☀️Big corporate deal

Plus: Yellen's African pitch | Wednesday, January 25, 2023

Open in app View in browser     Axios Generate By Ben Geman and Andrew Freedman · Jan 25, 2023 🐪 Halfway there! Today's newsletter has a Smart Brevity count of 1,230 words, 5 minutes. 🚨Join Axios' journalists Wednesday, Feb. 1, at 8am ET in Washington, D.C., for an inside perspective on the 118th Congress. Hear from Rep. Nanette Barragán (D-Calif.), Sen. Thom Tillis (R-N.C.) and more. Register 🎶At this moment in 2005, Mario was #1 on the Billboard Hot 100 with a perfect R&B cut that's today's intro tune...     1 big thing: Microsoft and Qcells team up in major U.S. solar push Illustration: Gabriella Turrisi/Axios   First look: Microsoft has a new business partnership with solar heavyweight Qcells as the tech giant boosts renewables procurement and Qcells expands U.S. manufacturing, Ben writes. Driving the news: Qcells, which makes panels and other equipment, will work with Microsoft to develop utility-scale solar projects in the U.S. They'll also provide equipment, engineering and construction services to projects Microsoft is backing with other developers via power purchase agreements, which are contracts that help finance new generation. Why it matters: It's a lot of business. It envisions Qcells — an arm of Korean industrial giant Hanwha — initially providing 2.5 gigawatts worth of panels and related services, with room to grow. That's "equivalent to powering over 400,000 homes," they said. The big picture: It's the "first time a company that procures energy is working directly with a solar supplier to adopt clean energy on such an important scale," the announcement states. Brian Janous, Microsoft's GM of energy and renewables, tells Axios the company's cumulative renewables procurement to date is around 13.5 GW. The initial Qcells agreement is equivalent to around half the renewable gigawatts Microsoft procured from all sources worldwide last year, he said. The intrigue: The deal is part of a tactical evolution. "We started to think it really makes sense for us to go further upstream, and work more closely and collaboratively with suppliers of solar panels... because it helps give us some control and certainty and it does the same thing for our suppliers as well," Janous said. Catch up fast: Two weeks ago, Qcells announced a $2.5 billion investment in Georgia, along with further plans to domestically source silicone materials. After growth announced this year and in 2022, it will have over 8GW of production capacity in Georgia in 2024, up from 1.7GW in 2018. Microsoft, already a top corporate renewables buyer, has a goal of matching 100% of its aggregate energy usage with renewables by 2025 and becoming carbon-negative by 2030. What they're saying: Qcells VP Jihyun Kim called the deal part of helping the U.S. become "energy independent." As they develop an integrated U.S. supply chain, "we definitely want to have partners, strategic and long term, for us to be able to continue growing our presence here," he said.     2. First look: Clean water for Texas colonias with a solar assist Photo illustration: Shoshana Gordon/Axios. Photo: Salwan Georges/The Washington Post via Getty Images   A new pilot initiative is tapping into solar-powered tech as a solution to the water crisis affecting hundreds of thousands of people living in colonias along the U.S. and Mexico border, Axios' Ayurella Horn-Muller reports. Driving the news: SOURCE Global, a public benefit corporation, is partnering up with Texas politicians and nonprofits to provide clean drinking water access to colonias — unincorporated, low-income communities with limited resources. The backstory: Colonias, which lack basic human services like traditional water infrastructure, are home to largely low-income, Latino residents. The state's increasingly unreliable water supply, which relies heavily on drought-stricken rivers and reservoirs, worsens existing barriers to access for those in colonias. "Colonia residents bought their land because they saw the opportunity to be homeowners, but they were never properly informed of the lack of political will to bring municipal water service to colonias," Laura Ponce, executive director of the El Paso County nonprofit Project Bravo, tells Axios in an email. "Without a safe source for drinking water, low-income colonia families take health risks like drinking potable water delivered by trucks, storing water in unsealed large containers, and minimizing their water consumption," says Ponce. An initiative led by SOURCE Global is aiming to mitigate this by installing hydropanels that turn water vapor into drinking water in 500 households in the Hueco Tanks and Quemado colonias. Read the whole story     3. 🛢️Catch up fast on oil: M&A, earnings, OPEC+ 🤝 Upstream oil-and-gas M&A deal volume in the U.S. fell to its lowest level since 2005 last year and, on a value basis, the $58 billion was a 13% drop compared to 2021, per Enverus Intelligence Research, Ben writes. Why it matters: "[T]he volume of deals has collapsed to a nearly two-decade low as activity has been driven by large companies targeting the highest quality assets in billion-dollar-plus deals," it said. Go deeper 💰 The big three oilfield services companies — Halliburton, Baker Hughes and SLB — reported a combined $4.4 billion in net profit last year, the Financial Times reports. Why it matters: It's the largest haul since the U.S. shale boom's heyday in 2014 "as high energy prices in the wake of Russia's invasion of Ukraine spurred global drilling activity," they report. 🗓️ A panel of OPEC+ ministers are likely to endorse maintaining their current crude output levels at a meeting next week, Reuters reports, "as hopes of higher Chinese demand driving an oil price rally are balanced by worries over inflation and a global economic slowdown."     A message from Axios Business news worthy of your time     Get a daily look at the news and trends dominating the business world. Delivered weekday mornings, afternoons and evenings. Subscribe for free.     4. Manchin moves to limit EV tax credits Illustration: Aïda Amer/Axios   Sen. Joe Manchin wants to block the use of expanded consumer EV subsidies on cars that don't meet strict battery sourcing mandates in the U.S. climate law, Ben writes. Driving the news: His new bill would immediately impose limits the Treasury Department has delayed by failing to issue formal "guidance" on the requirements. Catch up fast: The law tethers EV subsidies to Manchin-led provisions aimed at onshoring the supply chain. It sets escalating percentages for components and materials sourced, processed or recycled domestically or from free-trade partners. Few models currently meet the standards. But they're not in place until Treasury acts, so purchase credits up to $7,500 are widely available. What they're saying: An aide to Manchin, who heads the Senate's energy panel, said one motivation is concern Treasury will delay action beyond their March target for finishing the guidance. The "overarching concern" is reliance on foreign supply chains. "We really need to do this sooner rather than later," the aide told reporters. Anyone who has already claimed the credit since Jan. 1 will need to refund it. What we don't know: Whether the bill has political legs. Manchin has not begun seeking co-sponsors, aides said.     5. Yellen pitches U.S. as climate ally to Africa Secretary Yellen speaks to viliagers in Chongwe, Zambia. Photo: Hans Nichols/Axios   Treasury Secretary Janet Yellen traveled to a small farming community in rural Zambia to deliver a big message: Africans can help feed the world, Axios' Hans Nichols reports. Why it matters: Yellen wants to convince Africans — from women entrepreneurs to government ministers — the U.S. will be their partner for the long haul. That includes helping them to become more food secure and survive the effects of climate change. Driving the news: "Farmers — like the ones we work with here — are often the first witnesses of the changing climate and its consequences," Yellen told a few dozen subsistence farmers in Chongwe, Zambia. But she also said Africa "has the potential not only to feed itself but also to help feed the world." The big picture: Devastating droughts across Africa, coupled with Russia's invasion of Ukraine, have increased food insecurity and driven up energy costs across the continent. Catch up fast: Throughout her 10-day African trip, Yellen has done a combination of listening and selling. Read the whole story     6. 🚛 Following up: Tesla's semi-truck There's still plenty we don't know about Tesla's semi-truck plans, but the electric automaker confirmed Tuesday that it's investing in new manufacturing capacity in Nevada, Ben writes. Driving the news: Tesla, in a blog post Tuesday, said it's investing $3.6 billion to add two new factories to its existing Nevada Gigafactory complex outside Reno. One is a plant to build the semi, and the other is a battery cell factory with "capacity to produce enough batteries for 2 million light duty vehicles annually." Go deeper     A message from Axios Business news worthy of your time     Get a daily look at the news and trends dominating the business world. Delivered weekday mornings, afternoons and evenings. Subscribe for free.   📬 Did a friend send you this newsletter? Welcome, please sign up. 🙏 Thanks to Nick Aspinwall and David Nather for edits to today's newsletter. Your personal policy analyst is here. Track energy policy formation at every step of the process with Axios Pro. Talk to our sales team today.   Axios thanks our partners for supporting our newsletters. Sponsorship has no influence on editorial content. Axios, 3100 Clarendon B‌lvd, Arlington VA 22201   You received this email because you signed up for newsletters from Axios. To stop receiving this newsletter, unsubscribe or manage your email preferences.   Was this email forwarded to you? Sign up now to get Axios in your inbox.   Follow Axios on social media: