Weekly Highlights | From Ukraine integration into EU power grid to the threat of Nickel’s price surge

1. Gravity could solve renewable energy's biggest problem​

By CNN

• American-Swiss startup Energy Vault designs giant mechanical energy storage systems that relies on gravity and 35 ton bricks to store and release kinetic energy back to the grid when power demand rises

• In February, Energy Vault listed on the New York stock exchange, raising approximately $235 million. It recently announced that actor and environmentalist Leonardo DiCaprio had joined the company's strategic advisory board

• This year, Energy Vault has also signed deals worth up to $880 million with companies including Saudi Aramco, the world's largest oil producer, metal smelting company Korea Zinc, and mining giant BHP

2. Oil Market Report - March 2022​

By the International Energy Agency

• IEA Forecast for world oil demand has been revised down by 1.3 mb/d for 2Q22-4Q22, resulting in 950 kb/d slower growth for 2022 on average. Total demand is now projected at 99.7 mb/d in 2022, an increase of 2.1 mb/d from 2021

• The prospect of large-scale disruptions to Russian oil production is threatening to create a global oil supply shock, estimating that from April 3 mb/d of Russian oil output could be shut in as sanctions take hold

• ICE Brent oil futures slid to around $100/bbl after touching an intraday high of nearly $140/bbl on 8 March

3. Can the world cope without Russia’s huge commodity stash?​

By The Economist

• According to the numbers, Russia ranks number one, two and three, respectively, among the world’s exporters of natural gas, oil and coal. Russia also accounts for half of America’s uranium imports and supplies a tenth of the world’s aluminium and copper

• A shock of such depth and breadth is without precedent, and this is shown by a core-commodity index compiled by Thomson Reuters, which has risen by more than in any period since 1973, on a three-month basis

• Analysis performed by The Economist suggests that oil at $150 a barrel for a year would cause the current-account balances of 37 oil importers to sink by an average 2.3 percentage points

4. Ukraine becomes a member of ‘European Energy Union’​

By Ukrinform

• “Ukraine has become a member of the ‘European Energy Union’. Now our electricity flows to the EU and vice versa. I am grateful to EU members, and personally to European Commission President Ursula von der Leyen…”, declared Ukrainian President Volodymyr Zelensky on Twitter​

• “The enemy expected that the Ukrainian energy system would collapse, that we would not be able to cope, so he seized Zaporizhzhia Nuclear Power Plant, deliberately bombed and keeps bombing thermal power plants in Ukrainian cities, as well as transmission lines.”, Zelensky said

• “We now have a single energy circulatory system, from Lisbon to Mariupol. Ukraine is in the ‘energy eurozone’. We cannot be defeated,” Zelensky added

5. Gas price spike pressures governors to lower taxes​

By Politico

• Some USA states are quickly moving to suspend their own fuel taxes to counter price shocks at the pump. Governors and state lawmakers, in the midst of an election year, say it’s necessary relief for drivers

• Gas taxes pay for a host of transportation improvements, so suspending gas taxes without making up the dollars elsewhere could shortchange projects that are already strapped for money

• Not all states are jumping at the chance to lower gas taxes, saying the savings would be small. There’s also pressure from environmentalists and some unions who support the taxes to pay for infrastructure

6. Hydrogen Is Booming: 3 Things Investors Need To Know To Reduce Their Risk​

By Forbes 

• According to the Hydrogen Council and McKinsey, more than 350 large-scale projects worth $500 billion have already been announced, with hydrogen investments growing by roughly $1 billion per week

• To deliver on hydrogen’s promise, project backer should consider 3 aspects:

1. Critically assess where hydrogen is the smartest option in terms of competitiveness, prioritizing hard-to-abate sectors

1. Bring climate science to bear in investments decision-making

1. Support companies that address leaks throughout the value chain via comprehensive monitoring to verify climate performance

7. Why the wild ride for oil and gas prices won’t cease any soon​

By Economic Times

• The European Travel Commission, a tourism promotion organisation, had good news and bad news for the aviation industry. The good news was that its research showed air travel within the EU was predicted to recover to pre-pandemic levels by the end of 2022. The bad news was that long-haul intercontinental travel would not recover until 2024

• After increasing rapidly over the past two decades, global CO2 emissions from aviation fell by one-third in 2020 compared with the previous year, according to the International Energy Agency. Emissions were just over 600 million tonnes in 2020 – the lowest level since 1997

• The question is whether regulators, and the industry, can preserve the gains made in reducing aviation emissions during the pandemic. According to the International Council on Clean Transportation (ICCT), the pandemic could have reshaped the trajectory of that growth, from a high-growth scenario of a 3.7% increase in passenger traffic per year from now to 2050 to a low-growth scenario of 2.4%

8. Every VC needs an education in ESG​

By GreenBiz

• Many VCs are still treading water when it comes to their understanding of ESG. Sure, a growing number of funds focus on investing in ESG-centric startups. Far fewer members of the community are looking at how ESG factors within the core operating principles of the firms, but that’s beginning to change

• A growing number of European VC firms are beginning to bone up on ESG expertise, noted VentureESG co-founder Johannes Lenhard, a University of Cambridge social anthropology professor writing a book about the social science of venture capitalism

• VCs need to pay more attention to this issue as the public markets shift to value and expect IPO-minded companies to embrace sound ESG practices. And when it comes to climate tech, Ioannou said, many industries are ripe for disruption that favors entrepreneurs over companies locked into business models of the past

9. Covid’s effect on long-haul flights will have a big impact on aviation emissions​

By Energy Monitor

• While flights within the EU have recovered pre-covid levels, long-hauls are still well below what they used to be. From vaccine and test concerns to now the crisis in Ukraine, uncertainty is high for travelers

• Emissions from aviation fell by 54% between 2019 and 2021 lowest levels since 1997. This is mostly due to a drastic fall of long-haul flights, which account for more than half of emissions (while only for 6% of the flights)

• Business travels have also seen a big reduction due to the pandemic, a change expected to stay in the future. While long-hauls will most likely grow again as the pandemic fades away, what remains unknown is by how much

10. Nickel’s price surge could threaten automakers’ ambitious electric-vehicle plans​

By CNBC

• London Metal Exchange suspended nickel trading after three-month contract prices more than doubled to over $100,000 per ton

• “As of this writing, nickel is up 67.2% just today, representing around a $1,000 increase in the input cost of an average EV in the U.S.”, claimed Morgan Stanley auto analyst Adam Jonas

• Analysts at Rystad Energy warned last fall that global demand for the high-grade nickel required for EV batteries is likely to outstrip supply by 2024, a message that has since been echoed by other commodity analysts