Cost of supporting isolated systems still rising

Spanish Market: Electricity
05/09/22

A power surcharge that subsidizes fuel costs for northern Brazil's isolated power grids should raise considerably more money in 2022 compared with pre-pandemic levels, but it will still lag increases in diesel prices.

Diesel-fired generation accounted for more than 90pc of all electricity generated in these isolated regions in 2021, according to data from Brazilian energy research bureau EPE. The average price of Petrobras' S500 Paulinia diesel rose to to R4,546/m³ as of 1 August from R2,210/m³ in 2019, a 106pc increase. But revenue from the surcharge, known as CCC and paid by all power consumers in Brazil, only grew by 63pc in that period from R6.3bn in 2019.

This year, it is estimated CCC will raise R10.2bn ($1.9bn).This cost could continue to climb in ensuing years if it keeps trailing fuel cost increases, because CCC increases are not yet showing how much fuel costs have actually risen since the start of the Covid-19 pandemic.

The government discussed a series of measures to deal with climbing CCC costs during a mines and energy ministry event in late July. The ministry acknowledged the generation from these isolated systems could be significantly less expensive if they were connected to the main grid or if other sources were explored in the regions. Both courses are being considered.

The government said more isolated areas will be connected to the main grid by 2026 but expects increases in local demand until 2024. Total demand on local generation from these regions should reach 734GW by 2024 and then decrease to 696GW by 2026 as some areas are connected to the main grid, EPE said.

Also, Brazil expects to have 18pc of the demand in these isolated areas met by gas-fired power plants and another 20pc by biomass by 2023. Domestic energy company Eneva's 140MW Jaguatirica II power plant will play an important role in reducing diesel-fired generation, using gas from the firm's Azulao field in the Amazonas basin.

By Rebecca Gompertz

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05/10/26

Denmark to accelerate, simplify power grid expansion

London, 5 October (Argus) — The Danish energy ministry has proposed a new law to accelerate and simplify electricity grid expansions. The ministry has proposed that network acceleration areas be designated in most of the country, to quicken and render more predictable environmental permit approvals. This would allow for an entire designated area to be assessed environmentally, instead of individual projects, creating a simpler and faster permitting process. The proposal envisages dividing Denmark into three network acceleration areas — north Jutland, Zealand and the islands, and south Jutland and Funen — which are already being prepared. But while they way in which environmental approvals are administered would change, the specific environmental and nature protection requirements would not. The law would also aim for faster planning processes by increasing state physical planning for electricity grid projects. National directives for these projects would be prepared in line with current rules on national interest for transmission system operator Energinet's 400kV connections that cross municipal borders. The government also wants to speed up the approval processes for energy infrastructure projects through several measures that ensure improved access to land and fewer separate permits. This would include the possibility of imposing building lines and temporary bans, earlier expropriations and limitations on rights of appeal and time limits for judicial review. The new methodology would prioritise that electric cables be laid underground when they are facing reinvestment and when it is technically possible, and that the financing pool for laying 132-150kV cables be increased by up to 4.5bn Danish kroner (€600mn). The ministry would also increase and allow for new compensation for residents close to grid infrastructure. The Danish parliament adopted the 'emergency' power grid bill on 1 October, setting up a new grid connection prioritisation legislative framework, in reaction to a temporary pause on new connections in March, after a rise in consumption applications. By Lucas Waelbroeck Boix Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Denmark ‘clear’ it will hit 2030, 2035 climate goals

30/09/26

Denmark ‘clear’ it will hit 2030, 2035 climate goals

London, 30 September (Argus) — The Danish government said today that it can demonstrate that the country will achieve its 2030 climate goal and is "clear" that it will also reach its 2035 target. Denmark has legally binding greenhouse gas (GHG) reduction targets for 2030 and 2035. It plans to cut emissions by 70pc by 2030 from 1990 levels and has a legally binding target of 82pc GHG reductions by 2035, with an "objective" for 85pc cuts — also from the 1990 baseline. The government estimates that the country will surpass its 2030 goal by a margin of 400,000t CO2 equivalent (CO2e). Denmark's GHG emissions fell by 53pc in 1990-2024 to 36.7mn t CO2e, according to the government. The country looks also to have beaten an indicative target of a GHG reduction of 50-54pc in 2025 compared with 1990, the government said. Denmark's emissions stood at an estimated 33.9mn t CO2e in 2025, a drop of around 57pc from 1990. Denmark is an oil and gas producer, and in its North Sea Agreement set an end date of 2050 for fossil fuel extraction. But the government said in February that it would "initiate a process" to look at possibly extending one or more production licences in the Danish North Sea to contribute to European energy security and independence. Any extensions must "take place within the framework of the North Sea Agreement and Denmark's long-term climate goals", Copenhagen said. Denmark has largely phased out coal, with just one remaining coal-fired combined heat and power plant set to close by the end of 2028. The government estimates that the country will miss a binding target for the country's agriculture and forestry sector of 55-65pc cuts by 2030 from 1990. It estimates that the sector will reach GHG reductions of 52pc by that date, leaving a "gap" of 700,000-2.8mn t CO2e with the lower and upper ends of the targeted range. The sector's net emissions fell to around 11.2mn t CO2e in 2024 from 20.9mn t CO2e in 1990, but it is estimated that it will still be the country's highest-emitting sector in 2030 and 2035, the government said. It plans to use measures such as a CO2 tax on livestock emissions, subsidies for reduced fertilizer use and afforestation to ensure that emissions are lowered. Denmark has set some of the most ambitious climate goals among developed countries. It aims to reach net zero GHG emissions by 2045, and negative emissions — including 110pc cuts from 1990 levels by 2050 — beyond that. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Spain extends fuel tax relief to year-end

30/09/26

Spain extends fuel tax relief to year-end

Madrid, 30 September (Argus) — Spain will extend tax relief on motor fuels until the end of the year and reintroduce safeguards against sharp rises in electricity and gas bills. The €0.20/litre fuel tax cut for road diesel introduced in September will continue in October, while the cut for gasoline will rise to €0.20/l from €0.05/l. Unless a price-rise safeguard is triggered, the cut for both fuels will ease to €0.13/l in November and €0.06/l in December. The safeguard restores the tax cut for either fuel to €0.20/l if Spain's consumer price index shows that its retail price has risen by more than 15pc on the year. It was triggered for diesel in September on the basis of July inflation data. The measures are part of the Spanish government's third decree-law responding to fuel price increases caused by the conflict in the Middle East. They extend relief introduced for the second and third quarters that had been due to expire at the end of September. Professional drivers will receive the general fuel tax cut plus an additional sector-specific discount, keeping their combined relief at €0.25/l throughout the fourth quarter. The additional discount will be €0.05/l in October, €0.12/l in November and €0.19/l in December, rising as the general tax cut is scaled back. It will be adjusted if the safeguard restores the general cut to €0.20/l. Fuel price relief for the agricultural and fishing sectors will also be maintained, including the €0.20/l cut on the lower-taxed coloured diesel they use. The government has also reintroduced a safeguard under which a 15pc rise in electricity or gas prices would trigger a reduction in VAT on bills to 10pc from 21pc and a cut in Spain's special electricity tax to 0.5pc from 5.1pc. The reductions previously applied from March to June. Spain will limit the rise in its regulated natural gas tariff to about 15pc in October. The government said the tariff would have risen by more than 45pc without its intervention. It will also raise the maximum regulated price for a standard 12.5kg butane cylinder to €19.55 from €18.84 and freeze it at that level until 30 June 2027. The measures take effect on 1 October, putting Spain ahead of Portugal, where parliamentary debate on the government's proposed fuel price relief is scheduled to begin on 7 October. Portuguese energy and environment minister Maria da Graca Carvalho said on Monday that Portugal could not afford fuel tax cuts beyond those already proposed by its government. She called for greater EU co-ordination, arguing that differences between national support measures could distort competition within the single market. By Jonathan Gleave Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Mexico shifts renewable financing burden

25/09/26

Mexico shifts renewable financing burden

Mexico City, 25 September (Argus) — Mexico's proposed 2027 federal budget would dial back state spending on energy transition and climate change mitigation initiatives across all agencies as part of cost-cutting efforts to narrow a fiscal deficit. This places a greater burden on the private sector to shoulder utility-scale renewable power projects to meet national clean energy targets, three independent reviews found. The shift includes a 28pc cut in funding for climate adaptation initiatives across all agencies to Ps160.1bn ($9.12bn) alongside an inflation-adjusted 8.5pc cut to the physical investment budget of state electricity utility CFE. The cut at CFE comes as it aims to add 32GW of new capacity to the national grid by 2030, about 70pc of that from renewable energy sources. To complete it on time, the energy ministry (Sener) anticipates required investments of Ps740bn for electricity generation assets and an additional Ps244bn dedicated to transmission projects in 2026-2030. That investment, averaging nearly Ps200bn/yr over five years, compares with the Ps61bn marked for CFE's physical investment in the 2027 budget proposal, "a figure far from the federal government's targets for the electricity sector", Mexican policy think tank IMCO said in its budget analysis. As a result, IMCO said, "public-private partnerships and private projects will be expected to close the generation funding gap". The move will mean an even greater reliance on Mexico's mixed participation model in the electric power sector, which requires under the constitution that CFE have 54pc minimum ownership. New tax breaks could help, in addition to streamlining regulations and giving firms greater control in some concession contracts . But cuts are deep in certain areas, including a 24pc cut in real terms to transmission projects to Ps12.9bn — funding only maintenance and operational improvements and no new transmission lines. A parallel evaluation by budget watchdog CIEP confirms this lean capital profile. CIEP's analysis indicates that the proposal prioritizes rigid operational overhead, locking in Ps94mn for immediate personnel costs and distribution network management. The budget leaves no distinct capital line items to finance clean generation assets or multi-regional high-voltage transmission upgrades, cementing the government's reliance on external financing structures, the analysis notes. To expand the grid, IMCO said, CFE will have to raise money via Fibra E investments — a real estate investment market mechanism that backs "green" infrastructure projects. CFE expects to issue $1bn in debt via Fibra E by the end of 2026, and subsequent issuances "remain a possibility". A third analysis, by the non-partisan Climate Change Budget Observatory, found the 28pc cut in climate strategy spending. It also reported a high concentration of funding earmarked as related to energy transition but going to initiatives without clear climate change-related goals. The Observatory noted that 80pc of the climate spending goes to five of 51 projects with the largest at 34pc, or Ps54bn, routed to the infrastructure and transport ministry for the government's Ps739bn passenger and freight railroad expansion project. Cross-departmental spending on energy transition is similarly concentrated, with Ps8.8bn, or 43pc of all spending on the transition strategy, also set aside for the railroad expansion program. Beyond that, roughly Ps7.1bn, or 35pc, goes to electric power infrastructure and administrative support taking another 11pc. The study stated the remaining 11pc would be spread across 68 programs, including some with few if any programmed outlays in 2027. The analysis, said the Observatory, reveals "a discrepancy between the narrative the Mexican government presents in international forums" — such as the UN Framework Convention on Climate Change, "where it has put forward more ambitious mitigation and adaptation goals". "In practice, the allocation continues to drive a fossil-fuel-based energy model that exacerbates the climate crisis," the Observatory said. The final spending bill could pass by late November, after the revenue-side budget proposal is due on 20 October. Opposition lawmakers and environmental groups will likely challenge the proposed cuts in climate-related spending. By James Young Climate spending in Mexico's draft 2027 budget bn Ps Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Switzerland authorises Senegal Article 6 carbon project

24/09/26

Switzerland authorises Senegal Article 6 carbon project

Berlin, 24 September (Argus) — Switzerland has authorised a joint emissions-saving project with host country Senegal under Article 6.2 of the Paris climate agreement, supporting electric mobility in the west African country. The project has been developed by Australia-based Motion Energy and was authorised by Senegal in late August. It will roll out battery electric vehicles (BEVs) among the taxi and ride hailing service fleets of Senegalese capital Dakar, replacing mostly ageing internal combustion engine (ICE) vehicles and reducing greenhouse gas emissions in the country's transport sector. The project runs from August 2024 to the end of 2030, and is expected to yield total emission reductions of 175,993t CO2 equivalent (CO2e) to be converted into tradeable internationally transferred mitigation outcomes (Itmos). Emissions reductions generated by the project and converted into Itmos started at 8t CO2e in 2024, with just eight participating BEVs, and are projected to rise to 72,279 in 2030, when over 6,000 BEVs are expected to be on the road. Swiss procurement agency the Klik foundation will finance the project by buying the Itmos, the emissions savings from which will count towards Switzerland's 2030 climate target. The project is additional to Senegal's nationally determined contribution (NDC) to the Paris agreement, as the activity sits beyond the country's unconditional NDC. BEVs are currently not prevalent in Senegal, mainly owing to the significant price disparity compared with ICE vehicles, according to the project's mitigation activity design document. This means the programme is additional — dependent on carbon credits for its economic viability — a crucial feature under Article 6. But the project developer concedes that demonstrating financial additionality is "challenging", given how vehicle costs and operational revenues are expected to change over the coming years. The project uses a more conservative version of the voluntary carbon market's VCS methodology VM0038 from registry Verra for the charging infrastructure. The BEVs will be sold by Dakar-based Mbay Mobility. By Chloe Jardine Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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