Merkel and Hollande set goal of full decarbonisation by end of century
German Chancellor Angela Merkel and her French counterpart François Hollande have said that they will strive for “a profound transformation of the world economy and society, to achieve full decarbonisation over the course of this century”, giving a strong signal of the scale of their ambition ahead of the Paris climate change talks in late November/early December and the G7 meeting next month. As part of their joint statement, the two leaders said they will encourage countries to give clear and transparent reduction pledges before the Paris summit and set out strategies to meet those pledges, widen carbon markets, mobilise “climate finance”, strengthen support for low-carbon power generation in developing countries, and establish initiatives for investment in low-carbon technologies, amongst other measures. Separately to the communique, both leaders have given their support to the idea of a global carbon market, with Ms Merkel calling for a cut to global emissions of 60% by 2050 from 2010 levels (German and French targets are 80-95% by 2050 compared to 1990 levels). It may be that within the next few decades prices per kilowatt-hour for renewables drop below those for fossil-based power generation, which would reduce the need for carbon markets.
Power generators unsurprisingly see energy future that includes their own generation means
In other talks leading up to the Paris climate change summit in November/December, industry leaders from the coal, wind and solar industries have made clear their differences of opinion about the future of the energy sector at a conference in Paris, as the Financial Times has reported. The opinions were as would be expected – the chairman of coal miner Glencore said that coal was essential to the industrialisation of countries such as India (as renewables could not provide baseload generation and gas prices were three times as high as coal), and that what should be done is that cleaner coal-fired plants should be built, while wind and solar companies said that it was indeed possible for such industrialising countries to use those renewables for baseload generation. Oil and gas companies such as Statoil, meanwhile, have stated that they believe the first step in tackling greenhouse gas emissions is a switch from coal to gas. The truth may be somewhere in between all three opinions.
Greenpeace/European Environment Bureau report urges stricter EU coal-fired power station emissions rules
A report commissioned jointly by Greenpeace and the European Environment Bureau has found that draft rules for emissions from coal plants in the EU could lead to 71,000 deaths and a healthcare cost of €52 billion ($US 57.8 billion) in the treatment of asthma, bronchitis and other illnesses. The findings are built out of modelling performed by a consultant to the European Environment Agency as well as emissions data across the EU. The report finds that while the draft rules will seek to cut NOx emissions by 70% and SO2 emissions by 50%, these cuts are lower than what current best available technology could achieve; the cost to install best available control technology is estimated at €0.02/kWh ($US 0.22/kWh). The draft rules are to be examined by a working group later this year before becoming a directive next year. Greenpeace has criticised the draft rules as having been written by those it will regulate, and as a result too lax. As the Guardian has reported, Greenpeace’s chief scientist, Dr Doug Parr has said of the rules “EU leaders have completely failed to stand up to the energy industry’s pervasive lobbying for weak air pollution limits. If these lax rules are adopted, hundreds of thousands of UK and European citizens will pay the consequences for their political leaders letting polluting industries off the hook.”
Solar energy debate being reframed amongst US conservatives
Reuters has carried an interesting story into the push for solar and other renewables power generation installations by some groups of US Republicans. Polling has shown that 65% of conservative voters oppose renewables, while around 65% of people as a whole in the US support them. However, groups such as Floridians for Solar Choice (led by prominent Tea Party member Debbie Dooley) and Tell Utilities Solar Won’t Be Killed (led by former Republican Congressman Barry Goldwater, Jr.), have reframed the themes of the debate amongst conservatives, bypassing mention of climate change and instead promoting the ideas of “energy choice”, property rights (related to allowing power generated at home to be sold), destroying monopoly utilities, and increasing security against terrorism attacks. To add further interest to this reframing, both aforementioned groups take most of their funding from solar companies and the Southern Alliance For Clean Energy (composed of environmental groups). According to Ms Dooley, conservatives are “very receptive to solar when the right messenger delivers the right message.” It will be fascinating to see how successful these emergent groups are, and if a general shift amongst conservatives occurs.
Ghana sees march against handling of electricity industry
Ghana has seen a large march through its capital, Accra, in protests against the government’s inability to arrange for sufficient electricity supply in the country. Ghanaians currently only receive electricity for 12 hours out of a 36 hour cycle, a situation that has led to reduced economic growth in addition to a challenging life. The march, organised by local celebrities, was attended by several thousand people, one of whom, according to the Reuters report, carried a table-top refrigerator he said had been damaged by blackouts. The government has blamed increased demand for the shortages, but plans to install 3,000 MW of power generation capacity over the next two years, bringing the total capacity in the country to 5,000 MW. However, this seems highly unlikely to occur.
SSE’s Ferrybridge station to be closed by next March; Fiddlers Ferry to survive for now
The Financial Times has reported on the planned closure of one of Britain’s largest coal-fired power plants, the 980 MW Ferrybridge C station in West Yorkshire, owned and operated by SSE. The company announced in March that they would review the operation of both Ferrybridge and their Fiddlers Ferry station, and this month came to the conclusion that the expected losses from the operation of Ferrybridge – estimated at £100 million (€141 million/$US 155 million) over the next five years after losing out on a bid at being compensated for providing standby generation capacity – were too high, and that it will be closed by March 2016. Paul Smith, the managing director of generation at SSE, said “Environmentally, coal is a major emitter of carbon dioxide, which means it has a time-limited role in the UK’s electricity mix. Unfortunately, this means retaining coal-fired operations at Ferrybridge beyond the end of the current financial year is not sustainable.” Fiddlers Ferry for the moment will remain open. The National Grid, the UK electricity distributor, has speculated that by 2030 there may be no coal-fired generation capacity remaining in the UK.
Sur Independent Power Project inaugurated in Oman
The 2,000 MW, gas-fired combined cycle Sur Independent Power Project, in the north-east of Oman, was officially inaugurated in April, increasing the total installed capacity in the country to 7,150 MW. The plant, which has come online in stages during the last year, was built by Japanese companies Marubeni and Chubu Electric Power Corporation, as well as local partners Qatar Electricity and Water Company and Multitech. Now that the plant is up and running, 35% of the shares in the company formed to develop the plant, Phoenix Power Company, are to be sold in an initial public offering (in something close to a Sur thing) in accordance with the Omani law that majority foreign owned companies must conduct a share sale within five years of starting up. Demand for both water and electricity are growing in Oman at the rate of 8-10%, meaning that further generation capacity will be required by the country by 2018.
Pemex engages ENEL and Abengoa to build cogeneration plant in Mexico
Mexico’s state-owned oil company, Pemex, has awarded a contract to ENEL and Abengoa to develop a 517 MW cogeneration power plant to be built alongside Pemex’s Antonio Dovalí Jaime refinery, near Salina Cruz in the state of Oaxaca. The plant, estimated by Abengoa as costing around $US 950 million (€832 million), is to supply electricity and steam to the refinery, with any excess power to be sold via the market. The press release implies the plant will be gas-fired, forming part of Pemex’s goal of reducing its carbon emissions by 50% by 2050.
Malaysia’s Malakoff makes lacklustre IPO
South-East Asia’s largest independent power generation utility, Malaysian-based Malakoff, was floated on the Malaysian stock exchange in mid-May in an initial public offering. Shares rose only 0.6% on the first day’s trading, lower than what would typically be expected from an IPO but in line with sluggish Malaysian IPOs this year. After four days the share price had fallen 4.4% lower than its initial price, the explanation being that investors saw better opportunities in the US than in Malaysia. Regardless of the current price, Malakoff sold all the IPO shares, and is now hoping to use the $US 766 million (€696 million) raised to pay off debt and invest in new plants across the region, with a goal of increasing their total capacity from 6,000 MW to 10,000 MW. Malakoff is also involved in the water industry.