By David Callaway, Callaway Climate Insights
The global repricing of financial markets extended into a sixth chaotic week this week, fed by rising interest rates, fear of escalating war, oil embargoes and a collapse in tech stocks that all add up to the worst outlook since the great financial crisis more than a decade ago.
Against this backdrop, the fight to mitigate global warming faces a challenging spring, even as wildfires begin to burn in the American West and heatwaves devastate India, Pakistan and now Texas. The outlook for investors will be front and center in Ireland this week, however, as climate leaders from around the world gather for the Dublin Climate Summit, our signature annual event.
Ireland is very much in the news after nationalist party Sinn Fein won a majority of seats in Northern Ireland for the first time last week, and as its energy markets continue to set milestones in terms of transition from fossil fuels. April was the strongest month ever in Ireland for wind energy, which contributed almost a third of the country’s total energy usage.
Europe’s coming oil embargo against Russia will also be top of mind, as politicians such as Taoiseach (Prime Minister) Micheal Martin and climate leaders such as Blackstone’s Jean Rogers and Prelude Venture’s Gabriel Kra join entrepreneurs, institutional investors and media representatives for a full-day discussion of the latest trends in climate finance and how the world’s woes might impact them.
There is still plenty of time to register so please do. It’s free! We’ll be sure to offer an archived version of the highlights for those who need to wait until the weekend to watch. I’ll be arriving in Dublin just as this newsletter comes out on Tuesday and will be on the ground reporting as of Wednesday.
I look forward to seeing many of you there, or virtually, and reporting back on the most interesting insights.
More insights below . . . .
Climate stocks on sale
. . . . There’s plenty of blood in the streets in the broad markets, and climate stocks haven’t escaped the carnage so far this year. Just three names in the Callaway Climate Insights Index are up so far in 2022. With automakers scrambling to launch more electric vehicles, the key commodity required for them is in big demand. Shares of lithium producers are accordingly performing relatively well, with Sociedad Química y Minera de Chile leading all gains, up nearly 50% year-to-date. Vale (VALE), another mining stock is second on the list, although with a far smaller gain of 5.6%. JinkoSolar Holding (JKS) is the third and, so far, last winner for the year, up 2.9%. Livent (LTHM) and Beam Global (BEEM) round out the top five stocks in the CCI to date. The CCI itself ended Monday at 83.17, off 17% for the year-to-date. . . .
Tuesday’s subscriber insights: Companies confront new climate challenge – home offices
. . . . Turns out all the energy savings from corporations who shut down during Covid wasn’t so much saved as shifted — to our home offices. Some tech companies have begun counting what happens when employees boot up computers at home, turn up gas furnaces and ignore the tech world’s most energy-efficient corporate campuses. It’s not pretty. Read more here. . . .
. . . . Unilever (UL), which owns ice cream brands including Ben & Jerry’s, Magnum, and Wall’s, is experimenting with a unique way to save energy, turning the temperature of its freezers up. The conglomerate believes it can save up to 20% to 30% on energy costs by using less to keep freezers as cold as they can be. It’s the latest idea in the refrigeration transition, where investors and entrepreneurs believe money can be made by smarter management of our cold storage energy. Read more here. . . .
. . . . Last month — with the wind blowing and the sun shining — the California power grid hit a record 97% in renewable power. That promising number could soon be added to by offshore wind, which got a big boost when Golden State officials released a road map for the highly reliable energy source. If built, it would be the biggest in the country. Read more here. . . .
. . . . Do you binge watch “Bridgerton”? Crave “The Crown”? Marvel over “The Marvelous Mrs. Maisel”? If you live in Tokyo, you may soon be pressed to press that off button. That, and turn off the heated toilet seats, up the thermostat in summer and more. Read more here. . . .
Con Edison, one of Wall Street’s oldest stocks, plots new path on Electric Avenue
. . . . New Yorkers love to bash their energy company, Con Ed, which can trace its roots back to 1823. But the company that grew up in the smokestack generation is now leading a remarkable charge in renewable energy, particularly in solar, writes Justin Sharon in New York. Among investors, Con Ed isn’t loved either, but its move into the green world is worth a look for anyone looking for stocks passed over by the environmental, social and governance (ESG) revolution. . . .
Editor’s picks: Harsh heat in Southern Asia, summer blackouts loom for U.S.
Harsh heat will build in Southern Asia (again) in the coming days.
Pakistan will break 50°C (122°F) in places. This follows a very hot March and hottest April on record.
The heat really is relentless. Very hot also for large parts of India. pic.twitter.com/LJxFCFEqGL
— Scott Duncan (@ScottDuncanWX) May 8, 2022
Rolling blackouts loom this summer
Rolling blackouts during heat waves or peak-use periods are likely for later this summer, according to electric grid operators who are warning about capacity failing to meet demand. California’s Independent System Operator said Friday that the state likely will have an energy shortfall equivalent to what it takes to power about 1.3 million homes when use peaks during summer months. Electricity grid operators in Texas and Indiana, including the Midcontinent Independent System Operator, joined the chorus, saying that capacity shortages may force them to take emergency measures to meet demand and they flagged the risk of outages. Worsening drought conditions could force some hydro-electric plants offline and “the strain on the system could be unprecedented,” according to a report from San Francisco CBS affiliate KPIX and The Associated Press.
‘Blood Moon’ eclipse starts Sunday
A “Blood Moon” total lunar eclipse will occur on Sunday, May 15 and Monday, May 16. A total lunar eclipse, which happens as the full moon moves into the deep umbral shadow of the Earth, will be visible in total phase from portions of the Americas, Antarctica, Europe, Africa and the east Pacific, according to a full report from Space.com: “If the weather is clear, skywatchers across most of the Americas, Europe and Africa will have a view of one of nature’s most beautiful spectacles: a total eclipse of the moon.” This will be the first of two lunar eclipses in 2022. The next one will be on Nov. 8, 2022 and will be visible at least partially from Asia, Australia, North America, parts of northern and eastern Europe, the Arctic and most of South America, according to TimeandDate.com.
Data driven: Dry west, wet east
. . . . Severe weather across the Central Plains and parts of the Midwest highlights the most recent U.S. Drought Monitor map. Widespread heavy rainfall accumulations were also observed, ranging from 2 to 7 inches, with the heaviest accumulations in eastern Nebraska. The rainfall events provided much-needed moisture to the region-boosting soil moisture levels across parched areas from Kansas to South Dakota. In the West, fast-moving storm systems delivered late season high-elevation snowfall to the Cascades of northern Oregon and Washington, the Northern and Central Rockies, and areas of the northern Great Basin. In California and the Southwest, conditions were dry during the past week with strong winds observed across the region. The windy, dry conditions exacerbated fire-weather conditions in Arizona and New Mexico where several large early-season wildfires are currently impacting the region. In northern New Mexico, the Hermits Peak Fire, situated east of Santa Fe in the Sangre de Cristo Mountains, has burned 147,909 acres and was only 20% contained, as of May 4. On the water-resource front, the Colorado River Basin water situation continues to deteriorate due to the long-term impacts of drought with water levels at Lake Powell and Lake Mead currently at 24% full and 31% full, respectively. The U.S. Drought Monitor is produced through a partnership between the National Drought Mitigation Center at the University of Nebraska-Lincoln, the USDA and NOAA. . . .