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By David Gaffen, Editor, Energy Markets

Hello Power Up readers! The energy markets have largely been focused on central bankers of late, hoping for relief from the U.S. Federal Reserve, Bank of England and others. But the latter just raised rates, and the former is promising more, which means prices will probably continue their meandering ways. However, there are plenty of other developments, including the pomp and circumstance surrounding Narendra Modi’s U.S. visit. Here we go…

Today’s top headlines:

• COLUMN: Frustrated oil bulls made to wait for price recovery
• As EVs take off, makers pledge $14 bln for US lithium iron phosphate
• Hess expects cash flow to rise 25% per year for the next five years

“Solar panels, Jack.” (REUTERS/Jonathan Ernst)

The state visit by India’s Prime Minister Narendra Modi has brought with it a flurry of investment announcements as the two countries develop closer ties. The United States and India are both major energy importers but also large producers – and a new venture backed by Indian solar panel maker Vikram Solar Ltd has big investment plans, as Reuters reports here. The company will invest to $1.5 billion in the U.S. solar energy supply chain, starting with a factory in Colorado that plans to open next year.

The company is one of the latest trying to take advantage of the incentives in U.S. President Joe Biden’s climate change legislation passed last year to boost energy output. India has become a major solar manufacturer and the United States has been hoping to get away from importing much of the components for solar from China. The company, VSK, is a joint venture between Vikram and two New York-based firms, including developer Das & Co.  “It’s a great thing for us to be bringing an Indian company to the table here,” said Sriram Das, chairman of the joint venture.

India itself still relies mostly on coal for energy generation, though the country has invested in its solar capacity.

Guyana has a lot of offshore spots to offer. (Graphic by Marianna Parraga)

The tiny nation of Guyana and U.S. major Exxon Mobil are wrangling over unexplored offshore areas, as Sabrina Valle reports here. The country wants those areas back so it can auction them off to other players as it tries to grow oil revenue and put itself in a position where it isn’t completely dominated by the Exxon-led consortium. Right now, Exxon’s group is producing about 375,000 barrels of oil a day, and wants to triple that output in the next four years.

Guyana, in the meantime, says the returned areas could be included in a competitive auction or directly negotiated with other governments in agreements for oil exploration. The Exxon group was set to return about 20% of the unexplored areas to Guyana under the original agreement dating to 2016. Guyana estimates it has up to 25 billion barrels of oil and gas in place off its coast. The Exxon group operates the most important area, a 6.6 million-acre stretch that has so far produced more than 30 discoveries.

It’s hot. People here are cooling off in the Rio Bravo river between Mexico and the U.S, in Ciudad Juarez. REUTERS/Jose Luis Gonzalez

Various parts of the world are dealing with extreme heat that is testing their electrical grid’s reliability, with Mexico and Texas currently dealing with some of the highest temperatures. Electricity consumption has hit record levels in Mexico, and the country’s energy authority just issued a big alert over grid capacity as temperatures rise to more than 45 Celsius (113 Fahrenheit). Texas is seeing similarly high temperatures, and it has also warned of stress on its grid, though so far disruptions have been minor, as Reuters reports here.

The Mexican electricity grid last hit an emergency in February 2021.  “There’s more consumption, but we don’t have any difficulties. There’s no problem,” Mexican President Andres Manuel Lopez Obrador said. “It’s our responsibility that there aren’t blackouts.” In Texas, the state urged power conservation after the grid operator on Tuesday evening issued a warning for a “projected reserve capacity shortage.” So far, the grid has held up, but not without exorbitant costs – real-time power prices there at one point soared to more than $4,000 per megawatt hour (MWh).

That’s a worker for electricity company Khersonoblenergo in Pravdyne, Kherson region, in Ukraine. REUTERS/Lisi Niesner

Ukraine is scrambling to repair its power grid ahead of winter when Russia is expected to continue to barrage the country with attacks on its energy system, as Tom Balmforth and Pavel Polityuk report here. There have been massive blackouts and issues with energy delivery as a result of Russian attacks – with an estimated 43% of Ukraine’s energy infrastructure damaged in air strikes, per the country’s state-owned power distributor. Officials in the country, which is trying to fight off the Russian invasion, are telling people to conserve energy and be ready for ongoing high prices.

About 70% of the country’s substations have been attacked at least twice, per Ukrenergo, the country’s distributor. Electricity tariffs have been nearly doubled since June 1. “The most extensive repair campaign in the history of energy facilities is currently under way in Ukraine,” Energy Minister German Galushchenko was quoted as saying by his ministry on the Telegram messenger.

“The statement that ‘Poland was a logistics hub for the operation of blowing up Nord Stream’ is completely untrue and is not supported by the evidence of the investigation.”

The Polish National Prosecutor’s Office, after reports that the country was an operating base for the team that blew up the Nordstream pipelines.

Canada’s Communications Security Establishment (CSE) said that hackers aligned with Russia could target the country’s oil-and-gas sector, David Ljunggren reports here. The agency noted that the most likely targets from such actors would be the operational technology networks that monitor and control large industrial assets – and oil and gas facilities qualify in that regard.

“We assess there is an even chance of a disruptive incident in the oil and gas sector in Canada caused by Russia-aligned actors, due to their higher tolerance for risk, the increase in their numbers and activity, as well as the number of vulnerable targets in the sector overall,” it said in a threat assessment.

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