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German Chancellor Olaf Scholz last week announced a package worth 200 billion euros ($198 billion) designed to help with soaring energy prices. The “defensive shield” includes a gas price brake and a cut in sales tax for fuel.

Steffi Loos | Pool | Reuters

Amid downbeat predictions of a recession in Germany and the wider region, analysts at one Wall Street bank have shared wider concerns about violent bond market moves and European governments looking to borrow vast sums of money.

German Chancellor Olaf Scholz last week announced a package worth 200 billion euros ($198 billion) designed to help with soaring energy prices. The “defensive shield” includes a gas price brake and a cut in sales tax for fuel.

The proposals could cut 2 percentage points off inflation in the next year, according to Citi, but they are unlikely to prevent an economic contraction. The package “may soften the coming recession but also poses risks, in our view,” Citi analysts said in a note released last Friday.

Those risks relate to the question of how the package will be financed and what that could do to inflation, to Germany’s sovereign bond yields, to the European Central Bank’s benchmark rate, and to the borrowing plans of other euro nations that may do the same.

Germany’s example

“The risk is that others may follow that example,” Christian Schulz, deputy chief European economist at Citi, told CNBC’s “Street Signs Europe” on Monday.

Schulz noted the U.K.’s recent bond market blowup after unfunded tax cuts by the British government. Rate expectations and bond yields surged in Britain last month after a swathe of tax announcements. It caused the Bank of England to unleash a new bond-buying plan, mayhem in the mortgage market and talk of a housing crisis.

Schulz said Germany could “afford” any debt financing thanks to its low debt-to-GDP ratio and lower external funding needs, but the package could open the door for less fiscally prudent countries to want to borrow large amounts and issue new debt — potentially leading to trouble like that seen in the U.K. Citi predicts that German debt financing could also force tighter ECB policy, which could then also send yields surging in the euro area.

“The risk is that this same dynamic [seen in Britain] evolves on the continent as well now,” Schulz said.

Berenberg: German mid-cap exposure to a recession is substantial

“The way [Germany] want[s] to do it is by using an existing SPV [special purpose vehicle], an off balance sheet fund …. whether that’s going to lead to borrowing or whether it’s going to lead to guaranteed loans — because this fund can do both — we shall see,” he added, referring to the 200 billion euro plan.

Germany’s Federal Audit Court criticized the government and suggested it had dodged tax rules to fund the package, according to Politico.

Other banks and institutions pointed to the difficult environment in Germany — the largest European economy and an engine room for euro area growth — which is now trying to abruptly wean itself off of Russian fossil fuels.

Berenberg Economics said in a recent note that consumer confidence in Germany, and the euro zone more generally, has plunged to a record low, which it said is “a prelude to recession.” Indeed, the Institute for Economic Research predicts investment will plummet by 25% and expects a German recession in 2023.

Deutsche Bank analysts estimate that the “defensive shield” could boost household income and limit the projected GDP decline in 2023 to around 2%. That’s better than their previous forecast of a 3.5% contraction.

Recession may be on the cards

ECB President Christine Lagarde hinted at further interest rate hikes, saying on Sept. 28 that the bank was “not at neutral rates yet.”

More pain in the pipeline for Germany, economist warns

Speaking at the Frankfurt Forum, Lagarde said the latest hikes — most recently an unprecedented 75 basis point increase in September that demolished the region’s track record of negative rates — were just “the first destination on the journey.” The ECB president said the institution would “do what [it has] to do” in order to return to its 2% inflation target in the medium term.

While the EU and U.S. will see positive growth this year overall, “the signs are there of a slowdown and a recession can no longer be ruled out,” European commissioner for economy, Paolo Gentiloni, told CNBC’s Annette Weisbach at the Frankfurt Forum. “We are entering a phase of stagnation and possible recession,” Gentiloni said via video link.

That sentiment was echoed by World Trade Organization director-general Ngozi Okonjo-Iweala. “My worry is that all indicators are going in the wrong direction,” Okonjo-Iweala told CNBC’s Julianna Tatelbaum in Brussels at an emergency energy meeting last month — but she said she disliked the word “recession.”

“Let’s say ‘slowing’ and let’s say we are inching towards the ‘R’,” she said.

WTO chief: All the indicators are going in the wrong direction

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Starting today, California is coming for your e-bike throttles

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Starting today, California is coming for your e-bike throttles

Last September, California Governor Gavin Newsom signed into law SB-1271, which redefines and adds to several electric bicycle regulations in the state. Chief among them is a clarification of the three-class e-bike system, which is likely to now rule that many of the throttle-enabled electric bikes currently available and on the road in California will no longer be street legal.

As a refresher, California has long used the same three-class system employed by most states in the US to classify electric bicycles and ensure their road-legal status.

Class 1 e-bikes have been limited to 20 mph (32 km/h) on pedal assist, while Class 2 e-bikes can reach the same 20 mph speed but with a throttle (a hand-activated device to engage the motor without pedaling). Class 3 e-bikes have been permitted to reach faster speeds of up to 28 mph (45 km/h) on pedal assist, but can’t use a throttle to reach that speed. All three have been limited to a generally accepted “continuous power rating” of 750W, or one horsepower. That’s important, but more on that in a moment.

The main issue over the years with interpreting the three-class system is whether or not Class 3 e-bikes are permitted to have throttles installed at all, even if they don’t work above 20 mph. Most e-bike makers in the US interpret the law to mean that Class 3 e-bikes can have a handlebar-mounted throttle, but that it must cut out at 20 mph. After that point, the motor can help to achieve faster speeds of up to 28 mph, but only when the rider is pedaling.

Fucare

California’s new clarification of the three-class system now codifies that Class 1 and Class 3 e-bikes can not be capable of operating on motor power alone. In other words, a Class 1 or Class 3 e-bike can not have any functional hand throttle to power the motor without pedal input, regardless of the speed the throttle can help the bike reach. Throttles are still legal, but purely on e-bikes marketed and sold as Class 2 e-bikes.

The text of the law has now been updated to read that Class 1 and Class 3 e-bikes are bicycles “equipped with a motor that provides assistance only when the rider is pedaling, that is not capable of exclusively propelling the bicycle,” with one specific exception.

That exception is a throttle or walk button that powers the bike up to 3.7 mph. Why 3.7 mph? Likely because that is exactly 6 km/h, which is the regulation used in most EU countries that allow throttles to operate up to 6 km/h. That regulation exists because in such cases, the walking-speed throttle can essentially be used as a parking assist feature or to slowly roll the bike under its own power for repositioning purposes.

Under the new California law, Class 1 and Class 3 e-bikes with throttles can only be powered by the throttle up to 3.7 mph. Class 2 e-bikes remain permitted to feature throttles that allow the e-bike to be exclusively powered by the throttle up to 20 mph.

The law also affects motor power ratings, removing some ambiguity in the way manufacturers have often rated electric bicycle motor power output. The new law removes the word “continuous” from the legal definition, instead defining an e-bike as a bicycle with operable pedals and “an electric motor that does not exceed 750 watts of power.”

In the past, most e-bike legal definitions in the US have limited electric bicycle motors to a maximum “continuous power” rating of 750W, or approximately one horsepower. The continuous power is the amount of power a motor can output indefinitely, without overheating. However, depending on their designs, electric motors are capable of outputting higher power for shorter periods of time. For example, many nominally 750W electric motors with sufficient thermal mass for effective cooling can output over 1,000W of power for several minutes or 1,500W for several seconds. This extra power is often useful when climbing hills or accelerating from a stop, scenarios that generally require only a few seconds or minutes of higher power.

The actual amount of power output by a nominally 750W motor depends on the motor’s design as well as the electronic limits programmed by the e-bike maker.

This is why it is common to see electric bicycles in the US advertised as featuring 750W motors that output several hundred watts higher of peak power. In practice, nearly all 750W nominally-rated e-bike motors found in the US output higher peak ratings.

The same game is played in Europe, albeit less openly, when it comes to the lower EU-defined e-bike power limit of 250W. Major German motor makers such as Bosch and Brose manufacture a range of e-bike motors rated at 250W, but that can be easily dynamometer-tested to reveal an output of several hundred watts higher under peak loading conditions.

The new California law is likely to create uncertainty in the US e-bike industry, where nearly all e-bike companies offer their products in many states and generally don’t produce multiple formats to comply with different state laws.

Unlike in Europe, the US e-bike market is dominated by throttle-controlled electric bicycles. And unlike Europeans, Americans largely operate e-bikes by throttle.

Of course, plenty of Class 1 throttle-less e-bikes exist and have been sold in the US, but sales figures clearly underscore the trend that throttle-enabled electric bikes are the predominant type of e-bikes in the US. Among those, Class 3 e-bikes capable of 28 mph (45 km/h) have proven incredibly popular, with riders often cruising at 20 mph (32 km/h) on throttle only when not accessing the higher top speed enabled by pedaling on most Class 3 e-bikes.

Under the new law, Class 3 electric bicycles capable of speeds up to 28 mph will no longer be able to feature a functional throttle. That means starting today, if a manufacturer wants to sell a Class 3 e-bike in California, it must come without a functional throttle. And if a rider in California wants to use a Class 3 e-bike on California roads and bike lanes, but it is found to have functional throttle, that rider could be on the hook for a non-compliant vehicle.

It is not clear whether previously manufactured e-bikes could be grandfathered in under the new law, similar to how pre-1985 cars in California aren’t required to have seatbelts.

Can e-bike makers still skirt around the new law?

Yes, they can.

The way the law is written, there is limited yet sufficient room for e-bike makers to wiggle around the letter of the law in California. Yes, retailers will no longer be able to market or sell a Class 3 e-bike with a functional throttle. But even today, most companies ship their 28 mph-capable electric bikes as Class 2 e-bikes that are limited to 750W and 20 mph, throttle included.

Riders who wish to reach higher speeds of up to 28 mph are then required to enter the settings menu of their e-bike and adjust the speed limiter up to a higher figure, usually maxing out at 28 mph.

Many of the most popular Class 3 e-bikes we think of in the US market are technically marketed as Class 2 e-bikes that are merely capable of having their pedal assist speed unlocked to 28 mph. This practice would technically meet the requirements of the new California law.

Technically, the new California law would not prevent the sale of user-modifiable Class 2 e-bikes as long as the throttle-enabled electric bike 1) is listed as Class 2 in its marketing, 2) could only be user-modified to reach speeds above 20 mph on pedal assist and not by throttle, and 3) the motor remained limited to 750W of power even after user modification. The bikes couldn’t be marketed by the manufacturer as Class 3 e-bikes if they have a throttle, but as long as they are marketed as Class 2 e-bikes, the language of the law as written does not prevent them from being sold with programming that allows them to be modified to reach speeds up to 20 mph on throttle and to reach speeds higher than 20 mph on pedal assist, provided that the motor power does not surpass 750W. Thus, the biggest immediate impact of this law on many manufacturers is that they would no longer be able to advertise their peak power ratings, and would need to hide behind a generic “750W” label.

That isn’t to say that the e-bike would still fit the legal definition of an electric bicycle in California after being “unlocked” for higher-speed pedal assist. It would no longer be a legal e-bike in California, since it can exceed 20 mph AND would have a functional throttle installed (even if the throttle is inactive above 20 mph). However, at that point, it would have become the rider’s responsibility to physically remove the throttle from the bike so that it again conforms to the new law as a now throttle-less Class 3 e-bike.

This is because the law only outlaws the sale of e-bikes that are intended to be unlocked to reach speeds above 20 mph with a throttle, or which are intended to be unlocked to power levels above 750W. As long as the e-bike’s throttle still cuts out at 20 mph and the motor doesn’t exceed 750W, the bike could technically be capable of being unlocked to travel at higher speeds (actually, even higher than 28 mph) purely on pedal assist and still be permitted for sale – even if it would no longer be considered legal for riding on public roads in its unlocked state.

Theoretically, manufacturers could also be compliant by adjusting their e-bikes’ firmware so that unlocking the 28 mph speed would also electronically remove throttle functionality above 3.7 mph, but this would likely be a no-go for most American e-bike shoppers who rely on occasional or frequent throttle use at speeds up to 20 mph. Practically speaking, most are likely to either advise their customers to remove their throttle in California if unlocking 28 mph speeds, or simply avoid addressing the issue altogether as the law then puts the onus on the rider.

To summarize, e-bike makers could legally sell throttle-enabled electric bikes that conform to Class 2 regulations, but that are user-modifiable to faster than 20 mph on pedal assist, and the bike would only become illegal under California law once that modification is performed, which has now become the responsibility of the rider.

I’m not saying this is right or fair. I’m merely saying that it doesn’t take an expensive law degree to see the cargo bike-sized gap in the language of this new law.

What does this mean for the industry?

Because the user-unlocking higher speed pedal assist loophole still exists for the sale of throttle e-bikes in California, this law will first impact the e-bikes that are capable of operating at more than 20 mph on throttle only. Some popular US-based electric bike brands, such as SUPER73, are well known for offering “off-road modes” that allow faster throttle operation, though this is more common among Asian-based electric bike brands. We’ve seen plenty of these types of e-bikes before, and while they are widely considered to be outside the three-class system, there is no shortage of options on the market.

The new law clearly outlaws such e-bikes from being sold in California, and riders of these out-of-class electric bikes will now find that their e-bike is no longer considered an e-bike under California law. The feature to reach more than 20 mph on throttle-only is likely to begin fading from future models as companies realize they need to comply with the laws in the largest e-bike market in the US.

The bigger question will be how this affects future legislation in other states or at the federal level, and if the user-unlocking workaround is addressed in the future. Additionally, whether or not this new law is actually enforced will also determine its impact in practice.

Of note, as these new e-bike regulations are currently being implemented, California law still allows anyone holding a basic Class C driver’s license, obtainable at age 16, to operate large cars, SUVs, and trucks weighing up to 26,000 lb (12,000 kg) on public roadways.

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Wisconsin’s first 3 NEVI-funded EV fast charging stations are open

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Wisconsin's first 3 NEVI-funded EV fast charging stations are open

Wisconsin’s first three EV fast charging stations using funding from the National Electric Vehicle Infrastructure (NEVI) Formula program are now online.

The EV fast charging stations are in Ashland, Chippewa Falls, and Menominee, in western Wisconsin, which are rural areas that see a lot of visitors due to tourism and their location along key highway corridors.

As is required by the NEVI program, all three charging stations contain four ports with both CCS and J3400 connectors, and each station can deliver up to 150 kW per port.

NEVI-funded charging stations must also have 24-hour public accessibility and provide amenities like restrooms, food and beverages, and shelter, and must be sited within one travel mile of the Alternative Fuel Corridor.

The stations are located at local Kwik Trips, a Wisconsin-based gas station that serves 12 million customers weekly at more than 880 locations across six states, making the charging experience easy to find and increasing consumer trust.

“It’s great to see more states expanding the NEVI network and filling in coverage gaps for drivers and riders,” said Gabe Klein, executive director of the Joint Office of Energy and Transportation. “EV charging often happens in communities. Whether it’s parents visiting their kids at college, families staying at their cabins, or people road-tripping on Interstate 94 for the holidays – expanding the network gives consumers accessible options to charge their vehicles.”

The stations are part of Kwik Trip’s Kwik Charge program, which will provide DC fast chargers to guests traveling throughout the Midwest. Kwik Trip has received $8.1 million in NEVI funds in Wisconsin to install chargers at 24 of its locations. The company is building an app using Driivz’s software so EV drivers can find Kwik Charge chargers and check charger availability and pricing.

Read more: Kwik Trip is installing DC fast chargers across the Midwest


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The California grid ran on 100% renewables with no blackouts or cost rises for a record 98 days

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The California grid ran on 100% renewables with no blackouts or cost rises for a record 98 days

A new study published in the journal Renewable Energy uses data from the state of California to demonstrate that no blackouts occurred when wind-water-solar electricity supply exceeded 100% of demand on the state’s main grid for a record 98 of 116 days from late winter to early summer 2024 for an average (maximum) of 4.84 (10.1) hours per day.

Compared to the same period in 2023, solar output in California is up 31%, wind power is up 8%, and batteries are up a staggering 105%. Batteries supplied up to 12% of nighttime demand by storing and redistributing excess solar energy.

And here’s the kicker: California’s high electricity prices aren’t because of wind, water, and solar energy. (That issue is primarily caused by utilities recovering the cost of wildfire mitigation, transmission and distribution investments, and net energy metering.)

In fact, researchers from Stanford, Lawrence Berkeley National Laboratory, and the University of California, Berkeley found that states with higher shares of renewable energy tend to see lower electricity prices. The takeaway – and the data backs it up – is that a large grid dominated by wind, water, and solar is not only feasible, it’s also reliable.

The researchers concluded:

Despite the rapid growth and high penetration of [wind-water-solar] WWS, the spot price of electricity during the period dropped by more than 50% compared with the same period in the previous year, and no blackouts occurred, giving confidence that the addition of more solar, wind, and batteries should not be a cause for concern.

Mark Z. Jacobson, co-author of the paper and professor of civil and environmental engineering and director of the atmosphere/energy program at Stanford University, explained in an email to Electrek:

This paper shows that the main grid in the world’s fifth-largest economy was able to provide more than 100% of the electricity that it used from only four clean renewable sources: solar, wind, hydroelectric, and geothermal, for anywhere from five minutes to over 10 hours per day for 98 out of 116 days during late winter, all of spring, and early summer, as well as for 132 days during the entire year of 2024, without its grid failing.

The growth of solar, wind, and battery storage, in particular, resulted in fossil gas use dropping 40% during the 116-day period and 25% during the entire year. In comparison with 2023, solar, wind, and battery capacities increased significantly, with batteries doubling in capacity.

The paper also shows that high electricity prices in California have nothing to do with renewables; in fact, without renewables, prices would have been higher.

In fact, 10 of the 11 US states with higher fractions of their demand powered by renewables have among the lowest US electricity prices.

Instead, in California, the spot price of electricity dropped by over 50% during the period of interest between 2023 and 2024, indicating it was easier to match demand with supply with the increase in renewables and batteries in 2024.

Read more: New CA smart grid law will help solar and fix the grid by… simply replacing wires


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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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