#14 - China is crushing everyone else on clean energy...
Welcome to another edition of… *drumroll please* Enrgy Tech!
Yes, I’ve changed the name, logo and design of the newsletter. I have to admit, I didn’t like the old name. Hence the delay in sending edition #14. I hope you like it.
As ever, Enrgy Tech will cover the growing interest and investment in clean energy. It will vastly improve our lives and stop the climate crisis.
I take a tech and financial perspective. What technologies are around the corner? Where is the money coming and going? Who is doing interesting things?
If you like this email, please don’t hesitate to share / forward it on.
Why clean energy companies remain under pressure
The Financial Times reported last week that several hedge funds are trying to make money by shorting clean energy companies, i.e. betting their share prices will fall further.
In their sights: from EV manufacturers Tesla and Rivian to wind-turbine makers Vestas and Nordex, green hydrogen companies such as ITM Power and McPhy, and solar companies such as Enphase Energy.
Since February 2021, clean energy companies have seen their valuations fall, as I wrote recently, a sell-off that accelerated in 2022.
“In a bear market, a company doesn’t trade at 60 times earnings just because it does something morally good,” said one executive. “People will be a bit more hard-nosed about it.”
But this strategy may backfire. As one executive told the FT, they’re betting against an avalanche of government regulation and money. And share prices are recovering after their dramatic falls. On 9th February, Ceres Power jumped 22% after announcing a deal for China, while ITM Power shot up 12% alongside. Meanwhile, Enphase Energy’s share price has climbed by over 20% in the last fortnight on the back of strong earnings. Even energy storage companies such as Fluence and ESS Tech and have risen in recent days.
The hedge funds may end up paying dearly for their bets.
China added more wind power in 2021 than everyone else put together
China added a mind-boggling 17 gigawatts of offshore wind capacity in 2021. That’s more than the rest of the world added from 2015 to the year 2020 (14 GW).
In 2019, Britain was the world’s leader in offshore wind with 8 GW of capacity. China built 1.5x that in just one year.
At some point, western leaders will realise that building large amounts of clean energy capacity is a national necessity, not a luxury they can afford to put off. Only China seems to get it.
Spanish multinational quietly becomes a UK clean energy giant
The Spanish giant Iberdrola has acquired 17 solar farms in Britain with a capacity of 800 megawatts (MW) from Elgin Energy and Lightsource BP, becoming one of the country’s largest solar power companies.
Iberdrola owns Scottish Power in the UK too, and its recent acquisitions bring its share of solar energy capacity in the UK to 9% of the total. The company is already investing heavily into wind energy in the UK, committing another £6 billion in October 2021 into UK offshore wind energy, its biggest project investment worldwide.
Oberdrola is also the world’s second-largest wind energy producer. The company is planning to be a clean energy giant.
Informative Twitter thread on why geothermal energy is suddenly getting a lot of attention and money.
British scientists have had a major breakthrough in their quest for nuclear fusion energy. But we aren’t anywhere close to getting large scale energy production yet.
Danish company Seaborg Technologies says it has developed molten salt thermal energy storage technology that can store large amounts of intermittent wind and solar power.
Space-based solar power will be a new frontier for humanity, writes Anjana Ahuja in the FT. The US, UK and China are all exploring its potential.
German trains are going electric! Deutsche Bahn trialled its first fully electric train recently. Further testing will run throughout early May on all routes.
The UK’s biggest supermarket, Tesco, is trialling battery-powered lorries for shorter deliveries.
The UK government will hold auctions for clean energy suppliers every year, rather than every 2 years. It should speed up clean energy supply.
A startup called Energy Vault has raised millions on funding for its novel energy storage idea. Now some are raising questions its ideas can work.