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Seoul plans to phase out coal by 2050

  • Market: Coal, Electricity, Emissions, Hydrogen, Natural gas
  • 18/10/21

South Korea's presidential committee on carbon neutrality submitted to the government today two detailed scenarios to achieve 2050 net-zero emissions, both of which entail a complete coal phase-out by 2050.

The government is scheduled to review and approve one of the scenarios at the next cabinet meeting on 27 October, the ministry of industry and energy, Motie, said today. The government also expects to officially declare its 2030 nationally determined contributions (NDC) target at the UN Cop 26 climate summit next month.

Motie announced that the presidential committee held the second plenary session to finalise proposals for 2050 carbon neutrality scenarios on 18 October, based on the newly-proposed NDC target announced on 8 October.

The committee established two final scenarios at the session, which both assume a coal phase-out by 2050, although this is predicated on the establishment of an appropriate legal basis and compensation plan. The government also plans to facilitate the energy transition using market mechanisms such as environmental dispatch and the Korea emissions trading system, while significantly expanding installed capacity for renewables generation.

The first scenario assumes a complete suspension of all thermal generation, eliminating power sector emissions by 2050. Seoul plans to increase renewable output to 889.9TWh under this plan, which would be a 70.8pc share of 1,257.7TWh of overall power demand in 2050. Generation through zero-carbon gas turbines and fuel cell technologies — which are likely to be powered at least partly by hydrogen — would account for 21.5pc and 1.4pc, respectively, with combined output of 287.1TWh. Nuclear generation would total 76.9TWh under this plan, accounting for 6.1pc of the power mix.

The second scenario stipulates maintaining LNG in its role as a flexible power source but it would account for only 5pc of power demand, or 61TWh, in 2050, based on overall power demand of 1,208.8TWh. Renewables' share in the power mix is lower than in the first scenario at 60.9pc, totalling 736TWh, but the share of fuel cell and zero-carbon gas turbine output would be 10.1pc and 13.8pc, respectively — a combined total of 287.9TWh. Nuclear generation would total 86.9TWh, accounting for 7.2pc.

Under both scenarios, overall power demand is expected to more than double by 2050 from 552TWh in 2020. The share of nuclear in the mix is also expected to fall sharply from 160TWh in 2020, with the country planning to phase out nuclear power over the coming decades.

Seoul plans to reduce power sector emissions to 20.7mn t of CO2 equivalent (CO2e) by 2050 under the second scenario, which would be down by 92.3pc from 269.6mn t of CO2e in 2018.

Today's proposal follows an upward revision to the 2030 NDC target last week, which set net emissions from fossil-fuel generation including coal and gas to be reduced by 119.7mn t of CO2e to 149.9mn t CO2e by 2030, from 269.6mn t CO2e in 2018.

S Korea gen mix in 2020 vs targets %

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Australia's Climate Active program drives ACCU demand


12/07/24
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12/07/24

Australia's Climate Active program drives ACCU demand

Sydney, 12 July (Argus) — The Australian federal government-backed Climate Active certification program continued to drive voluntary demand for Australian Carbon Credit Units (ACCUs) last year, although future growth remains uncertain as the scheme will undergo a planned reform. Cancellations of ACCUs for Climate Active certification reached 592,837 units in 2022, down from an all-time high of 625,705 in 2021, according to estimated data that the Department of Climate Change, Energy, the Environment and Water (DCCEEW) recently disclosed to Argus . Figures for 2023 are not yet available, according to the department, but cancellations may have reached a new high between 650,000-700,000 units, according to Argus estimates ( see table ). Each ACCU represents 1t of CO2 equivalent (CO2e) stored or avoided by a project. The Clean Energy Regulator (CER) said it does not have a dataset of ACCU cancellations for Climate Active certification, despite having disclosed figures in some of its quarterly carbon market reports in recent years. It mentioned late last year that the program accounted for around 0.5mn of a total 0.8mn cancelled for voluntary purposes in the first three quarters of 2023, and later reported total voluntary cancellations of 290,146 units in the fourth quarter alone. Voluntary cancellations reached nearly 1.1mn units in 2023 , a new record high. Certification under the Climate Active standards is awarded to businesses that measure, reduce and offset their carbon emissions to achieve carbon neutrality. More than 700 certifications have been provided to entities including large and small businesses, local governments, and non-profit organisations. But significant changes in climate science, business practices and international benchmarks since the program was established in 2010 prompted the federal Labor government to seek modifications aimed at driving a more ambitious voluntary climate action in Australia, following its separate reform of the compliance market's safeguard mechanism . The DCCEEW late last year launched a consultation with proposals to reform Climate Active, which would require more climate ambition from businesses seeking to be certified under the program. The use of carbon credits to offset emissions that have not been reduced by businesses would be tightened, with a requirement that all eligible international offset units meet a five-year rolling vintage rule, replacing the existing post-2012 vintage requirement. Other proposals include mandating a minimum level of gross emissions reductions and a minimum percentage of renewable electricity use. "The government is working through feedback on these proposals and will announce the consultation outcome later this year," a DCCEEW spokesperson told Argus . No expected changes in eligible offsets ACCUs have been representing a small share of the total offsets used for Climate Active certification at between 5.7-10.8pc in recent years, despite the estimated record high last year, according to DCCEEW estimates ( see table ). Organisations can currently use certified emissions reductions (CERs) and removal units (RMUs) under the program, as well as verified carbon units (VCUs) from the Verra registry and verified emissions reductions (VERs) from Gold Standard. The DCCEEW did not provide a breakdown of cancelled volumes per credit type. No minimum use of ACCUs and no changes to the list of eligible international units are expected in the near term, following advice from a review from Australia's Climate Change Authority (CCA) in 2022. But some market participants have been asking for the removal of CERs, which account for the "vast majority" of carbon offsets surrendered by Australian organisations, according to utility AGL. CERs are "outdated", utility Origin Energy said in its submission to the Climate Active consultation. "We consider it would be consistent with international carbon reduction mechanisms to introduce a clear end date to phase out the use of CERs from the program and ensure greater alignment with the more relevant Paris Agreement," Origin said. "This reform is considered an immediate priority, and of more urgent need than some of the other proposals in this consultation." Uncertainties over future demand More investor and activist pressure in recent years over the use of carbon offsets with perceived low levels of integrity have also been forcing companies to review not only their offset standards, but also claims of ‘carbon neutrality' and similar terms. One of the DCCEEW's proposals is to discontinue the use of ‘carbon neutral' to describe the certified claim and to choose a different description. "A lot of the voluntary demand for carbon offsets in Australia has traditionally come from Climate Active, but the landscape is indeed moving quickly and the concept of carbon neutrality is being replaced by net zero," said Guy Dickinson, chief executive of Australia-based carbon offset services provider BetaCarbon and head of carbon trading at sister company Clima. This should drive more price stratification between carbon removals and carbon avoidance credits, he noted. Telecommunications firm Telstra, one of the biggest companies in Australia, recently announced it will stop using carbon offsets to focus instead on reducing its direct emissions. It will no longer seek Climate Active certification as a result and will remove references that its plans are ‘carbon neutral' or ‘carbon offset'. This could prompt other businesses to follow suit, market participants said. Another source of uncertainty over future voluntary demand comes from a DCCEEWW proposal that abatement from all ACCUs used under Climate Active would count towards meeting Australia's Nationally Determined Contribution (NDC) under the Paris Agreement. The use of ACCUs under the program have so far been treated as ‘additional' to Australia's emissions reduction target through accounting under the Kyoto Protocol. If the government goes ahead with such a proposal, this could disincentivise participation in Climate Active as organisations might consider this as "paying to help the government meet its targets through the voluntary action of businesses," utility EnergyAustralia warned in its submission. There has been increased interest in emerging and alternate standards to those acceptable under Climate Active, such as the American Carbon Registry, Climate Action Reserve and Puro.Earth offsets, according to environmental marketplace Xpansiv's vice president of carbon and Australian energy, Peter Favretto. But Climate Active has reported positive growth in certified brands since its inception and will likely continue to create demand for offsets in the international voluntary market and the Australian ACCU market, he said. "With the upcoming mandatory climate reporting legislation in Australia , and a similar atmosphere in other global jurisdictions such as the US and the UK, there is a growing demand that could lead to further growth in Climate Active certifications," Favretto added. By Juan Weik ACCUs used for Climate Active certification units Year Volume Total voluntary ACCU use Climate Active % 2019 243,105 329,145 73.9 2020 417,405 605,499 68.9 2021 625,705 844,445 74.1 2022 592,837 855,081 69.3 2023 650,000-700,000* 1,090,575 60-64* DCCEEW, CER *Argus estimates Total offsets under Climate Active unit Year ACCUs Total offsets ACCUs % 2019 243,105 4,230,011 5.7 2020 417,405 6,857,628 6.1 2021 625,705 5,796,466 10.8 2022 592,837 7,472,711 7.9 DCCEEW Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Houston power outages creeping down toward 1mn


11/07/24
News
11/07/24

Houston power outages creeping down toward 1mn

Houston, 11 July (Argus) — Slightly more than 1mn Houston-area homes and businesses were without electricity Thursday afternoon as local power distribution company CenterPoint Energy continues to slowly restore service after Hurricane Beryl. The storm knocked out power to about 2.1mn customers on 8 July when it made landfall southwest of the city as a Category 1 hurricane. The pace of restoration of service to areas that include major oil refineries, petrochemical plants and an LNG export terminal has been seen by many in the region as far too slow. At 6:50mp ET on Thursday about 1.04mn customers were still without power, according to CenterPoint. The company estimates that about 1.2mn customers have had power restored so far, another 400,000 should be restored by the end of day Friday and another 350,000 by the end of day Sunday. The 2 Bcf/d (57mn m³/d) Freeport LNG terminal in Texas remained offline and without power on Thursday after it was shut down ahead of Beryl's landfall. The electric power sector accounts for about 45pc of Texas' gas use, and gas generates about 43pc of the state's electricity, according to the US Energy Information Administration. Spot gas prices at the Katy storage hub, a key natural gas market near Houston, averaged $1.715/mmBtu on Thursday, down by 7.2pc from the previous session but 5.2pc higher from the start of this week. The index began July at $1.97/mmBtu. By David Haydon Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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France submits final updated NECP


11/07/24
News
11/07/24

France submits final updated NECP

Paris, 11 July (Argus) — France this week submitted the final version of its national energy and climate plan (NECP) for 2021-30 to the European Commission, putting an emphasis on its low-carbon energy targets. According to the NECP, France aims to bring its installed onshore wind capacity to 33-35GW, while offshore wind capacity should reach 3.6GW by 2030. Those targets were unchanged from the previous version of the NECP. The French government has not communicated on the share of renewable sources in final energy consumption, despite the EU's renewable energy directive (RED III) setting a 42.5pc target. Instead, it set a "low-carbon share", including nuclear and renewable sources, which would stand at 58pc by 2030, members of energy minister Roland Lescure's cabinet told Argus . This comes as the French Senate's electricity commission in its report last week questioned the EU renewable targets and also advocated for low-carbon targets instead . The European commission earlier this year recommended that France should bring its renewable target to 44pc . In comparison, renewables represented 22.2pc of overall energy consumption in 2023. The final updated NECP was due by the end of June but the government failed to submit it on time because of the political context and the snap parliamentary elections, Lescure's cabinet said. By Tatiana Serova Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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US June inflation slows to 1-year low of 3pc


11/07/24
News
11/07/24

US June inflation slows to 1-year low of 3pc

Houston, 11 July (Argus) — US inflation slowed in June to the lowest in a year while core inflation hit a more than three-year low, signs of easing price pressures that may prompt Federal Reserve policymakers to begin cutting borrowing costs in the fall. The consumer price index (CPI) slowed to an annual 3pc in June, lower than economists' estimates for a 3.1pc reading, from 3.3pc in May and 3.4pc in April, the Bureau of Labor Statistics reported today. So-called core inflation, which strips out volatile food and energy prices, rose by 3.3pc in June, the lowest since April 2021, and slowing from 3.4pc in May. The energy index rose by an annual 1pc in June, down from 3.7pc in May, while the gasoline index contracted by 2.5pc in June compared with a 2.2pc gain in May. Energy services rose by an annual 4.3pc, slowing from 4.7pc the prior month. After the report, the CME's FedWatch tool signaled an 81pc probability that the Fed will cut its target rate by a quarter point in September from near 70pc odds Wednesday. Probabilities of three quarter point cuts by December rose to 38pc today from 26pc the prior day. Food costs rose by 2.2pc in June from 2.1pc the prior month. Shelter rose by 5.2pc from 5.4pc the prior month. Transportation services rose by 9.4pc in June following a 10.5pc gain the prior month. Airline fares fell by 5.1pc in June after a 5.9pc decline. Headline inflation had risen from 3.1pc in January to as high as 3.5pc in March as economic data, especially job gains, had come in stronger than expected. That had prompted the Federal Reserve to delay widely expected rate cuts as it said it needed "greater confidence" that inflation was on a "sustained" path towards its 2pc target. The Fed hiked its target rate to a 23-year high of 5.25-5.5pc in July 2023 and has kept it there since to rein in inflation that hit a high of 9.1pc in June 2022. The Fed, in its latest policy meeting last month, penciled in one likely quarter point cut this year, down from three penciled in last March. CPI contracted by a seasonally adjusted 0.1pc in June from the prior month, after a flat reading in May, a 0.3pc monthly gain in April and 0.4pc gains in February and Marhc. Core CPI was up by 0.1pc for the month after a monthly gain of 0.2pc in May. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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