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Major project in Oregon could help transform prospects of wave energy

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With snow-capped mountains, shimmering lakes and vast swathes of forest, Oregon, in the Pacific Northwest of the United States, does not lack for natural beauty.

In waters off its coastline, one project is attempting to harness nature’s power by testing and analyzing wave energy converters, a technology which could have an important role to play in a transition to renewables.

Known as PacWave, the project is based around two locations: PacWave North, “a test-site for small-scale, prototype, and maritime market technologies,” and PacWave South, which is under development and has received grants from the Department of Energy and the State of Oregon, among others.

In March, PacWave South — which will be located 7 miles offshore in federal waters measuring 70 to 75 meters deep — took a significant step forward when it was announced that the Federal Energy Regulatory Commission had granted Oregon State University (OSU) a license to “build and operate” a test facility at the site. 

According to OSU, PacWave South is “the first commercial-scale, utility grid-connected test site in the United States to obtain a FERC license and will be the first marine renewable energy research facility in federal waters off the Pacific Coast.”

In a statement at the time, Burke Hales, who is the chief scientist for PacWave, described the news as a “huge moment for this project and for the industry as a whole.”

Hales, who is also a professor at OSU’s College of Earth, Oceanic and Atmospheric Sciences, added that the license was “the first … of its type to be issued in the United States.”

Once up and running, PacWave South will be made up of four berths. In total, the development will have the capacity to test as many as 20 utility-scale wave energy converters, or WECs.

How though, do WECs work? According to Brussels-based trade association Ocean Energy Europe, these types of devices are able to “capture the physical movement of swells and waves and transform it into energy – usually electricity.” At PacWave South, subsea cables will carry electricity from the WECs to a land-based site which will in turn send it to the grid.

According to the project’s website, the maximum power output of PacWave South will amount to 20 megawatts (MW). The site is “pre-permitted,” which in simple terms means WEC developers won’t need to apply for permits or permission to deploy their technology there.

If all goes to plan, construction work could begin this summer with operations starting by 2023. Once built, PacWave South would bolster America’s marine energy testing infrastructure, which already includes the U.S. Navy Wave Energy Test Site in Hawaii.

In a phone interview with CNBC last week, Hales sought to emphasize the importance of the U.S. having a test site such as PacWave South, as well as the task facing the sector.

“I would say that wave energy is … a couple to a few decades behind wind energy,” he explained.

“And the real bottleneck in the ketchup is that there is … really nowhere for these devices to test, basically, anywhere other than a couple of sites in Europe: there’s a site at Orkney, the EMEC site, (and) there’s a site in the Bay of Biscay called BiMep.

“But really nothing, nothing like this, anywhere else in the world, and certainly nothing like this in the U.S.,” he added, going on to explain how it was “critically important” for developers to have a full-scale testing ground.

Oceans of potential? 

The U.S. Department of Energy has described marine energy resources as having “the potential to contribute meaningfully to the U.S. and world energy supply.”

Similarly, the International Energy Agency describes marine technologies as holding “great potential” but adds that extra policy support is required for research, design and development in order to “enable the cost reductions that come with the commissioning of larger commercial plants.”

Looking to the future, marine-based sources of energy could have an important role to play in the U.S.  

“As we move to increasing penetrations of wind + solar + batteries, we need renewable resources that are available when the wind isn’t blowing, at night-time, and during winter,” Bryson Robertson, associate professor and director of the Pacific Marine Energy Center at Oregon State University, told CNBC via email.

“These are all attributes of marine energy,” Robertson said, adding that they complemented other renewable energy resources. “We need to diversify our renewables,” he explained, which would in turn ensure a robust, resilient, carbon free and distributed energy system.

Laura Morton, who is the American Clean Power Association’s senior director of policy and regulatory affairs for offshore, echoed this viewpoint, telling CNBC via email that wave and tidal energy technologies “could help supplement wind, solar, and energy storage in transitioning America to a cleaner, safer, and more affordable energy system.”

Tough targets

The progress of the PacWave project comes as governments around the world lay out targets to cut emissions and attempt to ramp up renewable energy installations.

The reality on the ground shows just how big a challenge this will be. In 2020, fossil fuels — in particular natural gas and coal — comfortably remained the biggest source of electricity generation in the U.S., according to the Energy Information Administration.  

Globally, a U.N. report published in February showed that as of Dec. 31 last year, only 75 parties involved in the Paris Agreement had updated their NDCs, which are individual countries’ targets for cutting emissions and adapting to the effects of climate change.

This represented just 40% of the total number involved, and together they account for only 30% of global greenhouse gas emissions.

The interim report was described as a “red alert for our planet” by UN Secretary General António Guterres.

“It shows governments are nowhere close to the level of ambition needed to limit climate change to 1.5 degrees and meet the goals of the Paris Agreement,” he added.

Work to be done

While there is excitement regarding the role tidal and wave power could play in the planet’s energy mix, the current global footprint of these technologies is small.

Recent figures from Ocean Energy Europe show that only 260 kilowatts (kW) of tidal stream capacity was added in Europe last year, while 200 kW of wave energy was installed.

According to Ocean Energy Europe’s outlook for 2021, “up to 3.1 MW” of wave energy capacity could be deployed this year. For the rest of the world, OEE has forecast just 850 kW of installations.

To put the above figures into context, industry body WindEurope has forecast 19.5 gigawatts of new wind installations for Europe in 2021.

With the above in mind, what needs to be done to ensure tidal stream and wave energy technologies mature and become viable options in the U.S.?

Gregory Wetstone, the president and CEO of the American Council on Renewable Energy, told CNBC via email that Oregon State University receiving a license from the FERC to build and operate PacWave South was “a great first step.”

“Wave and tidal technologies can provide clean, reliable electricity to help meet our growing energy demands,” he added, “but to bring them to an impactful scale, meaningful R&D investments are needed to truly catalyze the marine energy market.”

For his part, Oregon State University’s Bryson Robertson made a number of points. “We need time and reliable long-term federal financial support to get more devices in the water,” he said.

“The lack of ability for marine energy systems to quickly, repeatedly and cost effectively test is holding the industry back,” he added, noting that investments from the DOE in PacWave and other sites were “incredibly important.”

“We need to continue to invest in fundamental and foundation research in this arena,” he went on to add.

“We need breakthroughs to significantly change the economics to see large scale deployments — universities need to be supported to develop the talent and workforce to create these innovations.”

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More big Vision Fund returns expected

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Off the heels of a blowout quarterly report, SoftBank CEO Masayoshi Son told CNBC’s Andrew Ross Sorkin that he expects to see even more exits from companies in the Vision Fund’s portfolio.

“I want to create an ecosystem… where we would have multiple companies going for IPOs,” Masa Son said in the interview, which was recorded Wednesday night. He said 14 of SoftBank’s Vision Fund companies had an IPO or other exit over the last 12 months, up from eight exits the year before.

SoftBank on Wednesday reported $45.88 billion in net profit for the last quarter, largely thanks to the IPO of one of the crown jewels in its Vision Fund portfolio, the South Korean e-commerce company Coupang.

SoftBank also benefitted from the rising stock price of Uber, which it had invested billions in before the ride-haling company had its IPO. DoorDash, another Vision Fund portfolio company, also had a successful IPO last year.

SoftBank’s Vision Fund, a $100 billion fund for placing big bets on technology start-ups, has investments in companies like the online grocer GoPuff, self-driving car company Aurora and fitness tech company Whoop. SoftBank is invested in about 200 companies through its two Vision Funds.

The huge quarter comes after a remarkable slump for companies SoftBank made huge bets on, especially WeWork. WeWork botched its high-profile IPO in 2019, nuking billions in value from the buzzy start-up and ultimately leading to the ouster of its co-founder and CEO, Adam Neumann.

Still, Masa Son seemed optimistic about WeWork when asked if he had any regrets about his investments.

“WeWork is turning around now,” Masa Son said, adding that he expects the company to be profitable “sometime in the next several quarters.”

But beyond the WeWork debacle, Masa Son said he has bigger regrets for the investments he passed on, such as Airbnb and software company Snowflake. He said he didn’t invest in Airbnb because he thought it was too expensive at the time. Shares of Airbnb are down about 4% year to date, but it still maintains an $85 billion market cap.

“I saw they’re a pretty good company, a great business model, great talent an so on,” Masa Son said of Airbnb. “I thought the price was a little too expensive. We were discussing to invest, but I was not smart enough to accept the price tag that they had a couple of years ago.”

Masa Son said most investments he missed happened because of the price to get in on an investment. He also said that even though the Vision Fund tends to invest in high-growth, money-losing companies, he still looks for a positive outcome in the long term.

“So you have to have a pretty long view… and you have to imagine and so on,” Masa Son said. “Sometimes you may imagine the result would be a bad result, as we have experienced, but sometimes you have to be brave enough to imagine, you know, more on the positive side.”

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Uber rival Ola offers London drivers incentives to go electric

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Ola cab drivers talk with each other as they wait for passengers by a roadside in Amritsar.

NARINDER NANU | AFP | Getty Images

LONDON — Indian ride-hailing firm Ola said Thursday it would offer its London drivers incentives to switch to electric vehicles, turning on the charm as it seeks to convince city regulators it’s fit to operate in the city.

From Thursday, Ola will waive its commission fee until Aug. 13 for drivers that own an electric model. Ola users in London will be able to request a ride from a new “Ola EV” category, which allows only drivers with electric vehicles to accept trips.

The SoftBank-backed start-up launched its app in the U.K. capital in February last year, hoping to unseat Uber as market leader. But it was subsequently stripped of its license just eight months later, with local transport authorities concerned Ola was not “fit and proper” to hold one.

Ola appealed the decision by Transport for London not to renew its license. That means it can still operate in the city. A similar thing has happened to Uber, twice, but the San Francisco-based firm managed to regain its license after a court battle with TfL.

In Ola’s case, TfL found the company had committed “historic breaches” that compromised the safety of the public. It said unlicensed drivers were able to undertake more than 1,000 passenger trips using Ola, and that the company failed to notify regulators immediately when these breaches were first identified.

“We continue to work with TfL to address the issues raised in an open and transparent manner,” Ola said in a statement. “At Ola, our core principle is to work closely, collaboratively and transparently with regulators such as TfL.”

“As Ola stated at the time of TfL’s decision, we are appealing the decision and in doing so, our riders and drivers can rest assured that we continue to operate as normal, providing safe and reliable mobility for London.”

Ola claims to have over 25,000 drivers in London, 700 of which are eligible for Ola EV. Following the launch of Ola EV, the company says it will look to extend its offers through partnerships with other businesses to encourage more drivers to make the switch from polluting vehicles.

In March, Uber reclassified all 70,000 of its U.K. drivers as workers after the country’s Supreme Court ruled that a group of the company’s drivers should be treated as workers, not independent contractors. That meant that Uber had to give its U.K. drivers a minimum wage, holiday pay and pension plans.

Other ride-hailing apps, including Ola, Bolt and Free Now, say they are reviewing the Supreme Court ruling to see if it affects their business.

Ola has been pushing deeper into electric vehicles lately. The company’s Ola Electric unit, which makes electric scooters and charging facilities, has raised over $300 million from investors to date, according to Crunchbase. The firm recently hired Jaguar Land Rover veteran Wayne Burgess as its head of vehicle design.

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MSCI to swap Alibaba’s New York shares with Hong Kong in stock indexes

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Signage for Alibaba Group Holding Ltd. covers the front facade of the New York Stock Exchange November 11, 2015.

Brendan McDermid | Reuters

BEIJING — Stock index giant MSCI said Wednesday it is removing the U.S.-listed shares of Alibaba from its global indexes, and replacing them with Alibaba’s Hong Kong-traded shares.

The move, set to take effect after the close on May 27, could see trillions of U.S. dollars tracking those indexes leave the U.S. Trading volume for Alibaba’s Hong Kong shares, which is a fraction of those listed in the New York, could also surge.

The affected indexes include the benchmark MSCI Emerging Markets Index that many institutional investors use to determine how they should invest outside of the U.S., Europe and Japan.

A representative for Alibaba did not immediately respond to a request for comment.

When the tech giant founded by Chinese billionaire Jack Ma listed in New York in 2014, it marked the biggest initial public offering at that time.

Chinese start-ups have since rushed to list in the U.S. despite political tensions. But as concerns about potential de-listing of Chinese stocks from U.S. exchanges grow, major companies like Alibaba and JD.com have launched dual listings in Hong Kong in the last two years.

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