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Executive says that the largest California utility has seen a 40% increase in interest in data centers.
PG&E's, California's biggest electric utility, saw a 40% increase in the number of requests from developers of data centers across the northern part the state for power supplies this year, a company executive said on Tuesday. California's Silicon Valley has one of the oldest and largest data center markets in the world. However, analysts say that the high cost of electricity and the price of land will prevent the state from capitalizing on the surge of artificial intelligence data centers currently being built across the nation. PG&E said, however, that it sees signs that the state has still room to grow. PG&E launched a new process last month for data center developers who are interested in connecting with the utility's network. PG&E supplies power and natural gases to 16 million people across northern and central California including Silicon Valley. Mike Medeiros is PG&E’s vice president for South Bay Delivery. He said that the so-called "cluster study" yielded 4.1 Gigawatts in interest on top of 8.7 Gigawatts previously announced by the company during its most recent earnings call, held late April. Medeiros stated that not only has the pipeline of data centers within PG&E grown, but also the size of these projects have increased since last year's study on clusters. The typical data center that PG&E wanted to power last year had a capacity of 50 to 100 Megawatts. Currently, proposals range from 500 megawatts up to 1,000 megawatts. Medeiros explained that "we're seeing a big change in the type of homes customers want. Some of this might be due to land availability, or simply scale and efficiency of building larger." Data centers for AI, unlike earlier ones, are used to train large language models like ChatGPT and can be located further from the city center. California's oldest data centers are located in Silicon Valley, in the western part, but many of the proposed new developments are in the inland areas, such as Contra Costa County and Fresno. PG&E is not expected to connect all data centers that make inquiries. This is due to the short timelines set by operators and developers, as well as the backlog of equipment required to build the grid.
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Polish utility PGE Q1 profits jump on lower CO2 emissions costs
PGE, Poland's largest energy utility, reported on Tuesday a core profit of 4,33 billion zlotys (about $1.16 billion), up 71% from the previous year. This was primarily due lower CO2 emissions costs and regulatory revenue increases. The results are in line with preliminary estimates that were reported by the company in mid-May. Why it's important PGE, along with other Polish utilities is experiencing structural changes in the energy landscape of Poland as renewables slowly replace coal, which has long dominated. According to data from the Forum Energii think tank, coal's share of Poland's electricity generation fell to 57.1% by 2024. Renewable energy sources, however, reached a new record at 29,6%. CONTEXT The rise in the company's core profits was driven primarily by lower CO2 emissions costs and higher government-regulated payment for grid stabilization and capacity mechanisms. The result was also positively impacted by the improved results of electricity sales to customers, and increased revenue from heat sales. By the Numbers The net profit of PGE for the first three months rose by over 170%, to 2,42 billion zlotys. Sales revenue increased by around 2%, to 17.17 billion Zlotys. This compares with 16.84 billion Zlotys one year earlier. Cost of goods sold for the company was 13.34 billion Zlotys during the quarter. This is down 11% compared to 15.05 billion Zlotys at the beginning of 2024.
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Portugal wants EU to press France reluctantly on power connections
Portugal, following a major blackout on the Iberian Peninsula last month, said that the EU must enforce the common market rules in order to integrate the Iberian power grid with wider Europe. This will overcome France's unwillingness to add interconnections. Experts and officials say that the blackout in Spain, which began on April 28 and left Portugal's mainland without electricity, could have been avoided if both countries had interconnections for power supply, rather than relying solely on their own power stations. Last Wednesday, energy ministers from Spain and Portugal wrote to EU energy commissioner Dan Jorgensen to ask him to step up. The Portuguese Energy Minister Maria da Graca Carvalho said to reporters at an event near Lisbon, that France has a large amount of nuclear power and is not interested in importing renewable energy cheaper from Iberia. She added that the European Commission could "pressurize" France to conform with the rules on the EU electricity markets. "If Portugal does something that is deemed a barrier to internal market, then the Commission will not waste time sending us a notice with an alert. We expect France to be treated the same way," Carvalho stated. Iberia, with a share of only 3%, is behind the EU target that all countries should have 15% or their energy systems interconnected to broader European networks by 2030. The strengthening of an existing interconnector that connects France and Spain is expected to be finished this year. A new underwater powerline that spans the Bay of Biscay will be completed in 2028. Carvalho says that although RTE, the French grid operator, has looked into the feasibility of two more interconnections to Spain across the Pyrenees in the future, they will not be included in France's plan until 2035. This "worries her". (Reporting and editing by Gareth Jones.
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Think tank: EU sanctions have cost Kosovo 600 million euros in unpaid funds
According to a GAP Institute report, Kosovo has been denied more than 600 millions of euros in external funding for environmental protection projects and energy projects, among others, ever since the European Union implemented sanctions in 2023. Kosovo's Government disputes the amount, but a report by a local organization gives one of first independent assessments on the impact of sanctions on one of Europe’s poorest country for its role in inflaming ethnic tensions in the north of its Serb majority. The GAP Institute reported that "the measures... have had significant financial and development consequences, costing Kosovo approximately 613.4 millions euros in projects suspended or indefinitely deferred." The funds affected are related to various financial instruments which have contributed to Kosovo's growth since its independence from Serbia. According to the report, environment and energy are the most affected sectors, with more than 460 millions of euros stalled. This is a major blow to a country which desperately needs to reduce the reliance it has on coal-fired energy generation. In the first half of this year, at least 150 millions euros were identified as funds that had been stalled. The EU hasn't publicly stated how much money is being delayed. The Kosovo government disputes these figures. A spokesperson said that aside from the 7.1 million euro it claims to have lost due expiration of contracts, these funds are "neither lost nor at risk", because they will be resumed when sanctions are lifted. Kaja Kallas, the EU's chief of foreign policy, said that the bloc will begin lifting sanctions "gradually", on condition that tensions between Kosovo and the north are de-escalated. Senior diplomats told reporters that EU funded projects would receive technical assistance in the coming weeks, but there is no plan at this time to distribute funds. Some EU members do not recognise Kosovo as a country, making lifting sanctions difficult. The diplomat stated that "the gradual lifting is not very substantial" and that it was unlikely the EU could move forward in funding. Kosovo is aspiring to be a member of the EU. Albin Kurti, the Prime Minister, has played a role in stifling the process by raising tensions and closing Serb institutions in the north, as well as by banning the Serbian dinar inside its borders and by stifling trade. Reporting by Edward McAllister, Fatos Bytyci and Sophie Walker
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South African rand falls as gold prices weigh
The rand of South Africa fell against the dollar Tuesday as risk sentiment increased following Donald Trump's decision not to impose tariffs on Europe. At 1510 GMT the commodity-backed currency of the country traded at 17,8900 per dollar, down about 0.2% from its previous closing. The Top-40 index on the stock exchange was flat, with mining companies facing pressure due to the drop in gold prices of more than 1%. Gold Fields, AngloGold Ashanti, and Sibanye Stillwater are all South African mining companies that traded lower for most of the trading session on Tuesday. Shares of Harmony Gold fell even more after the company announced that it had agreed to purchase Mac Copper Ltd, an Australian miner, in a $1.03 billion deal. Investors in the United States will be focused on this week's central bank interest rate announcement. Economists surveyed by predict that the South African Reserve Bank will cut its main rate of interest by 25 basis points on Thursday, to 7.25%. Inflation in South Africa remained below the SARB target range of 3%-6% in April, while the local currency recovered from recent losses and now trades below 18 dollars per unit. Data released by the central bank earlier that day showed that South Africa's composite leading Business Cycle indicator increased 1.1% from month to month in March. The yield on South Africa's benchmark government bond for 2030 was down by 5 basis points to 8.84%. Reporting by Bhargavacharya and Sfundo parakozov, Editing by Bernadettebaum and Andrea Ricci
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US Judge extends the topping period for Citgo Parent's auction to June 2
According to a Tuesday filing, a U.S. Federal Judge has extended until at least June 2, the deadline for rival bidders to enter bids during a court-organized sale of shares of Citgo Petroleum's parent company. Citgo Petroleum is owned by Venezuela. Last month, Delaware Judge Leonard Stark accepted a $3.7billion offer from Contrarian Funds affiliate Red Tree Investments, as the opening bid for the auction of shares. The auction was intended to compensate 15 creditors who were affected by debt defaults and expropriations. Red Tree and other rival consortia were given until the 28th of May to submit their submissions Competing Last week, lawyers for Venezuela requested that parties take more time to review parallel lawsuits before other U.S. courts which could have an impact on the price or conditions of certain bids. According to a proposed new calendar by some creditors the final hearing of the auction would still take place in July, after a "special master" appointed by the court overseeing the process of sale recommends a winning bidder next month. Several Venezuelan creditors who were involved in the case of Delaware, which lasted eight years, have filed lawsuits to recover the same assets. Last week, a New York court dismissed arguments from one of the creditors groups. The Venezuelan lawyers requested the extension. They wrote: "This is an important development in the sales process." The Venezuela parties respectfully request an extension to the topping period in order to allow bidders or potential bidders to account for what the special master called a "cloud of uncertainty" that hung over bidding. In court motions, some creditors supported the extension. (Reporting and editing by Nick Zieminski, David Gregorio and Marianna Pararaga)
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Oklo, South Korea's KHNP enter into agreement to develop Aurora nuclear facility
Nuclear technology company Oklo announced on Tuesday that it had signed a Memorandum of Understanding (MOU) for the development of Oklo’s planned Aurora powerhouse with South Korea’s nuclear plant operator Korea Hydro & Nuclear Power. In morning trading, shares of Oklo rose 1.9% to $49.71. Oklo said that the MOU also outlines plans for collaboration on the development of advanced nuclear technology worldwide. The nuclear industry is in high demand because it's considered a cleaner fuel source and more reliable than solar or wind energy. The U.S. president Donald Trump signed Friday executive orders to jumpstart nuclear industry. These orders direct the independent nuclear regulatory agency of the United States to reduce regulations and expedite new licenses for power plants and reactors. Oklo announced that it will deploy its 75 Megawatt Electric (MWe), Aurora powerhouse. This is a neutron-fission reactor designed to provide clean, affordable energy for industries such as data centers. The facility is at the Idaho National Laboratory. The company expects to finish the licensing process later this year. Aurora's nuclear technology allows it to only need to be refueled every 10 years. This is in contrast to traditional reactors, where one-third is replaced every 1 to 2 year. It is also expected to cost less. According to the agreement, the Oklo, backed by Sam Altman, will work with the South Korean nuclear construction and operation company on the development and verification for the Aurora powerhouse. (Reporting and editing by Shasheesh Kuber in Bengaluru)
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Indian miner NMDC's profit quarterly falls due to lower prices
The Indian state-owned mining company NMDC reported a decline in its fourth-quarter profits on Tuesday, due to lower product prices. Iron ore mining company's quarterly profits before tax and exceptional items came to 23.51 billion rupees (275.56 millions dollars), a 3.5% drop from the previous year. The company's profit, including taxes, increased by 2% in the quarter January-March due to lower expenses for tax. NMDC's average iron ore price was 4,206 rupees. This is lower than the 4,299 rupees average a year ago, according to JM Financial Institutional Securities. According to commodities consultancy BigMint, the company announced a reduction in price back in January. JSW Steel, who primarily purchases iron ore through NMDC said earlier this month that a continued drop in iron-ore prices was expected in the first three months of the current fiscal year. NMDC’s fourth-quarter operating revenue rose 7%, to 69.53 Billion Rupees. This was mainly because of higher sales at its pellets division, which saw a near 13-fold rise in revenue. The company's iron ore revenue fell by nearly 2% in the third quarter. ($1 = 85,3180 Indian rupees). (Reporting and editing by Shreya Biwas in Bengaluru)
Stocks and the euro rise on Trump EU tariff delays
The global markets rose on Monday, and the euro also rallied. This was after U.S. president Donald Trump pushed back his threat to impose 50% tariffs on European Union products until July. It is another temporary reprieve in trade policy.
The broadest MSCI index of world stocks rose by 0.2%. The pan-European stock index, which last rose.9%, has recovered to its previous trading level before Trump unexpectedly announced on Friday that he would impose 50% tariffs on European products, claiming that negotiations with the region were too slow.
Trump changed his mind on Sunday and pushed the deadline for tariffs from June 1 to July 9, after European Commission President Ursula von der Leyen stated that the 27-nation EU needed more time to reach a deal.
Investors were reminded by Trump's recent policy moves how quickly things can change. Analysts point out that investors have moved their money from U.S. to Europe and Asia in anticipation of a possible U.S. economic recession and the resulting global slowdown.
Commerzbank stated in a statement that Trump's comments on Friday were a reminder about his unpredictable policies and decisions.
SEB Research said that a "toxic cocktail" was now being mixed in the U.S., consisting of (1) a rising risk premium for holding U.S. assets (2) global investors moving towards portfolio diversification and (3) a greater focus on the homeland. They also predicted the dollar would lose value, while U.S. rates might rise.
EURO GAINS
Dollar fell by 0.1% on Monday against a basket currency. The euro rose 0.23%, to $1.1380. This is its highest level since late April. Meanwhile, the pound increased by almost 0.2% to 1.3567.
Christopher Wong is the currency strategist for OCBC.
The policy uncertainty surrounding Trump's Tariffs, and of course the erosion of U.S. exceptionalalism could still potentially undermine sentiment and confidence in the medium-term.
Due to the fact that markets in America and Britain were closed on Monday due to public holidays, trading volumes are expected to be lower than normal.
The ballooning debt levels of developed economies have also been brought to the forefront following Moody's downgrade in credit ratings for the United States, and the weak auctions held in the U.S.A. and Japan in the last week.
This week, Japan and Germany will release their inflation reports along with data on the prices of U.S. goods.
China and Hong Kong closed Monday's trading lower as Apple suppliers and automobile shares fell on concerns about a price war.
The Shanghai Composite index fell 0.1% at the close while the blue-chip CSI300 Index dropped 0.6%.
After Trump seemed to approve of Nippon Steel’s acquisition of U.S. Steel, the Nikkei 225 index closed 1% higher in Japan. This was its biggest one-day gain in nearly two weeks.
After a week of record-breaking super-long yields, Japanese government bonds have also surged.
Investors will focus on super-long Japanese bonds, and inflation data is expected to be released later this week. They are trying to gauge Bank of Japan’s monetary policy outlook.
Brent crude and U.S. oil prices fell 23 cents each to $64.54 a barrel and $61.28 a barrel, respectively. Gold also slipped from its two-week peak of $3,339 per ounce.
(source: Reuters)