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December 28, 2023

Post-Christmas calm, except the Gulf Coast

Sunya

Good Morning. This is the Sunya Scoop. The newsletter that takes energy transition news and turns it into an easy-to-read email for you.

Here’s what we have for you today:

  • India introduces voluntary carbon market

  • Carbon credits begin to trade in Taiwan

  • Williams acquires $2 billion nat gas storage portfolio from Hartree

  • Chatterjee boosts stake in Tellurian to 7.3%

  • Pattern Energy raises $11 billion in financing

  • First Solar sells $700 million in tax credits

  • Japan restarts 8 MW nuclear plant

  • The almost headlines

  • Chart of the week

India introduces voluntary carbon market

  • India’s Ministry of Power announced a carbon offset market, reversing its earlier stance.

  • Key amendments include the inclusion of reduction and removal projects in the scheme.

  • Obligated entities will have emissions reduction targets, while non-obligated entities can register projects for greenhouse gas reduction, removal, or avoidance.

  • The government had previously scrapped the voluntary scheme and announced a compliance sector for 2026.

  • The Bureau of Energy Efficiency (BEE) will identify sectoral scope and methodologies for carbon credits.

  • Details on whether existing global voluntary market carbon credits will be allowed are unclear, but the BEE is considering options that meet higher integrity standards.

  • The threshold for offset credits in the compliance scheme is under consideration, potentially following the South Korea and China model of 5%-10%.

  • India’s compliance carbon market will begin in 2026, focusing on sectors like steel, iron ore, refineries, petrochemicals, and aluminum.

Carbon credits begin to trade in Taiwan

  • The sale of international carbon credits in Taiwan commenced on December 22, 2023.

  • 27 companies, including Taiwan Semiconductor Manufacturing Co. (TSMC), Foxconn Technology Co., and Chimei Corp., collectively purchased nearly 90,000 metric tons of carbon dioxide emissions.

  • The Taiwan Carbon Solution Exchange (TCX) officially began trading and sold 88,520 metric tons of international carbon credits, valued at over US$80,000 (NT$2.49 million).

  • Domestic carbon emission reduction carbon fees regulations are still pending from the Ministry of Environment (MOENV) and expected to be finalized in the first quarter of 2024.

  • TCX features include trading in U.S. dollars, secure trust accounts for transactions, and a “sub-account framework” to handle financial and carbon credit flows efficiently.

  • The first international carbon credits came from various countries and projects, covering clean water, wind power, and solar energy.

Williams acquires $2 billion nat gas storage portfolio from Hartree

  • Williams is acquiring a natural gas storage portfolio in the Gulf Coast for $1.95 billion from Hartree.

  • The portfolio includes six underground natural gas storage facilities in Louisiana and Mississippi with a total capacity of 115 billion cubic feet (Bcf).

  • Additionally, it includes 230 miles of gas transmission pipeline and 30 pipeline interconnects, connecting to attractive markets like LNG terminals and the Transco pipeline.

  • The acquisition is valued at approximately 10x estimated 2024 EBITDA.

Since 2010, U.S. demand for natural gas has grown by 56% while gas storage capacity has only increased 12%.

Williams’ CEO, Alan Armstrong
  • The six facilities consist of four salt domes (92 Bcf capacity) and two depleted reservoirs (23 Bcf capacity).

  • These facilities have high injection and withdrawal capacities, making them among the most capable natural gas storage platforms in the U.S.

  • Two of the facilities, Pine Prairie and Southern Pines, are directly connected to Transco and are well-suited for expansions to meet growing demand.

Chatterjee Fund Management boosts stake in LNG developer Tellurian to 7.3%

  • Chatterjee Fund Management increases stake in Tellurian Inc (TELL.A) to 7.3% from 5.2%.

  • The investment is described as an investment and not an attempt to control the company.

  • Chatterjee purchased nearly 13 million shares between 12/13 and 12/22

  • This move came shortly after Tellurian ousted its chairman and co-founder, Charif Souki.

  • Chatterjee now holds a total of 46.1 million shares in Tellurian.

  • Tellurian’s shares increased by 7.5% on the day of the announcement.

  • Auditors had previously raised doubts about Tellurian’s ability to cover future expenses.

  • Charif Souki, a key figure in the U.S. LNG export market, was replaced as Tellurian’s chairman.

  • Souki parted ways with the company following a settlement of over $8 million.

  • Chatterjee Fund Management was founded in 1989 by Purnendu Chatterjee and invests in various sectors, including petrochemicals, pharmaceuticals, biotech, financial services, and real estate.

Pattern Energy raises $11 billion in financing

  • Pattern Energy Group has closed an $11 billion non-recourse financing for the SunZia Transmission and SunZia Wind project.

Source: Pattern

  • SunZia Transmission is a 550-mile high-voltage direct current (HVDC) transmission line between central New Mexico and south-central Arizona, capable of transporting 3,000 MW of clean electricity.

  • SunZia Transmission will deliver power generated by Pattern Energy’s 3,515 MW SunZia Wind facility, the largest wind project in the Western Hemisphere.

  • The financing includes various facilities, such as a construction loan, letter of credit facility, term facilities, tax equity term loan facility, and holding company loan facility.

  • Pattern Energy aims for this project to serve as an example for other renewable infrastructure initiatives, helping accelerate the transition to a carbon-free future.

  • The project is expected to bring clean power to 3 million Americans and generate over $20 billion in economic impacts.

  • Construction is already underway on this historic and ambitious clean energy infrastructure project.

First Solar sells $700 million in tax credits

  • First Solar plans to sell up to $700 million in tax credits earned from selling photovoltaic (PV) solar modules to Fiserv.

  • These tax credits were earned under the new guidelines of the Inflation Reduction Act (IRA), which offers incentives for producing clean energy components.

  • Specifically, First Solar is eligible for 45X credits, also known as Advanced Manufacturing Production tax credits, for domestically manufacturing clean energy products in the U.S.

  • First Solar is set to receive $0.96 per $1 of tax credits in the first half of 2024 as part of the agreement with Fiserv.

  • The U.S. Treasury recently issued guidelines specifying which components, such as inverters and PV solar equipment, are eligible for these tax credits.


Japan restarts 8 MW nuclear plant

  • Japan’s nuclear power regulator lifted the operational ban on Tokyo Electric Power’s Kashiwazaki-Kariwa nuclear power plant.

Source

  • The plant has a capacity of 8,212 megawatts (MW) and had been offline since 2012 due to the Fukushima disaster.

  • Tokyo Electric Power (Tepco) needs local government consent from Niigata prefecture, Kashiwazaki city, and Kariwa village before restarting the plant.

  • The Nuclear Regulation Authority (NRA) imposed the ban in 2021 due to safety breaches, including inadequate nuclear material protection and unauthorized access to sensitive areas.

  • The ban prevented Tepco from transporting new uranium fuel and loading fuel rods, effectively blocking a resumption.

  • Tepco plans to regain trust in the local community, and the government will support the process, emphasizing safety.

  • Japan aims to reduce reliance on imported fossil fuels by bringing more nuclear power plants online.

  • Projections suggest a decline in LNG imports as more nuclear reactors restart and renewable energy sources increase.

  • Canada will require all new cars to be zero emissions vehicles by 2035

  • Adani Energy to spend $360 mm to build Gujarat power transmission line

  • $800mm investment to accelerate Octopus Energy’s global clean energy growth

Narrative violation

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

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