David Fuller and Eoin Treacy's Comment of the Day
Category - General

    World's biggest wind turbine shows the disproportionate power of scale

    This article from NewAtlas may be of interest to subscribers.

    China's MingYang Smart Energy has announced an offshore wind turbine even bigger than GE's monstrous Haliade-X. The MySE 16.0-242 is a 16-megawatt, 242-meter-tall (794-ft) behemoth capable of powering 20,000 homes per unit over a 25-year service life.

    The stats on these renewable-energy colossi are getting pretty crazy. When MingYang's new turbine first spins up in prototype form next year, its three 118-m (387-ft) blades will sweep a 46,000-sq-m (495,140-sq-ft) area bigger than six soccer fields.

    Every year, each one expected to generate 80 GWh of electricity. That's 45 percent more than the company's MySE 11.0-203, from just a 19 percent increase in diameter. No wonder these things keep getting bigger; the bigger they get, the better they seem to work, and the fewer expensive installation projects need to be undertaken to develop the same capacity.

    The overall result should be a drop in offshore wind energy production prices – a sorely needed drop, too. Current levelized costs of energy, as estimated by the US Energy Information Administration for new energy generation assets going live in 2026, place offshore wind as the most expensive way of generating a megawatt-hour right now, at US$120.52, where ultra-supercritical coal is more like $72.78 and standalone solar is around $32.78 before subsidies.

    Obviously, wind fills in gaps that solar can't, and it'll be a crucial part of the energy mix going forward. Scaling the industry up with these mammoth turbines is the key reason why industry experts are predicting that the cost of offshore wind will drop by between 37 and 49 percent by 2050, as reported by Renew Economy.

    MingYang says the MySE 16.0-242 is just the start of its "new 15MW+ offshore product platform," and that it's capable of operating installed to the sea floor or on a floating base. The full prototype will be built in 2022, installed and into operation by 2023. Commercial production is slated to begin in the first half of 2024.

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    Money Managers Race to Launch First U.S. Bitcoin ETF After SEC Signal

    This article by Michael Wursthorn for the Wall Street Journal may be of interest to subscribers. Here is a section:

     

    Asset managers have been trying to persuade regulators to green-light bitcoin ETFs for nearly 10 years. So far, the SEC has rejected or delayed a decision on the funds. The regulator has taken a cautious approach to regulating the volatile crypto market. The digital assets have boomed in popularity with amateur traders and a growing number of professional money managers.

    Speaking at the Aspen Security Forum, Mr. Gensler said issuers who structure ETFs under the Investment Company Act of 1940 would help protect investors from illicit activities. The decades-old law is a more stringent set of guidelines that usually apply to mutual funds. For example, it requires an independent board and gives a fund the ability to stop accepting new money -- something most ETFs can't do.

    "I look forward to the staff's review of such filings, particularly if those are limited to these CME-traded bitcoin futures," Mr. Gensler added. CME Group Inc.'s bitcoin futures contracts started trading in late 2017.

    Unlike crypto exchanges, trading venues such as CME have agreements with the SEC, giving the regulator greater oversight.

    Despite the additional safeguards, investors in such funds would have to deal with issues associated with trading futures, as well as the risks around cryptocurrencies.

    Todd Rosenbluth, head of ETF and mutual-fund research at CFRA, warned that futures-based ETFs rarely replicate the performance of the underlying market they track. The reason is pricing fluctuations between futures contracts and the spot market, especially if demand for the asset or commodity is expected to change significantly in the future. There are also costs associated with rolling over contracts when they expire.

    "It's likely that some of the investors who gravitate toward these products will either be disappointed in the performance or unaware of the risks they are taking," Mr. Rosenbluth said.

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    Delta Impact on Consumer Behavior Will Delay Tapering Announcement

    This note from Guggenheim may be of interest to subscribers. Here is a section:

    Expectations are mounting for a September announcement of tapering plans by the Federal Reserve (Fed), prompted by the strength of the economy and comments from more hawkish members of the FOMC, particularly Boston Fed President Eric Rosengren.

    We don’t see that happening. The Delta variant is throwing a wrench into the forward progress of the economy. Although Fed Chair Powell believes that “it’s not yet clear whether the Delta strain will have important effects on the economy,” our read of the latest data suggests that it is already having a negative impact on consumer behavior.

    After a large downside miss to July retail sales, spending on COVID sensitive activities such as restaurants, air travel, and hotels has weakened further in August. High frequency indicators of broader consumer activity such as daily credit card spending also show softening over the past few weeks.

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    A Tsunami of Disability Is Coming as a Result of ‘Long COVIDʼ

    Thanks to a subscriber for this article from Scientific American which may be of interest. Here is a section:

    Consider the numbers we know. At least 34 million Americans (and probably many more) have already contracted COVID. An increasing number of studies find that greater than one fourth of patients have developed some form of long COVID. (In one study from China, three quarters of patients had at least one ongoing symptom six months after hospital discharge, and in another report more than half of infected health care workers had symptoms seven to eight months later.) Initial indications suggest that the likelihood of developing persistent symptoms may not be related to the severity of the initial illness; it is even conceivable that infections that were initially asymptomatic could later cause persistent problems.

    Common long-term symptoms include fatigue; respiratory problems; “brain fog”; cardiac, renal and gastrointestinal issues; and loss of smell and taste. Surprising manifestations continue to emerge, such as the recent realization that infection may precipitate diabetes.

    For some, symptoms have now continued for many months with no apparent end in sight, with many survivors fearing that they will simply have to adjust to a “new normal.” More and more sufferers have not been able to return to work, even months after their initial illness. While the number of patients with persistent illness remains undetermined this early in the pandemic, estimates suggest that millions of Americans may enter the ranks of the permanently disabled

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    Amazon steps closer to modern Sears

    This article from Reuters may be of interest to subscribers. Here is a section:

    Amazon.com (AMZN.O) became a $1.6 trillion behemoth in part by using e-ecommerce to put brick-and-mortar retailers out of business. Jeff Bezos’ company, originally online only, already opened small physical stores, and may now add a department store format, according to the Wall Street Journal.

    That’s sadly ironic, with names like J.C. Penney and Neiman Marcus going bust in recent years. Yet it underlines how Amazon is, in some ways, a 21st-century Sears, Roebuck & Co. The storied U.S. group – another recent casualty of bankruptcy after years with investor Eddie Lampert in charge – produced the first of its famous mail-order catalogs in 1893, with a first retail store following in 1925. In a foreshadowing of today’s buy-now-pay-later enthusiasm read more , Sears even launched a credit program in 1940.

    Amazon can get more from stores by making them multitask as showrooms, instant gratification for customers unwilling to wait for delivery, and mini warehouses helping with challenging last-mile logistics. Still, it’s a reminder that what’s old can be new again. 

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    Evergrande Slumps as Investors See No Bailout After Huarong

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    Huarong’s bailout was reassuring for investors who went through months of agony guessing just how determined the Chinese government was in combating moral hazard. But even with $300 billion in liabilities that could roil banks, suppliers and home buyers, junk-rated Evergrande is seen as a separate case as authorities crack down on excessive leverage in the property sector. 

    Investor concerns grew Thursday evening after Chinese regulators demanded Evergrande resolve its debt risks and refrain from spreading untrue information. People’s Bank of China and banking watchdog officials summoned the company’s executives, telling them to maintain operations and protect the stability of financial and property markets, according to a joint statement.  

    “The Chinese government’s stance to prioritize social harmony and equality over corporate profit is becoming increasingly clear,” said Anthony Leung, head of fixed income at Metropoly Capital HK. “Evergrande is completely different in the sense that it is the poster child of an industrywide reckless risk-taking culture.”

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    It's Not Just Poppies

    Thanks to a subscriber for this article from Outcrop magazine. Here is a section:

    Plus, it would be many years before any mines would be developed, even if (as now seems possible) the Chinese are allowed by the Taliban to bring their can-do attitude to the task.

    China has been cosying up to the Taliban (some of their leaders were on a Beijing visit a few weeks ago) and the Chinese government made it clear this week they had "maintained contact and communication" in recent days with the bearded ones now in charge in Kabul.

    China has also said it wishes to help the "reconstruction and development" of Afghanistan.

    Clearly, Beijing wishes to draw Afghanistan into its Belt and Road Initiative (BRI). It is a telling detail that the 76km-long border between the two countries includes a pass that was a route on the old Silk Road, the template for the new BRI. Expect to see a highway and rail line this time rather than horses and camels.

    China may be able to achieve what others have failed to do: make Afghanistan a vassal state. In that case, they will have under their control Afghanistan's mineral wealth.

    The British Raj failed to subdue the Afghans — it's famous retreat from Kabul in 1842 ended with the entire 16,000-man army dying or being killed. Then the Soviet invasion came a cropper in more recent years.

    And now the Americans have been humiliated.

    Rare earths would be uppermost on Beijing's mind when it comes to mineral resources.

    The USGS estimated that rare earths in Helmand province could contain up to 1.4 million tonnes of rare earth elements, which would dwarf what Australia could potentially supply to the world. China's control of those resources, as well as their downstream processing capabilities, would enable Beijing to maintain its stranglehold on those vital critical metals.

    And presumably the Chinese would like to get their hands on the iron ore.

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