Last year, in November, the UK, together with key partner, Italy, hosted the COP26 climate summit, an event many believed to be the world’s best last chance to get runaway climate change under control.
A key outcome of the summit was that dozens of nations pledged to end deforestation, curb CO2 and methane emissions and also stop public investment in coal power.
Specifically regarding coal, a total of 46 countries signed the Global Coal to Clean Power Transitionstatement, promising to “accelerate a transition away from unabated coal power generation” and “cease issuance of new permits for new unabated coal-fired power generation projects.”
But less than a year later, all those promises have gone to the dogs, with developed countries now scrambling to resume coal-based energy generation after the Ukraine crisis triggered a global energy meltdown.
According to a report by the Observer Research Foundation, energy supply disruptions triggered by Russia’s war on Ukraine took LNG prices even higher, leaving coal as the only option for dispatchable and affordable power in much of Europe, including the tough markets of Western Europe and North America that have explicit policies to phase out coal.
According to the Washington Post, coal mines and power plants that closed 10 years ago have begun to be repaired in Germany. In what industry observers have dubbed a “spring” for Germany’s coal-fired power plants, the country is expected to burn at least 100,000 tons of coal per month by winter.
That’s a big U-turn considering that Germany’s goal had been to phase out all coal-generated electricity by 2038.
Other European countries such as Austria, Poland, the Netherlands and Greece have also started restarting coal plants.
Meanwhile, China’s coal imports have been surging, increasing 24percent month-to-month in July as power generators increased purchases to provide for peak summer electricity demand. China has the largest number of operational coal power plants with 3,037 while Germany, the largest economy in the EU has 63.
The situation has led to soaring global coal consumption that could reach levels we have not seen in a decade, though there will be a limit to growth considering that investment in any new coal-powered plants has stalled. But that only makes the coal market tighter, pushing the energy source into an outperforming category.
Thermal coal, which is the variety used to generate power, has seen a 170 percent rise in price ince the end of 2021–most of those gains made following Russia’s invasion of Ukraine.
The German Dilemma
Germany is among the hardest hit by the growing energy crisis after effectively boxing itself into a corner with its energy policies. For decades, successive governments in Berlin have pursued a policy of maximising the country’s dependence on Russian oil and gas, and almost completely ditched nuclear energy with the final two functional reactors set to be turned off in 2022.
As a result, Germany has become heavily reliant on natural gas, with the fuel accounting for 25percent of the country’s total primary energy consumption.
Although Germany has substantial supplies of natural gas of its own that could be accessed by fracking, Berlin has banned the technology, meaning it has to import 97percent of its gas mainly from Russia, Netherlands and Norway.
In a worst-case scenario in which Russia stops all pipeline exports, Goldman Sachs’ Chief European Economist, Sven Jari Stehn and his team say, Euro area GDP growth is likely to fall by 2.2pp in 2022, with sizable impacts in Germany (-3.4pp) and Italy (-2.6pp).
Germany’s woes are partly excusable. The dramatic nuclear phase-out is as much part of the country’s Energiewende (energy transition) as the move towards a low-carbon economy.
Natural gas is cheap and reliable, produces only half as much emissions as coal, and is a critical input in many sectors. In Germany, 44percent of gas was used for heating buildings in 2020, while industrial processes consumed 28percent.
Gas is the best and cheapest feedstock for the manufacture of synthetic nitrogen fertilizer, of which Germany is a critical supplier. Gas is also used in refining, the production of chemicals, and many other types of manufacturing. All these are difficult, if not impossible, to completely replace with green energy anytime soon.
With a calamitous energy crisis unfolding, Germany will join the bandwagon of nations rolling back their climate goals by increasing its use of coal, which overtook wind to become the biggest input for electricity production globally in 2021.
Indeed, Germany is left with little choice than to burn lignite in its power plants—widely regarded as one of the dirtiest fossil fuels and extracted in vast open-pit mines that litter the German countryside.
The European Commission has already given its absolution to countries replacing Russian gas with coal and producing higher emissions as a result.
But coal is merely a stop-gap solution, and Germany must also be clear-eyed about its long-term energy future, a future without Russia’s gas.
Nuclear energy is out of the question considering that few, if any, European nations are as opposed to nuclear energy as Germany is. Back in February, German politicians vehemently denounced the EU’s attempt to label nuclear energy as sustainable.
By: Alex Kimani
Kimani reports for Oilprice.com
TCN Assures Energy Delivery To Nigerian Homes
Nigerians have been assured of adequate and efficient supply of electricity to their homes.
The General Manager, Transmission Company of Nigeria (TCN), Maiwada Sarki Bello Paiko, gave the assurance during a media chat with newsmen at the dam site in Shiroro Hydro Electric Power station, Shiroro Local Government Area, Niger State, recently.
Paiko stated that since TCN took over the affairs of transmission, the company had done well in procuring power for onward delivery to consumers.
According to him, as a private organization, TCN would not compromise on standard, noting that the company was working 24 hours to ensure steady and adequate energy.
He said, “TCN has been working round the clock to fix the aging equipment in order to avoid disruption in the daily transmission of energy.
“The company in collaboration with the World Bank had constructed a new 132 KV from Zungeru power station switch yard to Tegina, new control rooms at Shiroro, replaced over aged equipment at Jebba transmission station, and upgraded Minna sub- station with additional 132/33 KV 100MVA transformer”.
He further disclosed that during the period under review, TCN has made landmark achievements by decommissioning, installing and commissioning new six 330KV current transformer on bus coupler at Jebba T/S in January, 2023, as well as new 330KV circuit breaker on Jebba-Kainji.
While noting that there is no business without challenges, Paiko enumerated some of the challenges confronting the organization to include insecurity along Shiroro-Kaduna 330KV Lines, Shiroro-Kamtapa 330KV line, Gwagwalada 330KV line, Shiroro-Tegina 132KV line, redial nature of Shiroro-Tegina-Kontagora-Yauri line, among others.
He hinted that plans were at advance stage for the construction of additional 330KV line from Shiroro-Kaduna and PLAN Turn -IN-TURN-OUT at Tegina T/S.
Paiko attributed the successes recorded during the period under review to the unflinching support of the President Bola Tinubu led federal government and the management of TCN in the provision of an enabling environment for officers to operate.
Crude Oil Theft: Illegal Connections Hit 4,800 – Kyari
Group Chief Executive Officer, Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, has said there are over 4,800 illegal connections on crude oil pipelines in the Niger Delta region.
Kyari, who described oil theft and vandalism in the region as a calamity, warned that this could frustrate the projections of the Federal Government.
Speaking when he appeared before the Senate Committee on Appropriation on the proposed budget for 2024, in Abuja, Friday, Kyari said the daily oil production would depend greatly on the security situation in the oil rich region.
He said, “the situation we have in Niger Delta in terms of security is a calamity. We don’t have that anywhere in the world. To engage non-state actors as last resort as solution is abnormal. But we have to respond abnormally.
“You have over 4,800 illegal connections on our pipelines. That means, within every kilometer, you have an insertion. Even if you seal all the insertions, you can’t get what you want in terms of production.
“In the Niger Delta, people are coming from all parts of the country to do illegal refining. That’s why we engage locals to deal with it. We will contain this challenge. We are doing everything possible to restore sanity. What is happening is a colossal damage to the environment and the host communities”.
Kyari welcomed the projection of daily crude oil production of 1.78 million barrels at $77 per barrel of crude, explaining that OPEC restriction to a daily production of 1.5 million barrel does not affect condensates, which he said fetches Nigeria plenty of money.
According to him, Port Harcourt refineries would come on stream in December while Warri Refinery would resume production in first quarter of 2024, giving December 2024 as production target of the Kaduna Refinery.
Kyari disclosed that the entity would have liquidated as the company’s cash flow could no longer sustain the burden of the subsidy regime, but for the quick and bold intervention of President Bola Tinubu to terminate the fuel subsidy regime saying, “i will advise that we stick to the submission of Mr. President on the quota
“There is no way we will get crude oil less than $70. Once economies are growing, there will be sustained demands for crude oil in our country and other countries. The estimates supplied by Mr. President is realistic.
“When we say production, we mean total production of crude oil and condensates. So we combine condensates and crude oil as total marginal production. So we know our estimates is realistic. There is no curtailment on condensates from OPEC”.
Kyari further gave an update on the Turn Around Maintenance of the nation’s four refineries.
Hydrogen In The Limelight At COP28
The UN’s COP28 climate talks, a mega-conference running for two weeks, are organized around daily themes. The fifth day on Tuesday, last week, focused on energy and brought out much high-level discussion of hydrogen.
The high hopes for green hydrogen were apparent at last year’s COP27 summit in Egypt with a flurry of big project announcements. Those have faded from the news as few major projects have reached financial commitment.
Yet the seriousness of discussions in Dubai this week, pursued by top ministry officials and high-level executives, showed that the momentum toward green hydrogen continues to quietly build.
This year’s conference lacks the flashy announcements, but it is moving forward with putting the basic structures in place to support a future hydrogen economy.
COP28 is showing that, while a viable market for ‘green’ hydrogen still appears far from a ‘tipping point’, the ongoing activities of companies and governments is a growing force.
A ‘High-Level Ministerial-CEO Roundtable on Hydrogen’ convened on Tuesday, sponsored by the COP28 President’s Office, with two hours of talks that cumulatively felt like a hydrogen wave.
Ministers from numerous countries described their governments’ initiatives and financial support. An official from the US DOE spoke about $7bn for seven selected ‘hydrogen hubs’, also money for electrolysis development, and a hydrogen tax credit that can extend for up to 10 years at $3 per kilogram.
Then, top executives of some 15 companies, members of the Hydrogen Council, spoke of their already significant investments in the emerging sector.
Executives from Air Liquide, Air Products, Hy24, Masdar, Next Era Energy, OCI Global, Port of Rotterdam, Topsoe, Thyssenkrupp, and others, called for incentives and clear regulation to enable global trade in the energy-rich element.
These progress reports notwithstanding, the President’s roundtable made its most important statement with the announcement of two rather obscure initiatives: It featured the launch of a “Declaration of Intent on Mutual Recognition of Certification Schemes for Hydrogen and Derivatives”; it also introduced a new ISO methodology for GHG emissions assessment of hydrogen.
Thirty-nine countries have endorsed the Hydrogen Declaration of Intent to pursue mutual recognition of hydrogen certification schemes, according to COP28.
Later in the day, another roundtable focused on the basic tasks of putting the hydrogen structure together.
Part of the so-called Breakthrough Agenda that began with COP26 two years ago, it gathered representatives of World Bank, IEA, IRENA, the UN Industrial Development Organization (UNIDO), the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE), other major non-profits and some governments.
They considered needs in key areas, including standards and certification, demand creation, research and innovation, finance and investment. The bright spot, after the morning’s announcements, was standards and certifications.
“We’ve seen standards and certification really rise in the agenda, almost in a surprising way”, said Paul Durant, who is Head of Climate Innovation for the UK government. Mr. Durant chaired the roundtable meeting.
The subsequent discussion of demand creation indicated less certainty, where a huge gap between hydrogen and fossil fuel cost was considered.
“When it comes to demand creation, we are in the very beginning”, said Oleksiy Tatarenko, Senior Principal, Hydrogen Initiatives at Rocky Mountain Institute (RMI), whose large team is working specifically on demand creation.
He spoke of the need for combined policy interventions and market-based mechanisms to grow demand for hydrogen.
“We still have a massive challenge, even in the developed countries. Making an economic case, sector by sector, you have a gap in hydrogen competitiveness versus carbon fuels or other solutions.
“Today saw a big outcome for hydrogen… We are now putting into place concrete elements to ensure it will happen”, said Laurent Antoni, Executive Director, IPHE, who spoke at both roundtables.
His organization has advocated for years for the ISO methodology and helped to shepherd the declaration on certification schemes to agreement.
“We need to rely on robust regulations, which themselves have to rely on certification, the labelling of hydrogen.
“And within the certification schemes what matters, the main point, is carbon footprint”, he said.
He also stressed the importance of the new ISO method to ensure everyone uses precisely the same methodology to quantify the carbon footprint, to allow comparison across markets and borders.
It’s a key common piece needed in all countries’ regulations to facilitate a future hydrogen market. That’s a big breakthrough, he thinks.
Antoni, an electrochemist, won’t talk colours in regard to hydrogen.
“When speaking about a kind of hydrogen, what you’re really speaking about is the carbon footprint”, he said.
“And the carbon footprint of the hydrogen is regardless you of the primary energy and technology used to produce it.
“What matters for hydrogen is to use decarbonized hydrogen”, he said, adding that “It’s not a ‘silver bullet’, but without low-emission hydrogen, we won’t achieve our climate targets”.
By: Alan Mammoser
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