Markets in Motion
Energy Transition: The Future is Now
In this review of ESG thought leadership from the month of August, we explore the challenges and opportunities that are driving reform and innovation throughout the global energy grid. As climate risk begins to impact the credit worthiness of different regions, a patchwork of regulations and new technologies emerge to meet the need for a greener future.
Published: August 1, 2019
Richard Mattison
2019 is showing to be a transformational year for the sustainability agenda. Companies and financial corporations, global and local governments, and activist individuals are rapidly responding to climate impacts and risks. Better information is the key to managing uncertainty, and that’s why we’re collecting our best ESG insights and analyses into a monthly roundup to give stakeholders the essential ESG intelligence they need to make sustainable decisions with confidence.
Green Power
As demand for “green” power soars, utilities turn to Guarantees of Origin
Businesses and consumers are becoming more picky about the origin of their electricity supply, motivated by a growing sense of urgency to act on climate change.
European utilities have noted a strong rise in demand for green electricity – that is, electricity from renewable sources. An important part of the response has been the use of Guarantees of Origin (GOs) – tradable tags that certify the provenance of power supply, down to quite specific details of the generation technology involved and the geographic location.
So how do GOs work and how significant is the trend? Read the full article to learn more.
A proposed new European Union green classification system would help investors and companies identify and make environmentally friendly decisions and may evolve over time to include rules for social and governance-related investments, experts explain on the latest episode of ESG Insider, an S&P Global podcast.
LISTEN TO THE PODCAST
Energy Storage
'Lithium's not the only game in town': Energy storage hopefuls eye breakthrough
After numerous false starts, bankruptcies and billions of dollars invested, developers of alternatives to lithium-ion batteries for electricity storage believe that a new window of opportunity is opening. This renewed optimism is fueled by maturing battery and nonbattery technologies, some limited commercial successes, demand for longer-duration storage, and growing concerns around the safety and supply chain risks of the incumbent chemistry.
Key Takeaways
- Dozens of aspiring companies, from upstarts to industrial powerhouses, are courting investors, utilities, project developers and others to catapult them into competition with lithium-ion leaders.
- As lithium-ion battery-makers rapidly expand to meet rising demand for EVs, prices are plummeting and project developers are taking advantage.
Solar Capacity
Analysis: Solar rising in the southeastern US
After climbing 15% in 2018, utility-scale solar capacity in the southeastern US is expected to surge another 25% this year, but the geographic concentration of such growth is driven more by policy than by the quality of the sunshine, S&P Global Platts analysis shows.
Key Takeaways
- The Southeast is seeing a significant expansion of utility solar, largely driven by cole generation retirements and steep cost declines for solar.
- One factor that may slow solar power development in much of the southeastern U.S. is the lack of competition.
Stranded Costs
As Market Fault Lines Emerge, Where Could Stranded Costs Develop?
S&P Global Market Intelligence recently highlighted the possibility that stranded costs in the electric sector could emerge again, 20 years after a wholesale restructuring of the industry that was intended to mitigate this type of risk. A recent S&P Global Market Intelligence webinar, Grid Transformation and Stranded Assets: Why They Could Be Back and Bigger Than Ever, delved into historical and future potential stranded costs and related market developments.
This article, the second in a two-part series, examines regional market factors that may lead to future stranded costs.
Key Takeaways
- Low demand growth is an underlying risk factor for stranded costs.
- Resource adequacy in restructured and regulated markets is a risk for natural gas assets.
- Renewable electricy represents the second emerging asset class where the risk of incurring stranded costs may arise in coming years.
