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BFD Expert Voices - Climate Deals

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An unusual project that uses solar-powered steam and storage to decarbonize clean fuel production has started operating at a site in Southern California, the companies tell Katie.

Why it matters: The companies say the financing deal behind the project represents the first industrial solar steam power purchase agreement, which could help the tech become more mainstream.

Driving the news: Renewable fuels maker Oberon Fuels and solar steam company Sunvapor have just turned on the solar steam and storage system at Oberon's facility in Brawley, Calif., near San Diego.

Oberon uses the solar-powered steam to heat the reaction needed to produce its clean fuel, replacing natural gas-powered steam. The process lowers the carbon footprint of the clean fuel.

The demonstration project, which is supported by the Department of Energy, also uses compressed steam as storage to be able to generate the needed heat when the sun goes down.

The power purchase agreement enabled Oberon to avoid the upfront capital costs required to deploy the system.

Zoom in: Sunvapor has also deployed its solar thermal boilers for an almond processor in Southern California.

The big picture: Power purchase agreements (PPAs) are standard deals in the solar panel project world.

However, the market for solar-powered industrial heat is just emerging, partly driven by industrial decarbonization incentives available in the Inflation Reduction Act.

A solar industrial heat PPA could help the nascent sector become more mainstream and grow as potential customers see they can avoid upfront capex costs.

Bottom line: It's still early days for solar industrial steam, but adopting attractive financing is a major step.

1 big thing: Industrial solar heat PPA

A solar-powered boiler and steam storage unit developed by Sunvapor and installed at the site of Oberon Fuels plant in Brawley, Calif.

A solar-powered boiler and steam storage unit developed by Sunvapor and installed at the site of Oberon Fuels plant in Brawley, Calif. Photo: Courtesy of Oberon Fuels

Solar manufacturers in the U.S. have asked the Commerce Department to investigate whether Chinese rivals are engaging in unfair trade practices, Alan writes.

Why it's the BFD: A similar petition two years ago brought America's deeply Asia-dependent solar sector to a near-standstill.

Catch up fast: China heavily subsidizes its solar sector, enabling its companies to sell panels at a discount that U.S. companies say is unfair.

The U.S. under President Trump and then President Biden has imposed tariffs on Chinese solar imports to penalize Beijing for such practices.

The latest: Solar manufacturers in the U.S. say China is getting around the tariffs by working through third parties in Southeast Asia.

Seven companies yesterday submitted a petition to the Biden administration, asking it impose duties on $12.5 billion of solar equipment imported from Asia, per a Bloomberg report this morning.

The petition could lead to tariffs reaching 271.5% as soon as this year.

Flashback: A similar petition led by San Jose-based manufacturer Auxin in 2022 led to a Commerce Department probe that brought the threat of potentially ruinous retroactive tariffs.

U.S. developers, and especially large companies reliant on big orders from China, effectively halted new utility projects. New utility-scale installations that year plummeted 31%.

By the numbers: About 80% of America's imported solar panels come from Southeast Asia.

What's next: The petition yesterday was brought by manufacturers Convalt Energy, First Solar, Hanwha Qcells USA, Meyer Burger (Americas), Mission Solar Energy, REC Silicon and Swift Solar.

A U.S. investigation last summer concluded that Chinese companies were indeed bypassing tariffs by assembling panels in Cambodia, Malaysia, Thailand and Vietnam.

The Commerce Department is expected to decide in the next 20 days whether to investigate — and whether to impose preliminary duties.

💭 Alan's thought bubble: This is the latest example of America's climate and domestic manufacturing ambitions running headlong into China's dominance over certain sectors, from electric vehicles and minerals to solar panels.

2. The BFD: Anti-dumping petition

Illustration of a hurdle with a thin solar panel as the bar. 

French power giant TotalEnergies and UK energy supplier Octopus Energy are each pursuing low-carbon energy deals in the U.S.

Why it matters: Lucrative federal incentives are spurring the biggest players in energy to accelerate their American clean-energy spending, Alan writes.

The latest: TotalEnergies and BlackRock-owned Vanguard Renewables unveiled a joint venture to develop U.S. renewable gas projects, as colleague Ben Geman wrote this morning in Generate.

The companies plan to start constructing 10 projects over the next year and may invest in dozens more. The technology converts food waste and dairy manure into gas. 

Meanwhile, British renewable energy supplier Octopus Energy plans to invest $10 million to $30 million in Ocergy, an Oakland developer of foundations for floating offshore wind turbines, per WSJ.

Floating turbines are needed for wind farms off the U.S. West Coast, where the seabed is too deep for installing conventional offshore wind turbines. 

Of note: Neither TotalEnergies nor Octopus is new to America. TotalEnergies has sizable businesses in renewables, oil, gas, and biofuels. 

Octopus, one of the fastest-growing energy providers in Europe, entered the U.S. market in 2020 when it acquired Evolve Energy, a Houston- and Silicon Valley-based energy data provider.

💭 Alan's thought bubble: These are exactly the kinds of deals that policymakers have been aiming for. And, crucially, they're aimed at U.S. startups building the physical assets needed for the energy transition — not merely software developers.

3. Eurotrip in the U.S.

Illustrated collage of the American flag, the EU stars, an oil drum and a wind turbine. 

Tesla's revenue and profit tumbled in the first quarter, but the company promised to speed up the development of new vehicles as it encounters stiff headwinds in the EV space, our colleagues Nathan Bomey and Ben Geman write.

Why it matters: The wider electric vehicle transition is intertwined with Tesla, the world's largest seller of battery-powered cars.

Below are some outtakes from the results:

💵 A cheaper model is still happening — apparently. The earnings deck says it's among the products arriving before the second half of 2025.

But Musk did not repeat plans for a $25,000 model or offer a price point.

🧐 Musk insisted Tesla remains his priority. His focus on X and other ventures has been among investor concerns.

"Tesla constitutes the majority of my work time," Musk said.

🤖 He really wanted to discuss autonomy and AI. He wants Tesla to be viewed as a cutting-edge tech company.

"We should be thought of as an AI robotics company." Valuing Tesla as an automaker is "fundamentally" the "wrong framework."

🤔 Q1 was an aberration, Musk insists. He talked up specific logistical problems that hurt deliveries.

"I think we will have higher sales this year than last year."

🔋 Look for more energy storage growth. Margins in Tesla's energy business have reached nearly 25%, CFO Vaibhav Taneja said.

He expects the division to grow at least 75% this year, and will "begin contributing significantly to our overall profitability."

What's next: All eyes are on Q2 deliveries — and then the promised Aug. 8 robotaxi reveal.

4. Tesla results

Illustration of the Tesla logo with gauze bandages wrapped around it.

🚙 China EV in the U.S.: Volvo's forthcoming EX30 compact SUV promises to rival Tesla's ultra-popular Model Y on power and efficiency— and, at $35,000, a price that's $8,000 less.

Volvo is owned by Chinese auto giant Geely, and the EX30 was made in China. That makes it one of the first such cars to hit U.S. dealers, foreshadowing the intense pressure American automakers may soon face from Chinese competitors, per Reuters.

🏭 Another DOE loan: The Energy Department finalized a $362 million loan for a Texas factory that will produce wiring systems used in EVs, Ben Geman writes in Generate.

CelLink's plant is expected to produce enough lightweight harnesses for roughly 2.7 million EVs annually, Deputy Energy Secretary David Turk told reporters. It helps President Biden's target for EVs making up 50% of car sales by 2030.

🌊 More offshore wind: The Interior Department this morning outlined plans for up to 12 offshore wind lease sales through 2028, Ben also writes.

The 5-year plan shows Interior believes — or at least hopes — that large energy companies will remain interested in major projects despite recent setbacks. The sales are slated for the Atlantic and Pacific coasts, Gulf of Mexico, and, late in the schedule, an unnamed U.S. territory and Hawaii.

5. Temperature check

Illustration of a thermometer shaped like a smoke stack with smoke spewing out.

• Chemix, an AI EV battery startup, has raised a $20m Series A round led by Ibex Investors. https://axios.link/4aMF1sR

• Growcer, a Canadian vertical farming company, raised a $3m Series A led by Modern Niagara. https://axios.link/3Uuve4J

• Waste infrastructure financing provider Repurpose acquired Bluebird Climate, a software company that helps consumer brands track their products' environmental performance. https://axios.link/3Qg3JcG

• Gage Zero, an Austin-based charging provider for electric fleets, opened a truck charging site in Fontana, Calif. It plans to develop another public charging depot outside Fort Worth, Texas. https://axios.link/3WcV92n

• ZeroAvia, a hydrogen aviation startup based in Hollister, Calif., says it will sell its hydrogen and electrification tech to third-party aviation manufacturers from a facility at Paine Field, Everett, Wash. https://axios.link/4aO94Ab

• The European Parliament approved a proposed law banning certain single-use plastic packaging, such as tiny hotel shampoo bottles and single-use grocery bags, per Reuters. https://axios.link/3xQVAFi

6. Hot deals

• Tony Sage was named CEO of Critical Metals, an NYC-based mining company focused on energy-transition metals and minerals. Sage will remain board chairman. https://axios.link/3xQXRQX

• Chris Gannon was named president and CEO of 374Water, a Durham, N.C.-based waste and water treatment tech developer. Gannon was previously president and CEO of Energy Recovery. https://axios.link/3xOUBFP

7. It's personnel

Next-gen aviation startup Beta Technologies' ALIA eVTOL (electric vertical takeoff and landing) aircraft recently completed its first crewed transition from vertical to horizontal flight, colleague Alex Fitzpatrick reports in What's Next.

ALIA took off like a helicopter, switched to flying on its wings like an airplane, then landed like a chopper. (See the full video here; go to 3:30 for the big moment.)

Why it matters: It's a key milestone for the Vermont-based company, plus a chance to gather important data as it seeks FAA certification for its aircraft.

Context: VTOL aircraft aren't new — the most famous version, the V-22 Osprey, has been flying since 1989.

But today's models are sleek, modern aircraft, with updated technology, materials, and electric propulsion.

What's next: Beta and rivals like Joby Aviation are exploring military and cargo uses while working to ready their aircraft for passenger flights.

8. Video of the day: From vertical to horizontal

A GIF depicts a white, multi-rotor aircraft made by Beta Technologies taking off from a runway, hovering a few feet above the pavement, and then beginning to move forward.

Beta's aircraft takes off vertically and then begins to move forward laterally. Video: Courtesy Beta Technologies

👀 What we're watching: How solar developers and investors react to a new anti-dumping petition. Read on below.

♻️ Katie plans to tour a recycling plant today!

🧐 Alan isn't sure when exactly the main character in "Tokyo Vice" got a lobotomy, but when a ruthless crime boss suddenly disappears under mysterious circumstances, it's not an ideal time to start dating his girlfriend. 

Thank you to Michael Flaherty and Chris Speckhard for today's edits.

And thank you for reading Climate Deals! Please share with your friends, family and solar supporters.

April 24, 2024

1 big thing: Industrial solar heat PPA