Energy Storage Systems Boosted by Utility-Scale Battery BuildoutJul18

Daily Intelligence Briefing

Wednesday, July 17, 2019

Energy Storage

China’s Energy Storage Market to “Skyrocket” by 2024

China’s cumulative energy storage capacity is projected to skyrocket from 489 megawatts (or 843 megawatt-hours) in 2017 to 12.5 gigawatts (or 32.1 gigawatt-hours) in 2024. This represents a 25-fold increase in the installed base.

Front-of-the-meter (FTM) storage led growth, up fivefold in terms of installed power capacity compared to 2017. State Grid Corporation of China, a state-owned utility, has deployed 452 megawatt-hours of grid-connected FTM pilot projects, which accounted for 83% of FTM market growth nationwide last year.

Another promising spot in the energy storage market is the behind-the-meter commercial and industrial sector, which reached 513 megawatt-hours last year, up 2.8 times from 2017. C&I projects were developed to save on electricity bills for industrial users in manufacturing-intensive provinces such as Jiangsu and small commercial users in urban centers such as Beijing.

The ancillary services market will be transitioning from a basic compensation mechanism to a market integrated with spot energy prices by 2020. That, along with maturity in technology and subsequent cost reductions, are key factors that will contribute to the exponential growth in the nation’s energy storage market through to 2024.

By 2024, global cumulative capex investment in the energy storage sector could grow to $71 billion. Of that, China will account for about 14%, or just over $10 billion, according to Wood Mackenzie.

Read the full article from Green Tech Media +

Energy Storage

Giant batteries and cheap solar power are shoving fossil fuels off the grid

Officials in Los Angeles, California, are expected to approve a deal that would make solar power cheaper than ever while also addressing its chief flaw: It works only when the sun shines. The deal calls for a huge solar farm backed up by one of the world’s largest batteries. It would provide 7% of the city’s electricity beginning in 2023 at a cost of 1.997 cents per kilowatt hour (kWh) for the solar power and 1.3 cents per kWh for the battery. That’s cheaper than any power generated with fossil fuel.

The new solar plus storage effort will be built by 8minute Solar Energy, and is expected to create a 400-megawatt solar array, generating roughly 876,000 megawatt hours (MWh) of electricity annually — enough to power more than 65,000 homes during daylight hours. Its 800-MWh battery will store electricity for after the sun sets, reducing the need for natural gas–fired generators.

Wood Mackenzie estimated the cost to decarbonize the U.S. grid alone would be $4.5 trillion, about half of which would go to installing 900 gigawatts (GW) of energy storage technologies (today, the world’s battery storage capacity is just 5.5 GW.) As other cities follow the example of Los Angeles, that figure is sure to fall.

Read the full article from Science Magazine +

Energy Storage

NREL says utility-scale batteries can provide peaking capacity on the grid, if costs keep coming down

NREL says utility-scale batteries can provide peaking capacity on the grid, if costs keep coming down

New research from NREL suggests that utility-scale battery development will become more cost competitive at providing peaking capacity as battery costs continue to fall over the next few decades.

One key emerging application is providing storage for peaking capacity on the grid. Declining costs for battery storage have led to early deployments to serve peak energy demand and providing peaking capacity could be a significant U.S. market for energy storage in the near future.

Of particular focus are batteries with four-hour duration, due to their potential to achieve life-cycle cost parity with new combustion turbines, as well as rules in several regions that allow these devices to receive full resource adequacy credit.

Read the full article from Solar Power World +

Energy Storage

Europe Set to Race Past US in Battery Manufacturing

Europe’s battery manufacturing capacity is on the cusp of dramatic growth, though much of the investment and know-how are coming from Asian companies.

European nameplate lithium-ion battery manufacturing capacity will top 198 gigawatt-hours a year by 2023, up from roughly 18 gigawatt-hours a year today, according to Bloomberg New Energy Finance

This more than tenfold growth over the next few years should allow Europe to overtake North America, which is set to have around 130 gigawatt-hours a year of manufacturing capacity by 2023. Furthermore, Europe’s battery manufacturing growth estimate is viewed as being more reliable than North America’s because the latter is highly dependent on the fortunes of a single company, EV maker Tesla.

Much of the manufacturing capacity currently being built or planned in Europe belongs to Asian manufacturers including Chinese companies Contemporary Amperex Technology and Svolt Energy Technology, which are respectively planning 14-gigawatt-hours and 24 gigawatt-hours of production capacity. Meanwhile, South Korean manufacturers LG Chem, Samsung SDI and SK Innovation are expanding their European operations.

These companies’ aggressive investment plans have forced European Union leaders to seek ways of fostering a homegrown industry, so the continent’s auto sector does not end up being beholden to Asian battery giants. But, for now, examples of made-in-Europe lithium-ion battery manufacturing prowess are still scarce.

Read the full article from Green Tech Media +

SHORT

Airlines

LONG

CRISPR

LONG

Robotics & Automation

LONG

Video Gaming

LONG

3D Printing

SHORT

Autos

LONG

Electric Utilities

LONG

Solar

LONG

Vietnam

US Export Prices Fall the Most in 7 Months

Export prices in the US fell 0.7% MoM in June of 2019, worse than market expectations of a 0.2% drop. Prices for nonagricultural exports slumped 1.1%, the largest monthly decrease since last December. Prices for agricultural exports increased 2.7% in June led by a 13.5% rise in corn prices and a 5.0% increase in soybean prices. Year-on-year, export prices decreased 1.6%, the largest decline since August of 2016.

Click here to access the data +

US Import Prices Fall for 1st Time in 6 Months

US import prices fell 0.9% MoM in June 2019, after a flat reading in May and compared with market expectations of a 0.7% decrease. It was the first month of decline since December, as fuel prices fell 6.5% due to lower cost of petroleum (-6.2%) and natural gas (-21%). Year-on-year, import prices went down 2%, the largest YoY decrease since August 2016.

Click here to access the data +

Singapore Non-oil Exports Fall the Most in Over 6 Years

Singapore’s non-oil domestic exports (NODX) dropped 17.3% YoY in June 2019, following an upwardly revised 16.3% decline in May and compared with market consensus of a 9.9% decrease. It was the fourth straight month decline in NODX and the steepest since February 2013, as sales of both electronics and non-electronics products went down further.

Sales of electronics plunged 31.9% (vs -31.6% in May). Sales of non-electronics products fell 12.4% (vs -11.1% in May), of which civil non-monetary gold (-50.2.4%); petrochemicals (-16.7%), and pharmaceuticals (-11.3%).

Among major trading partners, exports declined to Hong Kong (-38.2%); Taiwan (-28.3%); Japan (-23.2%); South Korea (-22.7%); Malaysia (-18.4%); China (-15.8%); Thailand (-14.4%); Indonesia (-8.3%), and the EU (-22.1%). Exports to the US rose 1.5%.

Click here to access the data +

Pakistan Hikes Policy Rate to 13.25%

The State Bank of Pakistan raised its benchmark interest rate by 100 bps to 13.25% amid increased inflationary pressures and elevated fiscal and current account deficits. Consumer price inflation is expected to rise in the near-term due to higher utility costs.

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Oil Slides on Signs of Easing Middle East Tensions

Oil prices fell more than 3% on Tuesday afternoon, amid rising expectations that Middle East tensions could ease, after U.S. Secretary of State Mike Pompeo said Iran is ready to negotiate its missile program. US crude oil dropped 2.6% to $58.0 a barrel and Brent lost 2.5% to $64.8 a barrel around 03:10 pm New York time.

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Commodities: Steel +9.73%, Natural gas -3.36%

Top commodity gainers are Steel (9.73%), Orange Juice (1.63%) and Silver (1.30%). Biggest losers are Natural gas (-3.36%), Ethanol (-2.82%) and Coffee (-2.30%).

Click here to access the data +

Economics & Trade

China Economy

Chinese Consumers Are On a Spending Spree, Snapping Up Autos, Cosmetics, and More

Notwithstanding a deceleration of the economy ― China’s GDP grew 6.2% in June, the slowest pace 1992 ― Chinese consumers are doing just fine.

Retail sales grew 9.8% in June, surpassing consensus estimates of 8.5% and May’s 8.6% growth. Sales were helped by strong auto demand, which was spurred by discounting in the industry. But gains were widespread. Cosmetics sales rose 22.5%; household appliance sales were up 7.7%, and e-commerce sales surged 21%. Industrial production ticked up 6.3% YoY, above May’s 5% growth rate.

Beijing has cut taxes and fees and encouraged banks to lend to private businesses, offering a buffer to the economy. Although Chinese officials have said they would stimulate the economy further, if needed, Rothman says officials are wary of stimulating too much and increasing the country’s debt.

The takeaway for investors: China’s economy might not be in as much trouble as the bears fear, although optimism about a sharp turnaround should be tempered. The best opportunities right now are companies that will benefit from government stimulus, such as consumer-oriented stocks and parts of the economy, including software and health care, that China is trying to grow.

The iShares MSCI China ETF (MCHI) has been recovering from a nasty spill in May, and is up 13% so far this year.

Read the full article from Barron’s +

Finance

Banks

Big banks beat profit expectations but warning signs grow

JPMorgan Chase (JPM) and Wells Fargo (WFC) reported strong earnings on Tuesday, but also drops in net interest margins. On Monday, Citigroup similarly reported a decline in net interest margin. JPMorgan lowered its outlook for net interest income to “about $57.5 billion” in 2019 from the $58-plus billion it estimated in February.

Trading volumes have dropped as the US/China tariff war has kept investors on edge. A flattening of the Treasury yield curve and rising bets for a U.S. interest rate cut have also challenged banks’ ability to boost revenues. The biggest risk ahead is that lower interest rates will pressure banks’ bottom lines. JPMorgan expects as many as three rate cuts by the Fed.

The consumer business remained buoyant, though, offsetting weakness in other areas. At JPMorgan Chase, average loans increased 2% on the back of an 8% rise in credit-card loans. Debit and credit card purchase volumes each rose 6% at Wells Fargo showing consumers are still feeling confident and spending more.

Excluding a tax gain, JPMorgan earned $2.59 per share (or 2.82 with tax gain) and net revenue rose 4% to $29.57 billion, beating analyst expectations of $2.51 per share and revenue of $28.90 billion. The bank’s return on tangible common equity, a key profit measure for how well it uses shareholder money, rose to 20%, up from 19% in Q1 and above the bank’s 17% target.

Wells Fargo reported EPS of $1.30 for the second quarter ended June 30, up from $0.98 per share, a year earlier. Analysts had expected $1.15 per share.

Read the full article from Reuters +

Fintech

Singapore virtual banks to service Asia’s unbanked millions

Low-cost digital banks in Singapore are set to capture up to 2% of the country’s domestic banking sector worth about $24.3 billion, according to Moody’s Investors Service.

Not required to open physical branches, the new breed of virtual banks are also expected to shake up the market for unsecured loans, and use Singapore as a platform to target Southeast Asia’s SMEs as well as the region’s 250 million unbanked adults.

The Monetary Authority of Singapore, the city-state’s central bank, said last month that it would issue up to five new digital banking licenses, opening the sector to newcomers such as local ride-hailing giant Grab.

While the new digital licenses are only for the Singapore market, they are expected to open doors across Southeast Asia, where only 48% of Indonesians aged 15 years or older had a bank account, with 32% in the Philippines, and only 30% in Vietnam.McKinsey Global Institute estimated that of the 39 million SMEs operating across Southeast Asia, just over half were either not being catered to by credit services or were being underserved.

Read the full article from Nikkei Asian Review +

Fintech

IMF warns banks to evolve or be ‘left behind’ amid competition from big tech firms

A new IMF paper published Monday said the two most common forms of money today, cash and bank deposits, will “face tough competition and could even be surpassed.”

But banks are “unlikely to disappear” as they face growing threats from big tech companies and fintech start-ups, the paper said. “Some will be left behind no doubt … Others will evolve but must do so quickly … Policymakers should be prepared for some disruption in the banking landscape,” the IMF paper said.

The research was published as central bankers and policymakers debate the role that tech companies and digital currencies will play in the banking and payments system.

Read the full article from CNBC +

Services

Video Games

NVIDIA Takes the Road Less Traveled in Cloud Gaming

There’s been lots of buzz about companies building the “Netflix of games” with new cloud gaming platforms, which run games on servers and stream the gameplay back to players across a wide variety of devices.

Sony’s PS Now streams over 750 games to consoles and PCs. Alphabet’s Google Stadia will stream games on dongles, mobile devices and PCs. Microsoft is also developing a similar service, called xCloud.

NVIDIA doesn’t aspire to become the “Netflix of games” like Sony, Google, and Microsoft — instead, it’s taking the road less traveled by only letting gamers stream the titles they own.

In 2017, NVIDIA launched its GeForce Now service for PCs and Macs. This platform let gamers install games they owned onto NVIDIA’s remote servers. Earlier this year, NVIDIA claimed that 300,000 users were playing games “regularly” on GeForce Now, and that over a million gamers were still on its waiting list.

But will NVIDIA’s business model actually work? Each gamer would be initially given 1,000 free credits, which equals over eight hours of playtime on the mid-range platform and four hours on the high-end one. Additional bundles of 2,500 credits would be sold for $25. In other words, renting the time to finish a 40-hour PC game on GeForce Now could cost nearly as much as the game itself.

Read the full article from Motley Fool +

Manufacturing & Logistics

3DP

Norsk Titanium Additive Manufacturing Recognized in Boeing Material Allowables Program

Norsk Titanium, the company providing Rapid Plasma Deposition (RPD) additive manufacturing to the aerospace industry, has reached a new milestone in its relationship with Boeing. In its latest update Norsk has successfully characterized its RPD process as part of the Boeing Material Allowables Program. In addition, all pre-production requirements have been met, and so some structural titanium parts will be suitable for long -term production using Norsk 3D printing.

Norsk has been in partnership with the American airplane giant for several years. In 2017, the Boeing 787 Dreamliner became the first airplane to install flight-integral RPD 3D printed parts and, since then, Norsk has been in continuous production.

Outside of Boeing, Norsk Titanium has developed partnerships with other leading aerospace OEMs including Spirit AeroSystems, which recently received its first RPD 3D printed part. Most recently, global standards body SAE International gave its technical specifications for RPD technology, which will encourage adoption from other OEMs and aim in the standardization of the process.

Read the full article from 3D Printing Industry +

Technology

Semiconductors

Could chiplets help fuel the next leap in computer processing power?

Chip designers have had to find new ways of delivering the regular leaps in computer processing power we’ve become accustomed to. One of the more recent trends is a fresh push towards using specialized chips, whose design is optimized for carrying out a specific task.

One example is Google’s Tensor Processing Units (TPUs), the bespoke processors that excel at the mathematical operations required for machine learning, another are the many Bitcoin mining chips released when the cryptocurrency was at its peak. But the problem with increasingly relying on Application Specific Integrated Circuits (ASICs) like TPUs to handle different computational tasks is the prohibitive cost of developing such chips.

So, rather than building these monolithic ASICs, a new move is afoot to break them into smaller “chiplets”, where each task is handled by smaller chips that specialize in individual tasks — both general tasks and domain-specific, as shown in the diagram below.

Chiplets are becoming more viable than they once were, due to improved performance of interconnects for sharing data between each chiplet. Using chiplets has the potential to make domain-specific accelerators, such as Google’s TPUs, easier and cheaper to develop.

Read the full article from ZD Net +

Transportation

Airlines

Boeing Max Crisis Hits Airline Growth as Ryanair Pares Plans

The extended grounding of Boeing Co.’s 737 Max plane forced Ryanair Holdings Plc to scale back growth plans for next summer, putting the airline industry on notice that the crisis is starting to affect longer-term plans.

With a return date for the Max still uncertain after two fatal crashes, Ryanair is likely to receive barely half of the 58 planes it was expecting for the 2020 peak schedule, the Irish company said Tuesday, estimating that the reduction will wipe 5 million passengers from its full-year tally.

Ryanair’s announcement shows how a further extension to the Max grounding would have significant fallout for airlines, which draw up schedules about six months in advance. Air travel is particularly weighted toward the summer season in Europe, with passenger numbers typically surging from the Easter holiday, which starts on April 10 next year.

While U.S.-based operators of the Max haven’t yet talked about changing their growth plans beyond this year or readjusted deliveries, it will probably take 15 to 18 months for the carriers to catch up to their original schedules, said Savanthi Syth, a Raymond James Financial Inc. analyst.

Read the full article from Bloomberg +

Rail

Lighter Loads Weigh on Railroads

Freight trains are carrying a shrinking amount of cargo as railroads feel the effects of trade tensions, a cooling global economy and changes to their own systems that are driving customers elsewhere.

The number of U.S. railroad carloads shipped fell 2.9% in the first half of the year. The slowdown was widespread among industries, with 16 of 20 categories of shipments including food, lumber, auto parts and metals, posting declines.

Railroad shipping data provides insight into a broad cross-section of the domestic economy, given that the industry moves raw materials, finished goods and e-commerce packages.

The weak rail shipments are just one sign that the global movement of goods has been sputtering. FedEx Corp. has warned that trade disputes have dented demand for international freight shipments. Trucking companies are also confronting a softening environment after last year’s freight boom. The Cass Freight Index of North American shipments by truck and rail declined 5.3% in June, the seventh straight monthly decline, which Cass Information Systems Inc., a processor of freight payments for companies, says signals an economic contraction.

On Monday J.B. Hunt Transport Services Inc., one of the largest carriers in North America, said volumes in its intermodal business moving freight long distances by truck and rail were down 8% in the second quarter compared with the same period in 2018.

Read the full article from the Wall Street Journal +