Category: 3. Business

Ed Miliband has abandoned plans to charge southern electricity users more than those in Scotland, after senior officials warned it could put off investors and make it more difficult to build renewables.

Sources have told the Guardian that the government has decided not to proceed with the scheme, known as “zonal pricing”, and that the decision will be announced once it has been signed off by the cabinet.

The plan was first proposed by the Conservatives as a way to encourage heavy electricity users to relocate to areas where there is more generation, such as Scotland, and windfarms sometimes have to switch off because of a lack of demand.

The proposals were heavily backed by Greg Jackson, the founder and boss of Octopus Energy, but triggered a backlash among many other energy companies such as SSE, Scottish Power and RWE.

One source said: “The government has been weighing this up carefully and concluded that the benefits of delivering the clean power mission at pace, particularly given the expected impact of imminent grid upgrades; the need to deliver on the coming renewables auctions; and the significant risk premium being attributed to the UK by international investors, would outweigh the purported benefits of zonal pricing – which at any rate would take beyond the next election to implement.”

The energy department declined to comment.

The proposals would have set lower electricity prices in areas where supply far outstrips demand, in an attempt to encourage industry to move into those areas and reduce the need to switch off generation. Windfarms are sometimes paid to power down when renewable energy threatens to overwhelm the grid.

Zonal pricing could have cut the cost of renewing and updating the country’s electricity grid by billions.

A report by FTI Consulting predicted overall savings of £52bn for consumers over 20 years, while another, which was commissioned by Octopus, found the UK would need to spend £27bn less would need to be spent on major grid upgrades in the future.

The plans threatened an outcry from the sector and the wider public, however.

Alistair Phillips-Davies, the outgoing chief executive of SSE, said recently the plan would be a “huge mistake”, saying it would create a “postcode lottery” where some households would pay £200 to £300 more because of where they live.

An independent report co-authored by Rob Gross, the UK Energy Research Centre director, found the benefits of zonal pricing could easily be wiped out if renewable energy developers demanded higher subsidies to offset the risk of the new scheme.

Miliband is already under pressure from Downing Street to show when his sweeping reforms to the energy system will bring down bills for ordinary consumers, with No 10 officials increasingly concerned about the threat of Reform UK.

Downing Street intervened in the zonal pricing debate after aides to the prime minister, Keir Starmer, became concerned about the possible effect of rolling out plans which could lead to prices rise for some consumers.

Some also worried about the impact on international investment, which is seen as key to building the energy infrastructure which the government has promised.

The French company EDF confirmed on Tuesday it would take a 12.5% stake in the Sizewell C nuclear plant, boosting ministers’ promises of a “golden age” of nuclear power.

Advisers held meetings with a number of energy companies recently to discuss potential alternatives, and the government has now decided to abandon zonal pricing altogether.

The decision has gone to senior ministers in a process known as “write-round”, and will be announced before the next renewables auction which is scheduled for early August.

Officials are now focused on finding alternatives to zonal pricing which might encourage businesses and manufacturers to locate to electricity-rich parts of the country. They include paying battery storage companies to build major capacity in Scotland, or paying them to turn up their capacity on particularly windy days.

One government source said the search for other plans was “where all the brain power is now being expended”.

While prices initially slid yesterday following a larger-than-expected OPEC+ supply hike, the market managed to turn positive with Brent settling almost 1.9% higher on the day. The increase in August Saudi official selling prices provided some comfort. Furthermore, the market is still tight in the near term. This is reflected in the strength in the prompt Brent timespread. The expected supply surplus won’t materialise until later this year, when we expect more sustained downward price pressure.

Increased attacks on vessels passing through the Red Sea by the Houthis in Yemen provided further support to the market yesterday. Further attacks could see an increase once again in vessels avoiding the Red Sea. Instead, they would take a longer route around the Cape of Good Hope.

The middle distillate market continues to show increasing signs of tightness. The ICE gasoil crack remains well supported around US$24/bbl, while the prompt ICE gasoil timespread surged to a backwardation of more than $56/t. Speculators hold their largest net long in gasoil since July 2024. Middle distillate inventories in the US are at their lowest in more than two decades for this time of the year. In Europe, and specifically the Amsterdam-Rotterdam-Antwerp region, gasoil stocks have been trending lower since February. Stronger middle distillate cracks, along with growing OPEC+ oil supply, should support stronger yields in the months ahead. Still, this is worth keeping an eye on, given the potential risk of moving into the northern hemisphere winter with relatively low middle distillate stocks.

A new influenza drug that lasts for an entire flu season may outperform flu vaccines, according to the results of a large phase 2b trial highlighted in a news release by the drug’s manufacturer, Cidara Therapeutics of San Diego.

Single doses of 150 milligrams (mg), 300 mg, and 450 mg provided 58%, 61%, and 76% protection from symptomatic flu, respectively, for about 6 months after injection, according to the data, which has been submitted to the Food and Drug Administration (FDA).

The trial involved 5,071 healthy, unvaccinated adults 18 to 64 years old assessed at 57 US sites and 1 UK site. They received a single shot of the experimental drug, called CD388, at the beginning of the flu season—from September to December 2024—and were evaluated for clinically confirmed and lab-confirmed influenza for 24 weeks. The results have not yet been published in a peer-reviewed journal.

The researchers found that 2.8% of the placebo group contracted influenza within the study timeframe. But those receiving the drug had lower rates.

Highest dose provided 76% protection

The drug’s prevention efficacy (PE) was 76.1% in the 450-mg group, 61.3% in the 300-mg group, and 57.7% in the 150-mg group. All results for the 4,726 participants assessed for the primary end point were statistically significant.

According to US Centers for Disease Control and Prevention data, the effectiveness of flu vaccines in the past 15 flu seasons has ranged from 19% to 60%.

CD388 also met all secondary end points, including efficacy at body temperatures of 37.8°C (100°F) and 37.2°C (99°F) thresholds, as well as statistically significant maintenance of PE for up to 28 weeks.

Safety data were similar across all three dose groups and the placebo group, with no serious adverse events noted. Cidara plans to present additional results from this NAVIGATE trial at scientific conferences this year. It is assessing the data to determine what dose or doses to assess in the next step, a phase 3 clinical trial set to begin next spring.

We are blessed by the fact that any of the three doses would likely be well suited for the phase 3 study.

Jeffrey Stein, PhD, president and CEO of Cidara, said in a press conference on the results, “Traditionally, as you know, in clinical trials you tend to the go with the highest dose so long as there is no safety limitation or tolerability issues. And certainly that’s the case that we have here.”

“We are blessed by the fact that any of the three doses would likely be well suited for the phase 3 study. But the final dose selection will be dependent on our final analysis of the pharmacokinetics and virology data.” Stein added that more detailed results will be available by September.

‘Potential breakthrough’

Nicole Davarpanah, MD, JD, Cidara’s chief medical officer, said in the news release that the results “mark a potential breakthrough for patients and the future of influenza prevention.”

“These Phase 2b results support the potential of CD388 to be a highly effective and well-tolerated seasonal prophylactic for high-risk individuals, such as those with compromised immune systems or those at a heightened risk of severe illness due to underlying health conditions. We look forward to engaging with the FDA and expanding on these results in our planned Phase 3 trial.”

“Results such as these are unprecedented in influenza and support our confidence in the potential of CD388 to offer robust, once-per-season protection against influenza A and B,” said Stein in the release. “CD388 was designed to provide once per season protection against all strains of influenza in all people, irrespective of immune status.”

CD388 was designed to provide once per season protection against all strains of influenza in all people.

During the press conference, Stein said the company has reached out to the Biomedical Advanced Research and Development Authority (BARDA) for potential support for the drug but has not yet met with BARDA officials to go over the data in detail. 

As Aviation Continues To See Greater Demand, NASA and NREL Show How Regional Airports Can Become Energy Nodes

Between fleets of rental vehicles and ground support equipment, electricity demand at U.S. airports might quintuple in the next 20 years.

Smaller regional and general aviation airports, which often have simple rural electric connections, are part of that overwhelming growth. Major airport electric investments are incoming, to say nothing of battery-powered electric aircraft that require substantial charging supplies on the ground.

With 30-year decision-making in the air, researchers at NREL, a U.S. Department of Energy national laboratory, are using the Advanced Research on Integrated Energy Systems (ARIES) platform and other capabilities to analyze energy options for airports, utilities, and public regulators. In many cases, they find a win-win for on-site energy generation and storage.

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On-Site Power To Offset Costs

For any utility, a fivefold expansion in electric infrastructure is serious work. Adding new generation, lines, and substations quickly becomes an expensive project, especially with a regional airport budget. But NREL researchers say there might be a better way.

“Airports—which are often public entities—are figuring out whether there will be enough demand to pay for the infrastructure,” said Scott Cary, project manager of ports and airports at NREL. “To offset some of that cost and increase resilience, part of that conversation should be, ‘What should we generate locally?’”

On-site power from distributed energy resources can lower operating costs by letting airports sell electricity back into the grid. But perhaps more important to regional airports, the on-site resources can serve a local source of stability and energy backup: They can form energy nodes.

“Many of our small, rural airports have available land. Cost-effective distributed energy resources can potentially supply all loads and a majority of the charging loads at the airport. This could generate revenue while also helping the region with power reliability,” Cary said.

That value proposition could resonate with aviation stakeholders, but some may see it as a leap of faith. For that reason, NREL and the National Aeronautics and Space Administration (NASA) are evaluating the costs, policies, and operations in a research activity named Airports as Energy Nodes (ÆNodes). Starting with two partner airports, the research team will build a repeatable research model for the 5,000 other U.S. regional and general aviation airports to explore their energy horizons.

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Exact Answers to Airport Energy Buildout

To get an idea for how regional and general aviation airports will become energy nodes, researchers at NASA and NREL simulated thousands of hypothetical flight itineraries in which electric aircraft offer short-distance service for high-demand routes relative to existing traffic. These results provided a baseline concept of electricity requirements and options, enabling the next stage of research: replicating the power systems of partner airports, including Winchester Regional Airport in Virginia and Tweed New Haven Airport in Connecticut.

“First, we’ve forecasted electric loads and mapped those to typical regional airport buildout. Next, we’ll look at the system in coordination with the utility and ask how we can make it better,” Cary said. “Where do we site energy assets? What adjustments to airport policies or configuration are needed? We can test those questions virtually with power hardware in the loop. We forecast electrical behavior, so utilities can see there’s a way to safely bring those assets online.”

The two airports, which are seeing continued growth, are expanding services including electrified aircraft, and NREL’s expertise and research capabilities will deliver confidence around those intrepid investments. A significant challenge is showing the utilities that the electric plan will work, and for that, NREL will use the ARIES platform.

With data from both airports and their respective utilities, researchers have modeled the partners’ electric systems and loads in detail. Soon, they will translate that information to real utility hardware with ARIES, which they can use to emulate charging fleets of electric aircraft and ground equipment. This will show how utility components handle large loads and surprise disruptions. It will also show how airport electrical systems can be configured for local use: as a source of energy backup and potential economic revenue.

“ÆNodes is about easing the transition for the aviation, utility, and greater airport ecosystems. By looking at this now, we are identifying potential solutions proactively to improve resilience from economic, energy, and transportation perspectives,” Cary said.

Gates Are Closing, Prepare for Takeoff

Given the harmony between electric aircraft and short-distance flights, and constant developments in aviation technology, the next steps at airports could be consequential. NREL and NASA want to make sure aviation decision makers can see clearly down the runway.

“Electric aircraft are in certification—now is the time to prepare,” Cary said. “There is a whole adoption cycle for getting a network in place and scaling it to the demand that airports expect to see. NREL can help airports make those decisions effectively.”

By NREL’s analysis, airports can optimize the value of their energy investments by building local generation—like battery storage—and by supplying electricity back to the local grid to bolster its reliability. To realize this vision of airports as energy nodes, NREL will show that transformative electrical buildouts are safe and valuable and will utilize insights from its partnership with the Federal Aviation Administration around electric aircrafts.

“ÆNodes is focused on all loads at an airport. We’re taking the results from electrical emulations to the utility and saying, ‘Here’s the load, and based on your system, you can do it in this way,’” Cary said. “Then we can apply the same model from airport to airport.”

Learn more about NREL’s aviation, energy security and resilience, and broader transportation and mobility research.

Ensuring better use and development of artificial intelligence

UNESCO has a mandate to support its 194 Member States in their digital transformations, providing them with insights to develop energy-efficient, ethical and sustainable AI policies. In 2021 the Organization’s Member States unanimously adopted the UNESCO Recommendation on the Ethics of AI, a governance framework which includes a policy-oriented chapter on AI’s impact on the environment and ecosystems. 

This new report calls on governments and industry to invest in sustainable AI research and development, as well as AI literacy, to empower users to better understand the environmental impact of their AI use and make more informed decisions.

Accessible and effective solutions to reduce the environmental impact of AI

Generative AI tools are now used by over 1 billion people daily. Each interaction consumes energy—about 0.34 watt-hours per prompt. This adds up to 310 gigawatt-hours per year, equivalent to the annual electricity use of over 3 million people in a low-income African country.

For this report, a team of computer scientists at UCL carried out a series of original experiments on a range of different open-source Large Language Models (LLMs). They identified three innovations which enable substantial energy savings, without compromising the accuracy of the results:

1. Smaller models are just as smart and accurate as large ones: Small models tailored to specific tasks can cut energy use by up to 90%. Currently, users rely on large, general-purpose models for all their needs. The research shows that using smaller models tailored to specific tasks—like translation or summarization—can cut energy use significantly without losing performance. It’s a smarter, more cost and resource efficient approach: matching the right model to the right job, instead of turning to one large, all-purpose system for everything.

Developers also have a role to play in the design process: the so-called ‘mixture of experts’ model is an on-demand system incorporating many smaller, specialized models. Each model – for example, a summarizing model or a translation model – is only activated when needed to accomplish a specific task.

2. Shorter, more concise prompts and responses can reduce energy use by over 50%.

3. Model-compression can save up to 44% in energy. Reducing the size of models through techniques such as quantization helps them use less energy while maintaining accuracy.

    

Small models are more accessible 

Most AI infrastructure is currently concentrated in high-income countries, leaving others behind and deepening global inequalities. According to the ITU, only 5% of Africa’s AI talent has access to the computing power needed to build or use generative AI. The three techniques explored in the report are particularly useful in low-resource settings, where energy and water are scarce; small models are much more accessible in low-resource environments with limited connectivity.

5 primary challenges impacting digital infrastructure development

Stakeholders must navigate a labyrinth of challenges throughout the digital infrastructure ecosystem, from securing financing and managing construction timelines to ensuring compliance with evolving regulations and addressing sustainability concerns. Challenges for stakeholders typically fall into five key categories:

• Speed to market. There is an urgent need to deploy digital infrastructure at a pace that matches demand. As companies strive to capitalize on emerging opportunities, the pressure to expedite construction and deployment often results in accelerated timelines for negotiations, agreements, and project execution. This urgency can introduce vulnerabilities, particularly in service level agreements (SLAs), power purchase agreements (PPAs), and compliance with evolving regulatory standards. Moreover, considering the complexity of digital infrastructure projects, investors, owners, and developers often grapple with intricate contractual relationships, adding layers of complexity that can exacerbate risks if not managed effectively. 
• Capital and development. The sheer scale and complexity of digital infrastructure projects require substantial capital investment. Financing often involves multiple investors with varying financial returns expectations and distinct priorities and risk tolerances, which may complicate the negotiation process and lead to conflicts when expectations regarding project timelines and financial returns are not clearly communicated. As projects grow more complex, sophisticated financial strategies and partnerships become critical. Misalignment in these areas can result in funding shortfalls and project delays, potentially jeopardizing the entire venture.
• Regulations and geopolitics. Regulatory frameworks are evolving continually, often in response to environmental concerns and technological advancements. Navigating a patchwork of local, state, and federal regulations can complicate project execution, leading to delays and increased costs. Changes may necessitate a complete reevaluation of a project to ensure compliance, impacting project timelines and potentially resulting in financial penalties. The complexity of regulatory compliance is compounded by the need to engage with multiple stakeholders, including local governments and utility providers. Geopolitical factors further complicate the landscape, influencing site selection, resource availability, and operational agreements. Stakeholders must remain vigilant to both global trends and local requirements as they negotiate land use and power access agreements and apply for tax incentives. 
• Energy and sustainability. As digital infrastructure, particularly data centers, expands, energy demand is escalating. In the US alone, data centers are projected to consume between 6.7% and 12% of the country’s total electricity by 2028, up from 4.4% in 2023. The criticality of power availability is prompting stakeholders to reevaluate their energy sources. The industry is moving away from traditional grid reliance and exploring alternative energy solutions, including renewable sources, such as solar and wind, as well as on-premises power generation. There is also a push to optimize cooling mechanisms to reduce energy consumption and enhance the overall resilience and sustainability of digital infrastructure projects. 
• Emerging technologies and supply chain. The rapid pace of technological advancements, including innovative solutions intended to introduce efficiencies and address challenges, introduces a new set of risks for the industry. Increased reliance on advanced technologies necessitates a diverse array of components sourced from global suppliers. Complex and interconnected global supply chains have become increasingly vulnerable, particularly amid geopolitical tensions. Disruptions can lead to delays and increased costs, underscoring the need for strategic planning and risk mitigation.

In this high-stakes industry, the consequences of missteps or delayed action can be severe. Failure to adequately assess and address these risks can result in significant financial repercussions, including missed opportunities and diminished returns on investment. Stakeholders must adopt a proactive approach to identify, quantify, and manage their risks effectively. Given the industry’s fast pace, risk management strategies must be adaptive, allowing for a nimble response to evolving challenges.

Enabling growth and derisking innovation

Considering the vast range of risks associated with these large-scale projects, stakeholders must understand and address the individual challenges and risk interconnections across all elements of the digital infrastructure ecosystem. Getting ahead of risk requires insight and diligence in four key areas:

• Understand risks and interconnections for all stakeholders. Success requires investment in understanding the full range of risks that could derail success or performance of any and all components of the digital infrastructure ecosystem. From semiconductor and virtualization software to renewables and backup power, understanding event triggers and the interdependence among various risk segments throughout the lifecycle of a project is crucial. 
• Strengthen and de-risk contractual frameworks. Given the intricate nature of digital infrastructure projects, stakeholders must prioritize robust contractual agreements. This includes negotiating SLAs and PPAs that clearly delineate responsibilities, performance expectations, and risk-sharing mechanisms. Establishing clear terms upfront can help minimize disputes and ensure accountability among all parties involved.
• Drive cross-stakeholder solutions. Building strong partnerships with key stakeholders, including local governments, regulatory bodies, and energy providers, is essential for navigating the regulatory landscape and securing necessary resources. Open communication and collaborative implementation of risk transfer solutions can lead to innovative programs that address operational challenges and sustainability goals. 
• Diligently manage operational complexities. Rudimentary, reactive, or unstructured approaches to core development and ongoing operational risks can lead to excessive costs, administrative friction, and even uncovered loss scenarios. Learned approaches from experienced owner/operators, investors, and even emerging energy providers can provide blueprints to ensure all stakeholders are on top of risks that could derail success.

The digital infrastructure industry is at a critical juncture. The intense pressure to expand is met by a rapidly evolving landscape of risks that, unless properly addressed, can derail projects and undermine investments.
 

As the velocity of risk accelerates alongside the unprecedented speed of development, there is intense pressure for decisive action. Navigating evolving and emerging challenges will require collaboration across multiple industries to address critical challenges, including energy and power availability, construction complexities, persistent cyber threats, and many more.
 

United cross-industry collaboration can help navigate this dynamic risk environment and allow digital infrastructure to advance at a speed that addresses today’s and tomorrow’s needs.

As the digital infrastructure industry evolves and experiences rapid growth, so does the associated and complex risk landscape. Staying ahead of these challenges can minimize the risks of project interruptions and help protect investments. For more information, complete the form below.

As global supply chains pivot towards low-emissions production, Australia will need to lead, or risk being left behind. The country’s challenge is not a lack of technology, capital, or ambition. It’s a gap in policy architecture. Without bankable demand, Australia’s most promising clean commodity projects – green iron, sustainable aviation fuel, and clean ammonia – remain stuck at the starting line.

To meet that challenge, we propose a new demand-side policy model: the Clean Commodities Trading Initiative (CCTI) – a flagship example of green energy statecraft. At its heart is a new tool for national transformation: Clean Commodity Credits that reward innovation and emissions savings.

A market-friendly mechanism to kickstart large-scale clean production.

Green energy statecraft is a strategic approach to governance that uses the clean energy transition to simultaneously advance a nation’s economic, environmental, social, and geostrategic goals. Unlike conventional industry policy, which focuses on domestic market corrections, statecraft treats clean energy as key to national security and prosperity – used to build alliances, secure supply chains, boost productivity, and shape global rules.

The European Union, China, Japan, and South Korea are all pursuing variations of green energy statecraft. Australia must do the same – on its own terms, with tools suited to its advantages, institutions, and budget.

The CCTI is the tool for our times.

The CCTI is a market-friendly mechanism to kickstart large-scale clean production. Its core function is simple: government acts as an early buyer of clean commodities – not to stockpile goods, but to create the conditions for investment. Clean production projects face long lead times and high capital costs. But their biggest barrier is price uncertainty. Firms can’t justify investment if they don’t know whether the market will pay a green premium to offset higher costs. The CCTI removes that uncertainty. It contracts with producers to buy a baseline volume at agreed floor prices. These offtake agreements give developers and financiers the confidence to proceed.

But the real innovation lies in what happens next.

Upon purchasing clean commodities such as green iron, the CCTI would decouple the physical products from their clean attributes by creating Clean Commodity Credits, or Innovation Credits, since the clean attributes reflect not just lower emissions but innovation in production. This dual-market approach allows the physical commodities to be sold in conventional markets while the credits are banked or traded later.

A clean commodity contains two price components: the base cost of the commodity; and the cost of producing it with low emissions. This second factor – the “green premium” – raises prices above conventional alternatives. Clean Commodity Credits solve that problem. They let clean commodities enter traditional markets without the higher price tag. Meanwhile, the CCTI can offset its support costs by monetising the credits in flexible ways. As we argue in our new paper, it could:

• Bank credits for future sale as regulatory markets mature
• Sell credits into voluntary markets to recover costs
• Create bundled products combining physical commodities with clean attributes

This flexibility allows the CCTI to adapt as markets evolve, maximising taxpayer value while supporting market development. 

In effect, these credits create bankable demand for green innovation. They send a clear price signal – not just for carbon, but for the kinds of technologies, processes, and business models that will define the clean economy. They give governments a strategic mechanism to stimulate private investment and build advantage in future-facing sectors.

If Australia continues to rely on patchwork subsidies and fragmented supply-side measures, it will fall behind.

Traditional carbon markets, while important, work by penalising emissions. But in heavy industry, where low-carbon alternatives are still emerging, penalties alone often aren’t enough to drive change. Establishing a market for these credits flips the model. Instead of punishing laggards, it rewards leaders. Governments can set clean production targets – say, 30 per cent green steel by 2030 – and let firms meet them by innovating or buying credits from early movers. It creates a race to the top, not just a drag on the bottom line.

This model rewards firms that act now with firm demand at a price that justifies production – not in 2030 when carbon prices bite or regulation finally arrives. And it allows government to recover its support as credit markets develop. Once established, the same principle can apply to any product the government deems strategic, regardless of its carbon value. Thus Innovation Credits may be the better name.

Japan and South Korea, two of Australia’s key trading partners, seek long-term access to clean industrial inputs they cannot produce domestically. Australia, with its renewable energy resources and export capacity, is a natural partner. By embedding Clean Commodity or Innovation Credits into trade relationships – through joint offtake agreements, shared credit markets, or co-investment in CCTI-backed facilities – Australia can deepen economic ties and build geopolitical resilience. This is green energy statecraft in action: aligning clean industry development with alliance-building and regional stability.

The energy transition is a global race. Other countries are moving decisively. If Australia continues to rely on patchwork subsidies and fragmented supply-side measures, it will fall behind. The CCTI offers a smarter, faster, and more strategic path forward. It reflects the kind of governance Australia now needs: bold, integrated, efficient, and effective.

Green energy statecraft isn’t just theory. It’s practice. And with the right tools, Australia can lead.

This article relates to a Studies in Statecraft series from the Asia-Pacific Development, Diplomacy & Defence Dialogue (AP4D).