☀️ A big new plan to deploy clean power in developing nations

Plus: Oil's return from the pandemic and new battery ventures | Monday, June 21, 2021

Open in app View in browser   Presented By GE   Axios Generate By Ben Geman and Andrew Freedman ·Jun 21, 2021 Welcome back! Today's Smart Brevity count is 1,138 words, 4 minutes. 📊 Data points of the day: $3.2 billion, $84 billion. Those are Shell's estimated investments in clean energy vs. oil-and-gas since 2016, per this NYT story. 🎸 Neil Young's harrowing masterpiece "Tonight's the Night" turned 46 yesterday and provides today's intro tune...     1 big thing: A push to boost power access without surging emissions Illustration: Eniola Odetunde/Axios   Two foundations just unveiled a $1 billion initiative to help deliver clean energy to huge numbers of people worldwide who lack electricity access — and they hope it catalyzes vastly more outside capital, Ben writes. Driving the news: The Rockefeller and Ikea foundations said the new program "aims to reduce 1 billion tons of greenhouse gas emissions and to empower 1 billion people with distributed renewable energy." The new platform will be housed in the RF Catalytic Capital division that Rockefeller launched last year, which it calls a way for "impact investors, and governments to combine their resources and expand their global philanthropic reach." The goal is to unlock finance for areas like micro-grids and off-grid renewable power. Why it matters: While the initial $1 billion on its own is nowhere near the scale needed to sustainably expand global access, the Financial Times reports that the effort is aimed at mobilizing much more money. "[T]hey hope to attract $10bn of additional funds this year from international development agencies, before opening up to institutional investors in a bid to expand renewables investment in countries such as India, Nigeria, and Ethiopia," the FT reports. It quotes Rockefeller President Rajiv J. Shah expressing hope that the effort could eventually reach $100 billion or even $1 trillion by using "philanthropic capital as a lever to get commercial capital." This morning's announcement says the foundations see the new platform as a way to identify "viable, investment-ready projects." The big picture: Meeting rising global energy demand in developing countries without a corresponding increase in emissions is a key global challenge — especially as scientists say steep emissions cuts are needed to contain global warming. By the numbers: An estimated 759 million people worldwide lacked electricity as of 2019, per joint analysis from the World Bank and other agencies. And the two foundations' announcement this morning notes that access is unreliable for another 2.8 billion people. What they're saying: An International Energy Agency report this month looked more broadly at the need to scale up finance for climate-friendly energy in emerging and developing economies worldwide. They estimate that by the end of this decade, "annual capital spending on clean energy in these economies needs to expand by more than seven times, to above USD 1 trillion, in order to put the world on track to reach net-zero emissions by 2050."     2. U.S. oil's cautious return from COVID-19 Data: Baker Hughes; Chart: Axios Visuals There are fresh signs that U.S. oilfield activity is increasing alongside the return of demand and higher prices, but don't look for a return of record pre-pandemic production soon — or maybe ever, Ben writes. Driving the news: The number of active U.S. oil rigs rose again last week, per the oilfield services company Baker Hughes' rolling tally. Why it matters: It's the latest increase since COVID-19 significantly lowered oil consumption and prices cratered last year. The rig count is a rough proxy for the future output trajectory. Yes, but: Reuters' coverage notes that most producers are "focusing on capital discipline and investor returns, rather than expanding supply." If that holds, it's a reversal of years when they emphasized output above profit and shareholder rewards. World-leading U.S. production reached a new record of nearly 13 million barrels per day at the end of 2019, but companies piled up lots of debt along the way. The big picture: A recent Bloomberg story explored the new dynamic. "After years of booms and busts that produced astronomical losses along with a whole lot of oil, the fracking industry seems to have found a sweet spot," it reports. One data point in the piece is that the sector is estimated to generate $30 billion in free cash flow this year. "[S]hale is entering a new, better era, with higher profitability," analyst Elisabeth Murphy of ESAI Energy LLC told Bloomberg. What we're watching: The U.S. Energy Information Administration projects that domestic production will average 11.1 million barrels per day (bpd) this year and 11.8 million bpd in 2022. But those estimates issued monthly often change as analysts chase a moving target.     Bonus chart: The oil price revival Data: FactSet; Chart: Axios Visuals Oil prices have been on a largely upward march since bottoming out in April of 2020. Where it stands: Crude futures prices are trading near their highest levels since 2018. WTI, the U.S. benchmark, is in the mid-$71 range this morning, while Brent crude is in the mid-$73 range.     A message from GE The secret to more sustainable energy you may not know about     The future of energy lies in the power grid, where we have equipped 90% of transmission utilities with GE technology and 40% of the world's energy touches GE's software. What this means: GE is helping move all energy sources through the grid, giving us all access to electricity where and when we need it.     3. What's new in batteries: Volvo and Porsche Volvo and the Swedish battery company Northvolt this morning announced a joint venture to "develop and produce more sustainable batteries, tailored to power the next generation of pure electric Volvo and Polestar cars," Ben writes. What's next: The first step is a new R&D center that will begin operations next year, but they also plan to build a new factory in Europe that will begin battery production in 2026. Reuters has more. Meanwhile, via Bloomberg, "Porsche AG will develop and produce battery cells for electric sports cars in a new joint venture with a German lithium-ion specialist, taking a hands-on role in expanding its technological edge." Why it matters: The news this morning shows how major automakers are looking to secure access to battery production and improved battery technologies as they plan the electrification of their fleets.     4. New science group looks to juice climate efforts Annual temperature departures from the 1971-2000 average through 2020. (Ed Hawkins via Climate Central)   A new organization called the "Climate Crisis Advisory Group" is launching imminently that will seek to "advise, warn and criticise global policymakers about the climate and nature crises," the Guardian reports. Why it matters: The group includes well-known names in climate science and policy circles, including International Energy Agency head Fatih Birol. Check it out via their Twitter feed. What they're saying: "We are hoping that by putting expertise directly into the public domain we are reaching into policymakers' decision processes, and into the financial sector and how they invest in our future," David King, the former top U.K. science adviser heading the group, tells the Guardian. What we're watching: The paper reports that the new group will also look to provide journalists with expert responses to breaking climate news, such as new reports, multilateral meetings and more.     5. Sanders says no on EV fees Senate Budget Committee chairman Bernie Sanders told "Meet the Press" Sunday that he's against raising the gasoline tax or imposing new electric vehicle fees to help fund a bipartisan infrastructure plan. Driving the news: Sanders threw cold water on some of the funding avenues proposed by Sen. Susan Collins (R-Maine) last week, which included a tax on electric vehicles and repurposing leftover COVID-19 funding, Axios' Ivana Saric reports. Why it matters: Via Politico, "The statement demonstrates that Democrats are at risk of losing progressives' support in a 50-50 Senate even as they court Republicans to produce a bipartisan bill." Catch up fast: While roughly 20 senators are negotiating on a bipartisan plan, Democrats are also planning to try and move a much bigger package through the budget reconciliation process that would be immune from filibuster. Go deeper: What to watch as infrastructure talks heat up     A message from GE The global demand for power is estimated to grow by 50% by 2040     Utility companies must find a way to cut emissions and keep power flowing reliably to their consumers. The idea: GE is driving the digitization of the electric grid, partnering with some of the world's largest utilities and energy producers to build a world that works.   Like this style and format? 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