Some nuclear news

PLUS: Aramco's $500mm LNG deal, Japan-Malaysia CCS, Milestone & Trace CCS, bp TX solar, €1 bn infra fund

Author

Sunya Scoop
September 28, 2023

Good Morning. This is the Sunya Scoop. The newsletter that takes energy transition news and turns it into an easy-to-read email for you.

Warning. Today’s edition is packed. And by packed, we mean long.

Here’s what we have for you today:

  • Japan will discuss carbon storage initiatives with Malaysia, aiming to begin sending the first shipment of carbon dioxide emissions from Japanese power plants and industries to Malaysia by 2028.

  • Japan's Minister for Economy, Trade and Industry, Yasutoshi Nishimura, is expected to meet with executives from Malaysia's state-run energy group Petronas to explore carbon capture and storage (CCS) projects.

  • The proposal involves liquefying CO2 emissions in Japan and transporting them by ship to storage sites in Malaysia, potentially using low-impact fuels like hydrogen or ammonia to power the vessels.

  • If successful, this initiative would mark Asia's first international CO2 shipment and could set a precedent for regional carbon transportation rules.

  • Japan aims to achieve net-zero greenhouse gas emissions by 2050 and plans to store 120 million to 240 million tonnes of CO2 annually underground, equivalent to 10% to 20% of current emissions.

  • Malaysia offers potential suitable storage sites, which could help Japan diversify its carbon storage options.

  • Implementing CCS technology will require substantial investment, with some funding coming from "green transformation" transition bonds.

  • The widespread use of carbon capture technology faces challenges related to attracting private-sector investment and reducing costs, although Europe has seen pioneering cross-border CCS projects in countries like Norway and Denmark.

  • Trace Carbon Solutions, LLC (Trace) and Molpus Woodlands Group (Molpus) have signed a servitude agreement, granting Trace exclusive rights to develop and operate the Evergreen Sequestration Hub (Evergreen Hub) on approximately 20,000 acres in Louisiana's Calcasieu and Beauregard parishes.

  • The Evergreen Hub aims to permanently sequester industrial carbon dioxide (CO2) in underground geologic formations while Molpus continues to manage the aboveground acreage as a sustainably managed working forest.

  • Trace seeks to develop low-cost carbon capture, transportation, and sequestration (CCS) assets across North America, with the Evergreen Hub projected to possess a total sequestration capacity of over 250 million metric tons of CO2.

  • The strategic location of the Evergreen Hub places it near significant industrial emissions sources in Southwest Louisiana and Southeast Texas, with an estimated 65 million metric tons per year of existing stationary CO2 emissions located within 50 miles.

  • The partnership between Trace and Molpus is seen as an important step in providing decarbonization solutions for industrial carbon emissions in the region, covering the three main areas of the CCS value chain: capture, transportation, and sequestration.

  • Milestone Carbon, a subsidiary of Milestone Environmental Services, is developing a CO2 sequestration hub in the southwestern Midland Basin.

  • The site covers parts of both Midland and Upton counties and aims to enable permanent geological storage of carbon dioxide.

  • Milestone Carbon has acquired rights to over 10,000 acres of land and pore space in Upton and Midland counties for CO2 sequestration.

  • The company has received a Class II injection well permit from the Texas Railroad Commission, allowing for the sequestration of CO2 from local natural gas processors, with potential injection starting as early as 2025.

  • A Class VI injection well permit application has been submitted to the EPA, which would increase sequestration capacity and support decarbonization efforts in the Permian Basin.

  • Milestone Carbon estimates the hub's capacity to store approximately 30 million metric tons of CO2 over its life.

  • The hub aims to provide a low-cost solution for heavy industry and energy producers to reduce and offset emissions and create jobs related to CCS facility buildout and operation.

  • bp has initiated construction on the 187MWdc Peacock Solar project in San Patricio County, Texas.

  • The project will provide all its electricity output to Gulf Coast Growth Ventures (GCGV) under a long-term power purchase agreement.

  • Peacock will directly supply power to the GCGV complex, generating enough renewable energy annually to power 34,000 homes.

  • The project is expected to create ~300 jobs during construction and generate over $25 million in tax revenue over its first 25 years.

  • Peacock is part of bp's goal to invest in and build 50 gigawatts of renewable energy capacity by 2030.

  • Texas is the second-largest state for solar power, with over 40GW of capacity expected to be installed in the next five years.

  • The project aims to reduce emissions by more than 256,000 metric tons annually, equivalent to about 55,000 fuel-burning cars.

  • Planting native vegetation, improving habitat value, and practicing agrivoltaics are part of Peacock's sustainability efforts.

  • Lightsource bp, a global solar leader and bp's joint-venture partner, is developing and managing the project's construction.

  • PCL Construction, the main EPC contractor, will use ultra-low carbon solar panels and trackers from US-based manufacturers.

  • Peacock's electricity will partially power the GCGV plant and support emissions reduction efforts for a net-zero future.

  • Saudi Aramco is acquiring a strategic minority stake in liquefied natural gas (LNG) company MidOcean Energy for $500 million, with the option to increase the shareholding size.

  • MidOcean Energy is owned by U.S. investment firm EIG Partners, which previously led a consortium that purchased a 49% stake in Aramco's oil pipelines business in 2021.

  • Aramco's aim is to become a prominent global LNG player, and this investment supports that strategy.

  • The size of the stake in MidOcean Energy was not disclosed.

  • MidOcean Energy is currently involved in acquiring interests in four LNG projects in Australia as part of its plan to establish a global LNG business.

  • In October 2022, MidOcean agreed to purchase Tokyo Gas Co's stakes in four Australian LNG projects for $2.15 billion.

  • EIG had been seeking international investors, including those in the Middle East, for MidOcean Energy. This acquisition strengthens Aramco's relationship with EIG and aligns with Aramco's efforts to meet growing global demand for secure, accessible, and sustainable energy.

  • Aramco's purchase of the MidOcean stake is subject to regulatory approvals and other conditions.

  • EIG Chairman and Chief Executive Blair Thomas expressed that while the focus is initially on Australian transactions, the opportunity extends globally.

  • Europe will continue to depend on US fossil fuels for decades, aiming to reduce reliance on Russian natural gas and advance its renewables sector while ensuring energy security.

  • Ditte Juul Jørgensen, director-general for energy in the European Commission, stated that while the EU has the tools to manage winter energy crises, it will require American energy for the next couple of decades.

  • This reliance on US liquefied natural gas (LNG) is expected to persist past the 2030 timeframe, despite environmental concerns and climate goals.

  • The EU entered an agreement with the Biden administration to secure an additional 50 million cubic meters of US LNG annually until at least 2030.

  • The statement by Jørgensen is seen as a positive signal for US LNG developers and clears the path for European buyers to make long-term deals with US suppliers.

  • US LNG exports to the EU more than doubled in 2022, reducing Russian gas imports significantly.

  • While some European politicians and campaigners are concerned about expanding fossil fuel infrastructure, others emphasize the need to focus on reducing reliance on fossil fuels and promoting renewable energy.

  • Ireland, for instance, refused approval for the construction of a floating LNG import terminal due to concerns about increasing dependence on gas.

  • Nucor and fusion startup Helion Energy plan to develop a 500-megawatt fusion power plant at one of Nucor's U.S. steel mills by 2030.

  • Nucor is investing $35 million in Helion, backed by OpenAI CEO Sam Altman.

  • The partnership aims to address the steel industry's need for clean electricity to make greener products.

  • Fusion technology has the potential to provide abundant carbon-free power if harnessed successfully on Earth.

  • No company has yet achieved commercial fusion, but recent breakthroughs have spurred interest and investment in the field.

  • Nucor, a major electricity consumer, faces pressure from customers like GM and Trane Technologies to adopt greener steelmaking practices.

  • The fusion plant would be about 10 times the capacity of another facility Helion plans to build for Microsoft by 2028.

  • Nucor plans to buy power directly from Helion, potentially setting a blueprint for similar deals with fusion companies.

  • State and local regulations will influence the fusion plant's location, and local incentives and federal subsidies will be considered.

  • Nucor has also invested in conventional nuclear fission technology as part of its efforts to transition to cleaner energy sources.

  • Microsoft is exploring the use of next-generation nuclear reactors to power its data centers and AI.

  • A job listing for a principal program manager indicates that Microsoft is developing a nuclear energy strategy.

  • Data centers consume significant electricity, posing a challenge to Microsoft's climate goals.

  • Nuclear energy, though emissions-free, raises concerns about radioactive waste and uranium supply chains.

  • Microsoft appears to be focusing on small modular reactors (SMRs) for its nuclear energy strategy.

  • SMRs are touted as more cost-effective and easier to build compared to traditional large reactors.

  • Challenges include the need for highly enriched uranium fuel and long-term nuclear waste storage solutions.

  • Bill Gates, Microsoft co-founder, has been a proponent of nuclear energy.

  • The US Nuclear Regulatory Commission certified an SMR design in January, potentially revolutionizing nuclear energy.

  • Microsoft has not provided details on its nuclear plans or how it will address associated challenges.

  • The company's ties to TerraPower, an SMR developer founded by Gates, have been noted.

  • Microsoft has also invested in Helion, a company working on fusion power as a cleaner alternative to nuclear fission. Fusion power remains a long-term goal.

  • Microsoft's interest in nuclear aligns with its commitment to AI and sustainable energy solutions.

  • LyondellBasell has launched "+LC (Low Carbon) solutions," expanding its sustainable product offerings.

  • These solutions involve Intermediates and Derivatives (I&D) chemicals produced using an International Sustainability and Carbon Certification (ISCC) PLUS certified mass balance method.

  • +LC solutions are sourced from recycled and renewable feedstocks, offering a lower carbon footprint compared to fossil-based alternatives.

  • They are designed to help businesses achieve greenhouse gas (GHG) emissions reduction goals while maintaining high-quality applications.

  • The product range includes core I&D offerings like styrene monomers, ethylene, and propylene oxide (PO), with applications in various sectors.

  • Each +LC product comes with an ISCC+ mass balance certificate for traceability.

  • Product Carbon Footprint (PCF) data allows businesses to compare the carbon footprints of +LC solutions with traditional products.

  • The +LC solutions are currently available in Europe and the Americas, with plans for expansion into Asia in 2024.

  • They aim to preserve fossil resources and reduce GHG emissions from feedstock production, supporting sustainability objectives without compromising performance.

  • La Banque Postale, LBP AM, and CNP Assurances are launching a €1 billion impact infrastructure debt fund.

  • The fund aims to support energy transition projects in Europe that align with the Paris Agreement's goal of limiting global warming below 2°C.

  • It will have an investment capacity of €1 billion, contributed by CNP Assurances, to be deployed over three years.

  • The fund is classified under Article 8 of the Sustainable Finance Disclosure Regulation (SFDR) and will finance infrastructure projects contributing to climate change mitigation and decarbonization.

  • Target sectors include renewable energies, circular economy, clean transport, energy efficiency, and innovative areas like e-mobility, green hydrogen, and energy storage.

  • It positions La Banque Postale Group as a significant player in supporting French and European energy transition initiatives.

  • The fund will be managed by LBP AM, drawing on their experience in low-carbon infrastructure debt investment and impact measurement.

  • La Banque Postale's Asset and Project Finance teams will also contribute to project origination and structuring.

  • Indonesia has launched its government-backed carbon exchange, known as Indonesia Carbon Exchange or IDX Carbon, operated by the Indonesia Stock Exchange.

  • This exchange marks Indonesia's initial steps toward pricing carbon emissions and aims to facilitate carbon and emissions trading, as well as provide a platform for future environmental commodities.

  • IDX Carbon commenced its first trading day with a preliminary trade volume of 459,953 metric tons of CO2 equivalent (mtCO2e) and 27 transactions, with an initial trading price of IDR 69,600/mtCO2e ($4.50/mtCO2e).

  • The carbon units in the first trade were provided by Pertamina New and Renewable Energy (PNRE) through the Project Lahendong Unit 5 and Unit 6 PT Pertamina Geothermal Energy, which involves the development of a new geothermal power plant in North Sulawesi Province.

  • IDX Carbon offers four trading mechanisms: Auction Market, Regular Market, Negotiated Market, and Marketplace, and is linked to the National Registry System - Climate Change Control under the Ministry of Environment and Forestry to ensure efficient carbon unit transfers and avoid double counting.

  • Companies looking to reduce greenhouse gas (GHG) emissions voluntarily can register to buy available carbon units, while project owners with registered carbon units can sell them.

  • Initial buyers on IDX Carbon included Bank Central Asia, Bank CIMB Niaga, Bank DBS Indonesia, Bank Mandiri (Persero), Pertamina Hulu Energi, Pertamina Patra Niaga, and others.

  • The exchange is expected to help Indonesia meet its climate targets and provide access to funding for decarbonization efforts, as stated by Indonesia's Financial Services Authority (OJK).

  • OJK has issued regulations governing exchange trading, including ownership restrictions, with a cap of 20% for foreign entities.

  • Carbon units traded on the exchange will be considered securities and must be registered, and market operators must obtain licenses while adhering to restrictions on the types of environmental products they can trade.

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.