Energy News Beat

The DoD’s focus on climate change over national security reflects Biden’s top policies. Trump pledges to refocus on defense priorities.

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Given the state of affairs in Ukraine and the Middle East and the rise of China as a chief U.S. adversary, one would assume that the Department of Defense (DoD) has its hands full combating real threats to U.S. national security. [emphasis, links added]

One would also think that under the fraught geopolitics of the current world, the DoD would be harnessing its precious resources toward identifying future menaces that literally pose an existential threat to the security of the United States.

Climate change does not constitute a current threat to U.S. national security, but the DoD leaders think otherwise.

In fact, the DoD believes that the climate crisis is a “national security priority.”

On December 11, the DoD announced it is very concerned with climate change in Africa because “climate-stressed areas are a recruiting opportunity for terrorist groups.”

Accordingly, the DoD declared,

“The consequences of inaction on climate will be severe, and our allies and partners will face growing security challenges as a result.”

Tragically, this is only the latest example of the DoD being sidetracked into fighting climate change.

More concerningly, this is part of a much larger effort to reorient the military’s primary focus from preventing real-world threats to abating the nonexistent threat of climate change.

In September of 2021, the DoD released its Climate Adaption Plan, which states,

“The Department of Defense (DOD) has identified climate change as a critical national security issue and threat multiplier and top management challenge… [and] must take bold steps to accelerate adaptation to reduce the adverse impacts of climate change.” As expected, the 32-page plan outlines in intricate detail how the DoD must “integrate climate change adaptation and climate resilience across agency programs, management of real property, public lands and waters, and financial services.”

One month later, the DoD released its Climate Risk Analysis, which explained that:

“Climate change is reshaping the geostrategic, operational, and tactical environments with significant implications for U.S. national security and defense. Increasing temperatures; changing precipitation patterns; and more frequent, intense, and unpredictable extreme weather conditions caused by climate change are exacerbating existing risks and creating new security challenges for U.S. interests.”

Soon after, the DoD announced that the U.S. Army, U.S. Navy, and U.S. Air Force had all created “Action Plans” to mitigate the so-called climate crisis.

Here is a brief snippet from the Navy’s Action Plan:

“The Department must reduce its greenhouse gas emissions and draw greenhouse gases out of the atmosphere, stabilize ecosystems, and achieve, as an enterprise, the nation’s commitment to net-zero emissions by 2050.”

In case you’re wondering, the other two branches of the military have also pledged to be “net zero” by 2050 under their Action Plans.

Of course, the DoD’s pivot to fighting climate change rather than ensuring that U.S. national security is its ultimate priority comes courtesy of the Biden administration.

As Secretary of Defense Lloyd Austin wrote:

“On January 27, 2021, President Biden issued Executive Order 14008, Tackling the Climate Crisis at Home and Abroad, making it administration policy that climate considerations will be an essential element of U.S. foreign policy and national security.”

Fortunately, the Biden administration will be gone soon. Unlike Biden, President-elect Donald Trump understands that the attention of the U.S. military should be laser-focused on protecting the nation from viable threats instead of reducing its carbon footprint.

In 2017, Trump eliminated the term “climate change” from the list of worldwide threats in his National Security Strategy. Rather, Trump made it clear that his administration would focus on Russia, China, and other nation-states that pose a critical danger to U.S. interests.

Moreover, Trump pointed the finger at previous presidents who put “American energy under lock and key” while articulating that he “embraces a future of American energy dominance and self-sufficiency.”

During Trump’s first term, American energy dominance was achieved as the United States became a net oil exporter for the first time in 75 years.

Unfortunately, much of this progress was undone by Biden, who “mobilized a whole-of-government effort” to fight climate change. 

However, what Biden undid Trump can redo.

When Trump returns to the Oval Office on January 20, 2025, he will do everything in his power to ensure that the U.S. military is solely focused on protecting U.S. national security.

He will also unleash the American energy sector like he did during his first term, which will further cement U.S. hegemony.

The days of the DoD being preoccupied with fighting the weather are over. Going forward, the United States and the world writ large will be safer.

Read more at American Thinker

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The post Biden’s DoD Doubles Down On Climate Action As Trump Promises Military Reset appeared first on Energy News Beat.

Energy News Beat

GDP is forecast to decline by 0.2% this year, a sharp downgrade from Bundesbank’s previously projected 0.3% expansion

The post Germany facing economic stagnation – central bank appeared first on Energy News Beat.

Energy News Beat

[[{“value”:”

The United States will in the coming days introduce financial sanctions against Serbia’s oil giant NIS, which is majority owned by Russia’s Gazprom Neft and Gazprom, President Aleksandar Vučić said on Friday (13 December).

“We got confirmation that in the next few days, the US will introduce sanctions against NIS because of Russian ownership,” Vučić told Informer TV.

He said the UK and European Union would likely follow the US in introducing sanctions, which will mean that oil shipments through a pipeline from Croatia are halted.

“We are still waiting to get an official paper with details,” Vučić said.

NIS is one of the most successful companies and the largest contributor to the budget in Serbia.

The US Treasury Department did not immediately respond to a request for comment.

Serbia has repeatedly condemned Russia’s invasion of Ukraine in the United Nations and other international forums, but it has resisted Western pressure to impose sanctions.

The Balkan country is dependent on Russian gas. Russia’s Gazprom Neft and Gazprom own 50% and 6.15% of NIS, respectively. The government owns 29.87% while small shareholders hold the remaining shares.

“We will have to look if there is a possibility to reduce Russian ownership below 50% and to talk with Russian partners about it,” Vučić said.

(Edited by Georgi Gotev)

“}]] 

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​[[{“value”:”

Amid a surge in utility shutoffs, and in the face of a groundbreaking study finding racial disparities in those outcomes, Minnesota’s largest utility is taking a closer look at the issue.

In a November agreement with consumer groups and the state’s Public Utilities Commission, Xcel Energy has outlined a series of steps to provide more information to customers and make it easier for them to restore service.

Xcel also agreed to hire an outside consultant to conduct a one-year study of disparity issues related to disconnections and outages and, separately, do its own analysis of outages. The move came in response to a University of Minnesota study released earlier this year that found that people of color were more likely than White households to have their service disconnected for falling behind on bills, even when controlling for income and home ownership status. 

The agreement falls short of a demand from the Minnesota Attorney General’s Office for Xcel to institute a temporary moratorium on shutoffs until racial disparities are addressed, based on a recommendation from Fresh Energy and a coalition formed by Cooperative Energy Futures, Environmental Law & Policy Center, Sierra Club, and Vote Solar. 

Erica McConnell, staff attorney for the Environmental Law & Policy Center, represented the clean energy organizations advocating for grid equity. She supported the agreement but believes it will do little to help reduce disparities in shutoffs. 

“These are very important improvements that don’t really address — and the commission didn’t discuss — the disparate impacts and the racial disparity (of disconnections) and how to address that specifically,” she said.

A temporary moratorium on disconnections would have allowed for time to study disparities and find ways to address them.  

“The commission didn’t talk about that,” McConnell said. “They didn’t address it at all, so that was disappointing. I understand it’s uncomfortable and it’s a tough issue, but it’s disappointing they shied away taking it head on.”

Beyond the challenge of disparities, Xcel’s number of service disconnections has skyrocketed. More than 45,000 Xcel customers saw their power shut off this year, a number that has grown significantly over the last two decades. 

Xcel agreed to many proposals from the Citizens Utility Board of Minnesota, the Energy CENTS Coalition, clean energy organizations and the Public Utilities Commission to create more consumer protection against shutoffs.

Xcel Energy’s involuntary disconnection notices began rising significantly in 2023 before skyrocketing in 2024, when shutoffs doubled the prior year’s total for May through July. Despite Minnesota’s cold weather protection rules that limit disconnections during the winter through April 30, shutoffs even grew during the winter months.

Clean energy and consumer organizations point to Xcel’s ability to remotely disconnect customers who have smart meters as a major reason for the shutoffs, along with inflation, escalating rate increases and challenging repayment requirements. Xcel had demanded customers pay 50% of what they owe to reconnect, which may have violated Minnesota law, according to the Citizens Utility Board. 

Xcel’s pact with the Citizens Utility Board and Energy CENTS “is going to make payment agreements more affordable and hopefully help households that are behind on their bills avoid getting shut off and get caught back up,” said Annie Levenson-Falk, executive director of the Citizens Utility Board of Minnesota.

The utility board and Energy CENTS Coalition forged the agreement with Xcel under the purview of the Public Utilities Commission, which will issue a final order later. The agreement requires the following:

• Customers will pay 10% of what they owe to have the power turned back on, instead of 50%.
• The amount due will have to be at least $180 before Xcel can send a disconnect notice.
• Xcel cannot shut off power until a customer reaches a $300 past due balance. Xcel’s data from this year showed disconnected customers were $441 in arrears on average in October and much higher in other months.
• The utility must wait at least 10 days after a shutoff notice has been sent to disconnect, up from five days.
• Xcel must post clear disconnection and payment policies on its website, along with information about customers’ right to develop an affordable repayment plan. Any changes Xcel makes to shutoff policies and repayments have to be reported to the commission, and it must collect data on repayments and customer agreements.
• A variance allowing remote disconnections without field visits from Xcel remains, but the utility must contact customers via voicemail and use at least one other form of electronic communication.

Xcel spokesperson Kevin Coss said the utility believes “this agreement is a great step toward reducing disconnections for some of our customers who continue to struggle economically.”

George Shardlow, Energy CENTS executive director, said he thought a clearer explanation of the disconnection process on Xcel’s website brings a transparency that had been lacking.

“I don’t think the average person even knows that they have a right to negotiate when they’re struggling to pay their bills,” he said. “It’s all sort of opaque. We’re excited to see better documentation of people’s rights on Xcel’s website.”

Minnesota law says utility customers are “entitled” to a payment plan they can afford, Shardlow said. Customers who cannot afford the 10% down payment can still negotiate for a settlement that fits their budget, he added.

Shutoffs have been growing. This year Xcel sent disconnection notices to 51,000 customers in January and 71,000 in July. But not all notices result in shutoffs. The highest month for disconnections, May, saw more than 10,000 shutoffs. By August, slightly more than 8,400 customers had been disconnected.

Coss said Xcel works with customers to avoid disconnection by starting a nine-week process of contacting them through multiple channels to “point them to available options for energy assistance — both through the federal Low Income Home Energy Assistance Program and our own affordability programs — and offer flexible payment plans tailored to their circumstances.”

Minnesota also has cold weather protections that greatly reduce utilities’ ability to disconnect customers in winter months. But people who fail to pay their bills in winter see their balances grow, leading to higher disconnections in summer when they fail to catch up.

Xcel agreed to monitor progress and collect more data on racial disparities involving customers involuntarily shut off. The utility has already hired a third party evaluator, as the agreement requires, to study its shutoff policies and hold stakeholder engagement meetings during the year-long process.

Coss said disparities result in inequities throughout society and Xcel has been doing its part to address them. The utility has worked with the study’s authors and advocacy groups to identify actions to reduce disparities, he said.   

Earlier this year, the commission also approved a proposal by Xcel for a pilot program that will provide bill credits to select census tracts with high levels of disconnections. Coss said Xcel will provide $500 bill credits to customers in low-income census areas who have a greater than $2,000 past-due balance, using money available from a quality of service program.

Minnesota Public Utilities Commissioner Joe Sullivan said he believed the agreement negotiated among the nonprofits and utility would reduce the financial strain on households facing disconnections and assist Xcel in recovering debt.

“I thought that in that docket people came together and were constructive,” he said. “I feel like I’m hopeful that the order will make some progress.”

PUC Chair Katie Sieben said the commission is “always looking at affordability, and especially as it pertains to low-income customers, I think we have a great track record on working with stakeholders and with utilities to provide robust low-income assistance to customers.”

She mentioned the commission’s role in approving an Xcel pilot to decrease payments for low-income, low-usage customers and a September decision that used a penalty for the utility’s service quality underperformance to provide bill credits to around 1,000 customers with the oldest outstanding balances in low-income census tracts.

The agreement does not solve the problem of low-income customers struggling to pay utility bills. Shardlow said Energy CENTS and the Citizens Utility Board lobbied the state legislature to allow households to apply for energy assistance funding the entire year instead of the current policy of having a deadline of May 31. Only 20% of eligible Minnesota households participate in the program, he said.

Levenson-Falk wants Xcel to consider eliminating the 1.5% late fee it charges customers on their balance, or consider donating the money to affordability programs.

The Citizens Utility Board also wants Xcel to develop a plan to reconnect customers quickly on days of high heat or poor air quality. Coss said Xcel will evaluate reconnecting customers disconnected during days of air quality alerts.

Levenson-Falk said the agreement at least makes progress. “I think we resolved everything that we had discussed with Xcel but that’s not to say that we think this is going to solve the problem, because, of course, there are still going to be continuing shutoffs, and those are still very concerning,” she said. “There’s still more work to do.”

This story was updated to include a statement from Minnesota Public Utilities Commission Chair Katie Sieben.

Fresh Energy staff, board members and funders do not have access to or oversight of the Energy News Network’s editorial process. More about our relationship with Fresh Energy can be found in our code of ethics.

“}]] 

The post As utility shutoffs soar in Minnesota, Xcel Energy agrees to consumer protections and racial disparities study appeared first on Energy News Beat.

Energy News Beat

A Ukrainian Nobel Peace Prize winner weighs in on his prospects.

​

Insider

Your all-access pass to FP

Can Trump Really End the War in Ukraine?

A Ukrainian Nobel Peace Prize winner weighs in on his prospects.

By John Haltiwanger, a reporter at Foreign Policy.

French President Emmanuel Macron and Ukrainian President Volodymyr Zelensky meet with U.S. President-elect Donald Trump at Élysée Palace in Paris on Dec. 7, 2024. Oleg Nikishin/Getty Images

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December 13, 2024, 2:55 PM Comment iconView Comments ()

Russia’s War in Ukraine

Understanding the conflict two years on.

More on this topic

Donald Trump’s victory in the 2024 U.S. presidential election raised immediate questions and concerns in Ukraine amid its war with Russia. Trump has been critical of the Biden administration’s strong support for Kyiv and has expressed opposition to further U.S. aid. But if U.S. assistance dried up, Ukraine would struggle to sustain its forces in a fight against Russia, which has far more resources and manpower.

It’s a critical moment for Ukraine, as Russia continues to make advances in the eastern part of the country and as the war becomes more global in scope—with North Korean forces recently joining the fight on Moscow’s behalf.

Donald Trump’s victory in the 2024 U.S. presidential election raised immediate questions and concerns in Ukraine amid its war with Russia. Trump has been critical of the Biden administration’s strong support for Kyiv and has expressed opposition to further U.S. aid. But if U.S. assistance dried up, Ukraine would struggle to sustain its forces in a fight against Russia, which has far more resources and manpower.

It’s a critical moment for Ukraine, as Russia continues to make advances in the eastern part of the country and as the war becomes more global in scope—with North Korean forces recently joining the fight on Moscow’s behalf.

Meanwhile, Georgians are facing police violence as they demonstrate against a government widely perceived as pro-Russian, in events reminiscent of Ukraine’s Euromaidan protests a decade ago. Russia also just lost an ally in Syria after a blistering rebel offensive toppled President Bashar al-Assad’s regime.

Foreign Policy spoke with Oleksandra Matviichuk, a Ukrainian human rights defender who heads the Nobel Peace Prize-winning Center for Civil Liberties in Kyiv, about the potential dynamic between Kyiv and Washington under Trump, what Assad’s collapse means for Moscow and its allies, and why the situation in Georgia hits close to home for Ukraine.

This interview has been edited for length and clarity.

Foreign Policy: Trump has said he can end the war in Ukraine in “24 hours” but hasn’t elaborated on how he would accomplish this. He recently called for an immediate cease-fire in Ukraine and is pushing for negotiations to begin. Trump has also signaled that Ukraine could receive less aid from the United States once he’s back in the White House. Are you more concerned or hopeful about how Trump will approach relations with Kyiv during his second term?

Oleksandra Matviichuk: It’s very difficult for me to predict the policy of a new administration. But I hope that we will see the implementation of [former U.S. President Ronald] Reagan’s principle of peace through strength. The problems of the current situation come from only Russia being proactive all these years. Russia did something horrible, then pushed the entire international community to reckon with it. And the international community was always reactive and played [Russian President Vladimir] Putin’s game. Now is the time to start being proactive, stop playing by Putin’s rules, and move toward peace through strength.

FP: Ukrainian President Volodymyr Zelensky appears to be opening up to the idea of temporarily ceding territory to bring a halt to the fighting with Russia, but only if Ukraine is granted NATO membership. Russia strongly opposes Ukraine joining the alliance, and Putin doesn’t seem especially eager to negotiate. Is a cease-fire possible in the near future, or do too many obstacles remain?

OM: We need to discuss what really matters and not what Russia wants. This war started not in February 2022, but in February 2014. To stop Ukraine from becoming a genuine democracy, Russia invaded [and] occupied Crimea [as well as] part of the Luhansk and Donetsk regions, and two years ago extended the war with a large-scale invasion.

Putin is not afraid of NATO. He’s afraid of the idea of freedom coming closer to Russia’s border. What I want us to discuss and what Russia doesn’t want us to discuss is the real goal of Putin. Russia doesn’t just want one part of Ukraine’s land. Putin wants to destroy and occupy the whole country and to forcibly restore the Russian empire. If Putin isn’t stopped in Ukraine, he’ll go further.

We must take Putin’s real intent very seriously as we discuss the peace process and how to end Russia’s war against Ukraine. In this regard, the main issue is security guarantees for Ukraine to prevent future Russian aggression. The security guarantees have to be so serious for Russia that it will not just postpone the implementation of Putin’s goal, but make it impossible.

FP: Zelensky says that Ukraine needs a “just and robust peace, that Russians will not destroy within a few years.” What would a just and robust peace look like? You’ve spoken about security guarantees, but what other important aspects would there need to be?

OM: The rights of people who live in occupied territories, the return of abducted Ukrainian children, the release of all illegally detained civilians, and an end to political persecution must all be points of discussion.

The hell Ukraine now faces is a result of the total impunity Russia has enjoyed for decades. Russian troops committed horrible crimes in Chechnya, Moldova, Georgia, Mali, Libya, Syria, and other countries worldwide. They have never been punished. They believe they can do whatever they want. In this situation, justice is a precondition to sustainable peace in our part of the world, where Russia for decades has viewed war as a tool to achieve its geopolitical goals.

We are fighting for justice, and we’re not just fighting for people in Ukraine—we are fighting to prevent Russia from attacking other nations.

FP: Has there been any progress made in terms of returning these Ukrainian children home from Russia?

OM: This is a very sensitive problem for Ukrainian society. It’s a very systematic and deliberate policy of Moscow. Russia took Ukrainian children to Russia, put them in education camps, and told them that they’re not Ukrainian children but Russian children.

While Ukrainian authorities identified up to 20,000 of Ukrainian children being illegally deported, only about 500 children have been returned.

An international coalition was created, which includes the United States, to help bring the kids back. To be more successful, we have to invite more countries to this international coalition from Africa and Latin America. While they can be unsupportive and take more neutral positions on the Russian war against Ukraine, they can’t be neutral to human pain and human suffering. They can use their connections with Russia to help Ukraine solve this humanitarian problem and return Ukrainian children.

There are two urgent, alarming problems regarding these children. Today they are children, but tomorrow they’re adults. And tomorrow they will join the Russian army to fight against Ukraine, which is both illegal and immoral. Second, children are much more vulnerable to militarization and indoctrination. We must take decisive actions.

FP: You’ve warned of a growing authoritarian partnership among Russia, Iran, North Korea, and China. Bashar al-Assad, a close ally of Russia and Iran, just fell from power. Does Assad’s demise serve as a warning sign for other authoritarians?

OM: You’re totally right. I live in Kyiv, and my native city is constantly being shelled, not just by Russian rockets, but also by Iranian drones. China helps Russia circumvent sanctions and improve technologies critical to warfare. North Korea sent Russia more than a million artillery shells and recently sent their troops to Russia. Before Assad was crushed, he voted for Russia in the United Nations General Assembly. We are dealing with the formation of an entire authoritarian bloc. All of these regimes have the same worldview.

For Russia and for its authoritarian allies, Ukraine is not just a goal—it’s a tool to break the international order, to dictate rules to the entire international community, and even forcibly change internationally recognized borders.

And what lessons can be learned from the situation in Syria? First, Russia is not as strong as it pretends. Second, Russia is not a reliable partner. They left Assad alone. They broke their internal agreements with the Assad regime.

FP: How concerned are you about the current situation in Georgia? Is it fair to compare what’s happening there to Ukraine’s recent history? How much is Russia to blame for what we’re seeing, and what can be done to help the pro-democracy movement in Georgia?

OM: We Ukrainians are in full solidarity with the people of Georgia in their fight for freedom, democracy, and human dignity. We had the same story just 11 years ago. Millions of people in Ukraine also stood against a pro-Russian, corrupt, and authoritarian regime that stopped our European Union integration process. It’s the same pattern. People in Ukraine also took to the streets for a chance to build a country where the rights of everybody are protected, the government is held accountable, the judiciary is independent, and police do not beat students who are peacefully demonstrating. And we paid the highest price for this because the pro-Russian government engaged in large-scale, systematic repression.

I know what I’m talking about because I was the coordinator of the Euromaidan SOS initiative. We had thousands [of people] working 24 hours a day to provide legal and other kinds of assistance to persecuted protesters across the country. Every day, hundreds and hundreds of people were beaten, arrested, tortured, and faced fabricated criminal charges. So, I understand how difficult the path for freedom and democracy is right now for people in Georgia.

The international community needs to focus on their fight. It’s not just a moral obligation. We live in a world where 80 percent of people are in not free or partially free societies, which means that we are losing freedom in our world [and] that the Georgian people’s fight for their freedom and democracy will define our common future in a world where we’re losing freedom.

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John Haltiwanger is a reporter at Foreign Policy. X: @jchaltiwanger

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The post Can Trump Really End the War in Ukraine? appeared first on Energy News Beat.

Energy News Beat

By Wolf Richter for WOLF STREET.

Balances in money market funds held by households at the end of Q3 jumped by $167 billion from the prior quarter to $4.11 trillion, according to the Fed’s quarterly Z1 Financial Accounts released yesterday. This massive jump in MMF balances occurred even as the Fed started its rate-cut cycle with a 50-basis point cut on September 18, and even as MMF yields have been meandering lower since July in anticipation of the cuts.

Yields of MMFs roughly parallel three-month Treasury yields but are often a little higher. Three-month Treasury yields started descending in July from about 5.36%, and by September 18, the day of the rate cut, were down to 4.76%, and by the end of September, they were down to 4.60%. But even those lower yields were still good enough, and households poured more cash into MMFs in Q3.

These MMF balances include retail MMFs that households buy directly from their broker or bank, and institutional MMFs that households hold indirectly through their employers, trustees, and fiduciaries who buy those funds on behalf of their clients, employees, or owners.

MMFs are mutual funds that invest in relatively safe short-term instruments, such as Treasury bills, high-grade commercial paper, high-grade asset-backed commercial paper, repos in the repo market, and repos with the Fed – the Fed’s “Overnight Reverse Repos” (ON RRPs).

Total MMFs (held by households and institutions) jumped by $291 billion in the quarter to $6.84 trillion at the end of Q3, having ballooned by 53% since Q1 2022 when the rate hikes started from near 0%, and having more than doubled since 2018, when the prior rate-hike cycle took the Fed’s policy rates to 2.25%.

But even after the Fed started cutting rates in 2019 and slashed rates to near 0% in Q1 2020, cash continued to pour into MMFs. It wasn’t until Q3 2020, that relatively small amounts of cash left MMFs, and then balances remained essentially stable. When yields started rising again in 2022, a tsunami of cash washed over the funds. And that has continued so far despite lower yields:

When MMF yields began to move higher in 2022, banks had to respond by offering higher yields on CDs and savings accounts in order to motivate new customers to put their cash into the bank and to motivate existing customers to not yank their cash out. But paying higher interest rates on deposits increases banks’ cost of funding, and they don’t do it unless they have to in order to hang on to their customers’ cash (deposits).

Deposits – loans from customers to banks that form the primary funding of banks – are generally “sticky,” especially in checking accounts and low-yield savings accounts that customers are too lazy to empty out. This stickiness of deposits means that even when rates rise, a big portion of deposits doesn’t get the higher rates but stays at those banks nevertheless, and customers pay the “loyalty tax” to the bank. Banks count on it. Some deposits did leave when yields rose, and banks had to deal with it by selectively offering higher interest rates.

But by early 2024, banks had enough deposits and started dialing back the interest rates they offered even as MMF yields were still over 5%. And cash stopped pouring into CDs.

Large Time-Deposits (CDs of $100,000 or more) peaked in February at $2.37 trillion and then sort-of flatlined with a dip in June and July followed by a partial bounce-back in August and September. Then balances eased again, to $2.35 trillion at the end of November, according to the Fed’s monthly H.8 banking data released today.

In the two years since March 2022 (when the rate hikes began) and February 2024, large time-deposits surged by $951 billion, or by 67%. And when banks started dialing back their rates, the surge stopped, but the balances have remained sticky so far at these levels:

Small Time-Deposits (CDs of less than $100,000) dropped to $1.09 trillion in October following the first rate cut, according to the Fed’s latest Money Stock Measures. The data for November has not yet been released.

These small CDs reflect what regular folks are doing with their savings. When the Fed gutted their cash flow from savings in 2008, they lost interest in CDs and the cash reverted to savings and checking accounts, or went somewhere else.

From the end of 2008 through mid-2022, these CD balances had plunged by 97%, despite the rate-hike hump in 2018. When rates rose in 2022 and 2023, balances exploded. These small CDs are very sensitive to interest rates; they’re not “sticky” at all. They come and go.

Total deposits at all commercial banks edged up to $17.9 trillion in November, according to the Fed’s banking data released today. These are deposits by all bank customers: households, businesses, and state and local government entities. But the Federal Government’s checking account is no longer with commercial banks and is not included here; during the Financial Crisis, it was moved to the New York Fed.

All commercial banks combined lost about $1 trillion in deposits between the initial rate hike in March 2022 through May 2023, just ahead of the last rate hike. This kind of plunge in deposits, in dollar terms and in percentage terms, had never before occurred in the data going back to 1975.

Three banks collapsed during that time – Silicon Valley Bank, Signature Bank, and First Republic – and another was forced to shut down by regulators – Silvergate Capital – because depositors tried to yank their cash out all at the same time. But starting in June 2023, deposits started slowly rising again and have by now regained a large portion of the plunge:

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The post Money Market Funds, Large CDs, Small CDs, and Total Deposits: Americans’ Huge Piles of Interest-Earning Cash as Rates Drop appeared first on Energy News Beat.

Energy News Beat

By Wolf Richter for WOLF STREET.

The ECB took another step at its policy meeting on Thursday to speed up its bond QT program even as it announced the 25-basis point rate cut: It would step away from the bond market entirely after December 17 by removing the last remaining cap on the bond-roll-off.

After December 17, as bonds in its vast holdings mature and come off the balance sheet, they will no longer be replaced at all. Whatever matures comes off the balance sheet without replacement. And its bond holdings will shrink by the amount of bonds maturing. The effect is a further acceleration of its bond QT. By comparison, the Fed has caps in place and lowered the caps in June to slow QT.

The ECB’s last remaining cap that is now coming off slowed the roll-off of bonds in its “Pandemic Emergency Purchase Programme” (PEPP, started in March 2020). It has already removed the cap on bond roll-offs under its “Asset Purchase Programme” (APP, dating back to the Draghi years).

The ECB had two QE programs: Loans to banks that peaked in June 2021 at €2.22 trillion; and the bond buying programs APP and PEPP, which peaked in June 2022 at €4.96 trillion combined. Bonds under these programs include a broad range of government and private-sector securities, but mostly government securities.

The ECB’s QT program has already reduced its balance sheet by €2.48 trillion in total, or by about 28%, since late 2022.

Loan QT – that job is done. Loan QT began in late 2022, when the ECB changed the terms of the loans to make them unattractive, and banks repaid them in large junks. As of its balance sheet this week, the ECB has unwound nearly its entire QE loan program. The balance is down by 98%, to just €49 billion, the lowest in the data going back to 2004 (blue in the chart below).

Bond QT – long way to go and accelerating. Bond QT began in early 2023, when the ECB allowed bonds in its APP holdings to come off the balance sheet when they matured without replacement. Initially, the roll-off amounts were capped, and the amounts of maturing bonds over the cap were replaced with purchases of new bonds.

In July 2023, the cap on the APP roll-off was removed and APP bonds have been rolling off as they mature. In July 2024, the ECB started allowing PEPP bonds to roll off without replacement up to a cap. After December 17, that cap will also be gone, and whatever matures rolls off and adios.

As of its latest monthly reporting on its detailed holdings, the ECB still held:

• €1.62 trillion in PEPP bonds (including €50 billion in private sector securities and covered bonds)
• €2.70 trillion in APP bonds (including €554 billion in private sector securities and covered bonds).

In total, it held €4.32 trillion in securities at the end of November. Another €14 billion rolled off in early December, bringing its total bond holdings down to €4.30 trillion as of its weekly balance sheet this week, down by 13.3% from the peak (red).

QT has reduced total assets on the ECB’s balance sheet by €2.48 trillion, or by 28.1%. Of the amount added during the mega-QE pandemic, 60% is now gone.

The fact that the ECB is speeding up its bond QT, after already completing its loan QT down to near zero, even as it cuts its policy rates amid a slowdown in economic growth, shows that the ECB may be backing away from the QE experiment.

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Dunkelflaute hits Germany as low wind and cold temps raise electricity prices, deplete gas reserves, and push reliance on natural gas plants.

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Dunkelflaute is a cursed word in the German electricity sector.

The combination, typical of cold anticyclones, of low temperatures (which increase demand), and the almost total absence of wind (which hinders wind generation) configures one of the worst possible scenarios for the price of electricity: it forces the burning of more gas in combined cycle plants, which are much more expensive, and that substantially increases the bill. [emphasis, links added]

This dreaded cocktail, which is currently hitting Central Europe, is leading the price of electricity in Europe’s largest economy to levels not seen since the energy crisis.

German consumers will have to pay an average of €395 ($415) per megawatt-hour (MWh) on Thursday, the highest value since December 2022 at the height of the Russian invasion of Ukraine and when fears about European natural gas supplies were more than justified.

In some parts of the day, you would have to go back even further to find similar values: between 5 p.m. and 6 p.m., the German wholesale market exceeded €936 ($983) per megawatt-hour, the highest figure in 18 years.

The main factor behind this escalation is the lack of wind.

At this time of year, Germany’s powerful wind power sector (onshore and offshore) usually averages around 20 gigawatts (GW) of power, according to data from the specialist portal Montel, thus becoming the country’s main source of electricity, on Wednesday it will just exceed 3 GW.

With the cloudy skies, solar photovoltaic power is also operating well below its potential and forces combined cycle plants — in which gas is burned to obtain electricity — to operate at a higher rate than usual, driving up prices.

Unlike the worst days of the 2022 energy crisis — when the price of gas, at historic highs due to the Russian invasion of Ukraine, was the main trigger and the main focus of concern — now the situation is purely temporary: when the wind returns and temperatures rise, the wholesale electricity market should also return to normal.

In fact, this is not the first episode of this kind in recent months: in November, the bad streak of wind power pushed the German price above €800 ($839) per MWh in some hourly periods, only to fall back in the following days.

Less gas stored

Relying on combined cycles to meet demand not only has an impact on prices.

Gas stored in underground tanks, a variable that has been closely scrutinized since the energy crisis, has fallen sharply in recent weeks.

Compared to 98% of gas in early November, German reserves of this vital fuel for heating and industry are currently around 87% and have accelerated their decline in recent days.

The average European reserves are at 80% of their capacity, also falling sharply (by 15 percentage points) over the last five weeks.

In November, for example, the decline in continental reserves was the fastest since 2016 due to the greater use of combined cycles and also heating.

“Reserves are decreasing more than expected, although they remain at very healthy levels,” say analysts at Arcano Research.

Read rest at EL PAÍS

The post Dunkelflaute Pushes German Electricity Prices To Crisis Levels, Drains Gas Reserves appeared first on Energy News Beat.

Energy News Beat

UK government plans to curb protests against wind and solar projects, limiting judicial reviews to speed up permits and meet 2030 net-zero goals.

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The UK government is considering curbing communities’ rights to protest against wind and solar power projects, which extends to preventing these projects from being built. [emphasis, links added]

Currently, communities can oppose projects through judicial reviews and they can do it repeatedly.

The Starmer government’s proposal is to limit potential opponents of wind and solar installations to just one judicial review per project, a new document published today has suggested.

The document features plans to speed up planning and permitting processes for large wind and solar projects and “streamline” those processes to make sure that there is nothing to “unduly slow down vital infrastructure development,” the FT quoted from what was probably an earlier version of the document.

The final version published on the UK government’s website does not contain references to community opposition to wind and solar.

In the FT report, however, a quote says, “For example, this could include changing the rules so that claimants in each case only have one attempt to seek permission for judicial review,” while another says: “Any changes that we decide to make will strike the right balance between reducing delays to infrastructure projects and maintaining access to justice in line with our domestic and international legal obligations.”

The Keir Starmer government wants to build a net-zero grid in the UK by 2030, which it plans to do by building a huge amount of wind and solar generation capacity, including in areas previously protected by conservation legislation.

Local communities have protested several such projects due to their impact on the environment, which the government appears to see as an obstacle on the road to net zero.

Read rest at OilPrice

The post Starmer Govt Wants To Limit Communities From Stopping Wind And Solar Projects appeared first on Energy News Beat.