Weekly Climate Recap: Solar Supply Chain, Offshore Wind, IEA Report
One of the most interesting weeks with respect to some exciting updates and reports. A new report from Ember paints the true picture of China’s solar supply chain dominance. A new NREL report highlights the port infrastructure required before the offshore wind infrastructure. Lastly, the IEA released their report on the pathway to net zero and how it is still open!
🇨🇳 It’s China’s Solar Supply Chain and We Are All Just Using It
In case it wasn’t clear, China is dominating the clean technology supply chain and in no technology is this more pronounced than solar. Per a report from Ember, China has at least 80% of solar manufacturing capacity globally. Given that solar is expected to be the largest source of electricity capacity by 2027, this dominance is key to watch. Of all regions of the world, Europe represents nearly 60% of all solar modules exported from China in 1H2023.
The three key takeaways as reported by Ember include:
- China’s solar exports are rising with growth in 1H2023 of 34% equating to 114 GW shipped worldwide vs 85 GW in 1H2022.
- 58% of solar exports from China in 1H2023 went to Europe alone equating to 66 GW which is up from 44 GW in 1H2022. After Europe, Brazil is the next biggest importer with 9.5 GW
- On a percentage basis, Africa sees the fastest growth at a rate of 187% that Ember highlights is driven by large increases in South Africa.
Best put by the Data lead at Ember, Sam Hawkins:
“Solar growth is going through the roof. The world is racing to harness this cheap, clean and abundant source of energy to power the future economy. It is clear that global manufacturing capacity is currently not the limiting factor to achieving the required fivefold growth in solar power by 2030. We have enough solar panels, we just need to get busy installing them. Policies should focus on ensuring installation and grid integration can ramp up as fast as global module supply.”
Takeaway: The dominance of China in the solar supply chain is striking. Personally, I will find it incredible interesting to watch how the US plans to try and onshore solar manufacturing capacity given the huge lead that China has. While tariffs have been applied, as covered in an earlier edition of This Week in Climate, the framing of China’s supply chain dominance points to the challenges that need to be overcome. It is also very exciting to see the growth occur in Africa.
New NREL Report on Port Network for Floating Offshore Wind
The National Renewable Energy Laboratory estimates that total offshore wind resources in the United States total 4.3 terawatts of power. Of that amount, 2.8 terawatts is from wind resources that would need to be supplied by floating offshore wind farms. To throw some context on that huge figure, the International Energy Agency estimated that the total installed power generating capacity of the entire world in 2021 was 7.1 terawatts.
To access this 2.8 terawatts of electricity presented located in areas that can only be harnessed through floating offshore wind turbines, significant development to the ports of the United States will need to occur such that commercial-scale floating offshore wind becomes a reality. In a new report published by NREL, an analysis is conducted on what it will take to develop a system of ports on the west coast of the United States to enable this development of floating offshore wind energy. The headline takeaway:
“Our research shows that it could take an investment of around $5 billion to $10 billion to develop the installation and maintenance ports needed to build and operate 25–55 gigawatts of floating offshore wind on the West Coast and at least another $10 billion to build manufacturing ports to support a local supply chain,”
The report identifies five key challenge areas that will need to be overcome in order to develop this west coast port network.
Existing port infrastructure is inadequate for commercial-scale floating wind build-out:
This is because floating offshore wind turbines are much larger and heavier than traditional fixed-bottom offshore wind turbines. Additionally, floating offshore wind turbines need to be assembled at the port and then transported to the offshore site. This requires specialized equipment and procedures that most existing ports do not have.
Developing an efficient west coast port network will require effective communication between different stakeholder groups:
These stakeholders include port authorities, shipping companies, wind developers, government agencies, and environmental groups. It is important for these stakeholders to communicate effectively in order to develop a network that is efficient and meets the needs of all parties involved.
A significant workforce will be required to construct and operate west coast floating wind energy ports:
The construction and operation of floating offshore wind ports requires specialized skills and knowledge that are not currently widely available. The report recommends that governments and industry work together to develop and implement workforce training and development programs. These programs should be designed to train workers in the specialized skills required for the floating offshore wind industry.
Permitting and regulatory requirements can be uncertain and/or time-consuming:
There is no clear regulatory framework in place. Additionally, multiple government agencies may be involved in the permitting process, which can further complicate and delay the process. The uncertainty and delays associated with the permitting process can make it difficult for developers to finance and build floating offshore wind ports. This can hinder the development of the floating offshore wind industry on the West Coast.
A Floating Wind Vessel Fleet will Need to be developed in parallel with the port network:
Floating offshore wind turbines are installed using specialized vessels. These vessels are not currently available in the United States, so they will need to be built or purchased from other countries. Additionally, these vessels will need to be operated by trained crews. The report recommends that governments and industry work together to develop a plan to finance and build a fleet of vessels dedicated to floating offshore wind. This plan should include strategies for training and developing a qualified workforce to operate these vessels.
Takeaway: The development of a floating offshore wind industry on the West Coast of the United States has the potential to make a significant contribution to decarbonizing the region’s electricity grid and meeting its climate goals. However, a number of important challenges need to be addressed in order to support this development, including the need to update port infrastructure, develop an efficient port network, train a skilled workforce, streamline the permitting process, and develop a fleet of vessels dedicated to floating offshore wind installation and operations.
Pathway to 1.5 °C has Narrowed, but Clean Energy Keeps it Open
A new 227 page report from the International Energy Agency, the pathway to 1.5 °C 2023 update was released this week. In it, a roadmap forward through to staying within 1.5 °C. The key takeaways from the report include fossil fuel demand falls 25% by 2030, fossil sector methane emissions drop by three-quarters, energy efficiency adoption doubles, global renewable energy capacity triples, and annual clean energy investment rises from US$1.8 trillion in 2023 to $4.5 trillion by the early 2030s. An ambitious plan but an achievable one.
Interestingly, in an article by Corporate Knights on the release of this report, changes from the IEA’s 2021 energy outlook include what can be considered downgrades and upgrades of technologies.
📉 Downgrades
- Carbon capture
- Hydrogen
- Bioenergy
📈 Upgrades
- Renewables
- Energy efficiency
- Electrification
Specific points mentioned on the upgrades in particular include renewables and efficiency as tools to drive fossil fuel demand down:
Tripling global installed renewables capacity to 11 000 gigawatts by 2030 provides the largest emissions reductions to 2030 in the NZE Scenario.
Doubling the annual rate of energy intensity improvement by 2030 in the NZE Scenario saves the energy equivalent of all oil consumption in road transport today, reduces emissions, boosts energy security and improves affordability.
Booming technologies like electric vehicles and heat pumps drive electrification across the energy system, providing nearly one-fifth of the emissions reductions to 2030 in the NZE Scenario.
What I found most encouraging is the image below. The 2021 report estimated that technologies not available yet delivered half of all emissions reductions needed in 2050, that figure has fallen to 35%.
Takeaway The pathway is still open, we cannot lose hope. There are some ambitious advancements needed across all areas of the energy transition. The 30,000 foot view is that advanced economies need to reduce emissions by 80% and emerging market and developing economies need to reduce emissions by 60%. This requires action across everything, everywhere, and all at once. Clean energy developments are keeping the path open but things need to accelerate.
What Else is in the News
- Long duration energy storage continues to be one of the items at the top of the priority list for the Department of Energy as they announce the shortlisting of projects to receive US$325m which includes companies such as Energy Dome, Invinity, Form Energy, and Redflow. This grant funding is going towards 15 projects that meet the DOE’s definition of LDES being greater than 10 hours of discharge at full power. Unlike the short duration energy storage market, there are many horses in this race trying to fill the role of dominant long duration energy storage provider.
- Not to make this all about DOE, but another exciting announcement from them this week as they make the largest-ever federal government commitment to solar energy in for form of a 90% guarantee of up to US$3.3B in term loans to Sunnova. There are several features of this loan that are of particular interest, firstly that this represents DOE’s first loan guarantee for a virtual power plant and that 20% of the loan administered by Sunnova will go to customer with FICO scores of less than 680 that represents a huge accessibility move to enable solar adoption to underrepresented customers.
- I think on an individual level that the choices we make regarding our food represent the greatest changes we make with respect to climate change. As highlighted in an article by Corporate Knights, plant-based foods are undergoing a downward slide that can be associated with the natural flow of nascent industries. However, what I found especially interest is the commentary on how animal-source foods receive billions in subsidies, some of which goes to lobbying and marketing to turn people away from plant-based foods, the article is worth a read.
