Current conditions: 192 people are still missing after heavy rains set off a torrent of flash floods in the Indian state of Kerala • Spain’s heat wave is believed to have peaked after an observatory near Barcelona recorded an all-time high • Temperatures in Antarctica soar to more than 50˚F above normal.
THE TOP FIVE
1. A September rate cut could bring relief to renewable energy developers
The Federal Reserve once again voted to hold interest rates steady at 5.3% but signaled that a rate cut could arrive as soon as September. That rate cut would be music to the ears of renewable energy developers, who have struggled to cope with higher borrowing costs. Compared to fossil fuels, renewable energy is more vulnerable to interest rate changes because upfront capital expenditures comprise a greater share of the total project cost. As Joel Dodge wrote for Heatmap in March, high interest rates have hit the offshore wind industry particularly hard, contributing to cost overruns and even cancellations.
In a press conference on Wednesday, Federal Reserve chair Jerome Powell cited “further progress” towards the Fed’s goal of 2% inflation. “A reduction in our policy rate could be on the table” for the September meeting, said Powell. Renewable developers will certainly hope so.
2. Senate energy permitting bill passes through committee
The Senate Energy and Natural Resources Committee approved a bipartisan energy permitting bill in a 15-4 vote on Wednesday. The bill has a little something for everyone: sped-up permitting for renewable energy, requirements for oil and gas leases, and LNG approval time limits. It’s a joint effort by Republican Senator John Barrasso and Independent Senator Joe Manchin, who effused that the bill’s passage marked “a tremendous day for all of us.” Critics of the bill include over 360 environmental groups, who view the fossil fuel provisions as an affront to climate action. Three Democratic-caucusing senators and one Republican senator have already signaled that they will oppose the legislation. The White House has yet to weigh in, though senior climate policymakers have previously said that permitting reform is necessary to unlock the benefits of the Inflation Reduction Act.
3. Global battery investment declines for the first time this decade
After growing for four years straight, global investment in batteries is set to decline this year, according to analytics firm Rystad Energy. The main culprit, Rystad says, is a slump in the Chinese market, where industry consolidation and supply chain constraints have put a damper on the firehose of investment that marked 2021 and 2022. If the spending dip bears out, it could pose challenges for the global EV industry. Sustained technological improvements and cost declines – largely driven by Chinese investments – have made EVs more affordable and driven their adoption in Asian and Western markets alike.
What this means for the future of the battery industry is unclear, says Duo Fu, Rystad’s vice president for battery market research. He noted that “collaboration across the entire supply chain is crucial for the industry's health.”
4. Grid-enhancing technology gets a raise
TS Conductor closed a $60 million growth investment round, the company announced on Wednesday. The U.S.-based manufacturer of advanced power lines plans to use the money to open a second production facility, with its Southern California plant nearly at capacity. TS’s power lines offer an upgrade on the traditional stock by decreasing line losses, reducing sag, and accommodating up to triple the power during peak generation hours.
The National Renewable Energy Laboratory estimates that transmission capacity will have to nearly triple by 2035 if the U.S. is to integrate the renewable energy required to meet its climate goals. Transmission lines, however, are notoriously costly and time-intensive to build. Grid-enhancing technologies like TS’s can ease the burden on new construction by allowing grid operators to increase the capacity of their existing lines.
5. BYD and Uber strike a deal
Uber has announced that it will purchase 100,000 EVs from Chinese auto company BYD as part of an effort to shift Uber’s fleet of vehicles to electric. Uber drivers will be offered a host of discounts – on things like leasing, charging, and maintenance – to encourage them to make the jump to an EV. The vehicles will hit the streets first in Europe and Latin America, with Canada, Australia, New Zealand, and the Middle East further down the road.
The deal comes as political leaders in the United States and Europe scramble to stem the flow of low-cost Chinese EVs over worries that they will outcompete Western manufacturers. In May, the Biden administration announced that it would impose a 100% tariff on Chinese EVs, and European lawmakers imposed their own tariff (albeit smaller) on the cars in July.
THE KICKER
$120 billion — that’s the total cost of natural disasters in the first half of 2024, according to German insurance company Munich Re. It’s a slight decrease from the same period last year, but still well above the average for the past three decades.
