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Zimbabwe Sunshines Solar Projects

FILE: Zimbabwe’s Finance Minister Mthuli Ncube in Harare. Taken July 12, 2022

Zimbabwe has proposed incentives to accelerate 1,000 megawatts of privately owned solar energy projects worth about $1 billion, Finance Minister Mthuli Ncube announced on Monday, as the country scrambles to plug an electricity deficit that threatens to compound its economic woes.

Zimbabwe's drive towards generating 1,100MW from renewable energy sources by 2025 has been slowed by lack of investment by independent power producers (IPPs) spooked by the country's currency volatility and uneconomic tariffs.

Ncube said the government was guaranteeing viable tariffs and power purchase agreements to allay the IPPs' fears.

IPPs, many of which require foreign cash to fund development of solar energy plants, have cited the inability to remit dividends and service foreign loans due to Zimbabwe's chronic foreign currency shortages as key investor concerns.

"A key ingredient to the successful implementation of the solar IPPs projects is a bankable government implementation agreement with an economic tariff," Ncube said in a statement.

He added that the central bank would also guarantee the payment of dividends and foreign loan repayments to external investors and lenders.

Ncube said the guarantees would cover 27 solar power projects with sizes ranging from 5MW to 100MW and a cumulative capacity of 998MW at a cost of $1 billion.

The southern African country is currently generating about a third of its 2,000MW peak power demand and experiencing up to 18 hours of power outages daily after its main Kariba hydropower plant cut electricity generation due to low water levels. The country's ageing coal plants are prone to frequent breakdowns, impacting mines, industry and households.

The Zimbabwe dollar has rapidly lost value, plunging from around 2.5 to the United States dollar when it was reintroduced in February 2019 after a decade of dollarisation, to 673.42 against the greenback currently. The country's power tariffs have also failed to keep track of inflation, which was 255% in November.

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Europe Explores Geothermal Gas Replacement

FILE: Representative illustation of a geothermal power plant. Taken march 24, 2022

The heating plant in Munich's southern Sendling neighborhood has been run for more than a century on gas, often imported from far away. But increasingly, it is the hot waters from deep underground the station that provide the energy.

Tacked on to the side of the original 19th-century red-brick plant is a boxy new geothermal unit surrounded by a tangle of pipes.

Work on the new installation started in 2016 and it opened in 2021, before Russia launched its assault on Ukraine and shut the pipelines to Europe.

But the timely opening of the modern unit - one of the largest of its kind in Europe - is a happy coincidence for the city, which like the rest of the country is facing the challenge of making up for lost Russian gas supplies.

Munich is pouring in one billion euros ($1.1 billion) through 2035 to develop the geothermal energy and make the city's heating carbon neutral.

"We're sitting on a gold mine," says Christian Peltl, director of geothermal energy at SWR, the operator of the plant in Sendling.

"Munich has the perfect geological location" in a region known for its thermal baths, Peltl says.

Everywhere in Europe, interest in geothermal projects has grown in recent years as officials search for ways to decarbonize their energy systems.

Reliable and sustainable geothermal energy seems like the perfect alternative to gas.

Piping hot thermal waters are pumped up from three kilometers below the surface. The heat is transferred into the local network, which connects nearby homes to the plant, while the cooled thermal waters are sent back underground.

"There was really a boom in orders since the beginning of the (energy) crisis," says Peltl.

At the end of 2022, the German government published a plan to increase the production of geothermal energy tenfold by 2030 to 10 terawatt hours (Twh).

To reach the ambitious target, Germany, which uses gas for 50 percent of its heating, wants to start "at least 100 new geothermal projects".

Across the border in France, the government published a plan Thursday to increase the number of deep geothermal energy schemes by 40 percent by 2030.

In Hungary, the government issued a decree in October to expand use of the energy source.

The Italian government is also gearing up to support expansion, while in Denmark, the largest plant in the country is set to open in Aarhus in 2030, supplying 20 percent of the city's heating.

- 'Boom' -

Once fully operational, the new plant in Munich will be able to supply up to 80,000 local homes with warmth via a sprawling network of pipes.

The station is largely automated, with its operation controlled from a room in the older part of the edifice.

While geothermal energy is a boon to those who can access it, "it is only part of the solution", says Thomas Gilg, head of the Munich plant.

Not everywhere is suited to geothermal energy. Above all else, the energy drawn from below the surface has to be used locally.

"We must not fool ourselves. With this plant we cannot supply the whole of Munich," says Gilg.

Excavation works to install a plant in Strasbourg, France, were blamed for two minor earthquakes felt in the area at the end of 2020.

Nonetheless, the Sendling plant operators see the potential as "massive", according to Peltl.

According to the European Commission, geothermal energy could provide carbon-free heating for "up to 25 percent" of residents in the EU.

Europe Maps the Road for EVs

FILE: French President Emmanuel Macron views the Peugeot DS E-Tense Performance at the Paris Car Show, Oct. 17, 2022.

The electrification of the car industry is gathering pace, particularly in Europe, where the sale of new cars running on petrol and diesel will end in 2035. But challenges remain around their production, affordability and whether enough infrastructure can be put in place to persuade drivers to make the switch.

ore than 1.1 million electric cars were sold in the European Union last year, up by a quarter to a record 12.1 percent share of the market.

Electric cars are on average much more expensive than their petrol equivalents, starting from about 35,000 euros ($38,000). This puts them out of reach for many drivers, despite heavy subsidies.

But Tesla announced price cuts of up to 20 percent in Europe and the US in early January, quickly followed by a similar move from Ford.

Elon Musk's Tesla remains the biggest seller of electric cars globally, shifting 1.3 million units in 2022, driven by its Model Y SUV. It predicts a 37 percent increase this year.

In Europe, manufacturers could follow a similar route to gain market share, but also in order to comply with increasingly stringent European CO2 emission standards, according to German analyst Matthias Schmidt.

Traditional auto giants like Volkswagen and Stellantis group -- which owns Peugeot and Jeep -- are stepping up their launches of electric models.

Luxury brands such as Rolls Royce and Ferrari are also planning to launch their first battery-powered models soon.

"2022 was a problem of supply, (but) we're likely to see a complete switch," he said.

"If (manufacturers) start to panic, we're likely to see more and more cuts."

Producers could also react to Chinese manufacturers ramping up production, with plans to produce in Europe at a cheaper price.

Concern about battery life remains one of the main factors that deters drivers from switching to electric vehicles.

Most are limited to a few hundred kilometers and recharging can take anything from 20 minutes to several hours depending on the terminal.

This means the development of a network of fast and accessible terminals for charging is crucial for longer journeys.

The EU will need 3.4 million charging points by 2030, according to a report by consulting firm McKinsey, with updated power grids to cope.

This could cost some 240 billion euros, with companies including Fastned and Ionity ramping up investment in charging stations.

EU Takes Aim at AI

FILE: The logo for OpenAI, the maker of ChatGPT, appears on a mobile phone, in New York. Taken Jan. 31, 2023.

EU industry chief Thierry Breton has said new proposed artificial intelligence rules will aim to tackle concerns about the risks around the ChatGPT chatbot and AI technology, in the first comments on the app by a senior Brussels official.

EU's Breton said the risks posed by ChatGPT - the brainchild of OpenAI, a private company backed by Microsoft Corp.- and AI systems underscored the urgent need for rules which he proposed last year in a bid to set the global standard for the technology. The rules are currently under discussion in Brussels.

"As showcased by ChatGPT, AI solutions can offer great opportunities for businesses and citizens, but can also pose risks. This is why we need a solid regulatory framework to ensure trustworthy AI based on high-quality data," he told Reuters in written comments.

Under the EU draft rules, ChatGPT is considered a general purpose AI system which can be used for multiple purposes including high-risk ones such as the selection of candidates for jobs and credit scoring.

Breton wants OpenAI to cooperate closely with downstream developers of high-risk AI systems to enable their compliance with the proposed AI Act.

Breton said the European Commission is working closely with the EU Council and European Parliament to further clarify the rules in the AI Act for general purpose AI systems.

"People would need to be informed that they are dealing with a chatbot and not with a human being. Transparency is also important with regard to the risk of bias and false information," he said.

Breton said forthcoming discussions with lawmakers about AI rules would cover these aspects.

"Just the fact that generative AI has been newly included in the definition shows the speed at which technology develops and that regulators are struggling to keep up with this pace," a partner at a U.S. law firm, said.

Just two months after its launch, ChatGPT - which can generate articles, essays, jokes and even poetry in response to prompts - has been rated the fastest-growing consumer app in history.

Some experts have raised fears that systems used by such apps could be misused for plagiarism, fraud and spreading misinformation, even as champions of artificial intelligence hail it as a technological leap.

Concerns about plagiarism by students have prompted some U.S. public schools and French university Sciences Po to ban the use of ChatGPT.

Generative AI models need to be trained on huge amount of text or images for creating a proper response leading to allegations of copyright violations.

Microsoft declined to comment on Breton's statement. OpenAI - whose app uses a technology called generative AI - did not immediately respond to a request for comment.

Despite declining comment, Microsoft President Brad Smith wrote in a blog post on Wednesday "There are days when I'm optimistic and moments when I'm pessimistic about how humanity will put AI to use."

OpenAI has said on its website that it aims to produce artificial intelligence that "benefits all of humanity" as it attempts to build safe and beneficial AI.

Rand Drops, Reflecting Slump

Nota de 200 rands, a moeda da África do Sul

The South African rand fell against the dollar on Friday, after the release of a whole-economy survey that showed business activity shrinking in Africa's most industrialized economy.

S&P Global's South Africa Purchasing Managers Index (PMI) fell to 48.7 in January from 50.2 in December. Readings below 50 indicate a contraction in activity.

It was the fastest pace of contraction since the end of 2021 as new orders fell due to rolling power cuts and weak economic conditions, the survey showed.

Concurrently, the government's benchmark 2030 bond was weaker, with the yield up 8.5 basis points to 9.585%.

Along with the rand falling in response to new economic data, it also fell Friday as the U.S. dollar strengthened in global markets after the release of strong U.S. employment data.

US Services Sector Rebounds

FILE: A sign reading "Welcome Back Now Open" is posted on the window of a Morton's Steakhouse restaurant as a man works inside in San Francisco. Taken Mar. 4, 2021

The dominant services sector in the United States bounced back in January after contracting in December, survey data showed on Friday, helped by stronger business activity and new orders.

The Institute for Supply Management's (ISM) services index came in at 55.2 percent in January, rising more than expected above the 50-percent threshold signaling growth in the sector.

"Respondents indicated that capacity and logistics performance continue to improve," said ISM survey chair Anthony Nieves in a statement.

"The majority of panelists indicated that business is trending in a positive direction," he added, although some firms find it hard to fill open positions while others cut headcount.

In January, the business activity index jumped 6.9 points up to 60.4 percent while the new orders index surged 15.2-points to 60.4 percent, the ISM report said.

But analysts expect the good showing last month will not last as the impact of rate hikes and heightened borrowing costs ripples through the economy.

"Despite the rebound... the longer-term slowing in the services sector remains intact," said Oren Klachkin of Oxford Economics.

"A significant bounce is unlikely over the coming months as demand cools in the wake of Fed rate hikes and the past tightening in financial conditions," he added.

Survey participants also indicated a difference in mood across industries.

A respondent in the accommodation and food services sector expressed positivity on growth, noting that "consumer confidence is returning, and people are more willing to spend money on luxury items."

But another respondent in the construction sector said the "new residential housing market is still reeling from mortgage rate increases."

"Sales have fallen off dramatically at entry-level price points, as costs are trending flat," the unnamed respondent said.

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