Connect with us

Oil & Energy

Could We Actually See A Reversal In Energy Efficiency?

Published

on

Energy efficiency has become the next victim of the coronavirus pandemic, with lockdowns and a recession limiting efficiency gains now and into the future as businesses reprioritize investments to cater to the economic crisis caused by the pandemic.
This is the main outtake from a new report by the International Energy Agency, Energy Efficiency 2020. In it, the authority lists the main challenges for energy efficiency in the context of the pandemic and warns that these need to be addressed. Otherwise, we could see a reversal in energy efficiency gains at the worst possible time—as governments strive to accomplish increasingly ambitious climate-related goals.
The emission cuts driver
How relevant is energy efficiency for the Paris Agreement goals? Well, more than many might think. According to the IEA, energy efficiency improvements will account for as much as 40 percent of energy-related greenhouse gas emissions over the next two decades. This becomes even more important in light of the fact that the rate at which energy efficiency has been improving since 2015 has been slowing down.
This is neither surprising nor in itself troubling. Every technology has a finite improvement horizon, and energy efficiency is no exception. The nearer the technology—or set of technologies as is the case of energy efficiency—gets to this horizon, the more progress slows down simply because there are fewer things left to improve on.
So, in 2018, energy efficiency gains amounted to just 1.5 percent on the previous year, and in 2019, they were 1.6 percent on 2018. This year, however, efficiency gains are seen at less than one percent because of the pandemic, although there will still be some gains. Yet these, according to the IEA, would be insufficient with regard to achieving the Paris Agreement targets.
The challenges
Investments in energy efficiency have fallen. It’s as simple as that. As businesses in all industries have cut their investment plans for this year—and many for next, too—this has naturally affected the energy-efficiency part of these plans. Buildings, equipment, and cars will all be affected, the IEA said in its report.
In commercial property specifically, the authority also noted that the payback period for some energy efficiency investments will become longer as demand for this space slackens amid the pandemic, making such investments less attractive in the immediate future.
In cars, sales are falling because of the economic fallout of the pandemic, and this means people will continue driving older—meaning less energy-efficient—cars rather than buy new, more energy-efficient ones. On the flip side, EV sales are projected to rise to 3.2 percent this year from 2.5 percent in 2019, so that’s some good news there, too.
Technical efficiency gains such as smart meter installation have also stumbled because of movement restrictions that have limited access of contractors to the premises where they were supposed to install the meters. However, this was among the lesser problems of energy efficiency as it only resulted in delays rather than cancellations.
Industries are likely to become more energy-intensive because of the pandemic, the IEA also warned, because of the drop in energy demand that has driven prices—especially oil and gas prices—down. While demand for these is yet to recover to pre-pandemic levels, the manufacturing sector in many key regions is rebounding and with cheap oil and gas manufacturing businesses have less motivation to invest in energy efficiency than they would have has primary energy prices been higher.
The solution to the world’s apparent energy efficiency gains problem, according to the IEA, is to include more funds targeting these gains in government stimulus plans. As of October, the authority said, governments around the world had earmarked some $66 billion for energy efficiency-related projects. Of the total, $26 billion was allocated for energy efficiency in buildings, where the most jobs are created. Another $20 billion was allocated for making EVs more popular and desirable by drivers to stimulate more sales.
According to IEA calculations, these spending plans are good news for the jobless: between 2021 and 2023, these funds could create the equivalent of 1.8 million jobs. Most of these—80 percent—will be in Europe, more than 65 percent will be in energy efficiency for buildings, and 20 percent will be in transport.
But more needs to be done to reverse or at least arrest the slowdown in energy efficiency gains. Investments in making super-efficient appliances, for instance, are one way of doing this, as suggested by the IEA. More spending on energy efficiency in internal combustion engine vehicles is another. This is particularly important because a lot of oil demand over the last few decades has been lost precisely because of improvements in ICE efficiency.

Slav first published this article in London-based Oilprice.com

Continue Reading

Oil & Energy

BUA Group, A’Ibom Sign MoU For Refinery’s Access Road

Published

on

Bua Group has signed a memorandum of understanding, (MoU), with Akwa Ibom State Government, and the host communities in Ibeno Local Government Area, for the construction of access road to the proposed Bua Refinery and Petrochemical plant site in Ibeno, last week.
Akwa Ibom State Commissioner for Power and Petroleum Development, Dr. John Etim, who presided over the signing of the MoU, applauded BUA for their commitment to the project, prompt documentation and the preparation of the site towards the construction of the refinery.
Etim said that the refinery project will bridge the gap between host communities and Akwa Ibom State, thereby bringing about more developments in the oil and gas sector of the State.
The Commissioner called on all parties concerned to be committed to the terms of agreement and to ensure that peace dominates their relationship, while appealing to the host communities to protect the facilities which is now in their custody
“The refinery and petrochemical project is in line with the Governor’s vision to industrialise the State, develop local capacity in key industries where value can be added and raw materials sourced locally.”
Speaking shortly after the MoU signing, the Chairman of Ibeno local government, Williams Mkpa, expressed delight over the development, describing it as a giant stride in the industrialisation vision of the Akwa Ibom State Government.
The paramount ruler of the area, Owong Effiong Archianga, assured the company of his people’s unalloyed support and cooperation to see to the actualisation of the project.

Continue Reading

Oil & Energy

CSO Urges Oil Communities To Challenge PIA In Court

Published

on

A Civil Society Organisation, Policy Alert, has faulted President Muhammadu Buhari’s signing of the Petroleum Industry Act 2021, urging communities to test the provisions of the Act before the courts.
President Buhari had signed the erstwhile Petroleum Industry Bill, PIB, into law last Monday amidst protests from community groups and many other stakeholders that the Bill do not adequately cover the rights and interests of the host communities.
In a statement signed by its Communications and Stakeholders Engagement Officer, Mrs. Nneka Luke-Ndumere, Policy Alert, which is working for economic and ecological justice, described the presidential assent to the PIB as “grossly insensitive and problematic.
“It is sad that the bill has been assented to in the most controversial manner despite its many obvious flaws and its rejection by many stakeholders,” the statement read.
It added: “For example, the controversial provision for a direct payment of 30 percent profit oil and profit gas to the Frontier Exploration Fund potentially shortchanges the oil producing states and local governments of some of its thirteen percent derivation as it bypasses the requirement in section 162 (2) of the 1999 Constitution (as amended) which provides that all revenues be channeled through the federation account.
“This is most unfair, viewed against the ceding of only three percent of previous years’ operating expenses to the Host Communities Development Trust Fund and the punitive provision to charge costs of any damage to facilities against the community’s Fund, among other obnoxious provisions.
“That Mr. President has gone ahead to give assent to these vexing provisions only reinforces the politics of exclusion and expropriation that has for long characterised the relationship between the Nigerian state and the oil producing communities.
“We are also concerned that the host communities’ component of the legislation flies in the face of one of its stated objectives to address tensions between host communities and companies as it has all the ingredients for escalating rather than abating such conflicts.
“At a time when fossil fuel investments are being deprioritised elsewhere as a result of the global energy transition, it is unfortunate that this Act failed to provide a bridge between the current era of fossil fuel dependency and the low-carbon energy future that Nigeria aspires to within the framework of government’s much vaunted commitments under the Paris Agreement.”
The statement also said: “Granted, the new legal framework introduces some predictability and clarity to the governance and fiscal arrangements in the oil and gas industry. We are also not oblivious to certain clauses that respond to some of our earlier demands, such as those providing that the Board of Trustees of the Host Communities Development Trust will now be determined in consultation with the host communities, with  membership drawn from community members. But that is just as far as it goes.
“As a tool for improved benefit sharing to host communities, the Act falls flat on its face. It actually ridicules the exertions of the host communities and advocacy groups that have clamoured over the years for a law that yields some space for participation, direct socio-economic benefits and environmental remediation for oil-rich communities.
“The theatre of action will now have to move to the communities and the courts of law. As implementation of the Act gets underway over the next 12 months, we urge host communities and civil society groups to begin to seek interpretation of some of its more controversial provisions before the courts.”

Continue Reading

Oil & Energy

Kyari Tasks Greenfield Refinery On Fuel Importation

Published

on

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has charged members of the Board of the NNPC Greenfield Refinery Limited (NGRL), to explore all available options to bring an end to the current challenge of petroleum products importation.
Mallam Kyari gave the charge Thursday while inaugurating the Board of the newly incorporated subsidiary of the Corporation, NNPC Greenfield Refinery Limited (NGRL), at the NNPC Towers, Abuja.
The NNPC Greenfield Refinery Limited is a subsidiary of the Corporation set up in December 2020 with a mandate to oversee the establishment and operation of new refineries.
The GMD, who is also the Chairman of the NGRL Board, challenged members of the Board to focus on profitability in order to remain afloat and avoid liquidation.
“As a business, this is a big opportunity for us and this company’s balance sheet must change positively. Going forward, with the Petroleum Industry Act (PIA), I can tell you that if you continue to post negative for three years, you are out. So, there is really no excuse”, Mallam Kyari stated.
He urged the Board and Management Team of the new company to set up a proper structure with the required skills, technology and financing to drive the company’s operations, adding that he was optimistic that the company would be able to achieve its mandate.
“Our company must grow and we can’t do well except we are able to process our production whether it is the liquid or gas. If we don’t monetise it then we have done nothing. This is really a new chapter and we are committed to making it work,” he said.
The NNPC helmsman stated that all the Corporation’s initiatives in the areas of new refineries, condensate refineries and equity acquisition in credible private refineries were geared towards ensuring energy security for the country.
In his remarks, the Alternate Chairman of the Board and Group Executive Director, Refinery and Petrochemicals, Engr. Mustapha Yakubu, declared that the operations of the company would be guided by the principles of cost effectiveness in line with the new Petroleum Industry Act (PIA), noting that profitability would be the key focus.
Speaking in similar vein, the Group General Manager, Greenfield Refineries and Project Division (GRPD) and Managing Director of the NGRL, Engr. Bege Talson, disclosed that the Division was working with third party investors to establish greenfield, modular and condensate refineries with a combined capacity of 250,000barrels per stream day (bpsd).

Continue Reading

Trending