News Roundup

U.S., Canadian VCs Invest Heavily in the Energy Transition

S&P Global is reporting that U.S. and Canadian venture capital firms invested $6,711 million into what it categorizes as energy transition companies and technologies in 2021. This is four times the level of investment in 2020 and the highest level in 10 years. S&P cites investor’s appetite for risk as being driven by the possibility of “outsized returns” from technologies such as carbon capture and green hydrogen.

Source: Private money flowing freely to energy transition companies, technologies (S&P Global)

Energy Department to Send $6 Billion to Struggling Nuclear Plants

The U.S. Department of Energy has launched a new program to make up to $6 billion available to the operators of financially stressed nuclear power plants. The funding for this program was dedicated in last Novembers Infrastructure and Jobs Act. The program’s first phase will fund nuclear power plants that plan to close by September 30, 2026. This would cover the Palisades Nuclear Generating Station in Michigan and the Diablo Canyon Power Plant in California; however the latter’s shutdown is the subject of a 2018 state-level agreement and unlikely to change regardless of the provision of these funds.

News coverage: Biden tosses $6B lifeline to save struggling nuclear plants (E&E News)

Oil and Gas Leasing to Re-Start on Federal Land

On 15 April, the U.S. Department of the Interior announced that it would begin oil and gas leases on federal lands, after losing a court case on the matter. Interior Department’s new process reduces the area available for such leases by 80% from oil and gas industry proposals and increases the royalties to be paid to the federal government from 12.5% to 18.75%. Regardless, the move was denounced by environmental groups.

Source: Interior Department Announces Significantly Reformed Onshore Oil and Gas Lease Sales (Interior Department)

EPA Smog Rule to shut 18 Gigawatts of Coal

A new rule by the U.S. Environmental Protection Agency will shutter 18 gigawatts of coal-fired power plants, according to an analysis by S&P Global. S&P says that the power industry is downplaying the impact of the EPA’s plan to regulate interstate nitrogen oxides (NOx) on coal-fired power plants. However, its analysis shows that if implemented as written the rule will hasten the decline of coal by shutting down plants that have not adopted certain pollution control
technologies.

Coal represented only 22% of U.S. electricity generation in 2021, with the output from coal falling by roughly 50% since 2010. The Department of Energy expects this share to decline further as coal is replaced by both gas and renewable energy.

Source: US EPA’s plan for interstate smog might force even more early coal retirements (S&P Global)