US solar power likely to suffer at hands of tariffs imposed by Trump

The United States is likely to install far less solar power than was anticipated in the coming years. This forecast comes as a result of President Donald Trump’s decision to impose tariffs on basic solar equipment, which will inevitably pose challenges to big solar projects.

This tax on solar cell and panel imports was announced earlier this year and is already reducing demand alongside other obstacles the industry faces. These include slow expansion in pivotal state markets and an emphasis on growth over balance sheet discipline.

However, not all is doom and gloom for the solar industry. 2017 was a good year for solar with it being the second year in a row of double-digit gigawatt growth. The sector added 10.6 gigawatts of solar capacity in the form of photovoltaic technology.

Abigail Ross Hopper, SEIA President and CEO, was encouraged to see the growth in solar across the country. In a press release she said “the solar industry delivered impressively last year despite a trade case and market adjustments. Especially encouraging is the increasing geographic diversity in states deploying solar, from the Southeast to the Midwest, that led to a double digit increase in total capacity.”

Despite being double-digits, the increase in 2017 was still 30% less than the astonishing addition of 15 gigawatts in 2016. This record-setting figure came as a result of buyers frantically purchasing equipment before tax credits expired. However, the tax credits were extended in the end.

Over the next five years we can expect to see solar develop in a far less exciting manner.

GTM Research, a clean tech analysis firm, altered its forecast by 13% with regards to solar installation that will take place between 2018-2022. The revision has been put down to various factors, such as changes in federal and state policies, corporate tax reform impacts, and, of course, the consequences of Trump’s solar panel tariffs.

In 2018, GTM expects growth in the United States to stay flat at 10.6 gigawatts. Fortunately, many solar projects already bought their equipment before the tariffs were put in place. This means that the effects won’t be felt too much in 2018.

This is particularly true in the utility-scale segment, which constructs large solar facilities that work like power plants and feed into electric power markets. In fact, GTM predicts that this section of the market will actually expand more this year than it did last year.

However, growth in this segment is not going to last for long as stagnation looks likely between 2020 and 2022 as a result of the tariffs, which will undoubtedly delay or even kill off some projects.

The tariffs could also cap gains in installations for residential homes, despite the surge that has been seen so far in 2018. It is hoped, however, that solar for residential homes could bounce back by the 2020s if companies can sort out their finances and push into new markets.

Similarly, solar for businesses could shrink over the coming years before surging again.

To end on some good news, solar has seen notable growth of installations in the Southeast and Midwest parts of the country where renewables are yet to make much of a footprint. We also saw, in 2017, a rise in community solar. This allows neighbourhoods to benefit from community projects rather than having their own rooftop panels installed.


Surprise Oil and Gas Stocks Cause Ripples in the Market

Last week, oil prices dropped in the wake of official data showing that U.S crude inventories have increased beyond what was expected. The same went for the nation’s gasoline stocks.

The week ending on February 23rd saw crude inventories in the United States increase by 3 million barrels. This can be compared with predictions by analysts that believed the rise would sit around the 2.1 million barrels mark. Again, the rise in gasoline stocks was also a surprise to analysts.

“We had another pretty sizable build, and with that it kind of seemed like this recent bull market had the carpet pulled out from underneath it,” commented a senior market strategist, Phillip Streible, from RJO Futures, based in Chicago.

Furthermore brent crude futures continued to tumble for a second day after a steady increase over the last 6 sessions straight. Indeed, West Texas Intermediate also fell, dropping $1.37 to sit at $61.64 a barrel. The most active Brent crude futures sent out for delivery in May had fallen $1.79 and were resting at $64.73 a barrel.

The April contract settled down 85 cents, or 1.28 per cent, at $65.78 a barrel ahead of expiration.

Fortunately, prices reduced losses after the Energy Information Administration of the United States provided data that indicated the production of crude in December dropped down to 9.95 million barrel, a decrease of 108,000 barrels per day compared with November.

Prices continued to dip following the release of this data, in which the EIA took another look at the crude production numbers for November and altered it to a record 10.057 million barrels per day.

An analyst at Price Futures Group, Phil Flynn, commented on the situation, “The market did attempt a late day rally but because it’s the end of the month, a lot of hedge funds decided to try and take some profits.”

Despite OPEC’s production cuts, the huge increase in U.S. production, which has gone up by a fifth since the middle of 2016, have kept oil prices low this year.

Streible explained that the U.S. has no intention of slowing down its production and is likely to hit 11 million barrels per day far sooner than anyone expected.

Lower gas futures led the entire energy complex following a surprise increase in gas stocks in the United States. These stocks were expected to suffer a 190,000 barrel drawdown but instead got a boost of 2.5 million barrels. The most active gas futures fell in price to just over $1.9 a gallon.

The rise in inventories came even as refineries boosted activity in the most recent week.

Although refiners were undergoing maintenance, they were still able to produce more crude than had been in former years, which adds to supply of gas and diesel. This was commented on by Andrew Lipow, who is the president at Lipow Oil Associates based in Houston, Texas.

Finally, the market was under pressure by the rising dollar and stock markets. On Wednesday, equities markets weakened but the United States dollar shot up to the highest it has been in a month. The consequence of this is that oil becomes more expensive for holders of currencies that are not the dollar. This price pressure came from a slow down in monthly factory activity by three of the biggest crude consumers in the world: China, Japan and India.

General Electric Makes Poor Call Over Fossil Fuels

About a year ago, the executives at General Electric’s power plant business predicted that the company would have a great year. Although the demand for new natural gas power plants did not seem to be moving, the company was forecast a huge rise in revenue and profit.

Data from a range of sources indicated that gas, coal and nuclear power plants were far lower in cost than wind or solar. In fact they are the cheapest producers of electricity on earth.

Despite this, GE Power’s profit took a serious dip as it fell 45%. This forced the company to cut its overall profit outlook and slash its dividend. This is only the second time this has occurred since the Great Depression. Since the March forecast, the shares have dropped over 50% and the CEO was replaced last August.

The new chief executive of GE, John Flannery, has said that this bullish forecast, as well as serious mismanagement have been notable factors in the meltdown of the power business. At the start of 2018, Flannery said that this trend could continue this year and possibly even get worse.

Furthermore, the cost of wind and solar power is dropping every day and they are now considerably less expensive than gas and other energy sources. This seems to have been the case for years according to research published in a Lazard energy cost report in 2008.

The company says that it has in place a meticulous and rigorous financial planning process but the market seems to suggest otherwise. The company is now vulnerable to the drop in demand for conventional power plants. This is intrinsically linked to a notable surge in the sale of wind and solar power. Gas turbines just don’t seem to be pulling their weight and the market, in that respect, is down.

But power is only one of GE’s problems. Its finances aren’t looking to sharp either after its $10 billion loss in the last quarter. However, power is GE’s main business and accounts for around 60% of the conglomerate’s profit. However, GE is now cutting 12,000 jobs, which totals almost 20% of the work force.

Another huge reason why GE is struggling is because of its purchase of Alstom, which cost the company $10.3 billion. While this gave the company far better exposure to gas, coal and nuclear, it came just at the wrong time as solar costs drop below those of gas-powered plants. This meant that GE was trying to save money where it could, just as 65,000 new workers were added to the payroll.

The gap in cost between renewable power and conventional power is forever widening and it is understood that old fossil fuel plants are fast becoming obsolete. Indeed, many power companies are already retiring them, or revamping them in preparation for the renewable revolution.

The market is changing and giants like GE need to evolve with the times if they want to maintain their position in the power sector. GE’s public voice does not seem worried about the threats to fossil fuels. Although wind and solar are increasing at an unprecedented rate, GE believes that 2/3 of power will still come from gas coal and nuclear plants for at least the next decade.

Top News Stories in the World of Offshore Energy


The world of offshore energy is seeing a rapid increase in research and development. This includes underwater oil and gas extraction as well as wind farms in coastal waters. This article will take a look at a round up of the most important stories regarding offshore energy in the news this week.


Eni Makes Important Discovery Off the Coast of Cyprus


The Italian oil company Eni has announced that it has made a lean gas discovery off the coast of Cyprus. The company has said that its discovery is ‘Zohr-like’ – Zohr is the largest gas field in the Mediterranean. The company has said that this new discovery has excellent reservoir characteristics.


Transocean to Take Discoverer India Out of Retirement


Transocean, the largest offshore drilling company in the world, is planning to reactivate its ultra-deepwater drillship Discoverer India. The ship has been out of use since December 2016 after Reliance ended its contract with Transocean 5 years early – incurring a heavy $160 million fine. But now the vessel is set to start a new contract on June 1st of this year.


Statoil Plans to Drill 40 Exploration Wells in 2018


The Norwegian oil company Statoil has unveiled plans to drill 40 more wells in 2018, to increase its capacity from 2017. This is expected to cost the company around $1.5 billion. Presenting its fourth quarter and full-year 2017 results the company said it expected its organic capex to be around $11 billion for 2018. Organic capital expenditure in 2017 was $9.4 billion.



Exxon wants bigger FPSO for Phase 2 of Liza development in Guyana


Exxon has announced that it wants to use a Singapore-built FPSO (Floating Producation Storage and Offloading) to explore the Liza oil site off shore of Guyana. The company is already thinking about phase two of the discovery, which includes the use of the FPSO and subsea systems. The plans for the Liza oil field indicated that phase one should be online by March 2020.


Allseas’ Newest Vessel Will Trump Colossal Pioneering Spirit


Allseas is an offshore services provider that owns the world’s largest platform installation/decommissioning and pipelay vessel. However, the company is now thinking about building an even bigger vessel, which will be called Amazing Grace. The owner of Allseas has revealed that plans to build this behemoth vessel were in play when Pioneering Spirit first left its dock in Korea back in 2014. The ship is expected to cost around $4 billion.


Shell Transforms Oil Platform into Artificial Reef


Oil giant Shell has turned its oil platform in the Gulf of Mexico into an artificial reef. This comes as part of the decommissioning process of Cougar, Shell’s final fixed leg platform in the Gulf. The aim of this transformation is to sustain “a healthy, vibrant Gulf of Mexico ecosystem as an artificial reef.” The reef is already home to a number of reef-dependent marine species.


Sapura Energy Scores Huge Offshore Contracts


Malaysian energy services and production company Sapura Energy won big with its contract recently, contracting a total of $232 million spread out over five different contracts. The contract work scope involves the removal of existing HP compressors and reinstallation of refurbished LP Compressors at EWDP-A.




Five renewable energy trends to watch in 2018


Renewable energy is definitely one of the most interesting spaces to watch at the moment. There have been huge developments in the sector, such as China exceeding its target for solar installations, but also some major setbacks, including Trump’s withdrawal from the Paris Deal.

The price of renewable energy will continue to drop

This is encouraging news for a world working towards a clean energy future. The price of solar is down over 60% since 2009, while wind costs have halved in a similar time frame. This has caused governments to witness record low prices for solar and wind at power auctions.

Experts believe that the number of country-level power auctions will continue to rise in 2018 and this will drive down prices in India and other producing countries. Meanwhile, investment in renewables stayed steady throughout 2017 but did not increase by much and this trend looks like it will stay the same for 2018.

China will carry out its ambitious energy plans


Despite China’s pollution being the worst of any country on the planet, the nation is also the global leader when it comes to solar power generation. Over the last ten years, the country’s capacity for solar PV generation has increased by a factor of almost 800. This means that China has already surpassed its 2020 solar PV targets, which shows phenomenal progress.


Currently, eight huge carbon capture and storage projects are underway in China as part of China’s pledge to invest almost £300 billion in renewable power by 2020. This comes along with a commitment to cap coal burning and thus improve the air quality in its cities.


Companies will step up


Target took the limelight at the end of 2016 when it was announced that it had solar panels installed on 300 of its stores. This made it one of the leading corporate players on the solar power scene, but Target is not alone in this game.


Apple has opened a brand new campus in California, which is 100% dependent on green energy, while Goldman Sachs has joined RE100, a cluster of huge companies who are committed to becoming 100% dependent on renewables. There is also a push from investors for companies to disclose their exposure to climate change.


More jobs will be churned out thanks to the renewables industry


A report by the International Renewable Energy Agency has revealed that almost 10 million people across the globe work in the renewables sector. What’s more, the occupations of solar photovoltaic installer and wind turbine technician are the fastest growing in the US.


The renewables industry is relatively labour intensive, meaning it requires a significant amount of man power to keep it all functioning. We should expect to see thousands more jobs being created in this sector in the foreseeable future. However, the demand is for skilled workers, so individuals hoping to tap into the sector should think about getting qualified now.


There will be more competition in the battery market


Tesla is hoping to complete the construction of its Nevada battery factory (the biggest of its kind in the world) by the end of 2018. More huge battery factories are also expected to crop up in China, Sweden, Hungary, Poland and Germany.


The UK also has big plans for energy storage and is investing £246 million into research and development to put the nation ahead of the game. It has also been proposed by researchers that countries look at other ways of storing energy besides lithium-ion batteries.

The largest oil and gas companies in the world by Revenue


When it comes to the oil and gas markets, the terms used to describe the largest companies do not do their size justice. With revenues that surpass many countries’ gross domestic product, these companies keep our lights on, factories producing and transportation moving. So who are the players in this lucrative, and essential field.

1 Saudi Aramco

Making the top of our list is Saudi Aramco. A state-owned enterprise, it is the largest oil and gas company by revenue, which should come at no surprise given the Kingdom of Saudi Arabia’s vast oil and gas reserves over which it has the lion’s share of exploration and exploitation rights. The company can boast access to the second largest proven reserves of oil.

  1. Sinopec

One of China’s major oil and gas companies, Sinopec is traded on the Hong Kong, Shanghai, and New York stock exchanges, though it’s parent company, the Sinopec Group, is state owned. Though it is mainly active in the downstream markets, Sinopec’s businesses include oil and gas exploration refining, and marketing; as well as other activities in the petrochemical markets.

  1. China National Petroleum Corporation

Another behemoth player, the CNPC is one of the largest integrated energy groups in the world. CNPC forms the government-owned parent company of publicly listed PetroChina, and has seen many waves of restructuring and reorganization. Operating internationally since 1993, CNPC is active in over 30 countries.

  1. PetroChina

Though it is already mentioned above, PetroChina deserves its own mention in this list as the publicly traded arm of CNPC. Concerning itself with the exploration and exploitation of oil and gas reserves, this 18-year-old company has quickly become one of the major international players in terms of revenue in the oil and gas sector.

  1. Exxon Mobil

The first company in the Western Hemisphere to make the list is the US oil and gas giant Exxon Mobil. The company can trace its roots back to 1870 and Standard Oil. 1999 saw the company become the brand we know it as today with the merger of Exxon and Mobil. Though its revenues rank it in the top-5 of oil and gas companies, in terms of production the company ranks in the teens when compared to the state-owned enterprises.

Goldman Sachs’ Oil Analyst Advises on Making Money in Flat Market

gettyimages-504159316.jpgA senior analyst at Goldman Sachs has good news for oil traders. Jeff Currie has explained that despite the market being flat, oil traders are in a good position to make some great returns. This may come as a surprise given the probability that prices will fall from their multi-year highs over the next few months.

On Tuesday, oil prices reached their highest level since the middle of 2015. This came amid political concerns from various OPEC nations, which offset the forecast of higher oil production from the U.S.

OPEC, along with a number of allied producers, including Russia, has agreed to curb oil production in a bid to reduce global stockpiles and prop up the price of oil. Although this supply limitation was due to be lifted in March of 2018, it has been extended until the end of the year.

Currie explains: “We’re not bullish on prices but we are bullish on returns.”

He also noted that the energy market environment is very strong and that traders investing in oil will still be able to benefit throughout the year from what is known as backwardation. This is when the current price of oil is higher than the future cost of oil and sellers are willing to make future deals on this lower forecasted price. This occurs because of a high level of immediate demand and creates positive carry.

What is positive carry?

Currie sums it up succinctly by saying: “When we talk about positive carry in oil, the investor can go out and buy the back end of the (price) curve, hold onto the position, roll it up higher, sell it at a premium and buy again. That’s where we expect the returns from oil to come from,”

Late last year, Goldman Sachs revised its price forecast for Brent crude oil, lifting it from $58 per barrel to $62. Similarly, its prediction for WTI was raised to $57.50 from $55. This price inflation is said to be partly due to the commitment from OPEC to reduce oil production. The oil cartel and its allies were not expected to have stood behind their commitment so strongly and this is why prices are now being re-estimated.

Last week, Eugen Weinberg from Commerzbank declared that we were likely to see a pullback of around 15% over the next few weeks. This was put down to a ‘massive overheating of the speculators’ and would probably correct itself over the next month.

Back in 2014 the world saw a dizzying oil price collapse from nearly $120 per barrel in June to around $70. A number of factors caused this plummet, including a strong U.S dollar and an increased production in shale oil by the United States. OPEC’s reluctance to curb output was also seen as a major driver behind the crash, especially given the particularly weak demand for oil at that point in time. However, OPEC has now fully committed to limiting output in order to prevent another crash like this happening in the future.