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  • Domestic Solar Industry: DPA Money Not Enough // European Greens Fight EU Gas Projects // EIA: June Short-Term Energy Outlook

Domestic Solar Industry: DPA Money Not Enough // European Greens Fight EU Gas Projects // EIA: June Short-Term Energy Outlook

Domestic Solar Industry: DPA Money Not Enough

The split in the solar industry deepens. Shills for Chinese solar like the Solar Energy Industries Association have been celebrating their right to buy slave-labor-made solar panels unencumbered as protected by Biden's recent invocation of the Defense Production Act. But domestic solar manufacturers feel hung out to dry. Biden's "plan to kick-start domestic solar-panel manufacturing depends on a federal fund with less than a half-billion dollars that’s already being tapped to pay for products including military drones and baby formula," reports Bloomberg.

Nick Iacovella, a spokesman for the pro-manufacturing Coalition for a Prosperous America said, "Even if they spent all of that on solar panels, it’s a pittance."

The DPA seems like it will succeed more in entrenching our dependence on China for renewable energy than scaling up our manufacturing muscle. Timothy Brightbill, a lawyer for domestic solar companies said, "[I]t is bad law and it is extremely bad, short-sighted policy, because it only makes us more dependent on Chinese-owned solar companies."

Meanwhile, the money allocated for domestic solar does not appear to be enough to make a real difference, especially if American manufacturers still have to compete with Asian firms. "A new manufacturing plant with the capacity to churn out 1.4 gigawatts of modules each year could cost around $170 million, according to industry estimates and the coalition," reports Bloomberg. "That would hardly compete with the 24 gigawatts the US imported last year."

In a recent research note, Bank of America called Biden's push for domestic solar manufacturing more a show of rhetoric than anything else. “Feedback from various parties across the sector suggests it’s not a silver bullet," BoA said.

European Greens Fight EU Gas Projects

Friends of the Earth Europe and many other environmental groups in Europe announced that they are "challenging the European Union over its support for 30 natural gas projects under a directive earlier this year to consider certain gas projects as contributing to accelerating the energy transition," reports Oilprice.com.

Earlier this year, the EU updated its green energy taxonomy to include some natural gas projects to help with the "energy transition." Gas projects are considered green if they help move the EU away from coal and towards renewables. Renewables are intermittent and non-disptachable so they need support from natural gas, which can ramp up quickly to make up for their shortcomings.

At the same time, Europe is looking for different ways to get themselves off of Russian gas.

The greens, meanwhile, think energy is sinful in and of itself, especially fossil fuel energy, so they aren't happy.

“This list [of gas projects] amounts to a VIP pass for fossil gas in Europe, when we should be talking about its phase-out,” ClientEarth lawyer Guillermo Ramo said.

They want energy poverty and they're trying to get it.

EIA: June Short-Term Energy Outlook

The EIA has just released its new Short Term-Energy Outlook. Here are some highlights.

First off, the EIA lets readers know that this month's SEO should be taken with an extra grain of salt due to the chaos kicked up in the energy markets from the Ukraine War.

"We expect the Brent price will average $108/b in the second half of 2022 (2H22) and then fall to $97/b in 2023. Current oil inventory levels are low, which amplifies the potential for oil price volatility," the agency says. But price outcomes will depend on the situation with Russia.

The EIA predicts that "gasoline wholesale margins (the difference between the wholesale gasoline price and Brent crude oil price) to fall from $1.17/gal in May to average 81 cents/gal in 3Q22, and we expect retail gasoline prices to average $4.27/gal in 3Q22. Diesel wholesale margins in the forecast fall from $1.53/gal in May to $1.07/gal in 3Q22, and retail diesel averages $4.78/gal in 3Q22."

But they expect natural gas prices to rise "to average $8.69 per million British thermal units (MMBtu) in 3Q22, up from an average of $8.13/MMBtu in May." They cite three reasons for this:

  • "Natural gas inventories that are below the five-year average"

  • "Steady demand for U.S. liquefied natural gas (LNG) exports"

  • "High demand for natural gas from the electric power sector given limited opportunities for natural gas-to-coal switching"

Renewables will make up most of the new capacity added to the grid.

  • "We expect renewable energy will provide 22% of U.S. generation in 2022 and 24% in 2023, up from a share of 20% last year."

  • Solar additions: "20 gigawatts (GW) for 2022 and 22 GW for 2023."

  • Wind additions: "11 GW in 2022 and 5 GW in 2023."

Coal, meanwhile, will drop from 23% of US electricity production to 21% this year and 20% in 2023.

But electricity prices are going to stay high in all sectors. They predict that "the U.S. residential electricity price will average 14.6 cents/kWh between June and August 2022, up 4.8% from summer 2021. [...] We expect the summer increases in retail residential electricity prices will range from an increase of 2.4% in the West South Central region to a 16.1% increase in New England."

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Conversation Starters

  • A new report from Fitch Solutions Country Risk & Industry indicates that EU sanctions on Russian energy will perpetuate inflationary pressure in the market.

  • About 11% of Norway's offshore oil workers are threatening to strike. "Norway's offshore workers are hoping to secure pay increases that are more than inflation, as well as other contract changes, although the details of their asks have yet to be revealed," reports Oilprice.com.

  • After OPEC+'s decision to speed up its production hikes, Asian refiners are expected to increase their purchases from the Middle East.

Crom's Blessing

December 20, 1951, Argonne's EBR was used to generate electrical power. This was the first known production of electricity using heat from nuclear fission.