Jun 9, 2020

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Welcome back. Today's Smart Brevity count: 1,190 words, 4.5 minutes.

🎵 And this week in 2012, Rush released "Clockwork Angels," the band's final studio album that provides today's moving intro tune...

1 big thing: The power needed to stamp out coronavirus
Reproduced from The Energy Progress Report 2020 using The World Bank data; Map: Axios Visuals

The twin global goals of effectively responding to COVID-19 and bringing power to hundreds of millions of people lacking electricity and cooling infrastructure are converging.

Why it matters: "Reliable power is critical for effective responses to COVID-19 and other diseases," states a Brookings Institution piece.

Where it stands: Roughly 790 million people lacked electricity access as of 2018, per a late May analysis from the World Bank, World Health Organization and other bodies.

  • That annual report on progress toward UN energy access goals notes that COVID-19 has "further accentuated the need for reliable, affordable access" in health care facilities.
  • And as we've noted before, some places in Africa and Asia with access are often beset by unreliable or intermittent supplies.

How it works: Reliable electricity is needed along the entire testing, treatment and eventual vaccination chain.

  • Power is needed for diagnostics on active infections, ventilator treatments, cleaning equipment and other key services in health care facilities, Brookings points out.
  • "[P]owering a cold chain will be critical to delivering a COVID-19 vaccine when it becomes available," they write.
  • Vaccines can be ruined when refrigerated storage units lose power, while "last mile electrification" is needed for distribution.

The big picture: A suite of efforts are planned or underway to improve care and eventual treatment of the pandemic as well as future illnesses, in regions with limited or absent energy access. A few...

  • It's firmly on the radar screen of the World Bank-led Energy Sector Management Assistance Program.
  • The bank's Makhtar Diop notes efforts are underway to mobilize donors to help sub-Saharan African governments electrify health care facilities with solar and battery tech.
  • The International Renewable Energy Agency and the UN's Economic and Social Commission for Asia and the Pacific are working to help rural health centers.
  • Go deeper: Duke University's Rob Fetter, who co-authored the Brookings piece, pointed me toward this COVID-19 roundup posted by the group Power for All, which works to expand electricity access via decentralized renewables.

The bottom line: "Remedying electricity access in health facilities in response to COVID-19 brings us a step closer to ending the vicious cycle of panic and neglect in preventing deadly diseases," the Brookings analysis notes.

Bonus chart: Snapshot of health centers' power
Reproduced from The Energy Progress Report 2020; Chart: Axios Visuals

The multi-agency report on global power access highlights the energy hurdles facing health centers in developing nations.

What they did: The report compiles survey data on health care facilities in a subset of countries (as shown above).

What they found: "In every country analyzed, the power supply is compromised by unscheduled interruptions and voltage fluctuations," they find.

  • "Twenty-five percent of health facilities reported that unscheduled outages affect the capacity to deliver essential health services."
  • "Damage to equipment caused by poor-quality connections and frequent voltage fluctuations are also constraints for 28 percent of health centers."
2. Crude oil's interrupted comeback

"Oil prices fell on Tuesday weighed down by a stronger dollar and oversupply concerns after it was announced that a trio of Gulf producers would end voluntary output cuts," Reuters reports.

Where it stands: This morning, Brent was trading around $40.41 and WTI at $37.99.

What they're saying: Rystad Energy analyst Bjørnar Tonhaugen, in a note this morning, said concerns about the demand recovery are weighing on the market.

  • He cited WHO data showing a rise in new cases concentrated in the Americas and Southeast Asia, calling it "chilling" from a medical perspective but also for oil demand.
  • "A second wave of the pandemic isn’t such a distant possibility any more and if it is realized, oil demand, which has slowly been recovering, might plunge back to lockdown levels."
3. Tesla says lockdowns make the case for EVs

With a h/t to Bloomberg for spotting the irony, Tesla is hailing the air quality benefits of less pollution from internal combustion engine (ICE) vehicles during the lockdowns, calling it a temporary glimpse of what's possible in the long term.

The intrigue: Tesla CEO Elon Musk has railed against stay-at-home orders, even calling them "fascist," and has also battled local officials as he sought to re-open the company's plant in Fremont, California.

What they're saying: The company's annual impact report points out "dramatic" increases in air quality and carbon emissions cuts worldwide.

  • It notes that while these cuts won't be sustained, there's an "unprecedented opportunity to learn from this disruption and accelerate the deployment of clean energy solutions" as part of economic recoveries.
  • “It is not hard to imagine that many cities could become electric-only in the near future as they begin to witness the impact that ICE vehicles have on air quality," it states.

The big picture: Dissonance with Musk's comments aside, Tesla is hardly the only company making some version of these points.

  • There's a global movement afoot — with limited success so far — to stitch clean energy investments into government stimulus packages in response to the pandemic.
Bonus: Tesla's record stock close

Speaking of Tesla, the Silicon Valley electric automaker's stock ended the day at almost $950-per-share Monday, a record closing price.

Driving the news: The stock rose after China Passenger Car Association reported that sales of Tesla's Model 3 were over 11,000 in May, more than tripling April's levels, per Fortune and other outlets.

Why it matters: It signals China's importance for the growth of EVs as the world's largest auto market and a place with strong government backing for the sector. Tesla's factory there began deliveries at the end of 2019.

What they're saying: Wedbush Securities’ analyst Daniel Ives said in a note, "We believe that the China growth story is worth $300 per share to Tesla as this EV penetration is set to ramp significantly over the next 12 to 18 months in a more normalized backdrop," per CNBC.

4. Catch up fast: Taylor, shale, coal, Congress

In memoriam: "Ian Taylor, the British businessman who built Vitol into the world’s largest independent oil trader, has died aged 64 after a long illness." (FT)

Shale: "Chesapeake Energy Corp. is preparing a potential bankruptcy filing that could hand control of one of the leading lights of the U.S. shale revolution to senior lenders, according to people with knowledge of the matter." (Bloomberg)

Coal: "Britain is on course to pass an energy milestone as it reaches two months of coal-free power generation on Wednesday — the longest period the country has gone without using the fossil fuel since the industrial revolution." (Independent)

Congress: "House Democrats are ratcheting up pressure to insert financial help for clean energy into any upcoming bills to try to aid the pandemic-ravaged sector, setting up a clash with GOP lawmakers who’ve so far derided attempts to aid renewables as a furtive bid to implement the Green New Deal." (Politico)

5. Quote of the day
"Imagine you spend almost every single day in your own house. I think we're probably not going to give up on airplanes because of that. I think vacationing far and wide will become a far more prevalent thing. Nobody is going to want to staycation if all they do is stay at home working and living."

Who said it: ClearView Energy Partners' Kevin Book, speaking on a new episode of the Center for Strategic and International Studies podcast Energy 360°.

Why it matters: Book's comment gets to how unpredictable the energy fallout of the pandemic will ultimately be for both transportation fuels and power.

  • Known unknowns abound about remote work, driving, how and where people live, aviation and, as Book muses about, how they interconnect.
  • "There's a lot of counterintuitive results here," he notes.

Details: It's a wide-ranging look at COVID-19's effect on oil geopolitics, the potential for energy measures in stimulus bills, the U.S. election and more.

Worthy of your time

Ben GemanAmy Harder