Energy crisis today worse than 1970s: IEA
The worst may be yet to come, but renewable energy sources are more readily available than in the 1970s, writes Kevin Morrison
The global energy crisis triggered by Russia's invasion of Ukraine has had a larger impact on energy supplies than the oil crises in the 1970s, consumer country organisation the IEA's executive director Fatih Birol has said.
"We are in the middle of the first global energy crisis," Birol told delegates of the Sydney Energy Forum. "The world has never witnessed such an energy crisis in terms of its depth and consequences. It is interwoven by many factors including geopolitics, and I believe we may not have seen the worst of it yet. This winter in Europe will be very, very difficult."
The effects of the Arab oil embargo in 1974 and the Iranian revolution in 1979 were limited to oil. "Today we have a crisis with oil, gas and coal where all of their prices are going up," Birol said. "It is all to do with Russia, as on [the day the invasion began], Russia was the number one oil exporter of the world, the number one gas exporter and a major player in the coal market. As a result, we are seeing the entire energy system is going through a crisis."
But another contrast to the 1970s is the availability of clean energy technologies in the world today, Birol said. The share of renewables — especially solar power — in the global electricity supply is steadily increasing. "In 2019 only 2pc of new car sales were electric cars, this year in 2022 we are going to see almost 15pc of all the cars sold in the world being electric cars," Birol said.
The oil crises of the 1970s prompted massive increases in fuel efficiency and, in a similar way, today's energy crisis will prompt a response from energy consuming countries. "The current situation may also be a turning point in the history of energy," Birol told delegates. "The drivers for a clean energy future today are economic realities, climate commitments and at the same time national energy security." That said, "[we] are going to see some tension in some countries on how they are going to align their national energy security demands with climate demands. But countries should not lock in large-scale fossil fuel investments," Birol noted.
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Milei's bid to open Argentina's economy passes
Milei's bid to open Argentina's economy passes
Montevideo, 30 April (Argus) — Argentina's congress today approved the government's sweeping economic legislation that could open the door to more private-sector investment in energy and commodities. The bill passed on a 142-106 vote, with five abstentions, after a marathon 20-hour debate. Changes include privatizing some state-owned companies, controversial labor reforms and measures to promote LNG development. The omnibus legislation, which includes 279 articles, is an important victory for President Javier Milei's administration and will change the way many sectors, including energy, operate in the country. Lawmakers aligned with Milei's Liberty Advances party swiftly moved to the second stage of the process, which requires approval of individual articles. The omnibus bill was initially approved in February, but the administration withdrew it after congress failed to approve several key individual articles. That original version included 664 articles. Several of the more controversial articles were brought up immediately after the blanket approval and easily passed. They included an article allowing for privatization of state-run enterprises — national power company Enarsa is on the list — and another delegating to the administration the power to eliminate state agencies without having to consult with congress. Also approved was the article on labor reform. The country's oilseed industry and port workers' unions called a strike the previous day to pressure congress to modify the labor reform. That did not happen. It passed in a separate 136-113 vote. The strike started to fizzle with approval of the legislation. Approval of the package includes several articles the administration says will open the door to major investments in the energy sector. Chapter II specifically covers natural gas, and introduces new regulations for LNG. The chapter includes five articles that allow for 30-year contracts for LNG export projects and guarantees that gas supply cannot be interrupted for any reason. The energy secretariat has six months to design the implementing rules for LNG. The government wants to speed up monetization of the Vaca Muerta unconventional play, which has an estimated 308 trillion cf of natural gas reserves. It is pushing for Malaysia's Petronas to fully commit to a large-scale LNG facility that would start with a $10bn investment. Chapter IX of the legislation creates a new framework, known as the Rigi, for investments above $200mn. It offers tax, fiscal and customs benefits. Companies have two years from implementation of the legislation to take advantage of the Rigi. The chapter on this framework is one of the most complex in the bill, including 56 articles. It includes specific references to energy projects, from power generation to unconventional oil and gas development. The administration claims the legislation will help tame inflation and stabilize the economy. Inflation was 276pc annualized through February, but is declining, and Milei announced that monthly inflation would be in single digits when the March numbers are announced. The country recorded a 0.2pc quarterly fiscal surplus in the first quarter of this year, something not achieved since 2008. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
G7 countries put timeframe on 'unabated' coal phase-out
G7 countries put timeframe on 'unabated' coal phase-out
London, 30 April (Argus) — G7 countries today committed to phasing out "unabated coal power generation" by 2035 — putting a timeframe on a coal phase-out for the first time. The communique, from a meeting of G7 climate, energy and environment ministers in Turin, northern Italy, represents "an historic agreement" on coal, Canadian environment minister Steven Guilbeault said. Although most G7 nations have set a deadline for phasing out coal-fired power, the agreement marks a step forward for Japan in particular, which had previously not made the commitment, and is a "milestone moment", senior policy advisor at think-tank E3G Katrine Petersen said. The G7 countries are Italy — this year's host — Canada, France, Germany, Japan, the UK and the US. The EU is a non-enumerated member. But the pledge contains a caveat in its reference to "unabated" coal-fired power — suggesting that abatement technologies such as carbon capture and storage could justify its use, while some of the wording around a deadline is less clear. The communique sets a timeframe of "the first half of [the] 2030s or in a timeline consistent with keeping a limit of 1.5°C temperature rise within reach, in line with countries' net-zero pathways". OECD countries should end coal use by 2030 and the rest of the world by 2040, in order to align with the global warming limit of 1.5°C above pre-industrial levels set out in the Paris Agreement, according to research institute Climate Analytics. The countries welcomed the outcomes of the UN Cop 28 climate summit , pledging to "accelerate the phase out of unabated fossil fuels so as to achieve net zero in energy systems by 2050". It backed the Cop 28 goal to triple renewable energy capacity by 2030 and added support for a global target for energy storage in the power sector of 1.5TW by 2030. The group committed to submit climate plans — known as nationally determined contributions (NDCs) — with "the highest possible ambition" from late this year or in early 2025. And it also called on the IEA to "provide recommendations" next year on how to implement a transition away from fossil fuels. The G7 also reiterated its commitment to a "fully or predominantly decarbonised power sector by 2035" — first made in May 2022 and highlighted roles for carbon management, carbon markets, hydrogen and biofuels. Simon Stiell, head of UN climate body the UNFCCC, urged the G7 and G20 countries to lead on climate action, in a recent speech . The group noted in today's outcome that "further actions from all countries, especially major economies, are required". The communique broadly reaffirmed existing positions on climate finance, although any concrete steps are not likely to be taken ahead of Cop 29 in November. The group underlined its pledge to end "inefficient fossil fuel subsidies" by 2025 or earlier, but added a new promise to "promote a common definition" of the term, which is likely to increase countries' accountability. The group will report on its progress towards ending those subsidies next year, it added. Fostering energy security The communique placed a strong focus on the need for "diverse, resilient, and responsible energy technology supply chains, including manufacturing and critical minerals". It noted the important of "guarding against possible weaponisation of economic dependencies on critical minerals and critical raw materials" — many of which are mined and processed outside the G7 group. Energy security held sway on the group's take on natural gas. It reiterated its stance that gas investments "can be appropriate… if implemented in a manner consistent with our climate objectives" and noted that increased LNG deliveries could play a key role. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Gas-fired units win Japan's clean power auction
Gas-fired units win Japan's clean power auction
Osaka, 30 April (Argus) — A planned 10 gas-fired generation units have won Japan's first long-term zero emissions power capacity auction, with the awarded capacity totalling nearly 6GW, or auction volumes sought for the first three years of the programme. Japan launched the clean power auction system from the April 2023-March 2024 fiscal year, aiming to spur investment in clean power sources by securing funding in advance to drive the country's decarbonisation towards 2050. The auction generally targets clean power sources — such as renewables, nuclear, storage battery, biomass, hydrogen and ammonia. But the scheme also applies to a new power plants burning regasified LNG as an immediate measure to ensure stable power supplies, subject to a gradual switch from gas to cleaner energy sources. The first auction held in January saw 10 new gas-fired units with a combined capacity of 5.76GW secure the funding of ¥176.6bn/yr ($1.12bn), the nationwide transmission system operator Organisation for Cross-regional Co-ordination of Transmission Operator (Occto), which manages the auction, said on 26 April. All winners can receive the money for 20 years through Occto, which collect money from the country's power retailers, although they need to refund 90pc of other revenue. Winners with a new gas-fired project should start commissioning their plants within six years and then begin refurbishment work to introduce clean fuels and technology within 10 years after commissioning. This means all the projects selected in the 2023-24 auction need to start operations by the end of 2030-31. Hokkaido Electric Power previously planned to begin operations of its Ishikariwan-Shinko No.2 gas-fired unit in December 2034 but it has advanced the start-up to 2030-31. Japan has secured a total of 9.77GW net zero capacity through the 2023-24 auction. Contract volumes include 1.3GW of nuclear, 1.1GW of storage batteries, 770MW for ammonia co-firing, 55.3MW hydrogen co-firing, 199MW biomass and 577MW of hydroelectric power projects, along with the 5.76GW of gas-fired projects. By Motoko Hasegawa Japan 2023-24 decarbonisation power capacity auction result Winner Power plant MW* Planned start-up Hokkaido Electric Power Ishikariwan-Shinko No.2 551 FY2030 Tohoku Electric Power Higashi Niigata No.6 616 FY2030 Kansai Electric Power Nanko No.1 592 FY2029 Kansai Electric Power Nanko No.2 592 FY2030 Kansai Electric Power Nanko No.3 592 FY2030 Chugoku Electric Power Yanai new No.2 464 Mar '2030 Tokyo Gas Chiba Sodegaura Power Station 605 FY2029 Osaka Gas Himeji No.3 566 FY2030 Jera Chita No.7 590 FY2029 Jera Chita No.8 590 FY2029 Total gas-fired capacity 5,756.3 Source: Occto, Argus * Sending end capacity Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
APLNG's Jan-Mar output higher: Origin
APLNG's Jan-Mar output higher: Origin
Sydney, 30 April (Argus) — The 9mn t/yr Australia Pacific LNG (APLNG) project in Queensland state produced and sold more LNG than the previous quarter and year earlier, Australian independent Origin Energy said in its January-March results. Output rose from the final quarter of 2023 because of the power failure of a vessel docked at APLNG's terminal in Gladstone harbour in late November , which prompted upstream operator Origin to cut flows to the liquefaction plant and APLNG to defer three cargoes to 2024. APLNG exported 134PJ (2.4mn t) of LNG through 34 cargoes for January-March, 8pc up from 124PJ and 32 cargoes the previous quarter and 4pc up on the 129PJ and 33 cargoes shipped in January-March 2023. Total APLNG production for July 2023-March 2024, the first three quarters of Origin's fiscal year to 30 June, was 519PJ, 4pc higher than 498PJ a year earlier, because of effective well and field optimisation activities, fewer maintenance disruptions and the continuing benefit of reducing workover backlog resulting in more wells being on line, Origin said. The terminal will take half a train of capacity off line for 12 days in June , following a two-day maintenance period in January. APLNG's domestic gas sales were 36PJ, steady on the previous quarter but higher by 24pc from the 29PJ sold a year earlier. Gas sales volumes for Origin's energy markets business fell by 5pc to 36PJ from 38PJ in January-March 2023. Origin said it continues to negotiate a deal with the government of New South Wales (NSW) regarding the 2,880MW Eraring coal-fired power station's future . The power plant had been due to close in 2025 but insufficient new generation capacity has been completed in NSW for this to occur. "We continue to progress large-scale batteries under development at Eraring and Mortlake power stations and recently announced our first storage offtake agreement from the Supernode battery in Queensland, taking Origin's storage portfolio to around 1GW of capacity once these batteries come on line," chief executive Frank Calabria said on 30 April. By Tom Major APLNG results Jan-Mar '24 Oct-Dec '23 Jan-Mar '23 y-o-y % ± q-o-q % ± Production (PJ) 176 167 165 7 5 Sales (PJ) 168 160 158 6 4 Commodity revenue (A$mn) 2,303 2,149 2,583 -11 7 Average realised LNG price ($/mn Btu) 12.17 11.88 14.50 -15 3 Average realised domestic gas price (A$/GJ) 6.90 6.39 6.17 12 8 Source: Origin Energy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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