Aug 15, 2019

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Welcome back! Today's Smart Brevity count: 990 words, < 4 minute read.

Axios’ Amy Harder went on a podcast hosted by DNV GL, a services firm for the energy industry, to talk about her latest column. Listen here.

Tomorrow marks 25 years since Neil Young & Crazy Horse released "Sleeps with Angels," so we'll open with their churning, melancholy brilliance...

1 big thing: SoftBank's $110 million storage bet

Late yesterday brought word that investment giant SoftBank Vision Fund was pouring $110 million into Energy Vault, a startup with new technology for long-duration energy storage.

Why it matters: It's the first investment by the Vision Fund in the energy storage space. (It has staked Uber, Slack and other well-known companies.)

  • And it's notable for what it's not — money for a battery technology company.
  • Instead, it's for a firm with a new tech (using old concepts) that will need lots of capital to scale and compete with other emerging techniques.

The big picture: Per Quartz's Akshat Rathi, "[I]t’s an unusually large sum for a company that hasn’t even existed for two years or built a full-scale prototype."

  • He also notes that SoftBank's interest in energy storage is "signaling to the wider market that this area of technology is ripe for large investments."
  • Andreas Hansson, a partner with SoftBank Investment Advisers, is joining Energy Vault's board.

How it works: The Swiss startup has developed a new method for long-duration storage — something that's important for enabling very high levels of intermittent renewables on power grids.

  • It's conceptually similar to pumped-hydro storage, but instead involves 35-ton composite bricks stacked into a large tower controlled via software by a crane system.
  • "Bricks are then returned to the ground and the kinetic energy generated from the falling brick is turned back into electricity," their website notes. Check out a company-produced simulation here.
  • The company says it can provide storage at lower cost than hydro-based systems and without the need for specific topographies.

What they're saying: “If you look at a lot of the estimates in the world for what energy storage investment is going to look like over the next 10-20-30 years, the numbers are anywhere from $300 billion to $600 billion,” Energy Vault CEO Robert Piconi tells CNBC.

  • “Everyone understands the need to get storage to make renewables much more efficient and to reduce our [reliance] on fossil fuels,” he said.

What's next: Tests of whether and how fast the company can move beyond the small prototype phase. Quartz reports the investment will help build full-scale prototypes in Italy and India and then 35 MWh-capacity multiple towers for customers "soon after."

2. Economic fears reverse oil's bounce
Expand chart
Data: FactSet; Chart: Axios Visuals

Remember the heady moments on Tuesday morning, when crude prices spiked on news of a pause in escalation of the U.S.-China trade fight? It was short-lived.

Driving the news: Oil prices — both WTI and the global benchmark Brent crude — fell sharply yesterday and are dropping again Thursday morning.

  • Traders are reacting to bad economic news from China and Europe, higher U.S. stockpiles, and economic warning signals from the bond market.
  • "[W]e’re back in fear mode," analyst Phil Flynn of the Price Futures Group tells Reuters.

What's new: "China signaled on Thursday it may retaliate against President Donald Trump’s plans for tariffs on a further $300 billion of Chinese goods," Bloomberg reports.

Where it stands: This morning, Brent was trading around $58.58 and WTI at $54.96.

Go deeper:

3. Making sense of GM's electric strategy

Illustration: Lazaro Gamio/Axios

General Motors is laying down huge, simultaneous bets on electric cars and self-driving technology, a strategic gamble based on its belief that future automated vehicles will run only on electricity, Axios' Joann Muller reports.

Why it matters: It's a risky bet that few can stomach, especially if EVs and AVs are slow to be accepted by consumers. Other carmakers, like Ford, see near-term limitations to battery-electric AVs and favor a more measured approach.

Between the lines: GM believes both technologies are approaching a tipping point and hopes they will propel it to the forefront of a massive industry shift toward shared, self-driving electric cars.

  • "The only way to lead in either one is to go heavy and hard in both of them," said Doug Parks, GM VP for autonomous and electric vehicle programs.

The big picture: Automakers are split on the path to electrification, the Wall Street Journal ($) reports.

  • Toyota and Ford are rolling out more hybrid gas-electric models as part of a gradual shift toward fully electric cars. They are both heavily invested in hybrid tech.
  • GM and Volkswagen see no need for hybrids as a technology bridge and are concentrating instead on all-electric models. They also need to defend their strong positions in China, where they face government mandates to sell more zero-emissions vehicles.

Read more

Bonus: The electric SUV opportunity
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Adapted from Department of Energy; Chart: Axios Visuals

Speaking of EVs, the installment of the Energy Department's handy "Transportation Fact of the Week" series that ran during Generate's break last week provides a helpful breakdown of the U.S. market.

Quick take: It shows that automakers have a wide open market when it comes to trying to build SUVs that may appeal to U.S. drivers. SUVs are over 40% of total U.S. vehicle sales.

  • So that means there’s room to grow even within the still-tiny EV market as it expands.
  • And that will be especially true if a future administration toughens auto emissions rules in a way that juices EV sales to meet the mandates.
4. Catch up fast: nuclear, EV charging, wind

Geopolitics: "The US has put a major state-owned Chinese nuclear power company, a partner for the UK’s power generation programme, on its export blacklist, over accusations of stealing US technology for military use," per FT ($).

EV charging: BP said Thursday that it has deployed its first 150kW "ultra-fast" EV charging stations at a retail fuel site in the U.K., calling it the "first in a planned network of ultra-fast charging infrastructure stretching across the U.K."

  • Why it matters: The move signals how BP is seeking to capitalize on last year's acquisition of the Chargemaster network, now called BP Chargemaster.
  • The company plans to deploy 400 of these "ultra-fast"systems — which they say require only 10–12 minutes to use — in fuel stations in the U.K. by 2021.

Wind: Greentech Media explores how offshore wind farms in China, the U.K. and elsewhere are getting really, really big, with some having as much capacity (reminder: this is not actual generation) as small nuclear reactors.

  • "There are now half a dozen offshore wind farms larger than 400 megawatts in operation or under construction around the world, according to the Global Wind Energy Council," they report.
Ben GemanAmy Harder