New York climate summit held in advance of Paris 2015

The UN climate summit in New York was held on 23 September, designed to give momentum to the effort to come to a global agreement on tackling climate change at the UN Climate Change Conference scheduled to be held in Paris in November-December 2015. The one-day event was attended by 120 world leaders, including US President Obama, French President Hollande, and UN Secretary General Ban Ki-moon, though other national leaders, such as India’s Narendra Modi, China’s Xi Jinping, and Australia’s Tony Abbott failed to attend (despite the latter being in New York the previous day). The summit was notable for chief executives of several oil and gas companies, including Shell, Statoil, Saudi Aramco and Sinopec, pledging their support for climate change mitigation measures, while suggesting that fossil fuels should be seen as a heterogeneous group, with coal the chief culprit for the world’s climate problems. “Replacing coal with gas in power generation is a simple way of halving emissions,” was the message of Statoil’s chief executive, Hege Lund. While it is difficult to dispute that this would mean good business for oil and gas companies, it is equally difficult to deny that such conversions in the US have been a significant factor in a notable drop in US greenhouse emissions in recent years. The day before the conference, the Rockefeller Brothers Fund, responsible for $US 50 billion (€39.3 billion) of investments, made waves in the press by announcing it would divest (in some cases fully, in others partially) from fossil fuels, prioritising the sale of coal and oil sands. The general sentiment against coal drew a reaction from the American Coalition for Clean Coal Electricity, with spokesperson Laura Sheehan declaring, rather remarkably, “Our president has chosen to go ‘all in’ on climate change, an issue of little salience to the American people and certainly the global community.” Graça Machel, widow of former South African president Nelson Mandela, and an invited speaker, took a different view, saying at the end of the summit that “I have the impression that there is a huge mismatch between the magnitude of the challenge and the response which we heard here today.” Since at least April this year, according to reports, China and the US have been in detailed talks in preparation for Paris 2015, suggesting a significant deal might be struck then.

Global Commission on Economy and Climate report released

Keeping with the topic of the global climate, the Global Commission on Economy and Climate, led by a group of international experts in governance, economics and energy, released their Better Growth, Better Climate report a few days before the UN climate summit. The general thrust is that investment in low-carbon infrastructure will not only contribute to a better climate, but lead to economic growth that improves quality of life, and that when negative side-effects of a highly-polluting scenario are costed, the highly-polluting scenario is not always cheaper. Some of the detail is quite interesting, for instance the claim that the infrastructure (built globally between 2015-2030) for a low-carbon economy would cost $US 93 trillion (€73.8 trillion), in comparison to a business-as-usual case of $US 89 trillion – i.e. only 4.4% more. The cost of outdoor PM 2.5 exposure leading to death as a percentage of GDP is estimated for several countries, showing levels as high as ~11% for China, ~8% for Russia, and around 6% for India, Germany and Korea. The report suggests that improved land use and changes to the energy sector have the potential of being the major steps in reducing greenhouse gas (GHG) emissions, with the main changes in the energy sector being the removal of fossil fuel subsidies, a transition away from coal, and a reduction in methane emissions from oil and gas production. A large number of GHG reducing actions are profiled for their economic efficiency, with a range of efficiency (buildings, transport) and heat recovery measures, as well as clinker substitution, providing an economic benefit as well as a climate benefit, and other measures coming with an economic cost along with the climate benefit. In general, the win-win measures are at the lower GHG savings scale, while the measures with an economic cost provide larger GHG savings. The ‘indicative levelised cost’ of solar photovoltaic power, a chart shows, has reduced from over $US 1200/MWh in 1991 to around $US 150/MInsert/Edit LinkWh in 2013, with the implication that it will one day be cheaper than coal or natural-gas generated electricity (shown as between $US 60-100/MWh). The report makes for thought-provoking reading.

SaskPower commences operation of world’s first commercial scale CCS for coal-fired unit

The world’s first commercial-scale carbon capture and storage system integrated into a coal-fired power plant began operation on 29 September, at the 110 MW Unit 3 of SaskPower’s Boundary Dam plant in Saskatchewan, Canada. The milestone was followed by an official launch on 2 October, and operation so far has been without any major reported problems. The system will capture up to 90% of CO₂ produced by the unit (using Shell’s regenerable aqueous amine solution technology, Cansolv), with the CO₂ being sold to oil company Cenovus for use in enhanced oil recovery (EOR) in nearby fields. The commencement of operation follows the $CAN 1.2 billion ($US 1.07 billion/€849 million) upgrade of the 46-year old Unit 3, which has also led to 100% capture of SO₂ and a reduction in NO_x emissions. According to SaskPower, $CAN 300 million was spent on refurbishment of the coal unit, while $CAN 790 million was spend on the CCS system, to which the Canadian government contributed $CAN 220 million. The significance of the project is huge – the US Energy Information Administration projects that coal use in developing countries will increase by 70% to 2040, while the US Environmental Protection Agency projects that coal will still make up 30% of US power generation in 2030, and this, set against the internationally-agreed goal of limiting global average temperature rises to 2 ^oC, means that broad implementation of commercially viable CCS systems will be necessary. However, while Unit 3 at Boundary Dam is considered commercially viable, it is only so under its circumstances of the government contribution to the capital cost, the proximity of a coal mine to the plant, and the sale of CO₂ as a by-product for EOR. These conditions for commercial viability may improve, however, as efficiencies are gained with further deployment. What is more doubtful is the extent of further deployment near-term, with a relative dearth of new CCS projects being planned in recent years.

Air Liquide developing Shanghai Research and Technology Centre

In late July, Air Liquide announced their decision to invest in what will become known as the Shanghai Research & Technology Centre, in the Minhang district of Shanghai, China. When the ~€25 million ($US 31.5 million) centre begins operation at the end of 2015, it will employ 200 researchers and other professionals working on topics such as energy efficiency, CO₂ reduction from industrial processes, and water treatment. The centre is to cooperate regionally with already-established centres in Japan and South Korea, and more widely with Air Liquide’s global research and development network. A particular focus will be the application of technologies to the market.

Energy Academy Europe appoints new Senior Manager Power & Coal from RWE

Energy Academy Europe, a centre for education, research and innovation in the energy sector, based in the Netherlands, has announced it has appointed Marga Edens to the position of Senior Manager Power & Coal. Ms Edens currently works for RWE AG as Vice President Corporate Responsibility, and is also Chairperson of the Board of Directors for the Bettercoal initiative. She will continue those roles for RWE while filling the role at the EAE. RWE sees her appointment as a demonstration of the importance it gives to the ‘energy transition’ (to a sustainable energy sector).

General Electric to supply four gas turbines to Exelon Corp for Texas plants

General Electric has won a contract to supply Exelon Corp with over $US 500 million (€397 million) of equipment, including four gas turbines, for two combined-cycle gas-fired units to be added to the Colorado Bend and Wolf Hollow power plants, both in Texas, USA. It marks the first US order for GE’s new HA turbine, its most highly efficient at 61%, bringing the global number of orders to 13 (including orders from France, Japan and Russia). GE claims that each new turbine will save $US 8 million (€6.4 million) in fuel savings compared to its older F-class turbines. Exelon is to receive the new turbines in 2016.

Shanghai Electric wins Namibia contract

Namibia’s state power utility, NamPower, has chosen Shanghai Electric as the preferred bidder to construct the Kudu project, a 1,080 MW combined-cycle gas-fired power plant and the associated infrastructure to pipe gas from fields 170 km offshore. Siemens is to supply the generators and turbines for the $US 1.2 billion (€950 million) project. Kudu is a huge project for the country, which currently has a total power demand of 534 MW, against installed generation capacity of 507 MW. A consortium of Mitsubishi Hitachi Power Systems, Sumitomo and Posco Energy has been listed as the reserve bidders.

Morocco’s ONEE progressing coal-fired plants

In more news of success for Chinese business in Africa, the state power utility of Morocco, ONEE, has obtained a $US 300 million (€238 million) loan from China Exim Bank in order to finance a power project to be built by Sepco III, a Chinese construction firm. The plant will be coal-fired but relatively small at 318 MW, and located near the Algerian border, close to the town of Jerada. Interestingly, Morocco’s power strategy is to build coal-fired plants for domestic consumption, and renewable energy projects for export of electricity to Europe. A 1,386 MW coal-fired plant to be built by a consortium of Morocco’s Nareva, France’s GDF Suez and Japan’s Mitsui in southern Morocco secured finance in early September.