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    The race to roll out 'super-sized' wind turbines is on

    Recent years have seen companies like GE, Vestas and Siemens Gamesa Renewable Energy announce plans to develop huge wind turbines.
    The sheer scale of these turbines may pose a number of mid-to-long term challenges for the sector.
    Huge turbines are being designed at a time when countries around the world are laying out plans to expand wind energy capacity.

    A Haliade-X wind turbine photographed in the Netherlands on March 2, 2022. The Haliade-X is part of a new generation of huge turbines set to be installed in the years ahead.
    Peter Boer | Bloomberg | Getty Images

    In the not too distant future, waters 15 miles off Martha’s Vineyard will be home to a potentially crucial part of America’s energy future: the 800-megawatt Vineyard Wind 1, a project that’s been described as “the nation’s first commercial-scale offshore wind farm.”
    Construction of Vineyard Wind 1 started last year, and the facility will use 13 MW versions of GE Renewable Energy’s Haliade-X turbines. With a height of up to 260 meters (853 feet), a rotor diameter of 220 meters and 107-meter blades, the Haliade-X is part of a new generation of turbines set to be installed in the years ahead.

    In addition to GE, other companies are getting in on the big turbine act. In Aug. 2021, China’s MingYang Smart Energy released details of a 264-meter tall design that will use 118-meter blades.
    Elsewhere, Danish firm Vestas is working on a 15-megawatt turbine that will have a rotor diameter of 236 meters and 115.5-meter blades while Siemens Gamesa Renewable Energy is developing a turbine that incorporates 108-meter blades and a rotor diameter of 222 meters.
    The reasons for these increases in size are clear. When it comes to height, the U.S. Department of Energy says the towers of turbines “are becoming taller to capture more energy, since winds generally increase as altitudes increase.”

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    A bigger rotor diameter isn’t just for show either, with the DOE noting that they “allow wind turbines to sweep more area, capture more wind, and produce more electricity.”
    It’s much the same with blades. The DOE says longer blades can “capture more of the available wind than shorter blades—even in areas with relatively less wind.”

    Having huge turbines arrive on the market is all well and good, but their sheer scale may pose a number of mid-to-long term challenges for the sector, creating pinch points that could cause headaches.
    Shipshape
    Take installations. In February, research from Rystad Energy honed in on some of the possible issues related to the ships used to install offshore wind turbines out at sea.
    Not counting China, it said wind turbines had seen what it called “a growth spurt in recent years, rising from an average of 3 megawatts (MW) in 2010 to 6.5 MW today.”
    This shift, it explained, was likely to be sustained. “Turbines larger than 8 MW accounted for just 3% of global installations between 2010 and 2021, but that percentage is forecast to surge to 53% by 2030.”
    The above data relates to offshore wind turbines only. According to the energy research and business intelligence firm, demand for vessels able to install larger offshore turbines is set to outstrip supply by the year 2024.
    Operators, it said, “will have to invest in new vessels or upgrade existing ones to install the super-sized turbines that are expected to become the norm by the end of the decade, or the pace of offshore wind installations could slow down.”

    “When turbines were smaller, installation could be handled by the first-generation fleet of offshore wind vessels or converted jackups from the oil and gas industry,” Martin Lysne, senior analyst for rigs and vessels at Rystad Energy, said in a statement at the time.
    With operators continuing to favor bigger turbines, Lysne said a “new generation of purpose-built vessels” would be needed to satisfy demand.
    These specialized vessels don’t come cheap. U.S. firm Dominion Energy, for example, is heading up a consortium building the 472-foot Charybdis, which will cost around $500 million and be able to install current turbines and next-generation ones of 12 MW or greater. More vessels like the Charybdis will be needed in the future as turbines grow.
    “Out of the current fleet of purpose-built vessels, only a handful of units can install 10 MW+ turbines, and none are currently able to install 14 MW+ turbines,” according to Rystad Energy’s analysis. “This will change towards 2025 as newbuilds start to be delivered and existing vessels get crane upgrades.” 
    Ports
    The ships that transport and install turbines will be important in the years ahead, but the ports where they dock are another area where investment and upgrades will likely be needed to cater to wind energy’s growth.
    In a comment sent to CNBC via email, Rystad Energy’s Lysne described port infrastructure as being “very important” from a vessel perspective.

    Installation vessels moored in Ostend, Belgium. Industry bodies from the wind energy sector are calling for significant investment in port infrastructure to help cope with the rapid expansion of wind farms.
    Philippe Clément/Arterra | Universal Images Group | Getty Images

    Going forward, it would appear that a lot of money will be needed. Last May, a report from industry body WindEurope said Europe’s ports would have to invest 6.5 billion euros (around $7.07 billion) by 2030 in order “to support the expansion of offshore wind.”
    The report addressed the new reality of bigger turbines and the effect this could have in relation to ports and infrastructure. “Upgraded or entirely new facilities are needed to host larger turbines and a larger market,” it said.
    Ports, WindEurope said, would also need to “expand their land, reinforce quays, enhance their deep-sea harbours and carry out other civil works.”

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    More recently, a report from the Global Wind Energy Council also reinforced the importance of ports.
    “As offshore wind projects expand and commercial-scale floating wind projects proliferate, port upgrades will be critical for the future success of the industry,” it said.
    The Brussels-based organization said turbine sizes had “increased dramatically” over the past decade, noting that 15 MW turbines were available on the market.
    “Experts now predict turbines with a 17 MW rating will be commonplace by 2035,” it said, before adding that projects centered around floating offshore wind were being developed “at huge volumes.”
    These “floating projects” needed “significant quayside storage and assembly, necessitating more spacious facilities, on-land connective transport links within port areas and deeper-water ports.”
    “Several governments have identified port upgrades as vital to progressing offshore wind, from Taiwan to New York State.”

    As wind turbines grow in size, the vessels used to transport their component parts will also need to adapt.
    Andrew Matthews – Pa Images | Pa Images | Getty Images

    In relation to ports, Rystad Energy’s Lysne told CNBC that the U.S. — whose current offshore wind market is small — would “require more work as they do not have the same infrastructure in place as Europe.”
    Change on that front does appear to be forthcoming. At the beginning of March, BP and Equinor — two businesses better known as oil and gas producers — signed an agreement to convert the South Brooklyn Marine Terminal into an offshore wind port.
    In an announcement, Equinor said the port would become “a cutting-edge staging facility for Equinor and bp’s Empire Wind and Beacon Wind projects.” The site, it claimed, would be “a go-to destination for future offshore wind projects in the region.” Investment in infrastructure upgrades is expected to come in at $200 to $250 million.
    The road ahead
    All of the above feeds into the importance of infrastructure and logistics. Shashi Barla, who is global head of wind supply chain and technology at Wood Mackenzie, told CNBC that while companies had the technological capabilities, logistical challenges were proving to be “very difficult.”
    “It’s not that it is something new … we have been talking about logistics challenges since day one of the industry,” Barla said. “It’s that … we are kind of now, today, approaching the tipping point.”
    Around the world, major economies are announcing plans to ramp up wind energy capacity in a bid to reduce our reliance on fossil fuels.

    As the components of wind turbines get bigger, logistical challenges faced by the sector also look set to grow. This image, from August 2021, shows a 69-meter long rotor blade being transported in Germany.
    Endrik Baublies | Istock Editorial | Getty Images

    While these goals are ambitious, it’s clear they face a number of hurdles. Notwithstanding the issues related to turbine size, it will require a gargantuan effort to bring all these installations online. There’s work to be done.   
    “Increasingly, a lack of facilitating infrastructure is seen as a major limiting factor in the wind industry’s growth,” the GWEC’s report noted.
    “In many countries,” it added, “lack of infrastructure, such as grid and transmission networks, logistics highways and ports, is curtailing the expansion of wind power and stifling the very innovation needed to transform the energy system.”
    Alongside these issues, wind turbines’ interaction with wildlife is likely to be another area of major debate and discussion going forward.
    Only last week, the U.S. Department of Justice announced that a firm called ESI Energy Inc had “pled guilty to three counts of violating the MBTA,” or Migratory Bird Treaty Act.
    As the 21st century progresses, wind energy is set for a massive expansion, but the road ahead looks far from smooth. With the U.N. secretary-general recently warning the planet was “sleepwalking to climate catastrophe,” the stakes couldn’t be much higher. More

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    Japanese car giant Honda targets EV expansion, earmarks billions for R&D

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    Honda plans to invest around 5 trillion yen in electrification and software technologies across the next 10 years.
    The Japanese automotive giant says it will also target an EV production volume of over 2 million units per year in 2030.
    Company is also “planning for a dedicated EV production line” in North America.

    With several major economies looking to cut the number of diesel and gasoline vehicles on their roads, Honda and other carmakers are attempting to develop electrification strategies that will allow them to remain competitive going forward.
    Aimur Kytt | Istock Editorial | Getty Images

    Honda plans to invest around 5 trillion yen ($39.9 billion) in electrification and software technologies over the next 10 years, with the Japanese automotive giant aiming to launch 30 electric vehicle models worldwide by 2030.
    In a statement Tuesday, the company said approximately 3.5 trillion yen would go toward research and development expenses, with 1.5 trillion yen focused on investments.

    Honda said it would target an EV production volume of over 2 million units per year in 2030. Its total budget for R&D expenses in this timeframe would amount to roughly 8 trillion yen, or approximately $63.9 billion, it said.

    When it comes to production, Honda said it would look to set up what it called a “dedicated EV plant” in the Chinese cities of Guangzhou and Wuhan. The firm said it was also “planning for a dedicated EV production line” in North America.
    On the battery front in North America, the company is to “procure Ultium batteries from GM. Separately, aside from GM, Honda is exploring the possibility of creating a joint venture company for battery production.”
    Just last week, Honda and GM announced they would develop a series of affordable electric vehicles based on a new global platform.

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    With several major economies looking to cut the number of diesel and gasoline vehicles on their roads in the years ahead, Honda and other carmakers are attempting to develop electrification strategies to enable them to keep up with new regulations and remain competitive.  

    Last month, for example, Ford outlined plans to roll out three new passenger electric vehicles and four new commercial EVs in Europe by 2024, with the company saying it expected to sell over 600,000 EVs per year in the region by 2026.
    In March 2021, Volvo Cars said it planned to become a “fully electric car company” by the year 2030.
    Elsewhere, BMW Group has said it wants fully electric vehicles to represent at least 50% of its deliveries by 2030.
    Such targets will put these companies in competition with Elon Musk’s Tesla, which produced more than 305,000 vehicles in the first quarter of 2022.

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    Another carmaker with plans for electrification is Mercedes-Benz, which has previously said it “will be ready to go all-electric at the end of the decade, where market conditions allow.”
    On Monday, the firm held an ESG conference for analysts and investors. Among other things, it said it wanted to cover over 70% of its energy needs with renewables by 2030.
    It would achieve this, it said, by “rolling out solar and wind power” at its own sites as well as entering into more power purchase agreements.
    In an interview with CNBC’s Annette Weisbach this week, Ola Kallenius, chairman of the board of management at Mercedes-Benz Group, laid out some of the thinking behind his company’s strategy.
    “The good thing with investing in renewables, especially renewables in areas that have a high yield, is that if you look at the cent per kilowatt-hour once you are up and running, many of those options are actually less expensive than fossil-based energy,” he said.
    Investing in renewables, Kallenius added, was “good business.” More

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    Stock futures inch higher following highest inflation data in decades

    Stocks futures were flat in overnight trading as investors weighed the latest inflation data for March.
    Futures on the Dow Jones Industrial Average rose 20 points or 0.06%, while S&P 500 futures and Nasdaq 100 futures were flat.

    Tuesday’s inflation data showed consumer prices rise 8.5% in March from the previous year — the highest level since 1981 — further fueling concerns of tighter monetary policy from the Federal Reserve. Core CPI rose 0.3%, slightly below expectations.
    “I think it’s very likely inflation peaked,” Guggenheim Partners Global Chief Investment Officer Scott Minerd told CNBC’s “Closing Bell: Overtime” on Tuesday. “If it didn’t peak in March, we’re in the process of peaking.” 
    The 10-year Treasury hit a new three-year high, topping 2.82% before pulling back to 2.727%.
    After rallying earlier in the day the major averages closed Tuesday’s session in the negative. The Dow Jones Industrial Average fell 87.72 points, or 0.26%, to 34,220.36. The S&P 500 slipped 0.34% to 4,397.45, and the tech-heavy Nasdaq Composite slipped 0.30% to 13,371.57.

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    Seven sectors ended the day in the negative led by financials. Technology also struggled, with Microsoft and Meta closing down about 1%. Nvidia fell 1.9% and Advanced Micro Devices fell 2.3%, continuing a string of losses in the semiconductor industry.

    Oil prices jumped as China relaxed some Covid-19 lockdowns which could have hard-hit demand. The international benchmark Brent crude rose 6.26% to $104.64 per barrel, while West Texas Intermediate crude futures jumped 6.69% to $100.60 per barrel. The moves sent energy stocks rising with Marathon Oil and Occidental Petroleum ending the day up 4.2% and 2.1%, respectively.
    Meanwhile, the dollar index rose 0.39% and hit a high of 100.332, its highest level since May 2020. Gold also added 1.43% and settled at $1,976.1.
    Investors are looking ahead to the start of earnings season on Wednesday, which begins with JPMorgan and Delta Airlines.

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    Airfare surged 20% over pre-pandemic levels in March as inflation hit vacations

    Consumers spent $8.8 billion on domestic flights in March, Adobe data shows.
    Bookings rose 12% in March, but online spending on airfare rose 28%.
    Travelers are feeling the impact of strong demand and an increase in jet fuel prices.

    Travelers wait in line at the Delta Air Lines check-in area at the Hartsfield-Jackson Atlanta International Airport (ATL) in Atlanta, Georgia, U.S., on Tuesday, Dec. 21, 2021.
    Elijah Nouvelage | Bloomberg | Getty Images

    Airfare is surging as higher fuel prices and strong travel demand drive up the cost of flights.
    Consumers spent $8.8 billion on domestic U.S. airline tickets last month, up 28% compared with March 2019, before the Covid pandemic, while fares surged 20%, according to data from the Adobe Digital Economy Index that was published Tuesday. Bookings only rose 12%.

    Higher fares are one of the latest examples of inflation, which is hitting consumers at gas stations, supermarkets and in the housing market.

    Airline executives have been confident that they could pass along the bulk in the surge in jet fuel to travelers, who so far appear willing to shell out more for travel after two years of Covid lockdowns. Benchmark U.S. Gulf Coast jet fuel settled at $3.2827 a gallon on Monday, up nearly 50% from the start of 2022 and more than double a year ago, according to Platts.
    Delta Air Lines will kick off airline reporting season before the market opens on Wednesday and company executives will provide an outlook on travel demand, cost and fares.
    For travel from June through August, online spending is up 8% compared with 2019, and bookings are up 3%, according to the Adobe data, which track bookings at the biggest six U.S. airlines’ platforms.

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    CNBC’s Jim Cramer says these four financial GARP stocks are investable

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    CNBC’s Jim Cramer on Tuesday offered a list of four investable financial stocks that he believes will benefit from the Federal Reserve raising interest rates to control soaring inflation.
    “Now, what this market wants is entirely different. It wants GARP: growth at a reasonable price,” the “Mad Money” host said.

    CNBC’s Jim Cramer on Tuesday offered a list of four investable financial stocks that he believes will benefit from the Federal Reserve raising interest rates to control soaring inflation.
    “Growth at any price went out of style in the Wall Street fashion show nearly six months ago, as we saw yet again today. Now, what this market wants is entirely different. It wants GARP: growth at a reasonable price,” the “Mad Money” host said.

    “I think it’s a good time to pay some attention to the underappreciated financials with GARP appeal. … We don’t invest in hope, we invest in possibilities, and the odds of winning with growth at a reasonable price have rarely looked this good,” he later added.
    The S&P 500 on Tuesday tumbled 0.34% while the Nasdaq Composite dropped 0.30%. The Dow Jones Industrial Average declined 0.26%.
    Cramer picked four financial stocks investors should consider buying from the same list he used to choose his six favorite travel and leisure stocks on Monday. He came up with the list by running screens on companies listed in the S&P 500, leaving him with firms that have a reasonable valuation and earnings growth.
    Here is the list of four financial stocks that passed the test:

    Signature Bank
    State Street
    Bank of New York Mellon
    Charles Schwab

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    Cramer's lightning round: I like Tesla over Sunrun

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    It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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    Monday.com Ltd: “They’re losing too much money. So I’ve got to say no to Monday.”

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    Sunrun Inc: “I would rather own Tesla … than own Sunrun, which is losing a lot of money.”

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    Gores Guggenheim Inc: “There was a time, a time where I would’ve said this one could be good. … I can’t do that.”

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    Tilray Brands Inc: “I think that Tilray is actually a company that’s going to make a lot of money as we go national with cannabis.”

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    NortonLifeLock Inc: “We sold our whole position at a very big profit for the Charitable Trust. Why did we do that? Quite simply, because they promised several times to close the deal [for Avast]. And they didn’t close the deal. And so, we closed the deal with them.”

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    Cramer says if you believe in oil, HighPeak Energy is an aggressive play that could pay off

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    CNBC’s Jim Cramer on Tuesday said that investors bullish on oil should consider betting on HighPeak Energy.
    “If you believe the price of oil can stay elevated here, possibly because the war in Ukraine will turn into a drawn-out stalemate, then you’ll likely get more upside out of an aggressive oil producer like HighPeak Energy,” he said.

    CNBC’s Jim Cramer on Tuesday said that investors bullish on oil should consider betting on HighPeak Energy.
    “If you believe the price of oil can stay elevated here, possibly because the war in Ukraine will turn into a drawn-out stalemate, then you’ll likely get more upside out of an aggressive oil producer like HighPeak Energy,” he said.

    The stock is riskier than Devon Energy or Pioneer Natural Resources due to its “huge variable dividends, but if you believe in oil here, this is the one for you,” he added.
    One reason HighPeak stock is attractive is that it’s relatively cheap compared to its competitors, according to the “Mad Money” host. The company stock rose 3.94% on Tuesday to $21.88.
    Cramer, who last month encouraged investors to own an oil stock as Russia’s invasion of Ukraine drives prices up at the pump, said that HighPeak’s production ramp-up separates it from competitors like Devon. CEO Rick Muncrief told Cramer last month that Devon will not increase oil production as prices topped $100 a barrel.
    HighPeak said in its 2021 fourth-quarter results that it acquired its third drilling rig in October of last year and a fourth rig in January of this year, adding that the company plans to operate at least four drilling rigs and two frac fleets on average this year. 
    “Most players in this industry have been loath to drill or expand because they’re happy with the current status quo,” Cramer said. “But when everybody else is being disciplined, a company like HighPeak Energy can get away” with boosting production without affecting crude prices, he added.

    “Perhaps most important, they’re drilling really aggressively at the right time, and that time is now,” he said.
    Disclosure: Cramer’s Charitable Trust owns shares of Devon Energy.
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    Jim Cramer: Be ready to pounce with cash on hand when market uncertainty settles

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    CNBC’s Jim Cramer on Tuesday told investors that they shouldn’t rely on optimism as a market strategy, but should still be prepared to act when the market recovers.
    “I think you can do very well right now in a balanced portfolio that also has a lot of cash on the sidelines. You want to be ready for the moment when things actually get better,” the “Mad Money” host said.

    CNBC’s Jim Cramer on Tuesday told investors that they shouldn’t rely on optimism as a market strategy, but should still be prepared to act when the market recovers.
    “I think you can do very well right now in a balanced portfolio that also has a lot of cash on the sidelines. You want to be ready for the moment when things actually get better. It’s just that there’s so much uncertainty, you got to be a little more cautious than we might like at least in a number of key sectors,” the “Mad Money” host said.

    The latest U.S. inflation data revealed that consumer prices in March climbed 8.5% compared with a year earlier, their highest levels since 1981. Stocks on Tuesday fell in response, with the Dow Jones Industrial Average dropping 0.26%, while the S&P 500 fell 0.34%. The Nasdaq Composite declined 0.30%. 
    Cramer said that while he doesn’t think investors should lose all hope that the market will recover, he’s cautious of spreading “false positivity.” He noted Russia’s invasion of Ukraine, Covid shutdowns in China and the semiconductor chip shortage as some of the main culprits of the market’s poor performance.
    “When there are fewer problems, you’re leaving the realm of hope and headed toward the realm of reasonable possibilities. … I love betting on reasonable possibilities. That’s why we’ve got so much cash ready for the Charitable Trust so we can pounce when we start seeing them,” Cramer said.
    “But for now, all we’ve got is hope, and that’s not enough of a game plan,” he added.

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