Daily Update: March 5, 2024

Start every business day with our analyses of the most pressing developments affecting markets today, alongside a curated selection of our latest and most important insights on the global economy.

The Growth of Clean Energy Tech

The global clean energy sector will grow and transform significantly in the coming years. According to a report by S&P Global Commodity Insights, investments in clean energy technology are projected to increase 10%-20% in 2024 to nearly $800 billion. 

Global energy sector capital expenditures are estimated to have risen 8% in 2023 compared with 2022, reaching $2 trillion. Most of this spending went to upstream oil and gas ($565 billion), renewable energy ($463 billion), and transmission and distribution ($349 billion). In 2021–25, “renewable power generation spending will double while upstream spend will grow by nearly 35%,” wrote Amy Groeschel, a principal research analyst of costs and technology at S&P Global Commodity Insights.

Economics are the fundamental driver of the growth of renewables, analyst Francesco d’Avack said on S&P Global’s “EnergyCents” podcast. “Policy is a big driver, and so is corporate procurement and private decisions, but underlying that is always the fact that renewables, on average ... will continue to get cheaper.” 

Solar, wind and hydrogen are some of the fastest-growing sectors, with geothermal energy also emerging as a promising clean energy technology. Over the last three years, geothermal startups have received $630 million in funding. “The challenge for geothermal ... has been [that] it takes a really long time to get through the regulatory process; it takes a really long time to get the investment ready to go,” Travis Hagler, director of US content for energy at S&P Global Commodity Insights, said on another episode of “EnergyCents.” Though it lags behind other technologies for now, geothermal growth is expected to snowball in the coming years.

As renewable energy capacity increases, energy storage technologies will be crucial to balance supply and demand. The intermittent nature of tech such as wind and solar means that production is sometimes higher or lower than necessary. Storage solutions can store excess energy and release it later if supply gets low. Lithium-ion batteries dominate the global energy storage market, but rising demand for these batteries, driven by the push for electric vehicles, is causing concerns about raw material supply and prices. Alternatives such as sodium-ion batteries are being explored, though they face scaling and cost reduction challenges, which could be helped by market reform and government funding.

Groups such as FutureCoal, formerly known as the World Coal Association, advocate for using “clean coal,” which is when technologies such as carbon capture are used alongside burning coal to reduce CO2 emissions. Some argue that it’s better to invest in proven renewables, but according to FutureCoal CEO Michelle Manook, clean coal can help lower the cost of the energy transition and maintain energy security. “If the intention of the global community and the Western countries is to actually reduce the emissions and support developing and emerging nations, then abated coal technologies have to be on the table," Manook told S&P Global Commodity Insights. 

Overall, the global clean energy sector is set for significant growth, driven by increasing investments, technological advancements and shifts in energy policy. As the world strives to achieve its climate goals, the role of different energy sources will be vital.

Today is Tuesday, March 5, 2024, and here is today's essential intelligence.

Written by Claire Delano.

Economy

Credit FAQ: The Pros And Cons Of South Africa Tapping Into The SARB's Paper Profits

The South African government has announced it will use the South African Reserve Bank's (SARB's) paper profits in a bid to partly tackle the country's government debt levels. On Feb. 21, the National Treasury's 2024 budget outlined plans to draw on the country's gold and foreign exchange contingency reserve account (GFECRA) at the SARB amid slowing revenue growth.

—Read the article from S&P Global Ratings

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Capital Markets

US Housing Market: US Home Prices Hit Highest Annual Gain Since December 2022

US home prices swung higher in December 2023, with the national index reaching a one-year high in annual gains. The S&P CoreLogic Case-Shiller US National Home Price NSA Index, covering all nine US census divisions, increased 5.5% year over year in December 2023, up from a 5% annual gain in the previous month. The yearly increase was the highest since the 5.7% year-over-year change recorded in December 2022.

—Read the article from S&P Global Market Intelligence

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Global Trade

Worldwide Manufacturing Returns To Growth

February's PMI surveys showed manufacturing business conditions improving for the first time in 18 months. The upturn provides a welcome indication that the goods-producing sector may be pulling out of the malaise it has been embroiled in after the post-COVID-19 reopening caused global demand to shift from goods to services.

—Read the article from S&P Global Market Intelligence

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Sustainability

Sustainability Insights: As The European Apparel Sector's Environmental Footprint Widens, Credit Risks Are Low, For Now

Although the volume of clothes produced and sold globally is increasing alongside its environmental impact, the apparel sector's carbon emissions, waste and pollution risks remain largely unpriced. At the same time, the financial impact of environmental risks on the sector and ratings has so far been negligible, reflecting a lack of stringent environmental regulations and little change in consumers' buying behavior.

—Read the article from S&P Global Ratings

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Energy & Commodities

Europe Reengages With Energy Security

The security and affordability of energy supplies is again high on the agenda for governments, consumers and companies. This report explores the challenges facing Europe as it reconfigures its energy mix and supply-demand balance following the upheavals of COVID-19 and war in Ukraine; the emergence of a new divide between the industrial and developing countries; and the evolving transnational governance framework for energy security.

—Read the article from S&P Global Commodity Insights

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Technology & Media

Listen: MediaTalk | Season 2: Ep.2 Back to the Box Office

In this episode, MediaTalk host Mike Reynolds speaks to S&P Global Market Intelligence Kagan Senior Research Analyst Wade Holden, who specializes in the movie business. Wade shares his thoughts on the box office performance in 2023 as the industry continues its recovery from the pandemic. Touching on everything from big films that hit to big films that flopped, Wade discusses how studio windowing strategies may be affecting consumer behavior and box office results. Finally, Wade looks ahead to what summer will bring for all of us at the theaters.

—Listen and subscribe to MediaTalk, a podcast from S&P Global Market Intelligence

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