energy is not as common as other types of renewable energy sources, but it has a significant potential for energy supply. Since it can be built underground, it leaves very little footprint on land. Geothermal energy is naturally replenished and therefore does not run a risk of depleting (on a human timescale).

Current Limitations

Cost plays a major factor when it comes to disadvantages of geothermal energy. Not only is it costly to build the infrastructure, but another major concern is its vulnerability to earthquakes in certain regions of the world.


The ocean can produce two types of energy: thermal and mechanical. Ocean thermal energy relies on warm water surface temperatures to generate energy through a variety of different systems. Ocean mechanical energy uses the ebbs and flows of the tides to generate energy, which is created by the earth’s rotation and gravity from the moon.


Unlike other forms of renewable energy, wave energy is predictable and it’s easy to estimate the amount of energy that will be produced. Instead of relying on varying factors, such as sun and wind, wave energy is much more consistent. This type of renewable energy is also abundant, the most populated cities tend to be near oceans and harbors, making it easier to harness this energy for the local population. The potential of wave energy is an astounding as yet untapped energy resource with an estimated ability to produce 2640 TWh/yr. Just 1 TWh/yr of energy can power around 93,850 average U.S. homes with power annually, or about twice than the number of homes that currently exist in the U.S. at present.[4]

Current Limitations

Those who live near the ocean definitely benefit from wave energy, but those who live in landlocked states won’t have ready access to this energy. Another disadvantage to ocean energy is that it can disturb the ocean’s many delicate ecosystems. Although it is a very clean source of energy, large machinery needs to be built nearby to help capture this form energy, which can cause disruptions to the ocean floor and the sea life that habitats it. Another factor to consider is weather, when rough weather occurs it changes the consistency of the waves, thus producing lower energy output when compared to normal waves without stormy weather.


Hydrogen needs to be combined with other elements, such as oxygen to make water as it does not occur naturally as a gas on its own. When hydrogen is separated from another element it can be used for both fuel and electricity.


Hydrogen can be used as a clean burning fuel, which leads to less pollution and a cleaner environment. It can also be used for fuel cells which are similar to batteries and can be used for powering an electric motor.

Current Limitations

Since hydrogen needs energy to be produced, it is inefficient when it comes to preventing pollution.


Bioenergy is a renewable energy derived from biomass. Biomass is organic matter that comes from recently living plants and organisms. Using wood in your fireplace is an example of biomass that most people are familiar with.

There are various methods used to generate energy through the use of biomass. This can be done by burning biomass, or harnessing methane gas which is produced by the natural decomposition of organic materials in ponds or even landfills.


The use of biomass in energy production creates carbon dioxide that is put into the air, but the regeneration of plants consumes the same amount of carbon dioxide, which is said to create a balanced atmosphere. Biomass can be used in a number of different ways in our daily lives, not only for personal use, but businesses as well. In 2017, energy from biomass made up about 5% of the total energy used in the U.S. This energy came from wood, biofuels like ethanol, and  energy generated from methane captured from landfills or by burning municipal waste. (5)

Current Limitations

Although new plants need carbon dioxide to grow, plants take time to grow. We also don’t yet have widespread technology that can use biomass in lieu of fossil fuels.


Renewable Energy: What Can You Do?

As a consumer you have several opportunities to make an impact on improving the environment through the choice of a greener energy solution. If you’re a homeowner, you have the option of installing solar panels in your home. Solar panels not only reduce your energy costs, but help improve your standard of living with a safer, more eco-friendlier energy choice that doesn’t depend on resources that harm the environment. There are also alternatives for a greener way of life offered by your electric companies. Just Energy allows consumers to choose green energy options that help you reduce your footprint with energy offsets. Add JustGreen to your electricity or natural gas plan to lower your impact today!


Electricity, Energy Resources, Renewable Energy




  1., Advantages and Challenges of Wind Energy, Retrieved from:
  2., Advantages and Challenges of Wind Energy, Retrieved from:
  3. U.S. Energy Information Administration, What is U.S. Electricity Generation by Energy Source?, Retrieved From: 
  4. Bureau of Ocean Energy Management, Ocean Wave Energy, Retrieved From:
  5. U.S. Energy Information Administration, Biomass Explained, Retrieved From:



Bitcoin Could Churn Out 130 Million Tons Of Carbon, Undermining Climate Action. Here’s One Way To Tackle That

A Bitcoin mining manager checks equipment at a Chinese bitcoin mine in Sichuan.

The power demands and carbon emissions of bitcoin mining could undermine global efforts to combat climate change if stringent regulations are not placed upon the industry, a Chinese study has found. By 2024, mining of the cryptocurrency in China alone could use as much power as the entire nation of Italy uses in a year, with greenhouse gas emissions equalling those of the Czech Republic.

But rather than recommending increased taxation on bitcoin mining to curb emissions, or simply an outright ban on the practice, the paper, published today in the journal Nature, suggests that miners should be encouraged to shift their operations to regions that provide abundant low-carbon electricity.

The research is significant because China carries out at least 65% of the world’s bitcoin operations. Shouyang Wang, one of the report’s authors and chair professor at the Academy of Mathematics and Systems Science at the Chinese Academy of Sciences in Beijing, told “While everyone has focused on bitcoin’s great profitability, we want people to become more aware of its potential issues and start thinking about these questions: is this industry actually worth the associated environmental impact, and how can we make profitable bitcoin mining operation more sustainable in the future?”

Using simulation-based models, the researchers found that, short of any policy interventions, bitcoin mining in China will peak in 2024 consuming 296.59 terawatt hours of electricity—as much as a medium sized country—and generate 130.50 million metric tons of carbon emissions. The authors further note that this consumption and the resulting emissions could derail China’s efforts to decarbonize its own energy system.

“It is important to note that the adoption of this disruptive and promising technique without [taking into account] environmental concerns may pose a barrier to the worldwide effort on GHG emissions management in the near future,” Wang said, adding that the research team was “surprised by the energy consumption and carbon emission assessment results of bitcoin blockchain operation in China.”


Feb.09 — Tesla’s $1.5 billion bitcoin purchase this week sent the cryptocurrency soaring to a record. Nic Carter, founding partner at Castle Island Ventures, speaks with Bloomberg’s Caroline Hyde, Romaine Bostick and Joe Weisenthal on “What’d You Miss?” about mining bitcoins and its effect on the environment.

But the solution to the challenge, the authors argue, is “moving away from the current punitive carbon tax policy to a site regulation policy”—in essence, ensuring that mining operations move to areas that guarantee high rates of renewable electricity. Under such a policy, they found, only 20% of bitcoin miners remained in coal-intensive energy regions, resulting in lower carbon emissions per dollar earned, compared to a higher taxation scenario. Under the site regulation model, the researchers found bitcoin operations generated 100.61 million metric tons at peak, as opposed to 105.19 million tons under an additional taxation scenario.

Wang said government regulation of the industry was needed, but that bitcoin miners would likely be amenable to his team’s proposed solution.

“Site regulation should be carried out by the government, placing limitations on bitcoin mining in certain regions that use coal-based heavy energy,” Wang explained. “That being said, we think that there are enough benefits to this policy which will incentivize the miners to move their operation willingly. For example, since energy prices in clean-energy regions of China are lower than that in heavy-energy regions, the miners can effectively lower their individual energy consumption cost, which would increase their profitability.”

That isn’t to say, however, that regulation is the only method by which China should be reducing the emissions impact from bitcoin mining.

“The government should also focus on upgrading the power generation facilities in clean-energy regions to ensure a consistent energy generation,” Wang said. “That way, the miners would definitely have more incentives to move voluntarily.”

Crunching The Numbers

Bitcoin operates by using blockchain technology—publicly recorded peer-to-peer transfers on encrypted computer networks—which eliminates the need for centralized authorities or banks. Bitcoin miners use arrays of processors to determine results to algorithmic puzzles that verify transactions that are added to the blockchain, for which they are in turn rewarded in bitcoins. With the value of a single bitcoin having risen from $1 in April 2011 to around $60,000 in April 2021, and with yesterday’s news that the value of the cryptocurrency market has exceeded $2 trillion for the first time, the financial incentives to mine bitcoin are obvious.

But there is a finite supply of bitcoins: they are limited to 21 million in total. To control the currency’s circulation, the supply of new bitcoins is halved every four years, which also halves the miners’ rewards. This has helped ignite fierce competition, attracting an increasing number of bitcoin miners to get into the race, utilizing ever more powerful processing arrays requiring more electricity.

This, the authors say, means that after 2024, bitcoin mining—at least in China—will no longer be cost-effective; the costs of mining the currency will begin to outweigh the rewards.

“We have predicted through our model that bitcoin mining operations in China would start to decrease in 2025,” Wang said. “Due to over-competitive and the reward-halving mechanism of bitcoin, many miners would leave China and move their operations elsewhere in hope to improve their profitability. The decrease in mining activities would lower the associated carbon emissions generated in China.”

So, in at least one sense, bitcoin is self-regulating. Or as Wang puts it, “this is the industry’s natural built-in way of phasing itself out.”

Silver Linings?

It has until recently proved difficult to determine the total emissions impact of bitcoin mining. Industry advocates have long claimed that miners tend to rely on low-carbon energy due to its relatively low cost, but those claims have been disputed.

Now, using more advanced modeling techniques, Chinese researchers have been able to more accurately estimate the energy uses of specific industry operations. According to the China Emissions Accounts and Datasets platform (CEAD), for example, bitcoin mining accounts for more than 5.4% of emissions from electricity generation in China.

In response, various policy solutions have been suggested, including heavier taxation of bitcoin mining operations. The new research suggests site regulation could be the preferable option.

But did Wang think this could result in too many miners moving into areas with abundant renewables, gobbling up energy supply?

“There would be an influx of bitcoin miners into clean-energy regions,” he said. “However, we don’t think that this increase in bitcoin mining operations would place burdens on the local energy grid. The energy-generation infrastructures in the clean-energy regions of China are still being improved and developed … we think that increases in energy generation capacity would outpace the increase in bitcoin mining operations in these regions, which would reduce the potential burdens.”

Even so, with a forecast of 100 million tons of carbon emissions at the industry’s peak, would it not simply be better, in environmental terms, to ban the practice outright?


“We think that simply banning bitcoin mining altogether is not ideal,” Wang said. “Even if bitcoin mining is completely banned, its increasing profitability would drive miners to continue their activities through other measures, such as stealing electricity. That is why we are suggesting a push for moving the miners to clean renewable energy regions would be more ideal.”

Asked whether future cryptocurrency operations could potentially result in the same or similar energy demands as bitcoin, Wang offered a note of optimism.

“Cryptocurrency communities have become increasingly aware of the carbon emissions generated through mining activities,” he said. “As a result … we think the development of these new consensus algorithms would improve the energy efficiency of cryptocurrency mining activities, which would be beneficial for China’s sustainability efforts.”

Follow me on Twitter.

I spent much of the past 20 years as a journalist in Asia. Now based in Europe, my key interests are in decarbonization and the circular economy.

Source: Bitcoin Could Churn Out 130 Million Tons Of Carbon, Undermining Climate Action. Here’s One Way To Tackle That



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Policy assessments for the carbon emission flows and sustainability of Bitcoin blockchain operation in China
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How Will Pumped Hydro Energy Storage Power Our Future?

Pumped storage hydropower has proven to be an ideal solution to the growing list of challenges faced by grid operators.

As the transition to a clean energy future rapidly unfolds, this flexible technology will become even more important for a reliable, affordable and low carbon grid, write IHA analysts Nicholas Troja and Samuel Law.

“Anything that can go wrong will go wrong”. That old adage, Murphy’s law, must seem appropriate for many power grid operators in 2020.

This year has tested the safe running and reliability of grids around the world like few others. Often termed ‘the biggest machine ever built,’ managing a power system, involving the coordination of complex and instantaneous interactions, is a formidable task at the best of times.

With the impacts of the Covid-19 pandemic on top of extreme weather events, greater penetrations of variable renewables and increasingly aged thermal assets, the task has only become more demanding in many markets.

These challenges have brought into sharp focus the growing need for energy storage, such as that offered by pumped storage hydropower.

Recent events highlight the need for pumped storage

Covid-19 continues to have an extraordinary impact on electricity markets. During the height of worldwide lockdowns, with large sections of the economy shutdown or greatly impaired, electricity demand declined by up to 30 per cent in some countries across Europe and in India.

As Fatih Birol, Executive Director of the International Energy Agency (IEA) stated, the demand drop “fast forwarded some power systems 10 years into the future” regarding integrating higher percentages of variable renewable energy (VRE) which receive priority dispatch to the grid. Managing periods of such low demand can create “significant operational risks” for grid operators. In some markets, this has led to curtailing, or shutting down, wind and solar facilities to stabilise the grid.

During such periods, pumped storage hydropower, with its ability to both store and generate large quantities of energy over long periods, was the first port of call for those grid operators lucky enough to have such stations on hand. In Britain, its four pumped storage stations were hailed by the Financial Times newspaper as the “first line of defence in the battle to keep Britain’s lights on”. Able to increase system demand by pumping water back up to their upper reservoir, pumped storage is a more cost-effective way of managing the grid than paying operators to curtail variable supply.

In August, the U.S. state of California experienced rolling blackouts for the first time since 2001 due to a combination of record heatwaves driving up demand, faltering gas-fired stations and a lack of dispatchable generation. As Stephen Berberich, President of the California Independent System Operator (CAISO) said, “we thought there would be adequate power to supply the demand…we were wrong” and the costs to the Californian economy will be significant.

These managed blackouts provide yet another wake-up call for policymakers on the need to appropriately plan for a zero-emissions future. With limited balancing resources such as pumped storage, California’s grid did not have the flexibility to shift sufficient generating capacity to the evenings when the sun had set yet the demand remained high.

Given California’s aim of reaching 100 per cent clean electricity by 2045, mainly from wind and solar power which currently accounts for 20 per cent of generation, significant investment in flexible, low carbon balancing resources will be required.

In response, California is betting big on batteries for short-duration storage, from sub-seconds to up to four hours, to manage intraday variations in net load. However, with those high levels of VRE on the grid, long-duration storage, which can discharge for 10 hours or more at rated power, will be needed to accommodate the seasonal patterns of VREs. It will do so by shifting generation over days, weeks and months of supply and demand imbalance. This is a story that rings true for many countries across the world with ambitious climate targets.

Achieving California’s clean energy target is made even harder by the government’s decision to classify conventional hydropower stations greater than 30 MW as a non-renewable resource under its Renewables Portfolio Standard. This arbitrary classification is at odds with international consensus and penalises the state’s oldest source of affordable, flexible and low-carbon electricity.

Figure 1: Illustration of a closed-loop (off-river) pumped storage station and how it can be used support VRE.

Capabilities of pumped storage

With a total installed capacity of nearly 160 GW, pumped storage currently accounts for over 94 per cent of both storage capacity and stored energy in grid scale applications globally. This has earned pumped storage its name as the world’s “water battery”. It is a mature and reliable technology capable of storing energy for daily or weekly cycles and up to months, as well as seasonal applications, depending on project scale and configurations.

Pumped storage operates by storing electricity in the form of gravitational potential energy through pumping water from a lower to an upper reservoir (see figure 1). The result of this simple solution is a very high round-trip efficiency of 80 per cent, which compares favourably to other storage technologies.

Pumped storage tends to have high energy-to-power ratios and is well suited to provide long discharge durations at very low energy storage costs. Across different timescales, pumped storage can serve multiple functions (see figure 2). For example, at shorter discharge durations, it is suitable for ancillary services such as frequency balancing and back-up reserve.

With four to eight hours of discharge, it can provide daily shifting for day-night energy arbitrage. For longer durations over 10 hours, it can accommodate multi-day supply profile changes, reduce energy curtailment, replace peak generation capacity and provide transmission benefits.

Figure 2: The plot above visualises (logarithmic scale used) the estimated discharge durations relative to installed capacity and energy storage capacity for some 250 pumped storage stations currently in operation, based on information from IHA’s Pumped Storage Tracking Tool. The vast majority of pumped storage stations have a discharge duration longer than 6 hours, and some are capable of seasonal storage.

The majority of today’s pumped storage stations were built some forty years ago. Yet, they are still providing vital services to our power systems today. With occasional refurbishment, these long-term assets can last for many decades to come.

Despite being a mature technology, the resurgence of interest in pumped storage has brought forth numerous new R&D initiatives. One prominent example is the European Commission’s four-year XFLEX HYDRO project, which aims to develop new technological solutions to enhance hydropower’s flexibility. Latest innovations, such as variable speed turbines and smart digital operating systems, will be tested on a range of pumped storage demonstration sites.

While often thought of as geographically constrained, recent studies have identified vast technical potential for pumped storage development worldwide. Research by the Australian National University highlighted over 600,000 potential sites for low-impact off-river pumped storage development, including locations in California. There is also growing interest in retrofitting pumped storage at disused mines, underground caverns, non-powered dams and reservoir hydropower stations.                              

Seeking a path toward a clean, affordable and secure transition

California is a pioneer in the energy transition. Though many opponents of wind and solar have unfortunately used the blackouts as an example of why their rapid roll-out is a threat to a secure, reliable grid. As noted earlier, the blackouts were not due to too much VRE capacity being on the grid, but a lack of integrated planning to support an evolving electricity mix with sufficient dispatchable generation and storage.

The IEA recently stated that, dispatchable pumped storage, along with conventional hydropower, is the often overlooked workhorse of flexibility. However, its development, like many energy storage technologies, is currently being hampered by the lack of appropriate regulatory frameworks and market signals to reward its contribution to the grid. Outside China, year-on-year installed capacity growth has been anaemic at just 1.5 per cent since 2014 (see figure 3).

Figure 3: Global pumped storage installed capacity by region. Note that 2019 recorded the lowest growth in pumped storage capacity for over a decade, with only 304 MW added. Source: IHA’s database.

Given the technology’s long lead times, investment decisions are needed urgently to ensure that pumped storage, in conjunction with other low-carbon flexibility options, are available to grid operators without needing to rely on carbon-intensive gas-fired generation as a backup. This is especially important as VRE penetration reaches increasingly high levels not yet experienced on a regular basis.

IHA is continuing to work across the hydropower sector and is seeking to learn lessons from other sectors to support the development and deployment of pumped storage. Together with national authorities and multilateral development banks, we are developing a new global initiative to shape and enhance the role of the technology in future power systems.

Further information

Join our Hydropower Pro online community or sign-up to our email newsletter via our website homepage for latest developments.

To learn more about IHA and our work on pumped storage, please visit:

To contact the authors please email and

Nick Troja is a Senior Hydropower Sector Analyst. His work focuses on building and sharing knowledge on global hydropower, including identifying trends in project financing, policies and market dynamics.

Before joining IHA, Nick worked for the UK’s steel industry focusing on the EU Emissions Trading System and the impact of other EU level climate change and energy policies on the sector. Prior to this he worked for the UK’s department of energy and climate change, covering a wide range of policy areas and as an adviser to the shadow minister for emissions trading and climate change in Canberra. He holds a bachelor’s degree in international business and master’s degree in public policy.  

Samuel Law is Hydropower Sector Analyst. His work focuses on building and sharing knowledge on sustainable hydropower development, working on topics such as clean energy systems, green financing mechanisms and regional hydropower development.

Samuel holds a master’s degree in environmental technology from Imperial College London and has a technical background in environmental engineering. Prior to joining IHA, he completed an internship with the United Nations in Bangkok. At the UN, he conducted research on Sustainable Development Goals, integrated resource management and collaborative governance, as well as supported project implementation and organised international conferences. He also has experience as a business intelligence analyst in London, where he conducted research on market dynamics and investment trends across industries.



Australian Renewable Energy Agency

Like the hydroelectric power stations that have powered Tasmania for a century, a new generation of pumped hydro plants will play an important role in Australia’s future energy mix. With the Australian Energy Market Operator forecasting that 15 GW of large-scale storage will be needed by the early 2040s, pumped hydro is expected to operate alongside large-scale batteries and other energy storage technologies. Learn more about pumped hydro here –


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 Though this panel add-on has been available for some time, solar manufacturers are truly embracing the technology. GTM Research recently unveiled a recent report that shows a major upward trend in the popularity of tracking systems. GTM projects a 254 percent year-over-year increase for the PV tracking market this year. The report stated that by 2021, almost half of all ground mount arrays will include solar tracking capability.

Advances in solar panel efficiency

The past few years in the solar industry have been a race to the top in terms of solar cell efficiency, and recent times have been no different. A number of achievements by various panel manufacturers have brought us to higher and higher maximum efficiencies each year. The solar cell types used in mainstream markets could also see major improvements in cost per watt – a metric that compares relative affordability of solar panels. Thanks to Swiss and American researchers, Perovskite solar cells (as compared to the silicon cells that are used predominantly today) have seen some major breakthroughs in the past two years.

The result will be a solar panel that can generate 20+ percent efficiency while still being one of the lowest cost options on the market. Of course, the work doesn’t stop there, as MIT researchers reminded us in May when they announced new technology that could double the efficiency of solar cells overall. The MIT lab team revealed a new tech concept that captures and utilizes the waste heat that is usually emitted by solar panels. This typically released and non-harnessed thermal energy is a setback and opportunity for improvement for solar technology, which means this innovation could help the cost of solar to plummet even further.

Solar thermal fuel (STF)

There is little debate when it comes to solar power’s ultimate drawback as an energy source: storage. While the past decade has seen incredible growth of the PV industry, the path forward for solar involves an affordable storage solution that will make solar a truly sustainable energy source 24 hours a day. Though solar batteries (mentioned above) are a storage option, they are still not economically viable for the mainstream. Luckily, MIT Professor Jeffrey Grossman and his team of researchers have spent much of the past few years developing alternative storage solutions for solar, the best one appears to be solar thermal fuels (STFs).

The technology and process behind STFs is comparable to a typical battery. The STF can harness sunlight energy, store it as a charge and then release it when prompted. The issue with storing solar as heat, according to the team’s findings, is that heat will always dissipate over time, which is why it is crucial that solar storage tech can charge energy rather than capture heat. For Grossman’s team, the latest STF prototype is simply an improvement of a prior design that allowed solar power to be stored as a liquid substance. Recent years saw the invention of a solid state STF application that could be implemented in windows, windshields, car tops, and other surfaces exposed to sunlight.

Solar water purifiers

Stanford University researchers collaborated with the Department of Energy this year to develop a new solar device that can purify water when exposed to sunlight.  The minuscule tablet (roughly half the size of a postage stamp) is not the first solar device to filter water, but it has made major strides in efficiency compared to past inventions. Prior purifier designs needed to harness UV rays and required hours of sun exposure to fully purify water. By contrast, Stanford’s new product can access visible light and only requires a few minutes to produce reliable drinking water. As the technology behind solar purifiers continues to improve, expect these chiclet-sized devices to come to market with hikers and campers in mind as an ideal consumer audience.

What new solar technology means for homeowners

For those considering solar panels systems, this long list of solar panel technology innovations from recent years is nothing but good news. Efficiency upgrades, storage improvements and equipment capabilities all contribute to more efficient power output for solar panels and lower costs for systems. Many of the products mentioned in this article, such as tracking mounts and solar batteries, are available in the EnergySage Solar Marketplace – all you have to do is indicate your preference for particular equipment options when you register your property. To get an instant estimate for your home’s potential solar costs and savings, try our free Solar Calculator.

By: Luke Richardson

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5 Factors That Will Enable A Hydrogen Society

In 1792, William Murdoch, an engineer with the company Boulton & Watt, switched on the lights in his home in Cornwall, in southwest England, and made history. He was the first person to use piped ‘coal gas’ for residential lighting. The fuel, also known as ‘town gas,’ consisted of carbon monoxide and hydrogen. 

More than 200 years later, the world is coming full circle: Countries around the globe are putting their legislative weight behind hydrogen as a carbon-free alternative to fossil-fueled energy generation. By mid-2019, more than 50 programs supporting a transition to hydrogen were underway worldwide.

But despite the growing alignment on hydrogen, the speed of this shift will depend on scaling the carbon-free production of hydrogen and making it easily accessible.

The U.S. and European Union (EU) have recently both announced plans that will help build the infrastructure necessary to get countries hydrogen-ready. Alongside this, international partnerships are forming to advance the production of hydrogen.

What else will it take to realize a hydrogen society? Five key developments.

1.     Advanced ‘

A large share of hydrogen is still being produced from fossil fuels. Less than 0.1 percent of global volumes is generated through electrolysis of water. But it’s the only way of making green hydrogen – that is, carbon-free – because it can be powered by electricity from renewables such as wind and solar.

Renewable energy facilitates green hydrogen production.
Renewable energy facilitates green hydrogen production. Shutterstock

Still in its infancy, electrolysis cannot currently produce enough hydrogen at an affordable cost.

Even in the U.K., one of the frontrunners in the hydrogen race, electrolysis projects such as Gigastack and Dolphyn are still at early development stages.

To build a market, power-to-hydrogen facilities need to proliferate, production methods have to mature and costs need to come down.

A move in the right direction is Germany and Morocco’s recent announcement that they will jointly build a 100 MW renewable energy plant that will power a green hydrogen manufacturing site in Morocco.

2.     Enough low-carbon ‘blue’ hydrogen to build demand

With the current global push for hydrogen, industry analyst IHS Markit predicts that green, renewable hydrogen could be cost-competitive by 2030.

It expects costs – which have already fallen by about half since 2015 – to reduce by a further 30 percent by the mid-2020s. This will be due to economies of scale, greater renewable energy volumes to be converted and the falling cost of renewables.

But to get there, legislators face a chicken-and-egg scenario.

To scale the production of green hydrogen, there needs to be sufficient demand for hydrogen in the first place. This means making enough hydrogen available to encourage the energy sector, transportation and industries like steel and cement to move away from fossil fuels.

Blue hydrogen will be critical to build and supply the market until green hydrogen comes of age.

The European Commission (EC) was criticized when it announced in July 2020 that its hydrogen strategy would see a role not only for renewable hydrogen but also for low-carbon blue hydrogen. The latter combines traditional, fossil-fuel production of hydrogen with Carbon Capture and Storage (CCS) to avoid the resulting CO2 from being released into the atmosphere.

The EC has highlighted that low-carbon production of blue hydrogen will be critical to build and supply the market until green hydrogen comes of age.

3.        Greater accessibility

As the slow progress of the electric vehicles market has shown, easy access to widely available matching infrastructure – i.e. charging stations – is critical to building demand. That’s why developing the underlying infrastructure for hydrogen will be fundamental to success.

Transport methods for hydrogen include compressed gas storage, which is only suitable for small to medium quantities, and liquefied hydrogen, which is more cost-effective as it allows for larger volumes to be carried. An alternative is converting hydrogen to ammonia, which is a denser gas and enables the shipping of large volumes. Mitsubishi Shipbuilding has already introduced a multi-gas carrier capable of holding both LPG and ammonia.

speeding train
Selling hydrogen at a viable price for heavy transportation must be prioritized. Shutterstock

Pipeline networks are another option. But as Hydrogen Europe reports, as of 2016, only 4,500km of hydrogen pipelines were in place globally, and primarily in the U.S. That said, plans for a European ‘hydrogen backbone’ announced in July 2020 could see a pan-European pipeline network emerge over the next few decades. The goal is for it to cover nearly 23,000km across 10 European countries by 2040.

And while the backbone is key, end-user infrastructure and cost must not be forgotten: building a well-dimensioned network of refueling stations, especially for passenger fuel-cell vehicles, and selling hydrogen at a viable delivered price for heavy transportation need to be prioritized over the next few years.

4.     More applications in heating 

Closing the loop from hydrogen’s original use in the home, the hydrogen transition will also need to tackle home heating. 

Half of the world’s energy consumption goes toward heating, which also contributes 40 percent of CO2 emissions as fossil fuels continue to dominate in this area. While industrial processes account for half the heat produced, another 46 percent is used to heat buildings and water, and a smaller share is used for cooking. 

woman adjusting thermometer
Residential heating can’t continue to rely on fossil fuels. Shutterstock

In Japan, a demonstration plan has been running since 2009 installing hydrogen fuel cells to provide heat and electricity for homes and businesses. The ENE-FARM program is expected to reach 300,000 installed units in 2020.

In Europe, heat and hot water account for 79 percent of household energy use, with the vast majority of European homes relying on natural gas boilers. That presents a significant opportunity for hydrogen as a carbon-free alternative that can use the existing gas grid.

The H21 project is currently testing if the U.K. gas network – converted from hydrogen-heavy ‘town gas’ in the 1970s – could carry hydrogen again.

Meanwhile, manufacturer Worcester Bosch has presented its first hydrogen gas boiler prototype. The prototype is ‘dual fuel,’ so it can run on both hydrogen and natural gas. The manufacturer expects that the familiarity of the concept and associated infrastructure will simplify the transition for consumers.  

5.     Common standards

Thinking back to the era of William Murdoch and those who followed him, standardization has played a significant role in growing the addressable market for gas, as well as for electricity and many other industries, over time. 

We can no longer rely solely on pioneers and inventors. We need collective action between industry and government to build the necessary infrastructure.

Analysts point to a lack of harmonization as a barrier to market entry and, with that, to the expansion of the hydrogen economy. Harmonization and international cooperation, therefore, need to be top of the political agenda.

In its hydrogen strategy, as well as advocating an international harmonization of standards, the European Commission has made a point of highlighting the importance of integrating the EU’s entire energy system, overcoming national and sectoral silos.  

Globally, initiatives such as the Hydrogen Energy Ministerial Meetings provide an important platform to align and promote hydrogen internationally.

These initiatives show that we can no longer rely solely on pioneers and inventors like Murdoch. We need to bring together industry leaders, civil society, governments and regulators to build the infrastructure necessary for a global shift to hydrogen − and lower carbon emissions. 

About the author

Andrea Willige has spent many years creating content for the international business and technology press, working on behalf of some of the world’s largest technology companies.

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Mitsubishi Heavy Industries

A leading industrial firm, Mitsubishi Heavy Industries Group (40 billion USD annual revenue) is finding new, simpler and sustainable ways to power cities, improve infrastructure, innovate manufacturing and connect people and ideas around the globe with ever-increasing speed and efficiency. For over 130 years, the company has channeled big thinking into innovative and integrated solutions that move the world forward. MHI owns a unique business portfolio covering land, sea, sky and even space across industries from commercial aviation and transportation to power plants and gas turbines, and from machinery and infrastructure to integrated defense and space systems.

Visit MHI Global or MHI Spectra.




1.2K subscribers Hydrogen will play a key role in the transition to a sustainable economy. That is why Nouryon, Tata Steel and Port of Amsterdam are studying the construction of a 100 megawatt hydrogen plant in the greater Amsterdam metropolitan area, project H2ermes. The new plant would use water and renewable electricity to produce up to 15,000 tons of green hydrogen per year for more sustainable industry, transport, heating and other applications. Learn more:…#hydrogen#Nouryon#Amsterdam#Steel

STM Hydrogen

Top Oil Companies Invested $9 Billion In Clean Energy Deals Since 2016


Oil companies, particularly those based in Europe, are among the most active investors in clean energy and technologies.  Six of the top companies have invested about $9 billion in the industry since 2016, according to estimates from the research firm Wood Mackenzie.

For some, including BP, Shell, and Total, the investments are part of a broader strategy to be net-zero emissions companies by 2050. Here’s how much the oil majors have each spent on clean energy since 2016.

For more stories like this, sign up here for our weekly energy newsletter, Power Line.

Big Oil is trying to rebrand itself as Big Energy. And now, many of its constituents can point to more evidence that what they offer does, in fact, extend beyond oil and gas.

On Tuesday, BP revealed a new strategy for how it plans to become a net-zero emissions company by 2050, which included near-term targets. The company is planning to shrink oil and gas production by 40% over the next decade while increasing spending on low-carbon energy.

“We’re pivoting from being an international oil company to an integrated energy company,” Bernard Looney, the company’s chief executive, said Tuesday.

Other European majors including Shell and Total have set similar net-zero emissions goals, though they’ve yet to provide many details. US majors Exxon and Chevron, under less pressure from investors and local policies, have laid out less-ambitious plans to limit emissions.

One measure of a company’s commitment to a cleaner future is investment in clean energy. Here’s how the top companies stack up, according to data from the research firm Wood Mackenzie (Wood Mac).

Related: How to start a real estate business by investing of only 500$

Oil majors invested about $9 billion in clean energy deals since 2016

Wood Mac tracks M&A and VC deals in clean energy for the seven so-called oil majors — Shell, Total, BP, Chevron, Exxon, Eni, and Equinor.

Since 2016, the majors spent just over $9 billion on clean energy, Wood Mac said, not including internal R&D. Exxon was not included in the data provided to Business Insider because it has done little M&A in clean energy, Wood Mac said.

That is not a lot of money. Last year alone, Shell had a capital expenditure budget about three times that, while the budgets of BP, Chevron, and Total were about twice as large.

Total and Shell, which are way out in front, have inked big clean-energy deals in the last four years. In 2019, for example, Shell acquired the energy-storage giant Sonnen through its new energies division.

“Shell is really at the forefront of the transition together with Total,” Valentina Kretzschmar, an analyst at Wood Mac, said. “They have invested across the electricity value chain, and they are really focusing on the power sector and the electricity side of the business.”

While falling near the bottom, US giant Chevron is among the most active investors in carbon capture technologies. Based in San Ramon, California, the firm says………

Read more: Business Insider


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How This Billionaire-Backed Crypto Startup Gets Paid To Not Mine Bitcoin


It’s everyone’s dream to get paid to do nothing. Bitcoin miner Layer1 is turning that dream into reality — having figured out how to make money even when its machines are turned off. 

Layer1 is a cryptocurrency startup backed by the likes of billionaire Peter Thiel. In recent months, out in the hardscrabble land of west Texas, the company has been busy erecting steel boxes (think shipping containers) stuffed chockablock with high-end processors submerged inside cooling baths of mineral oil. Why west Texas? Because thanks to a glut of natural gas and a forest of wind turbines, power there is among the cheapest in the world — which is what you need for crypto.

“Mining Bitcoin is about converting electricity into money,” says Alex Liegl, CEO and co-founder. By this fall Layer1 will have dozens of these boxes churning around the clock to transform 100 megawatts into a stream of Bitcoin. Liegl says their average cost of production is about $1,000 per coin — equating to a 90% profit margin at current BTC price of $9,100.

So it’s odd how excited Liegl is about the prospect of having to shut down his Bitcoin miners this summer.

Already this year west Texas has seen a string of 100-degree days. But the real heat and humidity don’t hit until August, which is when the Texas power grid strains under the load of every air conditioning unit in the state going full blast. During an intense week in 2019, wholesale electricity prices in the grid region managed by the Electricity Reliability Council of Texas (ERCOT) soared from about $120 per megawatthour to peak out at $9,000 per mwh. It was only the third time in history that Texas power hit that level. And although the peak pricing only lasted an hour or so, that’s enough to generate big profits. Analyst Hugh Wynne at research outfit SSR figures that Texas power generators make about 15% of annual revenues during the peak 1% of hours (whereas in more temperate California grid generators only get 3% of revs from the top 1%).

Turns out that running a phalanx of Bitcoin miners is a great way to arbitrage those peaks. Layer1 has entered into so-called “demand response” contracts whereby at a minute’s notice they will shut down all their machines and instead allow their 100 mw load to flow onto the grid. “We act as an insurance underwriter for the energy grid,” says Liegl, 27. “If there is an insufficiency of supply we can shut down.” The best part, they get paid whether a grid emergeny occurs or not. Just for their willingness to shut in Bitcoin production, Layer1 collects an annual premium equating to $19 per megawatthour of their expected power demand — or about $17 million. Given Layer1’s roughly $25 per mwh long-term contracted costs, this gets their all-in power price down 75% to less than 1 cent per kwh (just 10% of what residential customers pay).

It may seem like grid operators are paying Layer1 a lot for something that might not even happen, especially with coronavirus reducing electricity demand, but it makes total sense, says Ed Hirs, a lecturer in energy economics at the University of Houston and research fellow at consultancy BDO: “It’s a lot cheaper option than building a whole new power plant or battery system just to keep it on standby.”

And although this may be a new concept for cryptocurrency miners, it’s been done before. Two decades ago industrialist Charles Hurwitz bought up power-hogging aluminum smelters in the Pacific Northwest and made more money reselling electricity than making metal. “It used to be called load management,” says Dan Delurey, a consultant with Wedgemere Group. “In old commercial buildings you might still find telephone wires connected to air conditioning systems so that grid operators could send a signal to shut off.” More recently we’ve seen companies install radio-based devices to control hot water heaters and lighting systems. Indeed, grid management is a hot enough area that in 2017 Italy’s power giant Enel bought Boston-based Enernoc for $250 million and Itron ITRI bought Comverge for $100 million. What’s emerged are entities, like Layer1, that Delurey calls the “prosumer” — producing consumer.

As for Layer1, Liegl says his next step is to vertically integrate into financial products, including Bitcoin derivatives and more. “We are building an in-house energy trading division to leverage this into being a virtual power plant.”

His message to any pikers still trying to mine cryptocurrencies from their bedroom PC or even via cloud services: “I can’t think of something more irrational at this point. It’s like if I wanted to dig a hole in my backyard and try to get oil out of the ground.”

Follow me on Twitter or LinkedIn. Send me a secure tip.

Tracking energy innovators from Houston, Texas. Forbes reporter since 1999.





This Bill Gates-Backed Solar Startup Just Had a Breakthrough That Could Cut the World’s Carbon Emissions by 20 Percent​

Los Angeles-based startup Heliogen, backed by Bill Gates and AOL founder Steve Case just announced that it has found a way to replace fossil fuels in industrial plants. Those plants produce more than 20 percent of the world’s carbon emissions, but Heliogen’s new concentrated solar technology may change that. It can create heat over 1,000 degrees Celsius, potentially replacing much of the fossil fuels these plants currently use.

You wouldn’t think that making something really, really, really hot would be the best way to fight climate change. But it is, because the production of steel, cement, and petrochemicals among others requires heating them to very high temperatures. Up till now, the only way to achieve this was with fossil fuels such as coal, gas, and oil.

For decades, the solar industry has been trying to produce the high temperatures needed for such manufacturing with concentrated solar–basically a very much larger version of the experiment you probably did as a child, starting a fire using sunlight and a magnifying glass. Concentrated solar companies have traditionally used hundreds of mirrors to reflect the sun’s beams onto a single spot.

It requires a great deal of precision and engineering skill to determine the precise angle of each mirror in order to point the beam at exactly the right spot, and then to keep changing the mirror’s position as the sun moves across the sky. Despite its best efforts, the concentrated solar industry was never able to create temperatures higher than 600 degrees Celsius, which is certainly very hot, but not hot enough for things like steel or cement manufacture.

Heliogen’s breakthrough is that, rather than trying to predict precisely where the sun’s beams will land, it uses cameras to observe where sunbeams are going and make minute adjustments several times per second in order to keep the mirrors pointed in precisely the right direction.

Using this approach, Heliogen says it’s been able to achieve temperatures of more than 1,000 Celsius. And that was on its first try. The company believes it can produce temperatures above 1,500 Celsius–enough to split water molecules and produce hydrogen fuel. That could solve hydrogen fuel’s biggest problem, which is that the energy needed to produce it negates any environmental gains from using it.

Cement alone contributes 8 percent of greenhouse gases

“I don’t know how many people will understand how significant breaking 1,000 C is,” Heliogen founder Bill Gross told GeekWire. Gross is a serial entrepreneur who also founded the tech incubator Idealab. [Disclosure: I am also a GeekWire contributor.] Here’s why Gross said getting above 1,000 using solar is such a big deal: “There’s all these things that happen above 1,000 C. Cement is made above 1,000 C. Steel is made above 1,000 C.

Hydrogen is made above 1,000 C.” But, he added, even if the lay person isn’t particularly excited by what Heliogen has achieved, “In the industry, it’s going to be really, really spectacular.” He added that cement production alone accounts for 8 percent of global CO2 emissions so a switch to concentrated solar in that industry alone would have a huge impact.

Gross said he was inspired to start Heliogen after attending Bill Gates’ 2010 TEDx talk in Long Beach, California, “Innovating to zero!” In the talk, Gates said that if he could be granted a single wish for the next 50 years, it would be for someone to invent a technology that would lower the cost of energy and eliminate CO2 emissions at the same time. Afterward, Gross went up to Gates and expressed his interest in working on such a technology.

Gates invited Gross to Seattle for a brainstorming session during which Gates and Gross bounced around ideas with other Gates Foundation leaders. “We talked about all the different ways that this could happen, and that was the beginning of thinking through the different technical challenges and ways to pull this off,” Gross said. “And he’s just been fantastic. Of course he’s going around the world telling everybody about this.”

Heliogen’s technological breakthrough depends in part on the growing availability and affordability of GPU, or graphic processing units, something that gamers need to play today’s graphically intense games. So if Heliogen succeeds in its mission to replace fossil fuels in high-heat manufacturing and eliminate a signficant portion of carbon emissions? You may have kids playing Fortnite to thank.

By Minda ZetlinCo-author, The Geek Gap

Source: This Bill Gates-Backed Solar Startup Just Had a Breakthrough That Could Cut the World’s Carbon Emissions by 20 Percent​

43.7K subscribers
… , With Momentum Toward Commercial Hydrogen Fuel Creation Heliogen – Replacing Fuels with Sunlight…
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