Current conditions: July was China’s hottest month since official record-keeping began in 1961 • Chile also experienced a month for the books as its capital, Santiago, had its first rainless July since records began in the 1950s • One death has been reported as multiple fires blaze in central and northern Colorado.
THE TOP FIVE
1. Sky-high PJM capacity prices highlight a halting energy transition
Recent retirements of coal- and gas-fired plants have left a gap in the generating fleet for PJM — the country’s largest regional transmission organization, spanning 13 states and Washington, D.C. — that wind and solar plants (many stuck in permitting and interconnection delays) have yet to fill. Add to that a projected 2% increase in peak demand, analysts say, and you’ve got a recipe for high prices.
To that end, PJM will offer record-high payments to power plant operators for the capacity they agree to maintain next delivery year. Producers across the region can expect to earn $269.92 per megawatt if they commit to being available during predetermined times, with prices in certain locations reaching as high as $466.35 per megawatt-day. Grid operators hope this will encourage the construction of new generating assets.
PJM’s quagmire is also a warning to other transmission organizations and independent system operators navigating a clean energy transition in the face of rising electricity demand. The bottom line? “PJM didn’t prepare for an energy transition we all saw coming,” said Jon Gordon, the director of clean energy trade group Advanced Energy United.
2. Home efficiency rebates roll out in Wisconsin
Starting today, Badger State residents can officially take advantage of federal rebates to make their homes less dependent on fossil fuels. Wisconsin is the second state after New York to launch a program to fund home energy improvements with money from the Inflation Reduction Act. To participate, residents will first have to get an energy audit by an approved contractor, who will then model potential energy savings from different courses of action, like new insulation, windows, doors, or even a new heating and cooling system. Depending on their income level and how much energy they save from the project, Wisconsinites will be eligible for up to $10,000 in rebates. But the program may see a slow start — there are currently only 13 approved contractors in the entire state.
The IRA’s home energy rebates programs are among those that are likely to be targeted first by a potential Trump administration. To date, the Department of Energy has provided funding to launch rebate programs in just approved applications from 10 of the 22 states that have applied.
3. Hydrogen has a long way to go, according to a new report
“Hydrogen-ready” has become a popular moniker for utilities and developers constructing new natural gas plants in an era of climate concern. A new report by the Institute for Energy Economics and Financial Analysis suggests that the term — meant to convey the infrastructure’s capability to transition to carbon-free hydrogen when the fuel becomes more available — may be little more than hot air. It identifies three major barriers: a lack of hydrogen supply, a lack of hydrogen-capable pipelines, and a lack of storage capacity. The authors highlight Duke Energy’s plan to build a “hydrogen-ready” gas turbine at an existing coal plant in Roxboro, North Carolina — a plan that wouldn’t introduce hydrogen into the pipeline until 2035, and even then would start with a mix of just 1% hydrogen to 99% methane.
Claims of hydrogen readiness, the report concludes, are “little more than marketing designed to obscure the myriad shortcomings and unanswered questions associated with using hydrogen in methane-fired turbines.”
4. A new financing tool aims to accelerate coal retirements
On the back of a record year for coal consumption driven by demand in Asia, climate advocates are searching for new ways to hasten the decline of the carbon-intensive fuel. One problem that has long bedeviled effort: Shutting down a coal plant prematurely means forfeiting years of profit. This amounts to a premium of $310 million for a five-year premature retirement, according to one estimate.
A group of financial institutions led by the Monetary Authority of Singapore is exploring a new financial tool to get around that barrier. The idea is to allow people and companies to purchase “transition credits” like they purchase carbon offsets. The money from these purchases would reimburse coal plant operators for the money they stand to lose by shutting down their plants. Some big banks see transition credits as a growth market. “We would also like to see how these can be traded, as creating a liquid secondary market should help support the primary markets too,” Patrick Lee, Standard Chartered’s chief executive officer for Singapore and ASEAN, told Bloomberg.
5. A booming business for undersea cables
Offshore wind is driving a surge in demand for undersea cables, with backlogs reaching up to 12 years. That’s bad news for utilities but good news for Europe’s three biggest manufacturers — Nexan, Prysmian, and NKT — which have all seen their stock more than triple in the past five years. A single kilometer of one of these cables can, according to Bloomberg, weigh as much as 50 Ford F-150 trucks, and cost more than $1.1 million. The specialized equipment required to produce such an item is a hurdle to any new companies trying to enter the market.
European regulators have long suspected the manufacturers of cartel behavior, and both the German and French governments are currently investigating them for price-fixing. Meanwhile, a Japanese manufacturer has begun construction on a new assembly plant in Scotland, which is slated to start production in 2026.
THE KICKER
Residents of Budapest were treated to an unusual sight on Thursday, as around 60 farmers paraded camels through the Hungarian capital to raise awareness about the impacts of climate change on agriculture. A drought cost the country’s agricultural sector $2.7 billion in 2022, according to Hungary’s farm ministry.“
And I said, dam. Egyptian Cabinet/Handout/Anadolu via Getty Images