2024-11-01 19:50

NEW YORK, Nov 1 (Reuters) - Costs and reliability concerns related to the burgeoning trend of building energy-intensive data centers next to U.S. power plants were the focus of a technical conference held on Friday by the Federal Energy Regulatory Commission. As the technology industry races to deploy data centers for technologies like generative artificial intelligence, quickly accessing the massive amounts of electricity for the centers has become a critical problem. Connecting data centers directly to power plants, in an arrangement known as co-location, has presented a fast route to accessing large amounts of electricity, instead of toiling for years in queues to connect to the broader grid. "I believe that the federal government, including this agency, should be doing the very best it can to nurture and foster their development," said FERC Chairman Willie Phillips, adding he considered AI centers vital to national security and the U.S. economy. This year Amazon bought a data center powered directly by a Pennsylvania nuclear plant owned by Talen Energy. Shares of fellow major independent nuclear operators, including Constellation and Vistra, have shot up this year partially on the prospect of striking similar deals. The possibility of a ballooning number of co-located data centers has raised questions about potentially higher power bills for everyday customers because the centers will use grid infrastructure and services paid for by the public. Connecting data centers directly to power plants that had been supplying power to the public has also sparked reliability concerns, in part, because they can divert steady power from the grid. FERC questioned whether the co-located centers will use the grid as backup power and what will happen if the neighboring power plant unexpectedly goes offline. "Does the customer get to still draw power from the grid? Because if it does, that's going to have a huge impact," said Commissioner Mark Christie. The technical conference could lead to new co-located data center guidelines, including ones that determine who is responsible for transmission and distribution upgrade costs and how agreements for the centers are governed. FERC is also currently gathering details on a regulatory battle being waged by electric utilities over the co-located Amazon data center agreement with Talen Energy. Talen's interconnection agreement for the center is being opposed by utilities Exelon and American Electric Power, and FERC's decision on the case could set a precedent for similar deals. The data center would take as much as 960 megawatts, or enough to power nearly 1 million American homes, of nuclear energy from the largest U.S. electrical grid. At Friday's conference, Joseph Bowring, watchdog for PJM Interconnection market activity, said more co-located data centers at nuclear plants would exacerbate the region's supply-demand imbalance. "It is not a way to solve the problem, it is a way to actually make it worse," Bowring said, recommending that data center developers instead help bring more power online. Brian George, Google's head of global energy market development and policy, said Google's interest in co-located developments is being driven by a need to access electricity and not to avoid the associated costs. "We will pay for our fair share of those costs," George said. Sign up here. https://www.reuters.com/world/us/us-regulators-mull-issues-around-siting-data-centers-power-plants-2024-11-01/

2024-11-01 19:20

China hopeful for continued US cooperation on climate change, official says Climate official Xia Yingxian says international cooperation is indispensable Xia says China will 'firmly implement' its climate commitments BEIJING/SINGAPORE, Nov 1 (Reuters) - China hopes the United States will be able to continue to cooperate with other countries on climate change, whatever the outcome of the presidential election next week, a senior government official said on Friday. Cooperation between China and the United States, the world's top two emitters of climate warming greenhouse gases, has helped seal major climate deals, including the 2015 Paris Agreement. But the re-election of former President Donald Trump could end bilateral climate engagement between the two sides, with Trump likely to pull the United States out of the Paris Agreement for a second time. "We expect the U.S. can maintain the stability and consistency of its climate policy, and we hope it can continue to work with other countries globally," said Xia Yingxian, director general of the climate office at China's environment ministry, during a briefing. With COP29 climate talks set to get underway in Baku, Azerbaijan in 10 days, Xia told reporters he hoped the meeting would send a positive signal that "multilateralism cannot be reversed and international cooperation is indispensable." As part of their obligations under the Paris Agreement, countries must submit new and more ambitious "nationally determined contributions" (NDCs) to the United Nations by February next year. Washington has been pushing Beijing to commit to an emissions cut of 30% by 2035, but experts have warned that U.S. clout in climate diplomacy would be eroded significantly if Trump wins next week. Xia told reporters China will "firmly implement its NDCs" and said new targets for 2035 had already been proposed, but he didn't give any further details. While China has pledged to bring carbon dioxide emissions to a peak "before 2030" and become carbon neutral by 2060, researchers say it is capable of greater ambition, with CO2 possibly already in decline. But though China has "made significant progress", energy demand is still on the rise and green trade barriers are holding back progress, warned Wen Hua, vice-director of the environmental protection office at the National Development and Reform Commission, China's planning agency. "It has to be pointed out that the carbon peaking and carbon neutrality goals require arduous efforts," he told the Friday briefing. Last month, an influential Chinese state think tank called on the government to set a target to cut absolute levels of carbon emissions by 2035. The China Council for International Cooperation on Environment and Development (CCICED) also recommended the government to double total wind and solar capacity to 2,400 gigawatts (GW) by 2030. Sign up here. https://www.reuters.com/business/environment/china-hopes-us-will-continue-climate-change-collaboration-whoever-wins-election-2024-11-01/

2024-11-01 18:54

Canadian dollar weakens 0.1% against the greenback Touches a two-year low at 1.3953 Factory PMI rises to a 20-month high Bond yields increase across a steeper curve TORONTO, Nov 1 (Reuters) - The Canadian dollar weakened to a two-year low against its U.S. counterpart on Friday as the greenback notched broad-based gains ahead of the U.S. presidential election and despite domestic data that showed factory activity growing at a faster pace. The loonie was trading 0.1% lower at 1.3950 to the U.S. dollar, or 71.68 U.S. cents, after touching its weakest intraday level since October 2022 at 1.3953. For the week, the currency was down 0.4%. "This looks to be a play with U.S. dollar bulls wanting to push this thing (USD-CAD) to the topside should the election result suggest it should go in that direction," said Michael Goshko, senior market analyst at Convera Canada ULC. The loonie is expected to rebound against its U.S. counterpart in the coming year as lower borrowing costs boost the domestic economy but the result of Tuesday's election could unsettle the outlook, a Reuters poll found. Republican candidate Donald Trump has proposed sweeping tariffs on imported goods. Canada sends about 75% of its exports to the United States. Analysts say that tariffs and other proposed measures could boost U.S. inflation, reducing prospects of Federal Reserve interest rate cuts. The U.S. dollar strengthened on Friday against a basket of major currencies. The S&P Global Canada Manufacturing Purchasing Managers' Index (PMI) rose to its highest level in 20 months at 51.1 in October as production and employment picked up in anticipation of rising orders. The price of oil , one of Canada's major exports, increased 0.6% to $69.68 a barrel on reports Iran was preparing a retaliatory strike on Israel from Iraq in the coming days. Canadian bond yields moved higher across a steeper curve, tracking moves in U.S. Treasuries, as investors looked past a weaker-than-expected U.S. jobs report. The 10-year was up 6.1 basis points at 3.283%. Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-hits-2-year-low-us-election-jitters-2024-11-01/

2024-11-01 18:52

GABORONE, Nov 1 (Reuters) - Botswana's new president, Duma Boko, said on Friday he wanted to conclude talks for a new sales pact with global diamonds giant De Beers as soon as possible. De Beers, a unit of mining company Anglo American (AAL.L) , opens new tab, last year agreed a new diamond sales pact, which would see the government's share of diamonds from the Debswana joint venture gradually increase to 50% over the next decade. Debswana Diamond Company, equally owned by Botswana and De Beers, currently sells 75% of its output to De Beers. Although the Botswana government and the country's outgoing president, Mokgweetsi Masisi, touted the merits of the deal, it has yet to be signed. Boko, who took office on Friday after an election that dealt a stinging defeat to Masisi's party, said De Beers had been "considering walking away, not signing at all ... (a) very dangerous position to be in as a country." "The relationship with De Beers could have been damaged by the way the negotiations were handled," he said in a televised statement. "The first thing that needs to be done is to engage the other party." Boko added that his new administration wants to engage with De Beers to understand its concerns. "A proper negotiation involves compromise, where you get a bit of what you wanted, the other person gets a bit," he said. "Then ... you have a durable, sustainable agreement." In an emailed comment, a De Beers spokesperson said: "We will continue to work with Botswana's Government in support of shared objectives, as we always have." Anglo American is looking to divest De Beers as part of a broader restructuring of its sprawling business. Masisi had said in July the Botswana government may raise its shareholding in De Beers from its current 15%. Anglo American's process could become easier now that the election in Botswana has been concluded, diamond mining industry analyst Paul Zimnisky said. "Diamonds by far represent the most important industry for Botswana, so this has to be one of the front and centre issues for the (new) president," Zimnisky said. "I would expect to see progress on this front now." Like other luxury goods, diamond prices have been hammered by a slump in global demand. Sales of rough diamonds at Debswana fell about 52% in the first nine months of 2024, according to data released by Botswana's central bank on Tuesday. Sign up here. https://www.reuters.com/world/africa/botswanas-new-president-aims-finalise-de-beers-diamond-sales-pact-soon-2024-11-01/

2024-11-01 18:51

Nov 1 (Reuters) - U.S. energy firms kept the number of oil and natural gas rigs operating unchanged for a second week in a row, energy services firm Baker Hughes (BKR.O) , opens new tab said in its closely followed report on Friday. The oil and gas rig count, an early indicator of future output, held at 585 to Nov. 1. , , Baker Hughes said that puts the total rig count down 33 rigs, or 5% below this time last year. The number of oil rigs fell by one to 479 this week, while gas rigs rose by one to 102. The oil and gas rig count dropped about 20% in 2023 after rising by 33% in 2022 and 67% in 2021, due to a decline in oil and gas prices, higher labor and equipment costs from soaring inflation and as companies focused on paying down debt and boosting shareholder returns instead of raising output. U.S. crude futures were down 2% so far in 2024 after dropping by 11% in 2023, while U.S. gas futures gained about 6% so far in 2024 after plunging by 44% in 2023. U.S. oil production rose 1.5% in August to a monthly record high of 13.4 million barrels per day, while gross natural gas production eased by about 0.6% in the month to 115.9 billion cubic feet per day, the Energy Information Administration said on Thursday. The top U.S. oil producers Exxon Mobil (XOM.N) , opens new tab and Chevron (CVX.N) , opens new tab posted better-than-expected third-quarter profits on Friday after they pumped record amounts of oil and gas from the Permian basin after acquisitions in the biggest U.S. shale field. Exxon's output from the basin, which spans across Texas and New Mexico, hit a record 1.4 million barrels of oil equivalent per day (boepd), while Chevron's Permian production jumped by 22% to 950,000 boepd, and is on track to hit 1 million boepd next year. The 26 independent exploration and production (E&P) companies tracked by U.S. financial services firm TD Cowen said they planned to cut spending by around 1% in 2024 versus 2023. That compares with year-over-year spending increases of 27% in 2023, 40% in 2022 and 4% in 2021. Sign up here. https://www.reuters.com/markets/commodities/us-oil-gas-rig-count-unchanged-this-week-baker-hughes-says-2024-11-01/

2024-11-01 17:23

BUENOS AIRES, Nov 1 (Reuters) - Argentina's central bank cut its benchmark interest rate to 35% in a surprise move on Friday, boosting local markets and signaling growing optimism by the government that it can tame the country's triple-digit inflation. The 500 basis point cut was the seventh time the policy rate has been lowered since outsider libertarian President Javier Milei took office in December when it was 133%. Bond prices rose on average 2% on the news and the country risk index fell. Milei has targeted the country's inflation rate, long a drag on savings and economic activity. While annual inflation remains above 200%, monthly inflation has dropped sharply to around 3.5% from over 25% at the end of 2023. "The decision is based on the liquidity context and the drop observed in inflation expectations," the central bank said in a statement, which also pointed to the government's "strengthening of the fiscal anchor." Milei's government has overturned a deep fiscal deficit with major spending cuts, but the measures have hit economic growth and deepened a recession, while pushing up poverty rates over 50%. At 209%, Argentina's annualized inflation rate remains among the world's highest, though it has come down consistently in recent months, reaching its lowest level since late 2021 in September. Milei has presided over tough spending cuts during his roughly 11 months in office, including the elimination of energy and transportation subsidies. On Thursday, official data showed the government's tax amnesty scheme attracted around $18 billion back into local banks, with the program's initial stage extended through Nov. 8. Sign up here. https://www.reuters.com/world/americas/argentina-cuts-interest-rate-inflation-outlook-eases-2024-11-01/