The G7 Want to Ditch Russian Uranium

Nuclear powers within the Group of Seven nations have committed to ejecting Russia from global nuclear supply chains. The countries aim to end the reign of Russia's state-owned nuclear giant, Rosatom, which has remained the world's biggest and best exporter of reactors and fuel.

The US and its European allies have been considering sanctions targeting Russia's nuclear sector for over a year, but have struggled to strike an agreement. However, the commitment has now taken shape at a nuclear-industry conference that convened on the sidelines of the G-7 meeting in Japan.

“This agreement will be used as the basis for pushing Putin out of the nuclear fuel market entirely, and doing so as quickly as possible,” said UK Energy Secretary Grant Shapps.

But if America wants to keep up with Rosatom, it will have to revamp its nuclear regulatory framework. “Rosatom isn’t handicapped by non-proliferation rules imposed by the US Department of Energy,” reports Bloomberg. “In India, which has been under Western trade restrictions since it tested a nuclear weapon in 1974, Russia supplies nuclear fuel and is building two reactors scheduled to open in 2025. In China last year, Rosatom provided more than $375 million worth of fuel for a reactor that the US Department of Defense is concerned could bolster Beijing’s nuclear-weapons stockpile.”

Chinese Coal Demand Rises With EVs

ANZ Group analysts have stated that China may have to rely more on coal to keep grids stable. The country is concerned about power shortages and increasing demand for electricity, including demand from electric vehicles.

“As China’s electricity demand is set to increase, some areas of the country could face renewed power shortages at peak demand times this summer, Chinese officials said last week,” reports Oilprice.com. “The maximum power load could hit 1,360 gigawatts (GW) in the summer, which could lead to shortages in some regions, Liang Changxin, a spokesman for the National Energy Administration (NEA).”

While China is investing in renewable energy sources, it is still heavily reliant on coal-fired power plants to support its economic growth and meet its energy demands. In fact, China’s renewables build out has spurred coal on. Why?

A significant portion of China's new energy generation capacity is not connected to the local grid, meaning it cannot replace existing sources of energy. The majority of China's wind and solar fleets are located in less populated, less economically developed regions in the west, which have lower electricity demand. To transmit renewable energy to the more denser, economically developed eastern coastal provinces, it is bundled with coal power and sent through dedicated ultra-high-voltage (UHV) transmission lines.

The most recent Five Year Plan requires renewables to account for at least 50% of the "hydro, wind, solar and coal" mix; even with a coal power contribution of 70% through other transmission lines, China may still hit its target thanks to the existence of some hydropower-only transmission lines providing 100% renewable electricity.

“Those arrangements meant investment in renewables triggered a net expansion in coal power; in other words, without that wind and solar investment, the associated coal power construction and generation would not have happened. The two are complementary,” reports China Discussion. “Records for existing transmission lines[…]confirm this: wind and solar accounts for 20–40% of power sent by most cross-regional transmission lines. A new line planned to run from Hami in Xinjiang to Chongqing will come with 10 GW of renewable generation and 4–6 GW of coal power.”

Black Mountain Seeks Battery Unit Buyers

Black Mountain Energy Storage (BMES), a division of energy and natural resources company Black Mountain, wants to sell its power-storage projects division. The company hopes to cash in on the increasing demand for battery installations used to stabilize electricity grids.

“Austin-based Black Mountain Energy Storage has a pipeline of 32 projects projected to produce 6.4 gigawatts of battery power when completed,” reports Bloomberg. “The projects are being built mostly in Texas, but also include some sites in the Midwest and East Coast.”

The asset could be valued at around $300m. Black Mountain Energy Storage purchases land, obtains permits, and conducts preliminary project planning before selling the sites to investors, such as infrastructure funds, who then finish the development.

Despite a nearly 30% increase in storage project costs in 2022 due to higher commodity prices, BloombergNEF predicts that the installed global energy storage capacity for 2023 will be nearly double that of 2022. By the end of the decade, annual installations are projected to be three times higher than the current year.

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Conversation Starters

1. The Department of Energy is backing up the Brinks truck to Sunnova HQ. “Sunnova Energy International said on Thursday the U.S. Department of Energy (DOE) will provide the solar company up to $3 billion in a partial loan guarantee to expand clean energy access,” reports Reuters. “Shares of the company rose 2.3% to $16.20 in premarket trading. The company last month said it was in discussion with the DOE regarding the potential issuance of an indirect guarantee of 90% for up to $3.3 billion in solar loans.”

2. A heatwave is ripping across Asia, sparking fires and straining grids.
   “Bangladesh’s garment factories, a key source of foreign exchange for the South Asian nation, face the heightened risk of fires as summer temperatures soar, an industry lobby group warned,” Bloomberg reports. “The Bangladesh Garment Manufacturers and Exporters Association, the main industry body in the world’s No. 2 exporter after China, issued 11 instructions to its 4,500 members over the weekend. These include powering off all machinery at night, including lights, fans, electric irons and boilers. Factories were asked to keep the entry and exits free for movement and ensure all gates and passages are open during working hours.”

3. Pakistan 🤝 Russia. “Pakistan has placed its first order for discounted Russian crude oil under a deal struck between Islamabad and Moscow, the country's petroleum minister said, with one cargo to dock at the port of Karachi in May,” reports Reuters. “Pakistan's purchase gives Russia a new outlet, adding to Moscow's growing sales to India and China, as it redirects oil from western markets because of the Ukraine conflict. As a long-standing Western ally and the arch-rival of neighbouring India, which historically is closer to Moscow, analysts say the crude deal would have been difficult for Pakistan to accept, but its financing needs are great.”

Crom’s Blessing