Solar Stocks are on Fire, Giving Clean Energy Investors a Long-Awaited WinJun18

Daily Intelligence Briefing

Monday, June 17, 2019

Renewables

For the First Time, Renewables Have the Capacity to Generate More Power Than Coal

The Federal Energy Regulatory Commission’s most recent numbers found that in April, renewable energy—including wind, solar, geothermal, biomass, and hydroelectric—surpassed coal in energy generating capacity for the first time in American history.

Trends in the FERC’s monthly reports and other similar reports suggest renewable energy capacity and production are going nowhere but up—and coal is going nowhere but down. That decline is largely driven by the affordability of natural gas and the declining costs of building clean energy projects. This year, the percentage of total capacity available from coal has declined down to 21.55 percent, from 22.73 percent in April 2018.

With new renewable projects coming online, total generating capacity from renewable energy facilities increased to 21.56 percent of all available installed electrical capacity in the U.S.

An analysis of the FERC report by the Sun Day Campaign, a nonprofit group researching sustainable energy, found that total generating capacity from more traditional fuels like natural gas, coal, oil, and nuclear could actually decline by 2022 as plant retirements exceed new projects. If the ERC’s projections remain accurate, that means that renewable sources of energy could provide one-quarter of the power in the U.S. by that same year, according to the Sun Day Campaign.

Read the full article from Slate +

Renewables

Double-Sided Solar Panels Get Exemption From Trump’s Trade Tariffs

Bifacial solar modules, which generate power from the front and the back, have been exempted from a 25% trade tariff that had all but stopped imports from China.

This offers a fresh supply of lower cost solar panels to U.S. developers who have seen the construction of new projects level out after a period of significant growth.

In essence, bifacial solar cells use the exact same technology as dozens of GWs worth of existing solar farms, with a few tweaks to enable light to reflect from the ground and generate electricity via the back of the cell.

Now that prices for panels have continued to fall, the small price premium for bifacial modules has been eroded.

Read the full article from Forbes +

Renewables

Off-Grid Solar Energy Use Is About to Explode Thanks to These Key Regions

The renewable energy industry employed 11 million people globally in 2018, around 700,000 more than last year. Solar accounted for a third of those jobs, while the three million solar workers in Asia represented around 90 percent of the total solar industry.

Those are impressive figures, but the real standout of global solar industry growth is what’s happening off-grid. For the first time in its annual reports, the agency estimated that around 372,000 people in South Asia and parts of Africa are working in off-grid solar. That figure is expected to triple in the space of just four years.

The agency claims that the number of people benefitting from off-grid renewables jumped sixfold from 2011 to 2016 to reach 133 million people. Renewables are expected to account for 60 percent of all new electricity access by 2030, and around half of that will come from off-grid.

Read the full article from Inverse +

Renewables

Household solar surge drives down power sales

Surging rooftop solar panel installations and improved energy efficiency will push down the amount of power sold in the South West for the first time since at least 2006, according to the operator of the electricity market. The Australian Energy Market Operator predicts power sales will decrease an average 0.4 per cent a year over the next decade, reversing its prediction last year of 0.9 per cent annual growth.

In the WA Electricity Statement of Opportunities, to be published today, AEMO said power sold per residential customer had decreased 3.6 per cent a year because of more energy efficient devices, such as LED lighting and inverter reverse-cycle air conditioners, and continuing uptake of rooftop solar. Solar panels have also reduced the summer peak in power bought on hot days, and last year the winter peak equalled the summer peak for the first time since WA’s energy market started in 2006.

AEMO predicts that by 2024 renewable energy will at times generate 65 per cent of the grid’s power — equal to the world’s highest penetration. Rooftop solar, which is not centrally co-ordinated or monitored, can generate 1.1 gigawatts of power, more than the biggest generator on the grid and is expected to more than double in the next 10 years.

Read the full article from The West Australia +

Renewables

Target aims for 100% renewables by 2030; Walmart announces Minnesota solar deal

Target plans to power 100% of its US operations with renewable generation by 2030, including stores, distribution centers and offices, the big box retailer said Wednesday. The day before, Walmart announced it would subscribe to 36 community solar projects in Minnesota developed by US Solar. The retailer is also working toward 100% renewable energy

Corporate purchases of clean energy “surged to new record in 2018,” according to Bloomberg New Energy Finance. Last year, corporations worldwide more than doubled 2017 buying levels, purchasing 13.4 GW of clean power through long-term contracts.

Driven by state mandates, activist shareholders and economics, corporations are buying into renewable power at a rapid clip. Target’s goal comes with an interim target of 60% renewables by 2025.

Read the full article from Utility Dive +

SHORT

Airlines

LONG

CRISPR

LONG

Oil & U.S. Energy

SHORT

U.S. Pharmaceuticals

LONG

3D Printing

SHORT

Autos

LONG

Gold & Gold Miners

LONG

Robotics & Automation

LONG

Video Gaming

US Retail Sales Rise in May

US retail trade rose 0.5 percent from a month earlier in May 2019, following an upwardly revised 0.3 percent growth in April and compared to market expectations of 0.6 percent. 10 of 13 major retail categories showed month-over-month increases.

Excluding automobiles, gasoline, building materials and food services, retail sales grew 0.5 percent in May after a 0.4 percent advance in the previous month. These so-called core retail sales correspond most closely with the consumer spending component of GDP. Year-on-year, retail trade growth slowed to 3.2 percent from a revised 3.7 percent in the previous month.

Click here to access the data +

US Consumer Sentiment Weaker than Expected

The University of Michigan’s consumer sentiment for the US dropped to 97.9 in June 2019 from 100.0 in the previous month, slightly missing market consensus of 98.0, a preliminary estimate showed.

The consumer expectations sub-index slumped to 88.6 in June from the previous month’s 93.5; while the gauge for current economic conditions increased to 112.5 from 110.0.

Consumers anticipated an average long-term inflation rate of just 2.2%, the lowest rate the surveys have recorded since the question was introduced forty years ago.

Click here to access the data +

China Industrial Production

China’s industrial production increased 5 percent year-on-year in May 2019, easing from a 5.4 percent advance in April and missing market consensus of 5.5 percent. That was the weakest yearly growth in factory output since early 2002 amid an escalating trade dispute between Beijing and Washington, as production rose at a slower pace for both manufacturing (5 percent vs 5.3 percent in April) and utilities (5.9 percent vs 9.5 percent).

Meanwhile, mining output expanded faster (3.9 percent vs 2.9 percent). By industry, output rose less for power equipment and communication, while production growth accelerated for chemicals, non-metal minerals, ferrous metals, general equipment, transport equipment and machinery.

Click here to access the data +

French May Inflation Rate Slows Faster than Expected

France’s annual inflation rate fell to 0.9 percent in May 2019 from 1.3 percent in the prior month and below an initial estimate of 1.0 percent. It is the lowest inflation rate since August 2017, reflecting slower growth in prices for services, energy and food and a faster decrease in those of manufactured products.

On a monthly basis, consumer prices went up 0.1 percent, after a 0.3 percent increase in the previous month and slightly below an earlier figure of 0.2 percent. The harmonized index of consumer prices increased by 1.1 percent from the previous year (vs 1.5 percent in April) and went up by 0.1 percent month-over-month (vs 0.4 percent in April).

Click here to access the data +

Russia Lowers Key Rate to 7.5%, Signals More Cuts

The Bank of Russia cut its benchmark one-week repo rate by 25 bps to 7.5 percent during its June meeting and signaled more rate cuts were likely in the next few months, as inflation continues to slow amid weaker-than-expected economic growth. Policymakers also lowered their end-of-year annual inflation forecast for 2019 to 4.2-4.7 percent from 4.7-5.2 percent previously estimated. Moving on, the central bank sees annual inflation staying close to 4 percent.

Taking into account GDP growth statistics for 2018 — 2019 Q1 published by Rosstat, the Bank of Russia lowered its GDP growth forecast for 2019 from 1.2-1.7% to 1.0-1.5%. Subsequent years might see higher economic growth rates as national projects are implemented.

Click here to access the data +

India Wholesale Inflation Slows to Near 2-Year Low of 2.45%

Wholesale prices in India rose by 2.45 percent year-on-year in May 2019, easing from a 3.07 percent gain in the previous month and below market expectations of 3.1 percent. It was the lowest wholesale inflation rate since July 2017, amid a slowdown in cost of food, fuel and manufactured products.

In May, cost of primary articles rose by 6.16 percent, slower than a 6.5 percent increase in April, mainly due to prices of food articles (6.99 percent vs 7.37 percent in April. On a monthly basis, wholesale prices increased by 0.2 percent in May, after a 0.8 percent gain in April.

Click here to access the data +

Construction & Real Estate

Homebuilders

America’s Battle Over Housing Is Just Getting Started

In cities such as Washington, which are increasingly important hubs for upper-middle-class knowledge workers, rents have risen faster than incomes at a stronger pace than anywhere else. One obvious response would be to build more housing.

Presidential candidate Elizabeth Warren, famous for detailed policy ideas, released a plan in March designed to tackle the housing crisis. In characteristic fashion, Warren’s American Housing and Economic Mobility Act marries smart deregulation with increased government spending targeted at the poor. It would create a new federal grant program that would only go to regions that change their zoning rules to allow increased density. And it would invest about $50 billion a year in housing for the poor, through agencies called the Housing Trust Fund and Capital Magnet Funds, which also would seek to leverage additional private investment. The plan would also help poor and black homebuyers with down payments, crack down on racial housing discrimination and curb the ability of large financial companies to own concentrations of rental properties.

Another plan, by the think tank Data for Progress, includes many of these elements but would go even further, making transportation funding contingent on making zoning practices more inclusionary, limiting tax deductions for landowners, taxing empty homes and exploring land value taxes. Data for Progress’s plan also includes some elements that should be approached with caution: a major expansion of public housing and strict rent-control measures.

Read the full article from Bloomberg +

Services

Retail

Discount grocers will account for more than half of store openings this year

Discount retailers, led by dollar stores and Aldi, will account for more than half of retail store openings this year, according to data from Coresight Research cited by CBS News. Out of the almost 2,780 new locations slated for 2019, about 1,800 belong to discount chains.

Aldi, which is slated to open around 160 new locations this year, per Coresight, has transformed its no-frills legacy stores into mini supermarkets with an array of fresh and unique store brands. The discounter just opened its 1,900th store location in the U.S.

Dollar General leads growth by a wide margin, with 975 openings planned in 2019, Hundreds of stores now carry produce, and the company has begun self-distributing fruits and vegetables as it seeks to keep prices down. Dollar Tree is second to Dollar General, planning 350 new stores, then Family Dollar, Aldi and Five Below, according to the report. A recent study from the University of Nevada, Las Vegas found the quality of fruits and vegetables at the dollar stores is just as good as regular grocery store produce.

Adding further fuel to discounters’ store push is the fact that they perform well in a down economy and are able to push into low-income neighborhoods where traditional chains can’t venture.

Read the full article from Grocery Dive +

Manufacturing & Logistics

Plant-Based

Tyson to unleash Big Food push into plant-based meats with new products

Tyson Foods, the nation’s largest meat processor, unveiled Thursday its long-awaited plan to enter the burgeoning market for plant-based alternatives.The offering includes plant-based nuggets made from a blend of pea protein isolate and other plant ingredients, as well as blended burgers made with Angus beef and pea protein isolate.

Tyson’s venture capital fund currently holds investments in mushroom-based protein producer MycoTechnology and cell-based meat producers Memphis Meats and Future Meat Technologies.

In May, privately held Impossible Foods, the maker of the Impossible Burger, brought in another $300 million in funding to boost the amount of money it has raised so far to more than $775 million. The Good Food Institute, a nonprofit whose mission is to accelerate growth of plant-based and cell-based products, estimated investors have put more than $16 billion into U.S. plant-based and cell-based meat companies in the past decade — $13 billion of it in 2017 and 2018.

Beyond Meat, the first plant-based alternative meat company to list on Wall Street, went public at $25 on May 2, but has since surged to about $140 a share.

Read the full article from Food Dive +

Plant-Based

Impossible Burger Shortages Hit White Castle and Red Robin

Large restaurant chains Red Robin and White Castle are reporting shortages of Impossible Foods Inc.’s popular meat-free patties, even as the plant-based food producer embarks on a nationwide expansion with Burger King. Impossible Foods told Bloomberg earlier this week that its products are now on the menu at about 9,000 restaurants, but couldn’t say how many currently had access to stock.

The supply hiccups may be a sign of how eager companies are to expand market share as demand soars for meat alternatives and startups that make the products increasingly go national.

The company has said that it would sell its products in retail outlets this year, too. It’s currently awaiting Food and Drug Administration approval for its “magic” ingredient known as heme, which is made with genetically modified yeast.

Read the full article from Bloomberg +

Technology

Semiconductors

Trump’s trade war strikes again: Broadcom plummets after cutting its yearly sales forecast, dragging the entire chipmaker industry lower

Broadcom shares sunk on Friday morning as the chipmaker missed revenue estimates and lowered its sales outlook for the year.

“We currently see a broad-based slowdown in the demand environment, which we believe is driven by continued geopolitical uncertainties, as well as the effects of exports restrictions on one of our largest customers,” Hock Tan, Broadcom’s president and chief executive officer said in a press release. He continued: “As a result, our customers are actively reducing their inventory levels, and we are taking a conservative stance for the rest of the year.” Further, Broadcom lowered its 2019 revenue outlook from $24.5 billion to $22.5 billion.

Huawei, one of Broadcom’s largest customers, was blacklisted by the US in May over national security concerns, preventing the company from working with US businesses such as Broadcom.

Read the full article from Business Insider +

Semiconductors

China Is Still Multiple Generations Behind In Chip Manufacturing

Regardless of why the U.S. actually banned Huawei, the end result is the same: Huawei could find itself scrambling to procure components needed to complete the different products it makes, not least of which is its popular smartphone line.

Two major types of chips that the Chinese are keen on being able to build are memory-focused chips such as NAND and DRAM. NAND, a non-volatile memory chip is used for storage in everything from throwaway 16GB MicroSD cards to high-performance 2TB solid state drives. When it comes to this kind of chip, the Chinese seem to be closing the gap.

Perhaps the most advanced foundry there is owned by Semiconductor Manufacturing International Corporation (SMIC). A company spokesperson late last year said, “Our 14nm technology will start risk production by 2019, 12nm (nanometer) process development is completed and under customer verification.”

Keep in mind how much further along the rest of the world is: TSMC (Taiwan) is already producing high performance AMD CPUs on its 7nm process with low power Apple parts having shipped in 2018, Samsung is readying advanced EUV production lines for NVIDIA’s next generation of graphics chips, and Intel is rolling out its 7nm-equivalent this year as well. We even reported yesterday that TSMC is now actively developing its 2nm node!

If China’s most advanced foundry is only beginning low-volume 14nm production this year, that would put them about four or five years behind the rest of the world. An eternity in the world of semiconductors.

Read the full article from WCCF Tech +

Smartphones

New iPhone Lineup Unlikely To Spur Big Uptick In Demand, Analyst Says

Yasuo Nakane, global head of tech research for Mizuho Securities, said he foresees “weak demand” for the 2019 model iPhones because of “limited new features.”

In a report, he lowered his iPhone production estimate to 178 million units from 186 million units. That would represent a decline of 15% year over year from 209 million units in 2018. Nakane now expects Apple to produce 67 million units of the new iPhone in 2019. That’s down from his prior forecast for 73 million units. For last year’s new model, Apple built 77 million units in 2018, he said.

Apple is saving its big product refresh for the 2020 iPhone launch, he said. That handset family is likely to support 5G wireless. It also could feature physical design changes, such as a smaller front camera notch and increased display area, he said.

Read the full article from Investor’s Business Daily +

Commodities

Crops

Corn prices poised to hit 5-year high as flooding leaves U.S. plantings way behind

U.S. farmers are millions of acres behind their usual pace of corn planting this spring because of flooding, which may lead to a supply shortage that lifts prices by year end past $5 a bushel to their highest in more than five years.

Corn planted in the 18 states that account for the bulk of U.S. production was at 83% of expected plantings as of the week ended on June 9, significantly below the 99% seen a year earlier, according to the U.S. Department of Agriculture. Some 8.5 million acres in the eastern Corn Belt and 6.5 million acres in the western Corn Belt remain unplanted.

The most-active July contract for corn futures settled at $4.53 a bushel in Chicago on Friday, the highest since June 2014—and nearly 21% higher than the $3.75 finish on Dec. 31. The USDA’s World Agricultural Supply and Demand Estimates report forecasted a decline in corn production to 13.7 billion bushels for the 2019-20 marketing year, the lowest in four years.

U.S. grain exports have also suffered from “greater global competition,” and the ethanol industry cannot afford higher input prices with reformulated gasoline at current levels.

Read the full article from MarketWatch +

Metals

US initiative to reduce storage, EV reliance on Chinese minerals amid trade uncertainty

The U.S. Department of State on Tuesday issued a fact sheet related to its Energy Resource Governance Initiative (ERGI) to advance worldwide governance principals in the mining sector and secure a diversified energy resource mineral supply chain.

The US energy storage market, along with renewables and EVs, precariously relies on critical minerals, and any disruption in the supply from China could potentially damage progress: “Over 80 percent of the global supply chain of rare earth elements, important minerals for electric vehicles and wind turbine components, is controlled by one country,” the department said in its fact sheet.

Under the plan, the U.S. will share mining expertise with other countries to develop their mineral resources, as well as advise them on governance frameworks to help attracted foreign investors. Canada and Australia, two large mining countries, have partnered with the U.S. in its efforts and others could join later.

Read the full article from Utility Dive +

Oil

Putin’s $40 Oil Lie

Much has been made of President Vladimir Putin’s recent claim that crude oil prices are acceptable at present levels, and the Russian economy could even weather $40 per barrel. Many oil market “tea leaf readers” have taken this to mean Putin has caved to the demands of his country’s oil oligarchs and Russia is unlikely to agree to an extension of last December’s OPEC+ deal at the scheduled mid-year meeting.

In reality, the crafty old Russian fox is probably just posturing to get a better deal for his country. The Kremlin needs higher crude prices than Putin claims for economic and geopolitical reasons. Why else would his government agree to two previous rounds of OPEC+ cuts when crude prices were relatively low? But Saudi Arabia has only itself to blame for Russia’s more assertive bargaining position this time around, having fallen back to its traditional swing producer role so far this year given the kingdom’s need for relatively high crude prices.

Looking forward, we should expect an agreement to extend, and possibly deepen the OPEC+ cuts at the mid-year meeting. A deepening depends on downward adjustments to oil consumption growth projections between now and then balanced by expected production declines in Iran and Venezuela – and possibly elsewhere, such as Libya. Relatively speaking, Saudi Arabia will likely have to bear more of the burden of curbs than Russia – greater than the current 1.4 to 1 ratio – with the old fox Putin outwitting al-Falih and company. The price of spot Brent should average $75 per barrel in the second half of the year, roughly $10 more than the first half.

Read the full article from Oil Price +

Energy & Environment

Renewables

For the First Time, Renewables Have the Capacity to Generate More Power Than Coal

The Federal Energy Regulatory Commission’s most recent numbers found that in April, renewable energy—including wind, solar, geothermal, biomass, and hydroelectric—surpassed coal in energy generating capacity for the first time in American history.

Trends in the FERC’s monthly reports and other similar reports suggest renewable energy capacity and production are going nowhere but up—and coal is going nowhere but down. That decline is largely driven by the affordability of natural gas and the declining costs of building clean energy projects. This year, the percentage of total capacity available from coal has declined down to 21.55 percent, from 22.73 percent in April 2018.

With new renewable projects coming online, total generating capacity from renewable energy facilities increased to 21.56 percent of all available installed electrical capacity in the U.S.

An analysis of the FERC report by the Sun Day Campaign, a nonprofit group researching sustainable energy, found that total generating capacity from more traditional fuels like natural gas, coal, oil, and nuclear could actually decline by 2022 as plant retirements exceed new projects. If the ERC’s projections remain accurate, that means that renewable sources of energy could provide one-quarter of the power in the U.S. by that same year, according to the Sun Day Campaign.

Read the full article from Slate +

Renewables

Double-Sided Solar Panels Get Exemption From Trump’s Trade Tariffs

Bifacial solar modules, which generate power from the front and the back, have been exempted from a 25% trade tariff that had all but stopped imports from China.

This offers a fresh supply of lower cost solar panels to U.S. developers who have seen the construction of new projects level out after a period of significant growth.

In essence, bifacial solar cells use the exact same technology as dozens of GWs worth of existing solar farms, with a few tweaks to enable light to reflect from the ground and generate electricity via the back of the cell.

Now that prices for panels have continued to fall, the small price premium for bifacial modules has been eroded.

Read the full article from Forbes +

Renewables

Off-Grid Solar Energy Use Is About to Explode Thanks to These Key Regions

The renewable energy industry employed 11 million people globally in 2018, around 700,000 more than last year. Solar accounted for a third of those jobs, while the three million solar workers in Asia represented around 90 percent of the total solar industry.

Those are impressive figures, but the real standout of global solar industry growth is what’s happening off-grid. For the first time in its annual reports, the agency estimated that around 372,000 people in South Asia and parts of Africa are working in off-grid solar. That figure is expected to triple in the space of just four years.

The agency claims that the number of people benefitting from off-grid renewables jumped sixfold from 2011 to 2016 to reach 133 million people. Renewables are expected to account for 60 percent of all new electricity access by 2030, and around half of that will come from off-grid.

Read the full article from Inverse +

Renewables

Household solar surge drives down power sales

Surging rooftop solar panel installations and improved energy efficiency will push down the amount of power sold in the South West for the first time since at least 2006, according to the operator of the electricity market. The Australian Energy Market Operator predicts power sales will decrease an average 0.4 per cent a year over the next decade, reversing its prediction last year of 0.9 per cent annual growth.

In the WA Electricity Statement of Opportunities, to be published today, AEMO said power sold per residential customer had decreased 3.6 per cent a year because of more energy efficient devices, such as LED lighting and inverter reverse-cycle air conditioners, and continuing uptake of rooftop solar. Solar panels have also reduced the summer peak in power bought on hot days, and last year the winter peak equalled the summer peak for the first time since WA’s energy market started in 2006.

AEMO predicts that by 2024 renewable energy will at times generate 65 per cent of the grid’s power — equal to the world’s highest penetration. Rooftop solar, which is not centrally co-ordinated or monitored, can generate 1.1 gigawatts of power, more than the biggest generator on the grid and is expected to more than double in the next 10 years.

Read the full article from The West Australia +

Renewables

Target aims for 100% renewables by 2030; Walmart announces Minnesota solar deal

Target plans to power 100% of its US operations with renewable generation by 2030, including stores, distribution centers and offices, the big box retailer said Wednesday. The day before, Walmart announced it would subscribe to 36 community solar projects in Minnesota developed by US Solar. The retailer is also working toward 100% renewable energy

Corporate purchases of clean energy “surged to new record in 2018,” according to Bloomberg New Energy Finance. Last year, corporations worldwide more than doubled 2017 buying levels, purchasing 13.4 GW of clean power through long-term contracts.

Driven by state mandates, activist shareholders and economics, corporations are buying into renewable power at a rapid clip. Target’s goal comes with an interim target of 60% renewables by 2025.

Read the full article from Utility Dive +

Carbon

Some Republican Lawmakers Break With Party on Climate Change

A small but growing number of Republican lawmakers are urging action on climate change, driven by shifting sentiment among GOP voters and the effects of global warming, from stronger hurricanes to more-destructive wildfires.

Republican Rep. Matt Gaetz of Florida says the GOP needs to advance sound conservative proposals to combat climate change and embrace science, or risk long-term political damage. In April, Mr. Gaetz announced his “Green Real Deal” plan that seeks to cut greenhouse-gas emissions by fostering innovation and entrepreneurship and reducing government regulations on the development of clean-energy technology.

Rep. Francis Rooney (R., Fla.), the new co-chairman of the caucus, joined Democrats in co-sponsoring a measure in January that would tax the carbon emissions of fuel producers and importers. That followed a carbon-tax bill filed last year by then-Rep. Carlos Curbelo (R., Fla.) that didn’t advance. Mr. Rooney also introduced a resolution in February that called for planning to mitigate the effects of sea-level rise.

A 2018 Monmouth University poll found that 64% of Republicans believed in climate change, a 15-percentage-point jump from 2015, compared with 92% of Democrats. At the same time, 25% of Republicans called it a very serious problem, while 82% of Democrats did.

Read the full article from The Wall Street Journal +