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By Andy Home, Senior Metals Columnist

Hello Power Up readers! The Gaza crisis continues to dominate the headlines. But some of the heat has come out of the oil market, with prices slipping around 2% early on Thursday after the U.S. announced a broad easing of sanctions on South American producer Venezuela. OPEC, meanwhile, does not plan any action after Iran’s foreign minister called for an oil embargo on Israel, and Chevron finally gets a deal with unions at its Australian natural gas facilities.

In the renewables sector, the U.S. is splashing the cash on its aging power grid. It’s not the only one worried about the state of its power infrastructure. The lack of investment in power networks is becoming a global bottleneck in the green energy transition. Europe is also worried about cheap imports of wind turbine parts but has ended a long-running stand-off between Germany and France on power subsidies. And there’s a lot of heat in the corporate lithium sector right now with producers on the prowl for assets. Chile’s new national lithium champion has just made its first acquisition, but U.S. producer Albemarle has given up on its Australian play.

Today’s top headlines:

• OPEC plays down Iran’s call for an oil embargo on Israel

• Chevron gets a deal at its Australian LNG facilities

• Qatar signs second gas supply deal to Europe in a week

Gas flares are seen at the state-owned oil company PDVSA, in Jusepin, Venezuela March 29, 2023. REUTERS/Leonardo Fernandez Viloria

The U.S.  has granted a six-month waiver of its sanctions on Venezuela’s oil sector as the Biden administration looks to increase global oil flows in response to high prices. The measures were broader than expected but are still dependent on Venezuelan President Nicolas Maduro abiding by a deal with the opposition on elections next year. The lifting of sanctions could divert Venezuelan exports from China towards the U.S., Europe and the Caribbean. However, as Reuters’ Marianna Parraga explains in an analysis of what it all means, don’t expect any quick turnaround in the country’s production capacity.

A woman jogs by power lines as California’s grid operator last year urged the state’s 40 million people to ratchet down the use of electricity due to a wave of extreme heat. REUTERS/Carlos Barria.

The Biden administration has announced $3.5 billion in grants for upgrading the aging U.S. power grid to handle the demands of a green energy transition. It’s the first round of selections under the Department of Energy’s $10.5 billion grid resilience and innovation partnerships program. Timothy Gardner in Washington was on the call with Energy Secretary Jennifer Granholm when she explained the grid’s vulnerability to extreme weather such as wildfires and the cold snap that collapsed the Texas grid in 2021.

Electric grid stocks vs ICLN renewable energy ETF: Gavin Maguire.

It’s not just the U.S. power grid that is struggling to cope with the energy transition. The International Energy Agency released a report this week warning that a lack of investment in the world’s electric power grids is emerging as a key bottleneck in the race for net zero. New solar and wind farms are coming on stream at a faster pace than can be channeled by existing infrastructure, leading to lengthening queues to connect new energy projects to national power networks. But as my colleague Gavin Maguire writes in his latest column, what’s bad news for renewable power generators is good news for those companies specializing in grid construction and connectivity. Investors have started to notice with stocks in the sector up sharply.

European Union flags flutter outside the European Commission headquarters in Brussels, Belgium, March 24, 2021. REUTERS/Yves Herman.

The European Union has hammered out a deal to reform the bloc’s power market subsidy rules, ending a long-running dispute between France and Germany, which was concerned about how any changes to existing rules would favor its neighbour’s large fleet of nuclear power plants. Reuters reporters in London, Paris and Frankfurt have the lowdown on how the new deal will work and what it means for Europe’s hard-pressed industrial sector, which is still reeling from the steep rise in power pricing after Russia’s invasion of Ukraine.

A technician stands near a section of an offshore wind turbine at the General Electric plant in Montoir-de-Bretagne, western France. REUTERS/Stephane Mahe.

The EU is planning to boost further investment in its wind generation sector but is worried about “possible unfair trade practices which benefit foreign wind manufacturers” exporting products into the European market. The European Commission warns that if its concerns about subsidies are justified, it “will activate its trade defence instruments.” Kate Abnett in Brussels gives a sneak preview of the measures the Commission is planning to publish next week. Wind turbines are just part of a broader European push-back in the global battle for market share across the renewable power spectrum. Last month the Commission launched an investigation into the “flood” of cheap Chinese electric vehicle imports.

“The grid, as it currently sits, is not equipped to handle all the new demand…we need it to be bigger, we need it to be stronger, we need it to be smarter.”

U.S. Energy Secretary Jennifer Granholm on the Biden administration’s $3.5 billion of grants for the U.S. power grid. 

There’s a lot of action in the lithium sector right now. Producers are on the prowl as they look to scale up capacity to meet fast-growing demand from the electric vehicle sector. Codelco, Chile’s state-owned copper producer, has been tasked with taking control of the country’s vast lithium sector and, as Alexander Villegas reports from Santiago, it’s just made its first acquisition in the form of Australia’s Lithium Power Energy.

No such luck for U.S. major Albemarle, which has abandoned a A$6.6 billion ($4.16 billion) bid for Liontown Resources after a blocking move by Gina Rinehart, Australia’s richest person. Melanie Burton and Scott Murdoch in Sydney have the latest on a saga that has gripped both Australia and the global lithium market.

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