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🍺 Happy Friday! This week's final newsletter has a Smart Brevity count of 1,220 words, 4.5 minutes.

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1 big thing: El Niño spins initial hurricane outlooks

Illustration of a question mark with a hurricane icon as the dot

Illustration: Natalie Peeples/Axios

With an El Niño likely taking shape in the equatorial tropical Pacific Ocean, forecasters are already taking into account the likely knock-on effects, Andrew writes.

Why it matters: Such an event may alter global weather patterns for at least the next six months to a year, including the limiting of Atlantic tropical storms and hurricanes this upcoming season.

Driving the news: Two ripple effects — known to meteorologists as "teleconnections" — that El Niño is associated with are already becoming evident.

  • First, El Niño events can inhibit Atlantic tropical storm and hurricane formation by increasing winds in the upper atmosphere over the tropical Atlantic.
  • Such wind shear can tear apart incipient storms before they can strengthen.

Zoom in: According to a new outlook from the University of Pennsylvania, the 2023 Atlantic hurricane season is likely to feature between 12 and 20 named storms, with a "best guess" of 16.

Yes, but: Though heavily favored, the weather system's formation is not yet guaranteed.

  • El Niño intensity is now a major question facing forecasters.
  • The NOAA's current forecast calls for a 4-in-10 chance of at least a strong El Niño by late fall into the winter.

Between the lines: To get an El Niño, multiple sustained "westerly wind bursts" need to take place just north of the equator, slackening or even reversing trade winds that typically blow from east to west.

  • Sometimes, as occurred in 2014, ocean conditions may be ripe for an El Niño, but the atmosphere can pull a head-fake.

The big picture: A hallmark of El Niño events is above-average ocean temperatures in the central to eastern equatorial tropical Pacific Ocean.

Threat level: Another consequence of El Niño events is that, when it comes to the climate, they can act like hitting the gas pedal in a car that's already speeding.

  • Given human-caused warming since the last big El Niño in 2016, even a mild-to-moderate event today would shatter global temperature records.

What we're watching: Any shift in the odds for El Niño's occurrence and strength when the next NOAA forecast comes out May 11.

Read the whole story.

2. Nuclear giant plans small reactors

Artist's rendering of Westinghouse's planned small modular reactor

Artist's rendering of the Westinghouse AP300 small modular reactor. Image courtesy of Westinghouse

Westinghouse Electric Co. is jumping into the small modular reactor market with both feet — and claims an edge in the crowded space, Ben writes.

Driving the news: Westinghouse on Thursday unveiled a 300-megawatt design that's a small version of its AP1000, a move that greatly deepens the company's foray into SMRs.

Why it matters: There's growing investor and policymaker interest in nuclear power to help decarbonize electricity.

  • Proponents herald lower costs and faster timelines, avoiding budget overruns and delays that have hobbled large reactor plans.

The intrigue: Westinghouse says it's the only SMR "truly based on an Nth-of-a-kind operating plant."

  • A dozen AP1000s are operating or under construction, mostly in China, but also including two at Southern Company's Vogtle plant in Georgia (which itself has suffered delays and overruns).
  • That means mature supply chains, construction "lessons learned" and a design familiar to regulators in multiple countries.

What's next: Westinghouse is seeking design certification from U.S. regulators by 2027, with construction launching in 2030 and power production in 2033.

  • The company tells Axios it sees "global possibilities."
  • Reuters reports "informal" talks with parties in Ohio and West Virginia about deploying the tech at former coal plants.

The bottom line: It's a major move in the SMR space, where other nuclear giants like GE Hitachi and lots of startups are also competing.

3. Charted: The growing offshore wind pipeline

U.S. offshore wind project pipeline by state
Data: American Clean Power Association; Note: Projects in the advanced development phase have secured offtake, identifying the state where power generated will be provided; Chart: Alice Feng/Axios

A new report provides a data-rich window into the future of U.S. offshore wind — and warns of hurdles to making it happen, Ben writes.

Driving the news: The American Clean Power Association broke down the development pipeline into buckets.

  • The above chart represents what's under construction or in "advanced" development, i.e. with secured buyer agreements.
  • Roughly twice as much is in early development — projects somewhere in the planning stages that lack power off-take deals for now.

The big picture: Over 51,000 megawatts of capacity, largely on the East Coast, is somewhere in the pipeline.

  • Add on states' targets — like California's goal of 25,000 MW by 2045 — and there's far more still.
  • Many deep-pocketed companies are in the game, such as Shell, Equinor, Ørsted and BP.

Why it matters: Those 51,000-plus MWs can power over 20 million homes, per ACP.

Threat level: Rising project costs due to inflation, supply chain constraints and other "economic disruptions" cloud some projects' viability, it states.

The bottom line: The U.S. has a tiny amount of capacity operating now (42 MW), vastly behind China (over 31,000 MW) and several European nations.

  • But it's slated to rise as construction ramps this decade and beyond.

4. On our screen: A fossil divestment decline

Illustration of big banks leaving oil companies

Illustration: Sarah Grillo/Axios

Investment funds are slowing their roll when it comes to shedding fossil fuel holdings, Ben writes.

Driving the news: New Goldman Sachs research finds a "precipitous" decline in 2022, asking if "peak fossil fuel divestment" has occurred after a record 2021.

  • It also suggests a growing backlash against environmental, social and governance practices could be taking a toll.
  • "Our latest analysis . . . shows a 99% y/y drop off in new [assets under management] being committed to divest from some portion of the fossil fuel value chain in 2022."

The big picture: There are a host of reasons why.

One thing Goldman noted is "increasing signals" of a "more nuanced and engagement-oriented approach" to energy holdings.

  • In other words, a shift toward pushing emissions-intensive companies to do better rather than dumping them.
  • A subset of this dynamic: more ESG funds focused on fossil companies seen as "improvers" on climate.

The intrigue: Raging U.S. political battles are also having an effect, Goldman found, as conservative state officials make moves against climate-friendly ESG investment policies.

  • Yet another reason on the list: the energy sector's strong financial performance, and what the firm calls "shifting views" on fossil fuel divestment.

5. NOAA eyes new public-private underwater lab

Illustration of a deep-sea fish with a photo-luminescent antenna in the shape of a question mark

Illustration: Sarah Grillo/Axios

NOAA is set to advance its crewed underwater research through an agreement it signed with the Proteus Ocean Group, using a forthcoming underwater research station off the coast of Curacao, Andrew writes.

Why it matters: The partnership would give NOAA access to an underwater version of the International Space Station, complete with laboratories and living quarters, along with media and food production facilities.

Zoom in: The agreement to use PROTEUS opens up possibilities for public-private ocean research. The ocean group would gain access to NOAA’s physical and human assets at sea and on land.

  • It comes as interest is growing in ocean climate solutions.
  • “We will address research topics such as carbon dioxide removal, climate refugia, super corals, acoustics role in healthy marine environments and microenvironmental data tied to climate events,” Lisa Marrocchino, CEO of Proteus Ocean Group, told Axios in a statement.

Context: NOAA previously operated Aquarius, an underwater lab in the Florida Keys. It is now operated by Florida International University.

6. 💬 Quoted

"Everybody feels like the oil and gas sector is somehow dominating hydrogen and [carbon capture and storage], and we’re not seeing that in our data set."
— Jigar Shah, head of the Energy Department's loan office, speaking to the Financial Times

The big picture: Oil majors have multibillion-dollar plans in these areas, and Shah said they can become major players.

He cited a "strong record of successfully developing large, complex energy infrastructure projects on time and on budget."

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🙏 Thanks to Gail Hughes and Javier E. David for edits to today's edition.