US to review reliance on critical minerals supply from overseas

President Biden signed an executive order on Wednesday to review the four key global supply chains in order to avoid shortages in semiconductors, medical equipment, and other goods considered critical during the ongoing Covid-19 pandemic.

The review comes amidst fears that American industries are relying too much on foreign suppliers, particularly those from China.

The order will also start yearlong reviews into the six sectors: energy, food production, information technology, defence, public health, and transport, to determine their reliance on foreign imports.

According to a White House official, the reviews will be “modelled after the process that the Defence Department uses to regularly evaluate and strengthen the defence industrial base”.

The White House has also said that for now it is not “taking anything off the table”, as the strategies to fix the supply chains will depend on the identified shortages.

An administration official told American political journalism company Politico: “Clearly we are looking at the risks posed by dependence on competitor nations, but that is only one of a range of risks we are looking at.”

The news comes as auto producers across the US stumble upon a global shortage in semiconductors, the computer chips used in almost every piece of technology we use.

The threats to the battery supply chain also became visible after Ford and Volkswagen informed the US Government that they would have to delay production of new electric vehicle lines if Korean battery supplier SK Innovation was banished for intellectual property theft.

New York begins construction on $854m transmission project

The New York State Government has started construction of the $854m Marcy to New Scotland Transmission Upgrade Project in the US.

The works will increase the electricity transmission capacity of the line and supply more renewable energy to higher demand areas across the state.

The project will involve upgrading energy transmission along a 93-mile, 345kV line in the Mohawk Valley and Capital Region. It will make use of the existing electric transmission corridors and replace transmission towers to increase energy efficiency.

LS Power Grid New York and the New York Power Authority (NYPA) will jointly manage the project. The project forms part of $2bn of investments in transmission to accelerate the integration of renewable energy resources.

The project will also involve construction of two new substations between NYPA’s central transmission hub in Marcy, Oneida County, and New Scotland in Albany County.

The project will help New York state to meet its targets under the Climate Leadership and Community Protection Act. This mandates for a zero-emissions electricity sector by 2040, achieving 70% renewable energy generation by 2030, and economy-wide carbon neutrality.

Additionally, the Marcy to New Scotland Transmission Upgrade Project will create construction jobs.

New York Governor Andrew Mark Cuomo said: “A clean and reliable transmission infrastructure is critical to combating climate change and achieving New York’s nation-leading clean energy goals.

“It makes little sense to divest from Total, Shell, and Exxon, just because of climate change,” Total CEO

During his speech as part of the International Petroleum Week event (IP week), Patrick Pouyanné, chairman and CEO of Total, expressed his view that alongside their renewable efforts, oil majors shouldn’t take the divestment road to oil and gas.

He expalined: “It makes little sense to divest from Total, Shell, and Exxon, just because of climate change because, if [we] stopped producing oil and gas, other companies would produce it.”

Alongside this, Pouyanné said that Total is taking a different action plan in response to cash constraints induced by the Covid-19 pandemic, which saw the five integrated supermajors – ExxonMobil, BP, Shell, Chevron, and Total post a combined record loss of $76bn in 2020, as reported by Rystad Energy.

“Again, we want to be a reliable provider of energy by 2030. We did not anticipate a lower demand for oil and gas. We anticipated a decrease in oil demand from 2030 onwards. And so, we will adapt our own production profile to the demand, and [then we’ll] go with lower [hydrocarbon] rate, but not for the next 10 years,” he said.

“Our teams have been disciplined, of course, concentrating on health and safety first, but also [on] delivery, managing costs, reducing our CAPEX by $5bn, OPEX by $1bn.”

In the meantime, the CEO pointed out that the company has embarked on a new strategy to broaden the business with renewable energy, investing more than 20% of its CAPEX in the renewable power business.

Total is pledging to create up to 100GW of renewable energy capacity by 2030, having already built a portfolio to 35GW by 2025.

Pouyanné explained: “Let me be clear, the word transition does not mean that we can do everything in a minute and it’s not with a blink of an eye that you will do the transition.

"We need time, because we need investments, and it’s required that the energy transition has to be organised, but it takes time because it’s a highly capital-intensive industry.”

He also reinforced the company’s stance that the economy and the market still need oil and gas today: “We want reliable energy, but we are driven by questions about the future of the company.”

British Gas buys EVs from Vauxhall to electrify its fleet by 2025

Energy and home services provider British Gas has ordered 2,000 electric Vivaro-e vans from British car manufacturer Vauxhall, aiming to electrify its commercial fleet by 2025.

The electric vehicle (EV) order from Vauxhall is the largest order for a commercial fleet in the UK and adds to the 1,000 EVs purchased from the manufacturer in 2020. The company has also introduced plans to not purchase another internal combustion engine vehicle again.

The company’s commitment to electrifying its fleet by 2025 has been brought forward by five years from its previous commitment and is also ahead of the 2030 deadline set by the UK Government.

All 3,000 electric vehicles will be on the road by 2022. While engineers can volunteer to use the new vans during the rollout, the company is prioritising high pollution areas to help reduce emissions.

Vauxhall Motors managing director Paul Willcox said: “As with all businesses up and down the country, tradespeople rely on their van as an essential tool of their work and our 300-strong retailer network is crucial in continuing to provide support to carry British business.

“The strength of the quantity of orders for our all-electric van demonstrates that the Vauxhall Vivaro-e can contribute towards the transition towards low-emission vehicles whilst improving air quality.”

British Gas engineers will install all chargers at engineer homes, accelerating EV adoption in the UK for homes and businesses with charger installs and innovative EV tariffs.

British Gas is currently increasing the EV engineer workforce through training existing engineers, recruiting new engineers, and creating 1,000 new engineering apprenticeships by the end of 2022.

CEO of Centrica, British Gas’ owner, Chris O’Shea said: “Everyone needs to act now to lower carbon emissions and help the UK reach net-zero. We are leading from the front by not only lowering emissions for our customers and our communities, but by lowering our own emissions and increasing the speed at which we do this."

Texas to raise energy prices and suspend price cap amid winter storm

The Electric Reliability Council of Texas (ERCOT) has announced sweeping changes to the state’s energy pricing structure amid the ongoing winter storm, including higher energy prices and the suspension of a spiralling energy price cap.

The storm, which has killed at least ten people and trapped millions more without power as energy infrastructure has frozen solid across the state, has led to Governor Greg Abbott declaring a state of disaster across Texas.

ERCOT has also come under fire for failing to provide reliable power to the citizens of Texas and this week, the Public Utility Commission of Texas (PUC) ordered the council to take action to cut state-wide power demand by 10,000MW, in order to alleviate the crisis.

The commission’s first order will see energy prices raised to better balance supply and demand, with the former dramatically outpacing the latter amid the crisis. The current Texas offer cap, the highest price available for power, is set at $9,000 per MWh.

However, the storm has caused energy prices to plummet as low as $1,200 per MWh, a discrepancy that PUC described as “inconsistent with the fundamental design of the ERCOT market, [where] energy prices should reflect the scarcity of supply”.

The news has been greeted with dismay by many in Texas, with Austin-based radio station KVUE reporting that this would translate to higher bills for Texans, both during and after the current crisis.

However, the PUC’s second order could help protect customers from potential exploitation of these raised prices. ERCOT’s energy prices are capped by two thresholds, known as the low and high system-wide offer caps.

The lower figure is set at $2,000 per MWh or 50 times the price of natural gas, whichever is higher, while the higher cap is the figure of $9,000 per MWh.

This two-tiered system is designed to take into consideration fluctuations in energy demand, such as the summer months when high temperatures lead to greater demand for products such as air conditioning, and protect Texans from price-gouging, while ensuring the market retains some flexibility.

The PUC has ordered that ERCOT suspend the use of the lower cap, the one currently in place, as collapsing demand and spiralling gas prices could push this cap higher than the supposedly higher cap.

On Wednesday, Natural Gas Intel reported that the price of Henry Hub, considered a benchmark for gas prices, had increased by $6.65 per MMBtu to an average of $23.61 per MMBtu, a sudden and dramatic rise that threatened to push the lower price cap above the higher one.

“This outcome would be contrary to the purpose of the rule, which is to protect consumers from substantially high prices in years with substantial generator revenues,” wrote the PUC in its order. “It would make little sense to expose consumers to prices that are higher than the usual maximum price after a generator revenue threshold has been achieved.

Iberdrola to invest €1bn for offshore wind farm in Spain

Iberdrola has announced plans to invest more than $1.2bn (€1bn) in the first industrial scale floating offshore wind farm project in Spain. The wind farm will have a capacity of 300MW.

In a statement, Iberdrola said that the project will spearhead the development of up to 2GW of floating offshore wind projects identified by the company off the coasts of Galicia, Andalusia, and the Canary Islands.

An Iberdrola spokesperson said: “The renewable facility would become a driver of the country’s industrialisation and job creation. The study, design, and engineering could begin this year and it could generate more than 2,800 jobs per year until it becomes operational in 2026.

“The scheme would require the participation of 66 Spanish companies and technology centres, including 52 SMEs. In the short term, the initiative could generate between 1,000 and 2,000 jobs during 2021-2022, before the start of the construction phase.”

The company estimates that the initiative would mobilise investments of €21bn and involve several small and medium-sized enterprises. The project will offset approximately 202,500t of carbon emissions annually.

Iberdrola has submitted the plans to the Next Generation EU programme. It is one of 150 initiatives submitted to the programme in the fields of heat electrification, floating offshore, sustainable mobility, green hydrogen, innovative renewables, smart grids, circular economy, and energy storage.

Additionally, these projects would create 45,000 jobs annually, while generating an economic growth of more than 1.5% of GDP.

A company statement says that the project is in line with the pillars of the Spanish Government’s Recovery, Transformation, and Resilience Plan.