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Closed-down European coal plants are good for scrap hardware, but cash is harder to find.͏‌  ͏‌  ͏‌  ͏‌  ͏‌  ͏‌ 
 
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August 9, 2024
semafor

Net Zero

Climate
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Hotspots
  1. Climate Week cometh
  2. Tax credits in action
  3. Ukraine’s coal dilemma
  4. Cheaper than cheap
  5. Charging ahead

A rift on the IRA in the GOP, and another on ESG at GBX.

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1

Climate Week cometh

 
Tim McDonnell
Tim McDonnell
 
Tim McDonnell/Semafor

The world’s top climate financiers, policymakers, engineers, and activists are getting ready for one of the biggest dates on the climate calendar. Climate Week NYC, from Sept. 22-29, was once a sideshow to the UN General Assembly meeting the same week. Now it’s a draw in its own right, with hundreds of events sprawled out across the city. Our friends at Climate Tech New York and Climate Tech VC are keeping track of everything from film festivals and happy hours to tech workshops and VC pitchfests. We’ll be there as well — drop me a line about the talks I should attend and people I should meet, and stay tuned for details on Semafor’s own events.

Email me. →

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2

Tax credits in action

3.4 million Americans have claimed Inflation Reduction Act tax credits for household clean energy use and energy efficiency upgrades against their 2023 income tax, according to new Internal Revenue Service data.

That adds up to more than $8 billion in tax credits, and is expected to grow as late-arriving tax returns filter in. For households that took advantage of them, the clean energy credits shaved an average of $5,000 off their tax bill. The data show that the credits are relatively popular in many Republican-majority and swing states, including Florida, Arizona, and Pennsylvania, pointing to the IRA’s centrality for November’s presidential election. But they remain underutilized in lower-income states, suggesting an area for improvement for policymakers. And they were only claimed on 2.5% of all tax returns, an indication that they’re not as popular as the Biden administration would like them to be. The state where the tax credits are least utilized: West Virginia, home of Sen. Joe Manchin, who was instrumental in making the IRA happen.

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3

Ukraine’s coal dilemma

 
Tim McDonnell
Tim McDonnell
 
Tim McDonnell/Semafor

As Ukraine struggles to rebuild its decimated energy system, among its obstacles are its allies.

Last week, I visited one of the six fossil fuel power plants operated by the private Ukrainian energy company DTEK in territory held by Kyiv (the company has another two plants in Russian-occupied territory). All six have been heavily damaged by Russian missile and drone, and in some cases artillery, attacks. The one I visited — for security reasons, identifying details have to be concealed — has been attacked more than 10 times since last year, and has been shut off entirely since it was last hit with a barrage of rockets in May.

Most of the plant’s turbine units are beyond repair. A mountain of coal sits unused outside its cavernous, hangar-like main building, constructed in the 1970s, when Ukraine was part of the Soviet Union. The roof is gone. Inside is a three-story pile of charred, twisted metal draped in fallen insulation; splintered stairways and caved-in catwalks; enormous turbine shells and fuel silos pockmarked with shrapnel; sagging pipes, bits of rockets, and mounds of broken glass, all coated in ash. The huge axle of a train car sits incongruously across a second-floor walkway, thrown there from the rail line outside by an explosion. A long room where hundreds of kilometers of cables converged — and drew the raging fire along their length, during the attacks — resembles the blackened interior of a pizza oven.

Russia’s attacks on energy infrastructure are forcing Ukraine to run its energy transition in reverse, dumping cash into the rebuilding of massive coal projects that would never fly in Europe or the US. And that tension has meant that even as Western capitals send weapons and aircraft to Kyiv in order to defeat an invading army, they could be hampering its efforts to rebuild critical infrastructure battered by those same forces.

In some respects, Europe’s energy transition has proved a boon to Ukraine; the decommissioning of coal plants in Germany, Poland, and elsewhere has created a stockpile of parts that Ukrainian energy officials are now scouring. But that stockpile covers only about 20% of DTEK’s repair needs, Executive Director Dmytro Sakharuk told me. As a result, cash is needed, and even though experts agree that repairing existing coal plants is the simplest and cheapest way to restore Ukraine’s energy security before this coming winter, funds are constrained by the climate policies of Western donors and financial institutions that don’t want to underwrite increased use of coal, some officials warn.

Read on for more on how Ukraine's energy entrepreneurs are preparing for closer relations with the EU.  →


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4

Cheaper than cheap

Price per million British thermal units of natural gas during some days in West Texas this spring. Negative pricing — in which drilling companies are effectively forced to pay utilities and other gas users to take the stuff off their hands — is becoming more common in the Permian as production grows faster than the capacity of existing pipelines and storage tanks. The problem illustrates how much gas production has increased during the Biden administration — too much, some industry execs believe.

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5

Charging ahead

Mark Blinch/Reuters

EV charging execs say potential EV buyers should get over their “range anxiety,” as EV charging networks overturn the longstanding business model of gas stations. For drivers in the US, fears about running out of juice on a long drive with no charger in sight remain an important barrier to EV adoption. That line of thinking makes sense when refueling is something that most often happens on the road. But with EVs, refueling happens when the car is parked. As a result, “we need to reduce the attention that’s being paid to fast charging and this idea of range anxiety, and instead focus on access anxiety,” i.e., a lack of sufficient charging stations in neighborhoods and parking lots, Nathan King, founder of the charging startup itselectric, said in an interview. King’s company builds chargers at street parking locations in high-density cities, and has found success in targeting areas with low access to public transit . Another charging network, EVPassport, is focused on large multifamily buildings, and commercial locations like malls and hospitals.

There are a few key obstacles to building out the US charging network, EVPassport CEO Hooman Shahidi said. One is uncertainty about federal tailpipe emissions standards; if a second Donald Trump administration weakens them, automakers will be less likely to invest in bringing down the costs of EVs. Another is cybersecurity — better protection is needed to make sure charging networks can’t be attacked by hackers, he said. And EV charging stations need to be not just more numerous, but more reliable and easy to use: showing up to many stations, he said, “is like going to a casino and hoping you win at the tables.”

The Biden administration has a goal for the US to install 1.2 million public EV chargers by 2030, up from less than 200,000 now. Meeting that goal, King said, will require mayors and state politicians to get more involved in the push: “It hasn’t moved fast enough so far, but I think it’s about to change.”

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Power Plays

New Energy

Fossil Fuels

Finance

Politics & Policy

  • A group of 18 Republican members of Congress implored Speaker Mike Johnson not to carelessly scrap clean energy tax credits in the Inflation Reduction Act, which would disadvantage businesses in their districts and could “create a worst-case scenario where we would have spent billions of taxpayer dollars and received next to nothing in return. The letter points to a growing rift in the party over clean energy subsidies that Donald Trump would have to grapple with as president.
  • After years of prioritizing energy reliability over emissions, China is suddenly shifting back to more ambitious climate policy — in part to grow the market for its oversized clean energy manufacturing sector.

Minerals & Mining

EVs

REUTERS

Food & Agriculture

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