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Trump vows to revive coal industry as China dumps 100GW of coal plants

Trump vows to revive coal industry as China dumps 100GW of coal plants


Donald Trump was sworn in as the 45th President of the US last week, and all previous references to climate change on the White House website were scrubbed clean. The updated site lists an “America First Energy Plan” which aims at easing “burdensome regulations” on the energy industry. According to this plan, “President Trump is committed to eliminating harmful and unnecessary policies such as the Climate Action Plan and the Waters of the US rule.” The Trump administration proposes to embrace shale oil and gas, and is also committed to clean coal technology, as well as to reviving America’s under-pressure coal industry. A note from Bloomberg New Energy Finance entitled Can Trump resurrect US coal? argued that it is competition from low-priced gas, rather than regulation, which has put coal out of favour for baseload generation.

In stark contrast to the US, China this month suspended more than 100 coal-fired plants totaling more than 100GW of capacity that were either approved or under construction, in a bid to curb overcapacity in generation and amid a push to limit fossil-fuel consumption. The directive came from the National Energy Administration, China’s energy regulator, according to a report in the Chinese financial media outlet Caixin, citing government documents. Earlier in the week, Trump’s predecessor President Barack Obama made a $500m contribution to the Green Climate Fund of the United Nations as part of a commitment under the Paris climate accord. The US has now contributed $1bn to the fund to help poor nations develop clean energy and cope with the impact of global warming, according to a statement from the US State Department last week. The US has pledged $3bn over four years to the fund. Trump has vowed to cancel future payments to the fund and redirect them toward projects in the US.

The rest of the world continues to invest in green technologies and raise resources to fund these: nine nations in 2017 are expected to issue sovereign green bonds, according to the chief executive officer of the Climate Bond Initiative, Sean Kidney. Weeks after Poland sold the first sovereign green bonds, France is conducting roadshows for its version, which officials expect will be at least EUR 2.5bn ($2.7bn) in size. Nigeria is expected to be third in line, with a domestic green bond in its currency, the naira, planned for March. A review of the green bonds market in 2016 from Bloomberg New Energy Finance can be seen here. Taiwan plans to introduce rules in the near term to pave the way for the first green bond issue in the island, according to two people familiar with the matter. The steps are in line with efforts to promote environmentally friendly finance and the development of the green energy industry, said the people, who aren’t authorised to speak publicly and asked not to be identified.

In financing, India’s ReNew Power Ventures raised $390m of debt finance to support 709MW of clean energy development in six states. The money came from the Asian Development Bank and Leading Asia’s Private Sector Infrastructure Fund, or LEAP – a funding arrangement provided by Japan International Cooperation Agency and administered by ADB. Pattern Energy Group, a yieldco founded to buy clean-energy projects, is seeking to raise $350m by selling senior notes. The notes would mature in 2024 and will be guaranteed on a senior unsecured basis by Pattern US Finance Company, the San Francisco-based yieldco said in a statement. It plans to use about $215m of the proceeds to help fund its acquisition of the 324MW Broadview wind project in eastern New Mexico.

Beijing Electric Vehicle, the electric-car unit of Beijing Automotive Group, plans to seek as much as CNY 10bn ($1.4bn) from investors, after raising CNY 3bn in its initial financing round last year. It plans to conclude the new round of funding in the first half of this year. There was quite a bit of activity on the acquisitions front too: Masdar Abu Dhabi Future Energy bought a 25% stake in a pilot floating offshore wind project in Scotland from Statoil. The Hywind project is expected to be commissioned in late 2017 and will be 25 kilometers (15 miles) off the coast of Peterhead, Aberdeenshire. The company will install five floating turbines with a capacity of 6MW each.

Green Investment Bank of the UK and its offshore wind fund acquired a 75% stake in the 270MW Lincs offshore wind farm in the southern North Sea for GBP 731m ($892m). The government-owned GIB bought a 31% stake for GBP 302m from Centrica and Siemens Project Ventures. The GIB’s Offshore Wind Fund acquired a 44% stake for GBP 429m.By 2040, some 13 million barrels of oil per day will be displaced by electric vehicles — equivalent to 14% of EIA estimated global crude oil demand in 2016, according to BNEF. By 2025, electric vehicles will displace 1.1 million barrels per day, forecasts the London-based company.

Q&A of the week
Comfort of charging electric vehicles outweighs cheap gas, says General Motors
The “convenience, security and comfort” of charging electric vehicles is now a major selling point helping to outweigh the impact of low gas prices, according to Darrin Gess, product manager for the Chevrolet Bolt EV at General Motors. Electric vehicle customers appreciate being able to recharge their vehicle from the security of their own home, without “the inconvenience factor of having to stop and pump gas,” he said in an interview.

GM’s first all-electric car to be released since the 1990s — the Chevrolet Bolt EV — has so far proved most popular among the tech-savvy, environmentally-minded consumer, with 500 cars sold in California at the end of December. “We like to consider treating an EV like a smart phone,” said Gess. “There are many different ways to refuel” — at home, work or at charging stations. The Bolt’s 238-mile range roughly equates to half a tank of gas — enough to give drivers peace of mind that “they could achieve the day’s activities with a few surprises thrown in,” Gess told Clean Energy and Carbon. GM will be rolling out the $30,000 vehicle (inclusive of the federal tax credit) to Virginia, Maryland and New York by the end of the winter, after its market launch phase in California and Oregon.

The Detroit-based automaker has brought what it says is the first affordable, long-range electric car to market by streamlining its manufacturing processes and outsourcing its lithium-ion battery production to South Korea-based LG Chem. “The reason why we went to a supply base rather than integrating internally was that we wanted to make sure that the supplier can achieve economies of scale” and hence lower the cost to the end-consumer, said Gess. “There is opportunity” for GM to integrate battery operations into its own business were EV demand to accelerate, he added.

The “low price and high EV range” of the new Chevrolet Bolt “is the tipping point that’s going to raise awareness” in the market, said Gess.

The following is a Q&A from the Bloomberg Clean Energy and Carbon Brief published every Monday. Sign up for a trial here.

Q: GM has begun selling the all-electric Chevrolet Bolt on the US West Coast. With what kind of customer have you had most success?

A: We’re finding, not just with the Bolt EV but with also the Chevrolet Volt and other electric vehicles, that the customers for this type of vehicle tend to be what we call the ‘early tech adopters’. They are highly-educated, have fairly good household income and want the latest technology.

The Chevrolet Bolt EV was designed for the customer a bit beyond that — what we would maybe call the ‘fast follower’. Certainly interested in technology but one that wants to make sure they make the smart choice — not just beta testing products but purchasing a product that has already shown satisfaction to maybe those early tech adopters.

Q: How many units have you sold in California so far?

A: We had just a little over 500 Bolt EV sales at the end of December. This is our market launch in California and Oregon and we expect this to grow significantly as we distribute more nationally…

Anand Gupta Editor - EQ Int'l Media Network


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