Aurelia Butler

Sunny and windy weather is good news for countries that rely on renewable electricity. But both can be turbulent for the grid. Transmission operators must pay power stations to switch off when too much supply overwhelms the system. Earlier this month SSE was fined nearly £10mn for charging “excessive” amounts to reduce output from a pumped storage hydro plant in Scotland. Although a mere rounding error against SSE’s annual profits of £2.2bn, the penalty shone an unfortunate light on a technology that once again piques investors’ interest. The UK has four pumped hydro storage plants — or “water batteries”. The last was commissioned in 1984 before privatisation. More of this long duration storage will be needed to balance out the intermittency of renewables. Pumped storage plants use electricity when prices are cheap to push water from one reservoir to another higher up. In the reverse, releasing water from the upper reservoir through turbines produces electricity. Consultancy Aurora Energy Research estimates 24 gigawatts of long duration storage will be needed under a net zero electricity system. That is eight times the current installed capacity. A 2020 report by engineering group Jacobs found water batteries were the cheapest storage technology after four hours. The high upfront costs of pumped storage are a problem. Construction takes at least five years. A new scheme planned by SSE, Coire Glas in the Scottish Highlands, will cost more than £1.5bn if it goes ahead. Drax’s expansion of an existing project will cost about £500mn.UK ministers have promised to consult on investment mechanisms. The most appropriate is the “cap and floor” incentive used for subsea electricity trading cables. A levy on household bills underwrites a minimum revenue level; a rebate follows when revenues rise above the cap. A “net zero” electricity system is planned in the UK by 2035. That deadline already looks challenging. This form of storage deserves more urgent attention. More

Money markets are currently pricing in a nearly 72% chance of a 25 bps rate hike in July, and the first rate cut in March next year.Following are forecasts from some big U.S. banks and their global counterparts:Brokerage July September Comments Terminal Rate Expectati on BofA 25 bps 25 bps 5.5% – hike hike 5.75% Moved 25 bps expectation for June 5.5% – Citigroup (NYSE:C) 25 bps hike hike to September hike 5.75% JP Morgan 25 bps No hike 5.25% hike 5.5% Goldman 25 bps No hike Sees a possible 5.25% – Sachs hike second hike as more 5.50% likely in November than September Morgan No No hike “In the very 5.1% Stanley hike near-term, the bar to a July hike is not insurmountable but we think would be an Olympic feat” Deutsche 25 bps No hike 5.3% Bank hike UBS 25 bps hike More

ZADAR, Croatia (Reuters) – Croatian tourism officials are anticipating a record year for the sector after the country joined Europe’s free-movement Schengen zone in January, which has boosted the number of visitors to its picturesque Adriatic coast.Tourism accounts for 20% of Croatia’s economy and following a slump during the COVID-19 pandemic, the sector recovered in 2022 and based on results in the pre-summer season, officials expect the positive trend to continue this year.”So far, we have recorded nearly 5 million arrivals and over 17.5 million overnight stays, which is a 20% rise from the last year,” said Kristijan Stanicic, the director of the Croatian Tourist Association, adding that overnight stays were up 11% compared with 2019, which was a record year for visitors.     “Based on these results, we can expect a positive continuation of the main tourist season and … even of the whole year,” Stanicic told Reuters in an interview.    The sector raked in record revenue of over 13 billion euros ($14 billion)in 2022, and Stanicic said he expected even higher revenue this year.    EU member Croatia joined the Schengen area as well as the euro zone on Jan. 1, enabling visitors from the bloc to travel faster and make payments easier.    Officials see a new trend of more weekend tourists from neighbouring countries as a direct effect of Croatia joining the Schengen zone.    “We have never been closer to our main markets such as Slovenia, Italy, Hungary, Austria and Bavaria, from where the largest number of visitors have arrived in the pre-season period,” Stanicic said.     However, in the Adriatic historical town of Zadar, which is surrounded by national parks and whose old town’s remains are a United Nations-protected heritage, locals who rent out their properties to tourists complain of poor government investment strategy, citing lack of hotels and a bigger airport.    “(Tourism) unfortunately mostly depends on nice weather – the weather forecast is key because there is nearly nothing else offered except for national parks and beautiful nature,” said Daniel Radeta, the president of the Zadar renters’ association.     “We need to better brand the destination.”    ($1 = 0.9237 euros) More

The German industrial conglomerate Siemens has announced significant investments in factories in China and Singapore, as it pursues a strategy of diversifying in Asia while expanding in the Chinese market despite growing geopolitical tensions. Chief executive Roland Busch told a news conference in Singapore on Thursday that Siemens would invest €2bn globally this year to increase its manufacturing capacity, starting with a factory expansion in China and the opening of a high-tech plant in the city-state.The doubling down on China comes after Busch had described it as a driver of technological innovation, but Siemens is also hedging against overreliance on a country where US restrictions have been making it difficult to operate — by choosing Singapore as a hub for exports into south and south-east Asia.“I avoid the word decoupling, because decoupling means deciding either/or and nobody wants to do that . . . the difference is diversification, which is looking at how you can serve more markets . . . which makes you at the same time more resilient,” Busch told reporters on Thursday.Siemens’ new €200mn plant in Singapore, which is set to employ 400 people, will produce digital twin and “intelligent hardware” technologies for companies in the region.The conglomerate will also invest €140mn to expand by 40 per cent a plant in Chengdu, south-west China, which makes software to control robots and other industrial machines. However, this would continue to “serve the local growth opportunities in China for China”. It comes alongside a new research and development centre in Shenzhen that will “speed up development of motion control systems”.Siemens said the high-tech investments in China were being made because of customers in the region being “early adopters of new technologies especially in digitalisation and high-tech manufacturing”, echoing comments Busch made to the Financial Times last month.“Where can I find the customers which pull me into the next level of innovation, which are demanding, and which are looking for the next technology?” he said at the time. “It’s China in very many cases.”But Siemens’ China strategy has been questioned by investors, who are becoming wary of any dependence on the country, amid calls from Berlin for the German industry to diversify.Germany’s government noted yesterday, as it unveiled its first-ever national security strategy, that its largest trade partner China had in recent years become a growing threat to international security.The German publication WirtschaftsWoche reported that Busch had originally wanted the Singapore plant to be based in China, but that he yielded following protests from members of his supervisory board.Busch on Thursday described the increasingly volatile relationship between the US and China, by saying that “we have this race for who is number one in the world — and this causes some tensions”.Siemens’ diversification strategy, however, had mainly been prompted by the pandemic when companies realised “a very, very strong dependency on certain supplies from certain countries, or even individual companies”.“The whole world is now working on reducing those dependencies,” Busch said. More