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Welcome to Energy Source – coming to you today from sweltering New Orleans.
I’m in town for the annual conference of the American Clean Power Association, the largest green confab in the United States, dubbed by one executive “Coachella clean energy”.
The gathering has never been bigger – with more than 8,000 attendees descending on the city, from home-equipment makers and clean-tech bros to big renewable energy developers and utility colossi. With capital flowing into the sector at an unprecedented rate in the wake of the Cut Inflation Act, the inflated size of the event comes as no surprise. To paraphrase Kermit the Frog, it’s never been easier to be green.
But the clean energy industry is no longer the preserve of well-meaning environmentalists. Today, Big Green is big business. And the industry came to town with a lot of gripes and demands.
Meanwhile, on the other side of the world, a spat is unfolding over the role of Sultan al-Jaber, head of the UAE’s state-owned oil group, as chairman of the COP28 climate conference in the United Arab Emirates. ‘UN. A host of US and EU lawmakers want him out. My colleagues Aime and Camilla have the latest.
In today’s newsletter, I dive into some of the major themes that emerged from the ACP conference. In Data Drill, Derek looks back on hydrocarbons and provides insight into the biggest private drillers in the United States – a shopping list, perhaps, for Big Oil in search of stocks.
Thanks for reading – Myles
Key Themes from Go Green at NOLA
The IRA’s cleantech supercharge is on
John Podesta – the man tasked by the President with implementing the Green Revolution – took to the stage at the opening of the conference to proclaim “there has never been a better time for clean energy in America” .
“Almost every day there is news of another new investment in clean energy,” he said to cheers from the crowd.
He’s not wrong. This week, Enel announced it had chosen Oklahoma for a billion-dollar solar panel manufacturing plant, while GE announced the massive construction of a wind turbine parts assembly line in Schenectady.
More than $100 billion in green investments have been announced since the IRA was passed nine months ago, as tax credits spanning a 10-year horizon unleash a flood of capital.
“It’s extraordinarily exciting to think about the growth you can plan for over a decade,” said Craig Cornelius, chief executive of Clearway Energy, one of the nation’s largest developers. “We haven’t been able to do that in the history of [this industry].”
The praise for the IRA was exuberant. But in panel discussions and conversations on the sidelines of the conference, discussions quickly turned to the headwinds holding the industry back.
But it takes too long to build things
The first of the complaints concerned the time required to bring the projects to fruition.
The plethora of approvals needed at the local, state and federal levels, from a host of different bodies and agencies, means it can take more than a decade to get projects through.
This is true not only for large wind and solar developments, which require permits from agencies ranging from the U.S. Fish and Wildlife Service to the Army Corps of Engineers, as well as green lights at the state and county levels, but especially c It’s a problem for the transmission lines needed to send electrons across the country.
“There is a fundamental question about this nation’s ability to build great things quickly,” said CPA leader Jason Grumet. “We have particular issues with what we call linear infrastructure – anything that has to cross multiple jurisdictions – is so much more difficult because you literally have to have every process aligned at the perfect moment.”
Developers also lamented the long queues to connect projects to the network, as regional network operators are overwhelmed with applications. The backlog is holding back investment.
Various bills aimed at streamlining the licensing process have been launched in Congress. But none has yet acquired sufficient political influence. There is hope that there can be a bipartisan agreement on a licensing reform package before the end of the year. Without this, participants said, the goals of the ERI will ultimately not be realized.
“We have to do better and we can do better and we have to do better if we really want to capitalize on the potential of this industry – especially with this bill that was recently passed,” said David Hardy, developer’s US lead. Orsted wind farm.
And it’s too hard to get parts
Then there’s the supply chain issue – a particular bone of contention for the solar industry.
The icy relationship between the United States and China is a constant headache, given that the latter is responsible for manufacturing the vast majority of wafers and solar modules.
Heavy U.S. anti-dumping tariffs on Chinese parts are set to be extended in many cases to parts from Southeast Asia after a Commerce Department investigation found companies were using this as a back door. (The White House has frozen any such extension until next year).
But separate rules prohibiting imports linked to forced labor have led to parts being seized by customs officials for long periods while their providence is investigated.
The IRA has provided grants to establish a national solar parts supply chain. But weaning the industry off its reliance on China will take time.
“People will move these factories here because of the incentives,” said Leo Moreno, president of AES Clean Energy, a leading clean energy developer. “They will move these wafer, cell and module factories to the United States, but it will take years.”
“Between now and when these facilities come online, the supply chain is still constrained. There are still several vendors who cannot bring products into the United States.”
Of the solar developments that were due to come online in the United States last year, 40% were delayed, according to the ACP. The industry fears a precipice when tariffs are extended next year before a national industry has taken hold.
Yet ‘Big Green’ has arrived
Yet between the beers and good timesthe conference was underpinned by a sense that the clean energy industry was no longer just for the ride.
A ragtag group of activists and benefactors, it was not. The industry is now organized and a force to be reckoned with in Washington. This month, the CPA even announced that it had hired Frank Macchiarola from his role as a champion of fossil fuel deregulation at the American Petroleum Institute.
Big Green has big demands on America’s political elite – he wants to be at the table. And he has big plans to make a lot of money.
ACP’s Grumet said: “I think it’s fair to say that over the past 20 years the people who have been the most important – the people who, in some ways, have been the most successful – have been the female fighters. .”
“Over the next 20 years, the most successful people will be builders, repairers and developers.”
For public companies looking for growth, Enverus’ new catalog of the 100 largest private oil and gas producers is practically a target list of mergers and acquisitions.
That’s because compared to their public rivals, private equity-backed companies face less scrutiny of their environmental performance and don’t face the same pressure from Wall Street to withhold spending. . Many are also secret family fiefdoms. And they’ve increased production — and cash flow — in recent months to incentivize a buyout.
And they grew. The data supporting the list below shows that the top 100 U.S. private oil companies produce about 2.4 million barrels per day, or about 20% of the country’s total and not far off the power plant’s output. of OPEC, Kuwait. They also pump about a third of the United States’ total natural gas production.
Continental Resources, which shale pioneer Harold Hamm privatized last year, is the largest private oil producer in the United States, pumping 280,000 bpd. It is also a natural gas plant. The second and third places are held by Permian producers Mewbourne Oil and Endeavor Energy – names little known beyond West Texas. Collectively, the top five produce more oil than the UK.
Energy Source is written and edited by Derek Brower, Myles McCormick, Justin Jacobs, Amanda Chu and Emily Goldberg. contact us at firstname.lastname@example.org and follow us on Twitter at @FTEnergy. Find previous editions of the newsletter here.
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