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The Point of Ayr Gas Terminal in Talacre, Wales, on September 20, 2021.
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A global energy crunch is sending natural gas prices soaring in the U.K., Europe and Asia hitting record highs. However, experts say the stratospheric prices seen in Europe are unlikely to carry over to the States.

Much will ultimately depend on what the winter weather brings. But the U.S. is better positioned heading into the colder months given that it’s the world’s largest natural gas producer, and because inventory levels are not as depleted as they are in Europe.

“We’re at a unique point in time now where just all energy prices are going up,” Francisco Blanch, head of global commodities, equity derivatives and cross-asset quantitative investment strategies at Bank of America Merrill Lynch, said last week on CNBC’s “The Exchange.” “The U.S. is much more insulated from this global energy trend than the rest of the world,” he added.

That’s not to say U.S. prices won’t be volatile. Natural gas futures settled at their highest level since December 2008 on Tuesday. On Wednesday, the contract traded as high as $6.466 per million British thermal units (MMBtu). 

Natural gas for November delivery has since eased from that level, but it’s still on track for the seventh straight week of gains. The contract currently trades around $5.63 per MMBtu, which is more than double where prices were at the beginning of the year. 

But the moves abroad are far more extreme. Analysts at Deutsche Bank noted that in Europe prices are up five fold, while in the U.S. and Asia prices are about 1.5 times higher. In Europe, the price spike in natural gas is equivalent to if oil were trading around $200 per barrel.

“The importance of these moves on inflation, growth and external accounts are not to be underestimated,” the firm wrote in a note to clients. “These price moves are a big deal.”

Coal and oil prices are also jumping. West Texas Intermediate crude futures, the U.S. oil benchmark, topped $80 per barrel on Friday for the first time since November 2014. International benchmark Brent crude, meanwhile, traded at its highest level since 2018. Analysts say that elevated natural gas prices could even prompt utilities to swap the fuel for oil.

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Why are prices jumping?

A number of factors are fueling the price surge in natural gas and commodities like oil and coal more generally.

Demand is rebounding as economies get back to business and consumers return to pre-pandemic activities. At the same time, producers, who suffered through 2020’s unprecedented downturn, have been slow to hike output. 

A colder and longer-than-expected 2020 winter meant that European inventory levels were below average heading into the fall. On top of that, slow wind speeds and dry conditions weighed on renewables’ energy output. Carbon offsets are pricey and the continent has moved away from coal-fired plants, meaning everyone was suddenly competing for natural gas.

Europe’s gas production has declined over the last two decades, and the continent now depends on imports from Russia. The country has limited supplies to Europe this year in what some have called a politically motivated move, although this week President Vladimir Putin said Russia could boost output in an effort to alleviate the strain in Europe. 

Europe is not the only place in need of supplies. Asian demand is jumping as countries including China look to shift away from dependence on coal. In some cases, cargoes are bypassing Europe for Asia, where they can get better prices. 

The Oxford Institute for Energy Studies summarized this confluence of factors, noting it creates “this perfect storm.”

What about in the U.S.?

While the U.S. has its own power problems, as demonstrated in Texas last winter when millions of customers were left in the dark for multiple days, the same price jump and energy crunch playing out in Europe and Asia is unlikely to happen.

“[The U.S.] hasn’t had to rely on the rest of the world to provide its supply and that’s really what Europe’s problem has been,” said Robert Thummel, managing director at TortoiseEcofin. He noted that the shortage stems not from a lack of supply, but rather from a lack of infrastructure — specifically for liquified natural gas. 

“You’re not going to see the U.S. to the rescue here, because there’s just not enough infrastructure on either side — on the U.S. side or the European side and most importantly on the Asian side to solve this,” he added.

At the end of the day, Thummel said his forecast for natural gas prices all comes down to weather. A normal winter could see prices stay slightly elevated in the $3 to $4 range, while warmer-than-expected temperatures could see a retreat to between $2.50 and $3. On the flip side, if temperatures drop prices could spike into the double digits.

While the U.S. is in a better position than Europe heading into the winter, such wild swings in overseas energy markets do have cascading effects around the globe. This week Credit Suisse lifted its forecast for fourth-quarter prices by more than 60% — from $3.50 MMBtu to $5.75 MMBtu.

“The near-term set-up around winter storage inventories and increasingly tight global demand fundamentals have proven more bullish than we had anticipated,” the firm wrote in a note to clients. While the new target is elevated relative to average prices in recent years, it’s still below the $6 level natural gas crossed last week.

JPMorgan, meanwhile, raised its 2022 annual average price forecast by $1.70 MMBtu to $4.81 MMBtu in a note titled “unthinkable upside, limited downside.” The firm made sure to point out that it’s atypical to adjust forecasts right before winter weather reports become available. But this time it was warranted. Analysts said there was an “absolute need” to adjust forecasts given the “risks that are plaguing this balance at the current time.”

“We go where the US supply and demand balance takes us, and it has taken us to a place that hasn’t been visited in quite some time,” the firm said. For the current quarter, JPMorgan envisions prices averaging $5.50 MMBtu, which would bring 2021’s average price to $3.65 MMBtu.

While the energy crunch is likely the primary driver of the price action, some of the volatility could also be from Wall Street firms shorting futures into the massive rally, and subsequently being forced to cover positions.

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Tesla plans mini Oasis Supercharger with solar and batteries near its giant project

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Tesla plans mini Oasis Supercharger with solar and batteries near its giant project

Tesla appears to be doubling down on its new “Oasis” Supercharger station concept, which consists of larger stations powered by solar and a microgrid battery system.

Although, this new one is a bit less ambitious.

Last month, Tesla announced its “project Oasis” (pictured above), which should become one of Tesla’s largest Supercharger stations with several pull-through stalls for trucks and trailers, but the real differentiating factor is a large solar array and battery system that enables the charging station to operate off-grid mostly.

CEO Elon Musk has been saying that the goal of the Supercharger network is to be powered by solar and batteries and mostly off-grid since 2016, but Tesla has yet to make this common.

The announcement of the Project Oasis gave us some hope that it might finally happen, and now it looks like Tesla is planning a mini Oasis.

Marco RP, who tracks Supercharger projects, reported on the new construction plans submitted for the Coalinga, California station:

https://twitter.com/MarcoRPi1/status/1852794833154535719

The project is about 50 miles north of Project Oasis – also on Interstate 5 between Los Angeles and the Bay Area.

We call it a “mini Oasis” not because it has fewer charging stations than Oasis; it actually has the same number of planned stalls, 168 stalls, but because it doesn’t have as much solar and batteries to enable off-grid use.

Oasis has 11 MW of planned solar power and 39 MWh of energy storage.

This new project in Coalinga has less than 1 MW of solar and 15.5 MWh of energy storage. In the case of Oasis, the grid complements Tesla’s microgrid, and in this new project, it’s Tesla’s microgrid that complements the grid connection.

But Tesla could eventually expand its solar array and battery storage system at the new station.

This new station also includes restrooms, which Tesla has sometimes deployed at bigger stations.

Supercharging with solar is great, but the best solar to charge your car is the one you own. If you want to make sure you’re finding a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage. EnergySage is a free service that makes it easy for you to go solar – whether you’re a homeowner or renter. They have hundreds of pre-vetted solar installers competing for your business, including some who install Tesla products like Powerwalls. They ensure you get high-quality solutions and save 20 to 30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and you share your phone number with them.

Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.

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Lucid (LCID) is gaining momentum in Europe’s largest auto market with its luxury EVs

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Lucid (LCID) is gaining momentum in Europe's largest auto market with its luxury EVs

Home to luxury automakers like Porsche and BWM, Lucid Motors (LCID) is making a name for itself in Germany. Lucid just had its second consecutive month of record EV registrations in Europe’s largest auto market.

Lucid is taking on Europe with its luxury EVs

According to new data released Tuesday from Germany’s Federal Motor Transport Authority (KBA), Lucid had 129 new registrations in October.

Although it may not seem like much, it’s a considerable jump from the 41 registrations Lucid had in September. Lucid sold more cars in Germany last month than it did in the entire third quarter. The luxury EV maker has 256 registrations in Germany through the first ten months.

Lucid’s growth comes despite overall EV registrations in Germany slipping nearly 5% YOY to 35,491 units in October.

After opening its newest studio in Hamburg last month, Lucid declared its “expansion in Europe continues.” The new studio comes just a month after opening one in Frankfurt.

Lucid now has four showrooms in Germany and eight in Europe as it expands overseas. Last month, the EV maker also signed a deal with SIXT to add its luxury Air sedan to its fleet in Germany.

Lucid-Europe-luxury-EV
Lucid EV studio in Germany (Source: Lucid)

Following the deal, former CEO Peter Rawlinson said more customers will be able to “experience the only EV in the world which is equally at home on the Autobahn as on city streets.”

Lucid’s mobile service network covers 15 European markets, including Belgium, Luxembourg, France, Austria, Italy, Spain, the United Kingdom, Sweden, Denmark, Poland, and the Czech Republic.

Lucid-Europe-luxury-EVs
Lucid retail studio in Düsseldorf, Germany (Source: Lucid)

The Lucid Air Pure starts at about $93,000 (€85,000) in Germany and has up to 464 miles (747 km) of WLTP range. Lucid’s Air Touring and Air Grand Touring models start at $108,200 (€99,000) and $141,000 (€129,000), respectively.

Starting Price WLTP Range
Lucid Air Pure $93,000 (€85,000) 464 miles (747 km)
Lucid Air Touring $108,200 (€99,000) 451 miles (725 km)
Lucid Air Grand Touring $141,000 (€129,000) 521 miles (839 km)
Lucid Air EV prices and range by trim in Germany

Lucid said it plans to continue expanding in Europe with its newly opened service and delivery centers in Munich and Zurich.

In the US, the company is gearing up to launch its first electric SUV, the Gravity. Lucid will begin taking Gravity SUV orders for US buyers on November 7, 2024.

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Why repowering wind farms is wind power’s next big thing

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Why repowering wind farms is wind power's next big thing

Renewables developer Exus Renewables North America is giving a $200 million upgrade to Somerset County, Pennsylvania’s 139 megawatt (MW) Twin Ridges Wind Farm – here’s why repowering projects like this are the future of the wind industry.

Wind energy repowering is all about breathing new life into older turbines or entire wind farms. By swapping out aging parts like turbines, blades, and nacelles for the latest tech, wind farms can see significant boosts in efficiency, power capacity, and overall lifespan. Other infrastructure and control systems can also get a second life, too.

Adding new components to existing infrastructure and grid connections mean it’s less expensive to extend the life of the wind farm with fewer resources. New components make the turbines less prone to breakdowns which means less maintenance, so there are fewer operational costs. Plus, a wind farm’s debt is usually paid off at around 10 years, and it qualifies for new tax credits and new financing at around that time. Existing wind farms often have power purchase agreements in place, and data companies are increasingly chasing power sources as demand grows.

Repowering Twin Ridges meant keeping all 68 towers and foundations while swapping out the nacelles and blades. Vestas, which has identified the repower market as a huge opportunity and engineered a solution that’s compatible with most turbines, supplied US-made nacelles, hubs, blades, and tower adaptors for the project. (Twin Ridges’ original supplier, RES, is no longer in business.)

Jim Spencer, CEO of Exus Renewables North America, said of Twin Ridges, “This upgrade will increase the power generation by 30%, which is a lot more power going into the grid. Repowering will allow it to use more of its allotted grid capacity since wind farms don’t operate at maximum capacity 100% of the time.”

Unlike a new wind farm, which comes online all at once, a repowered wind farm sees refurbished turbines turned on one at a time since the infrastructure is already in place. Out of its 68 upgraded turbines, Twin Ridges has brought 40 repowered turbines online, and a 41st turbine will soon follow.

Industry estimates suggest that up to 50 GW of US onshore wind capacity will be assessed for repowering in the next few years.

Read more: Renewables now make up 30% of US utility-scale generating capacity


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Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisers to help you every step of the way. Get started here. –trusted affiliate link*

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