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The week in energy | April 22-27

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By illuminem

· 4 min read

illuminem provides essential energy insights from this week, including updates on Biden's renewable energy policy, the EU's withdrawal from the energy charter treaty, Biden's mandate for gas plants to capture emissions, and China's struggles in phasing out coal by 2040. 

1. Biden marks Earth Day with $7bn ‘solar for all’ investment amid week of climate action
Category: Renewables ☀️
President Joe Biden announced a $7 billion "solar for all" initiative as part of a week of "historic climate actions." This initiative, funded by the Inflation Reduction Act, aims to benefit over 900,000 households in disadvantaged communities across various regions. Biden underscores the urgency of addressing both climate change and economic disparities simultaneously. Aligned with the Justice40 plan, the initiative ensures that at least 40% of federal clean energy benefits reach marginalized communities, promoting environmental justice. Janet McCabe, EPA's deputy administrator, notes the initiative's potential to generate over $8 billion in electric bill savings for overburdened households and create 200,000 jobs.

2. New regulation mandates US coal-fired power plants to capture emissions
Category: Coal 🏭 
The Environmental Protection Agency (EPA) has issued a rule that mandates coal-fired power plants to capture emissions or face closure, marking the Biden administration's most ambitious effort to curb planet-warming pollution from the power sector. The rule aims to eliminate carbon pollution from the electricity sector by 2035 as part of President Biden's pledge, alongside measures targeting toxic wastewater pollutants and coal ash management. While hailed by environmental groups, the plan is expected to face challenges from industry groups and Republican-leaning states concerned about grid reliability. The rule would require existing coal plants to cut or capture 90% of their carbon emissions by 2032, with future plants needing to control up to 90% of their carbon pollution.

3. EU Parliament approves plan to withdraw from the energy charter treaty 
Category: Oil & Gas 🔥
The European Parliament's approval of the EU's departure from the Energy Charter Treaty marks a significant stride in removing legal barriers hindering the shift away from fossil fuels. Established in 1998, the treaty allowed energy companies to challenge government policies impacting their investments, particularly those targeting fossil fuel phase-outs. The EU's decision to exit, following similar moves by member states like Denmark, France, and Germany, signals a collective push towards more ambitious climate policies. The next steps involve finalizing the exit process, including negotiations on proposed reforms to modernize the treaty. 

5. Coal is seeking new advocates in Washington
Category: Coal 🏭 
The US coal industry is facing challenges under new Biden regulations aimed at reducing carbon pollution, making coal burning costlier. Figures like McConnell and Manchin are stepping back, while infrastructure issues hinder exports. Despite some political support, coal's share in energy is shrinking due to natural gas and renewables. The debate has shifted from culture and economics to grid reliability. While opponents stress coal's environmental impact, proponents highlight its role in ensuring stable power. However, as coal plants decline and cleaner energy gains traction, its future remains uncertain despite political influence. Amidst these changes, embracing cleaner energy alternatives becomes imperative for the coal industry's long-term viability and relevance in the modern energy sector.

4. China will be unable to phase out coal by 2040, despite global climate goals
Category: Coal 🏭 
A recent study by DNV forecasts China's coal consumption will decrease by only one-third by 2040, falling short of global climate goals. Despite rising renewable energy use, coal will remain vital, especially in sectors like iron, steel, and coal-to-chemicals. This modest decline threatens global climate efforts, highlighting challenges in aligning national strategies with international targets. China aims for 88% renewable power by 2050, but reaching carbon neutrality by 2060 requires aggressive decarbonization. Xie Zhenhua, former climate envoy, noted phasing out fossil fuels entirely is unrealistic. Coal will still make up 25% of China's energy mix by 2050, underscoring its lasting importance.

6. G7 countries aiming for a sixfold increase in electricity storage expansion
Category: Power Grid 🔌 
G7 countries are poised to endorse a sixfold increase in global electricity storage capacity from 2022 to 2030, aiming to tackle the challenges posed by intermittent renewable energy sources. The proposed target of reaching 1,500 gigawatts by 2030, up from 230GW in 2022, encompasses various storage solutions like batteries and hydrogen. Contentious topics include coal usage and methane reduction goals, with the US proposing stringent emission rules for coal plants beyond 2039. The talks underscore G7 nations' commitment to transitioning away from fossil fuels, aligning with agreements made at the recent UN COP28 climate conference.

7. U.S. solar manufacturers urge Biden to enforce tariffs on imports from Asia
Category: Renewables ☀️
U.S. solar panel producers are urging President Biden to impose import tariffs on panels from Cambodia, Malaysia, Thailand, and Vietnam, citing low prices threatening their viability. Despite significant support for the solar industry in Europe and the U.S., cheap Asian imports, mainly of China, are surpassing U.S. installations, causing oversupply and price declines. This oversupply, compounded by rising interest rates and material costs, has led to bankruptcies and relocations among Western solar panel manufacturers, despite federal subsidies. 

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