In a groundbreaking leap towards sustainability, Plus Power’s Kapolei Energy Storage (KES) facility in Hawaii has commenced commercial operations. As Hawaii bids farewell to its last coal plant, KES takes center stage, offering an innovative solution to maintain grid reliability amid the transition from fossil fuels to renewable energy.

The plant is considered as the most advanced grid-scale battery energy storage system (BESS) in the world. BESS are rechargeable batteries that can store energy from various sources and discharge it when necessary. The system is composed of one or more batteries often used to balance the traditional grid, provide backup power, and enhance grid stability. 

The project, developed and owned by Houston-based Plus Power, began operations before Christmas. It features 158 Tesla Megapacks with a total capacity of 185 megawatts of instantaneous discharge. This capacity matches the power output of the retired coal plant but offers a faster response time of 250 milliseconds.

RELATED: Tesla’s $413M Power Move: Megapacks to Revolutionize Massachusetts’ Energy Grid

Hawaii’s Clean Energy Revolution

The state of Hawaii decided to shut down its last coal plant on September 1, 2022. This decision marked a significant step in the state’s commitment to achieving 100% renewable energy for electricity by 2045. 

The challenge then arose of ensuring grid reliability with a mix of renewable sources subject to weather fluctuations. 

The Kapolei Energy Storage system addresses this challenge by absorbing excess power from the grid during renewable generation peaks and delivering it during high-demand evening hours.

Brandon Keefe, Executive Chairman of Plus Power, expressed pride in contributing to Hawaii’s renewable energy goals and enabling the transition. Keefe particularly noted that:

“This is a landmark milestone in the transition to clean energy… This project is a postcard from the future — batteries will soon be providing these services, at scale, on the mainland.” 

Despite facing construction setbacks, including disruptions caused by the COVID-19 pandemic and the project’s remote location, KES is now operational. It outpaces several other renewable energy projects in replacing the retired coal plant’s capacity.

The gigantic battery project aligns with Hawaii’s commitment to becoming a leader in clean energy adoption and grid transformation.

Beyond Energy: Kapolei’s Multifaceted Grid Stabilization

The Kapolei Energy Storage system operates differently from traditional coal plants, requiring a new framework to replicate essential grid functions. While the old coal plant provided energy, capacity, and grid services, the battery directly replaces the latter two aspects. 

Kapolei’s 185 megawatts of instantaneous discharge capacity matches the coal plant’s power output. Plus, it offers grid services, such as synthetic inertia and fast frequency response, to stabilize the grid in real time.

Although the battery’s 565 megawatt-hours of storage cannot directly replace the coal plant’s energy production, it collaborates with solar energy sources to enhance clean renewable energy integration into the grid. 

KES enables Hawaiian Electric to reduce the curtailment of renewables by an estimated 69% for the first 5 years. This minimizes the waste of surplus clean electricity. 

Additionally, the battery provides black-start capability, allowing it to restart the grid in case of a complete outage due to disaster.

According to Keefe, Kapolei is considered the most advanced battery energy storage facility globally because of its multifaceted capabilities. These include capacity, grid services, and black-start functionality. He further added that since the project connects to 3 other power plants, the battery ​“can be AAA to jump-start those other plants”.

Lithium Powers the Clean Energy Transition

Lithium-ion batteries are seen to be the solution for helping the world to transition to clean, renewable energy sources. This is crucial to meet the critical 1.5 degrees Celsius scenario by 2050, otherwise known as the Net Zero. 

Companies and governments are turning to battery energy storage systems (BESS) to achieve their sustainability goals. Research suggests that the market for BESS in the U.S. alone will grow to over $15 billion in 2027. 

 

The surge in the use and future demand for renewable energy will further lead to global grid-scale BESS market growth. As per the International Energy Agency’s projections, renewables will account for over 90% of global electricity capacity expansion from 2022-2027. With that, growth seems to be quicker in locations where renewables are also expanding faster than average.

READ MORE: Global Renewable Energy to Break Records

Hawaii’s Kapolei Energy Storage system represents a groundbreaking model for a reliable clean-energy grid, addressing the challenges of transitioning from fossil-fueled plants to renewable sources. 

The KES battery project uses 158 Tesla Megapack 2 XL lithium iron phosphate batteries, each roughly the size of a shipping container. 

In comparison to California’s grid battery fleet, which constitutes 7.6% of the state’s grid capacity, Kapolei alone represents about 17% of Oahu’s peak capacity, highlighting its central role in maintaining grid stability. 

Looking ahead, Kapolei’s success underscores its significance in achieving U.S. climate goals by phasing out fossil fuels from the electric grid. As one of the first real-world instances of successfully transitioning grid functions, the model established by Kapolei provides valuable insights for scaling similar grid services nationwide, offering a blueprint for the future of sustainable grid solutions.

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India is confronting a substantial “funding gap” of over $10 trillion to meet its commitment to achieving net zero emissions by 2070, according to Finance Minister Nirmala Sitharaman. 

The minister stressed the importance of establishing a carbon credit market at Gujarat’s GIFT City’s International Financial Services Centre (IFSC). The goal is to address the financial challenges associated with transitioning to green technologies.  

Gujarat International Finance Tec-City (GIFT City) is a central business district currently under construction in the Gandhinagar district of Gujarat, India. Positioned as the country’s first operational greenfield smart city and international financial services center, GIFT City is a significant greenfield project.

Sitharaman further emphasized GIFT City’s role as a gateway for India’s development, projecting a GDP exceeding $30 trillion by 2047. The IFSC, she stated, should evolve into a diverse fintech laboratory to support the country’s economic advancement. 

The Gateway to India’s Net Zero Goal

Current regulations prevent Indian companies from directly listing overseas. Instead, they can access foreign equity markets through depository receipts like American Depository Receipts (ADRs) and Global Depository Receipts (GDRs) only after completing an initial public offering (IPO) in India. 

Sitharaman announced that Indian companies would be able to access global capital by directly listing on exchanges at the IFSC. This will provide them a platform for raising funds for green initiatives. 

Prime Minister Narendra Modi suggested creating a platform for trading green credits, facilitating the sale of carbon credits. These credits are usually from initiatives such as tree planting. 

The PM specifically said that:

“According to certain estimates, India will need at least $10 trillion to achieve its net zero targets by 2070. This will need to be financed through global sources. Therefore, we must make IFSC a global hub for sustainable finance.”

Carbon markets play a crucial role in enabling businesses to trade carbon credits, aiding in achieving their emissions reduction targets. These markets allow carbon credits to be sold and bought by businesses and other entities. Voluntary carbon markets trade carbon credit offsets, which demand poised to grow rapidly. 

Carbon credits are the underlying commodities that enable the buyer to retire a certain amount of greenhouse gas emissions and help them meet their targeted emissions cut. One carbon credit represents one tonne of carbon removal or reduction.

These carbon credit markets are gaining traction, as an increasing number of global firms are committing to net zero targets. These entities also play a pivotal role in curbing India’s emissions. 

The super-emitter revealed its long-term strategy to achieve net zero by 2070 at COP27.

READ MORE: India Unveils Long-Term Strategy to Reach Net Zero at COP27

The Rise of Carbon Trading in India

The world’s third largest emitter has made ambitious NDC commitments. Some of them are definitive and measurable while some emission reduction plans still lack quantifiable aspects. 

India’s updated NDC include two major climate goals:

Reduce emissions intensity of its GDP by 45% from 2005 levels by 2030, and
Achieve 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030. 

The Paris Agreement recognizes the principle of common but differentiated responsibilities, considering nations’ capabilities and bandwidth for emissions reduction. 

To address this, key data should be made public, including the GDP projection for 2030, growth drivers under different energy scenarios, and the methodology used. This information will allow the calculation of carbon intensity of GDP under various energy mix scenarios.

To bridge the gap between estimated emission intensity and NDC commitment numbers, sector-specific GHG emission targets can be established. Sectors such as steel, aluminum, cement, and thermal power, known for higher emissions, could have quantifiable targets based on global best practices, adapted to domestic capabilities. 

The projected reduction in emissions, assuming these targets are met, should then be considered when estimating the total emission intensity reduction by 2030.

Earlier this month, Gujarat and its forest department, has signed various Memorandums of Understanding (MoUs) worth over $266 million of carbon credits from planting mangroves. Agreements have also been inked for carbon credits through agroforestry. 

READ MORE: Indian State Inks Three Deals Worth $266M in Carbon Credits

Unlocking Global Capital Via Carbon Credits

The Indian Government has taken a positive step by notifying the Carbon Credit Trading Scheme (CCTS) under the Energy Conservation Act, 2001. The CCTS outlines GHG emission intensity reduction targets for entities in specific sectors. It aims to establish a regulated domestic carbon credit trading market with transparent price discovery. 

The Bureau of Energy Efficiency (BEE) is responsible for administering the scheme and setting targets for obligated entities, while the Central Electricity Regulatory Commission (CERC) regulates carbon credit trading.

Now, Indian businesses find themselves on the verge of a lucrative venture by entering the thriving global carbon trading markets. 

As India grapples with its funding gap for net zero ambitions, the emergence of GIFT City and innovative financial strategies offer a glimmer of hope. From carbon credit agreements to direct listings, the nation is poised for a transformative journey towards a sustainable future.

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In 2024, the Carbon Capture, Utilization, and Storage (CCUS) landscape is poised for significant developments, with key themes and trends shaping the industry. Wood Mackenzie had some predictions for the year as laid out in their report, expecting storage capacity to grow rapidly.

CCUS has long been a crucial energy transition topic, playing an important role in the global net zero 2050 scenario. The research company predicted that CCUS capacity will increase from 80 metric ton per annum (Mtpa) to over 500 Mtpa.

Here are the major takeaways from Wood Mackenzie 2024 CCUS outlook report.

Unprecedented Number of CCUS Project Final Investment Decisions (FIDs)

The global CCUS pipeline would grow, with 119 projects aiming for FID in 2024, representing the largest number to date. These projects collectively target 115 Mtpa capture capacity and 240 Mtpa storage capacity. The map below shows the CCUS project hotspots and each region’s risked capacity.

Those projects reaching FID status this year are primarily hubs in North America and Europe. As illustrated below, the increase in projects’ capacity estimated this year more than doubled compared to last year. Over 60% is in North America.

CO2 Storage Licensing Momentum 

Licensing activity for CO2 storage will continue to support the increase in project capacity. New licensing rounds are anticipated in the US and the UK. Wood Mackenzie expects majors like Chevron, Equinor and TotalEnergies to bid in Texas. 

Over in Denmark, the country opened applications for CCS licenses in 5 onshore areas in December last year. Australia also opened 10 new blocks for the 2023 GHG acreage release, where Santos, Woodside and INPEX are likely to increase current acreage.

Meanwhile, Southeast Asia may witness the formal opening of CO2 storage license areas in Malaysia and Indonesia. Petros is the sole company which received 2 CO2 storage licenses in Malaysia.

Moreover, regulatory changes are expected to expedite project timelines, leading to increased applications for CO2 storage wells and drilling.

Advancements in Direct Air Capture (DAC) and New Capture Technologies

In 2024, there will be a focus on achieving at-scale readiness for DAC. Direct air capture is one of the go-to capture technologies available today. 

Below are the expected developments in DAC this year per Wood Mac outlook:

Stratos, the world’s first global-scale DAC plant with a capacity of 0.5 Mtpa, is expected to reach or near the end of construction. 
Climeworks‘ Mammoth DAC project would start operations in the second half of 2024. 
The US Department of Energy would announce additional DAC hubs and finalize funding amounts. 
Startups may develop pilots featuring newer technologies, reaching technology readiness level 6. 

READ MORE: US to Invest $1.2B in DAC Projects Led by Climeworks and Oxy

Despite these advancements, challenges related to cost and execution risks remain. The research firm will continue to report how new DAC projects can help improve operational efficiency and reduce costs.

Introduction of New Capture Technologies and Industry Involvement

2024 would see project announcements, FIDs, and startups involving new capture technologies and industries. Notable projects, such as Svante’s Veloxotherm Technology, could play a game-changing role.

Projects for commission this year include carbon capture technologies developed by Aker Carbon Capture, LanzaTech, and Honeywell UOP. They’re located in Norway, South Africa, and the US, respectively. 

Lastly, the report also covers the evolving regulatory framework, highlighting the development of regulations. 

It further explores the potential impact of global elections in 2024 on CCUS policies, particularly the U.S. elections. The full report provides in-depth insights into these predictions and trends shaping the CCUS landscape.

In a separate analysis last year, Wood Mackenzie said that to reach global net zero goals by 2050, carbon capture has to hit 7 billion tonnes of CO2 a year.

RELATED: Carbon Capture to Urgently Scale to 7 Billion Tonnes/Year to Hit Net Zero

With an anticipated surge in Final Investment Decisions (FIDs), growing CO2 storage licensing momentum, and advancements in Direct Air Capture (DAC) and new capture technologies, 2024 unfolds as a pivotal chapter in the journey towards global net zero by 2050. The industry is poised for unprecedented growth, innovation, and strategic partnerships, positioning CCUS as a key player in the energy transition landscape.

The post 2024 Would be a Strong Year for CCUS, Says Wood Mackenzie appeared first on Carbon Credits.

Spot uranium prices recently reached a peak not witnessed since 2007, standing strong at $101 per pound, per Numerico data.

This upswing signifies a constrained nuclear fuel market, growing expectations for future demand, and the imperative for additional mine restarts and new constructions, according to experts in the uranium industry. 

Uranium is Powering Up the Future

The surge in uranium prices aligns with an increased focus on nuclear energy in global climate change mitigation efforts. Furthermore, rising uranium prices have spurred the revival of uranium mining operations previously scaled back following the 2011 Fukushima disaster. 

Analysts and industry players anticipate more mine restarts in 2024. Plus, new builds are getting more attractive due to rising prices and anticipated supply deficits over the coming years. 

The spot price of uranium surging $100/pound was more than a 100% increase from the 2023 low. It is also a whopping >300% rise from the 2020 low. 

Uranium Spot Price USD Per Pound

Source: Numerico.com

The 16-year high uranium price, cracking at $101/pound since 2007, is driven by several factors.  

For one, shortage in uranium supplies since the Fukushima incident drove prices upward. 

Moreover, a U.S. bill seeking to ban nuclear fuel imports from Russia further contributes to the prices’ upward trajectory. The bill was called “NO RUSSIA” – National Opportunity to Restore Uranium Supply Services In America Act of 2022. Put simply, Russia will be out of the U.S. uranium market. 

RELATED: BREAKING: The US House Passed a Bill that just Repatriated the Nuclear Cycle from Russia’s Control

Once the bill passes the Senate, near-term demand for uranium will further surge upward. 

What Causes the Unprecedented Rise of Uranium?

But what are the market experts saying about this price breakthrough?

According to a uranium market analyst, Marin Katusa, the 16-year high uranium price reflects the “real” cost of bringing on previously built and permitted facilities to replace uranium exported from Russia and Niger.

Marin also noted that with the US banning Russian imports, the logical investment is exposure to permitted, built out production in the US. The banned imports include Kazakh production owing to Russian enrichment. 

Uranium prices have to increase more, Marin further noted, to incentivize new projects like the case with the Athabasca Basin. Building a new mine in North America would need even higher prices than $100.

Highlighting the growing demands for clean energy from data centers, which require more power for new technologies, SMR technologies offer a promising solution. 

Small modular reactor development, with under 300 MWe capacity, is taking place in Western countries with increasing private investment. North America, in particular, would be the epicenter of this rapidly growing nuclear resurgence. 

Marin also highlighted Japan’s decision to bring on the world’s largest nuclear power plant and its pro-nuclear stance since Fukushima. This and the positive outlook for nuclear technology globally coming out of the recent COP28 climate summit will create new demand for long term supply of uranium in politically stable jurisdictions. After all, Marin said that:

“…no nation wants to experience what France is experiencing in Niger with their uranium supply being completely cut off.”

For Miss America 2023, Grace Stanke, who happens to be a student of nuclear engineering, nuclear energy already plays a big role in the lives of many Americans. As a nuclear champion, Grace particularly noted that:

“From curing my dad’s cancer twice, to powering 20% of America, to helping with agriculture which is so important in my home state of Wisconsin… it really does feel like nuclear does it all.”

Beyond the Price: Uranium’s Ascent and Nuclear Energy Resurgence

As the world strives to reduce carbon emissions, zero-carbon nuclear energy is crucial. This is expected to make the demand for uranium explode much more. 

In effect, escalating spot uranium prices may also exert upward pressure on contract prices as sellers seek higher returns. While higher prices may not dissuade utilities for short-term needs, climbing contract prices, covering larger quantities of uranium, could have a more substantial impact. 

Some utilities are already experiencing “sticker shock”, as seen below in the S&P Global presentation. Experts also anticipate a widespread increase in nuclear fuel costs in the coming years due to rising market prices. 

Notably, higher uranium prices would also drive further restarts in the near term, with industry giants like NAZ Kazatomprom JSC and Cameco restarting idle capacity. Canada-based Cameco will add capacity as needed under long-term contract pricing. 

Meanwhile, Kazakhstan-based Kazatomprom, the largest uranium producer, plans to return to full production capacity by 2025. However, given the challenges that the company faces related to the availability of sulphuric acid (a critical operating material), they expect adjustments to their 2024 production plans. They also anticipate delays in finishing construction works at their newly developed deposits. These may affect Kazatomprom’s 2025 production plan, subject to considerable supply chain risks. 

For other companies like GoldMining Inc (GLDG), this price increase is great news for their high-value assets. GLDG is one among the companies that’s making waves in the sector. 

The surge in uranium prices signifies a resurgence in the nuclear energy sector. Driven by geopolitical shifts, legislative actions, and a growing demand for clean energy, the uranium market is poised for unprecedented growth.

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