energy management Archives - Page 4 of 7 - Energy Management Summit | Forum Events Ltd

Energy Management Summit | Forum Events Ltd Energy Management Summit | Forum Events Ltd Energy Management Summit | Forum Events Ltd Energy Management Summit | Forum Events Ltd Energy Management Summit | Forum Events Ltd

Posts Tagged :

energy management

New collaboration to support data centre market on net zero goals

 960 640 Stuart O'Brien
By:

Keysource and Chapmanbdsp have formed a partnership to support clients on the road to net zero carbon emissions in the data centre and critical infrastructure market.

The collaborative service combines both industry leaders’ expertise to provide customers with the ability to measure and manage the full carbon lifecycle of a project, including embodied and operational carbon, along with carbon offset options, whether planning a new build or upgrading an existing facility.

The aim is to give customers the insight of what contributes to a projects whole life carbon and the intervention opportunities available to realise their sustainability goals. The approach and methodology developed provides a transparent and visual way to manage key decision making whilst considering the broader impacts of those options.

Jon Healy, Operations Director at Keysource, said: “We recognise that measuring and managing embodied carbon needs to form part of a holistic development process, particularly for data centres. This partnership provides customers a combined resource of consultancy and advisory services to complete carbon assessments in parallel with other project drivers. Leveraging our data centre experience, we’re able to provide customers with high impact and feasible opportunities.”

Ray Upjohn, Chief Executive Officer at chapmanbdsp, added: “We see great value in combining our skills in the energy and sustainability arena. Together we’re proud to support the data centre market in overcoming the challenge of achieving net zero.”

CBI data highlights business anxiety at rising energy costs

 960 640 Stuart O'Brien
By:

New survey data from the CBI has revealed the extent to which businesses, like households, are concerned about soaring energy costs. More than two-thirds of firms expect their energy costs to increase over the next quarter.

A third of firms expect energy price rises to act as a barrier to growth, by stifling current or planned investment in energy efficiency or Net Zero measures.

With many firms, particularly Energy Intensive Industries and SMEs, already feeling the pinch, further energy price rises could push many viable businesses to the brink unless urgent action is taken to support them and their supply chains.

The says it will CBI will work with new ministers to explore all options for navigating the crisis and has proposed a 3-point plan that can be delivered at pace to support vulnerable consumers and businesses by targeting help where it is needed most, cutting costs, and kick-starting an energy efficiency drive that reduces demand and boosts the UK’s energy security:-

(1) To target support at those households and firms most in need, the UK Government should:

  • Urgently introduce targeted interventions for the most vulnerable households, through existing mechanisms like the Energy Bills Support Scheme
  • Instruct HMRC to replicate Time to Pay flexibility granted during the pandemic to take account of energy price rises
  • Launch a publicity drive around the recent extension to the Recovery Loan Scheme and commit to its expansion should evidence show this is needed; preparatory discussions with lenders should begin now, so future decisions can be taken at pace if the situation deteriorates and further help is needed

(2) To help keep costs down, the UK Government should:

  • Announce a business rates freeze now for 2023/24. This would head off a business-as-usual approach that would otherwise see rates increasing with inflation, and piling additional pressures on firms when they can least afford them. (Governments in devolved nations should do the same)

(3) To kick-start an energy efficiency drive to reduce demand, the UK Government should:

  • Roll out an ambitious programme to improve energy efficiency by providing people with upfront financial support to help retrofit household insulation (through a new ECO+ scheme)
  • Provide energy efficiency support for the most energy intensive sectors through an expansion to the Industrial Energy Transformation Fund

Matthew Fell, CBI Chief Policy Director, said: “The impact of soaring energy prices on households is going to have serious consequences, not just for individuals but for the wider economy.

“While helping struggling consumers remains the number one priority, we can’t afford to lose sight of the fact that many viable businesses are under pressure and could easily tip into distress without action.

“The guiding principles for any intervention must be to act at speed, and to target help at those households and firms that need it most.

“Firms aren’t asking for a handout. But they do need Autumn to be the moment that government grips the energy cost crisis. Decisive action now will give firms headroom on cashflow and prevent a short-term crunch becoming a longer-term crisis.

“With firms under pressure not to pass on rising costs, there is a risk that vital business investment is paused or halted entirely. That in turn could pose a real threat to the UK’s economic recovery and Net Zero transition.”

Connecting EV batteries to national grid ‘key to solving the energy crisis’

 960 640 Stuart O'Brien
By:

To solve the energy crisis and green the grid, we need to massively ramp up battery storage to help power the national and international grid; the successful trials of ‘Vehicle to Grid’ technology proves that electric vehicles (EVs) could do just that.

That’s the view of Aidan McClean (pictured), CEO of UFODRIVE and author of ‘Electric Revolution’ following a successful UK trial of Vehicle to Grid (V2G) technology connected the dots between an efficient, on-demand energy grid and the rapid uptake of electric vehicles (EVs). Drivers in Milton Keynes were given this technology, and at peak times were able to sell energy back –from their cars to either power their homes or the grid at large.

Through charging the vehicle during periods of low energy cost, such as at night, and powering the national grid or home during periods of high cost, users reduced energy costs by at least 40%, some to zero. Furthermore, charging the car during periods of high renewables generation and powering the home during fossil fuel generation (when renewable sources aren’t producing) allowed for reductions in carbon emissions of at least 25%, with some achieving 100% when timed correctly.

At a similar time, an Open Letter to the European Commission was penned by major market leaders in battery storage technologies. It argued that Europe’s net zero, geopolitically-independent energy goals, summed up in the REpowerEU plan, require a huge increase in battery storage infrastructure.

This letter argues that a renewable-powered grid needs a backup energy source when the sun isn’t shining or the wind blowing. Traditionally, this may have been gas, but this is now clearly not feasible due to the EU’s over-reliance on Russian gas supplies.

EVs help to power a more flexible energy grid

Here, the dots seem intrinsically connected: EVs could help achieve this flexible, cheap, and independent on-demand energy grid. According to Virta Global, there will be 140-240 million electric vehicles globally by 2030, which means that we’ll have at least 140 million small, portable energy storage batteries on wheels with an aggregated storage capacity of 7 TWh, or 7000 GWh.

In 2021, only 2.4 GW of storage was developed in Europe, but various studies predict we’ll need around 200 GW of energystorage by 2030; so there clearly needs to be a significant increase in battery storage capacity. Yet when you combine the numbers, you can see that even just a small percentage of EVs with V2G potential could provide the increase in battery storage that we need.

McClean says: “The V2G trials were a blinding success – and show both how flexible and useful EV batteries can be. With proper infrastructure and market rules, ensured by effective top-down policy, they could not only massively reduce pollution from our roads but also be the plan B energysource our grid needs to ensure capacity.

“This effectively combats one of the biggest issues renewables have when used as a primary energy source – there are extended periods when production is zero, such as on still days or dark nights. We used to combat this issue with natural gas – but not only is this still polluting, but also is geopolitically tenuous to say the least.

Developing efficient vehicle-to-grid infrastructure

Aidan continues: “The answers to this problem have always been numerous and obvious, if difficult to implement at-large; battery storage, efficient grid management, supply-side control, demand-side response, and pumped hydroelectric storage are all essential. We will need to use all of these en-masse to futureproof and green our energy grid.

“However, an obvious solution has been staring us in the face: if every EV battery by 2030 could plug into and power the grid or someone’s home, Europe would have more battery storage capacity than it could ever need.

“This still needs some work, however. At the moment, not all EVs offer a vehicle to grid option. For example, Teslas don’t yet have this capability and occasionally have declined to consider implementing it – as it could be argued that vehicle to the grid would compete with Tesla’s own Powerwall business. This must change if we want to achieve an effective net zero grid – we need unified technologies to provide solutions, not a spitefully fragmented market.

“As is so often the case – a lack of top-down policy, and a lack of care for universal accessibility by current titans of industry, is holding us back from an efficient V2G solution. We need clear, unified and brave public policy; and accessible and universal manufacturing standards; in order to embrace the technologies that are so clearly the answer to some of our biggest problems”.

Emerging tech ‘critical’ to manufacturers who want to embrace the Circular Economy in difficult times

 960 640 Stuart O'Brien
By:

A study by Sage has revealed advances in technology and innovation (72%) as the biggest driver of Circular Economy (CE) strategies in manufacturing and distribution.

Its “The State of the Circular Economy” report shows the industry is paying greater attention to the need for, and benefits of, the Circular Economy (CE). It comes in response to the growing importance of sustainable business practices to over 60% of employees, customers, shareholders, and supply chain partners alike.

CE is based on the principles of designing out waste and pollution, keeping products and materials in use, regenerating natural systems, and supporting environmental sustainability. 84% of senior leaders say building and implementing a CE strategy is now part of their role, with 32% stating it is central to their duties.

Rob Sinfield, Head of Business Unit, Sage X3 and Sage Intacct Manufacturing, said: “Sustainability is increasingly becoming a non-negotiable for modern manufacturers and distributors. While business goals remain front of mind, the industry equally recognises the importance of environmental drivers, with energy-efficiency and helping the environment as key motivations for pursuing a sustainability strategy.

“As a result, 32% of organisations adopting circular economy strategies are already reaping the rewards – from greater profitability and productivity to improved resource usage and an enhanced brand reputation. Better yet, a further 32% believe they will achieve benefits within the next three years.”

Manufacturers and distributors see new technology and innovations (72%) as a key enabler to adopting CE and sustainability strategies, and concerns arising from inaction such as damaged brand perceptions (46%) and reduced long-term profitability (46%) are consolidating the need for investment.

The promise of technology and innovation

Digital transformation is fundamental to delivering a CE strategy. The research found manufacturers and distributors ranked cloud applications (74%), data analytics (68%), and automation (67%) as the most important technologies for running a business more sustainably.

  • Cloud applications and infrastructure is impacting nearly every aspect of modern manufacturing already. The cloud enables manufacturers to develop products more effectively and support sustainable practices such as 3D printing.
  • Data analytics for predictive intelligence is helping businesses to refine their product development, optimize supply chains, and monitor equipment to increase resource efficiency.
  • Automation boosts productivity by speeding up workflows and reducing human error. It also provides valuable data-driven insights that can be analysed to improve production performance and sustainability.

However, the industry has more to do when it comes to technology adoption. Despite 61% citing cloud apps as helpful in collecting, analysing, and reporting on their CE capabilities, public cloud usage is far from universal among manufacturers and distributors. In fact, only a minority of respondents say they use public cloud for core apps such as supply chain (39%), CRM (38%), business intelligence (35%), human resources management (34%), ERP (32%) and payroll (29%).

Overcoming the barriers to sustainable transformation

Organisations want to take advantage of the opportunities presented by becoming more sustainable, such as improved reputation (50%), increased energy efficiency (47%), increased business resiliency (46%) and a reduced impact on the environment (46%).

But despite recognizing the many advantages, global manufacturers and distributors are struggling to realize the full benefits. Navigating a turbulent external market, with its own immediate challenges of rising costs (72%), supply chain disruptions (71%) and changing customer demands (68%), is taking up valuable resources that leaders could otherwise invest in future-proofing their business.

Furthermore, two-thirds (67%) of manufacturers and distributors still need to transform their business operations in order to shift to CE. 64% of those companies say transformation is a significant barrier and is hindering their pursuit of greater sustainability. Finding people with the right expertise (71%) is the biggest challenge, along with cost and budget limitations (68%) and updating technology integrations and processes (68%).

Tech expert Isaac Sacolick, President and Founder of StarCIO, said: “Organisations can overcome these barriers with innovative thinking. Recruiting from a wider talent pool to bring data and analytics skillsets into the fold will help manufacturers and distributors see the bigger picture – what can I solve today, how can I become more sustainable tomorrow, and where do I want to be in 10 years.

“With greater data insights at their fingertips, organisations will be able to identify the most suited use cases for automation and transformative technologies to enhance their cost efficiency and free up time to focus on the pressing need for a circular economy and sustainability strategy.”

ECIU: Data shows UK energy moving towards cheaper renewables

 960 640 Stuart O'Brien
By:

Government statistics on UK energy trends in Q1 2022 show that the shortfall in gas generation is being filled by cheaper renewables, namely wind and solar, which have increased their share of electricity generation on the same quarter last year.

Commenting on the statistics, Jess Ralston, Senior Analyst at the Energy and Climate Intelligence Unit (ECIU), said: “For every megawatt of renewable power this winter, that’s basically a megawatt less of gas power we have to source and pay for.

“This trend is only set to continue with recently commissioned wind projects four times cheaper than current gas and new farms coming online every year. This will protect us from gas price shocks in the long term particularly as the North Sea is a declining basin and fracking is so unpopular with voters.”

Shares of electricity generated by fuel main table (%)
2021
1st quarter		 2022
1st quarter		 Change on year before (%)
Coal 2.8 2.9 +0.1
Gas 38.7 33.3 -5.4
Nuclear 13.7 14.9 +1.1
Hydro 2.1 2.2 +0.1
Wind, onshore and offshore 25.2 29.1 +3.9
Solar 2.0 2.5 +0.4
Bioenergy 12.2 11.7 -0.5
Other fuels 2.1 2.3 +0.2
Pumped Storage 0.6 0.6 +0.0

Source: Energy Trends, BEIS. https://www.gov.uk/government/statistics/electricity-section-5-energy-trends

Gas prices are currently six times more expensive than last year [2], adding at least £2,000 to the average household’s annual bill this year [3]. Offshore wind projects online today are over three times cheaper than current gas generation, and the latest round of renewables auctions saw prices that are around five times less than the gas price during the gas crisis. [4]

Multi-billion euro energy link between UK and Germany gets green light for financiers

 960 640 Stuart O'Brien
By:

The European Investment Bank (EIB) — as part of a consortium of more than 20 international banks — has agreed on the financing structure of the first ever energy link connecting Germany and the United Kingdom.

The investment to build this interconnector will amount to €2.8 billion, with the EIB set to contribute up to €400 million for the financing of the European part. The investor consortium is led by French investor Meridiam, Allianz Capital Partners, and Japanese company Kansai Electric Power. Alongside the EIB, other promotional banks include the UK Infrastructure Bank and the Japan Bank for International Cooperation (JBIC).

The project will be the first interconnector between Germany and the United Kingdom, facilitating electricity trade between the European Union and the United Kingdom and contributing to the integration of high shares of intermittent renewables across the North Sea. The expected start date of commercial operations is in 2028.

The project consists of a high-voltage direct current link interconnecting England and Germany through German, Dutch and British waters. The project will have a rated capacity of 1 400 MW and DC voltage of 525 kV. The predominantly subsea cable will have a route length of 725 km and will connect a converter station and German grid interface to Tennet’s electricity network near Fedderwarden, and a converter station and grid interface on the Isle of Grain in the United Kingdom to the National Grid ESO network.

The project is an example of mutually beneficial cooperation between the European Union and the United Kingdom, including cross-border environmental benefits.

Siemens has been appointed as the contractor for the converter stations, and Prysmian will manufacture and install the cable. Both can be considered market leaders in these technologies.

The interconnector will help to ensure better utilisation of offshore wind capacities on the coasts according to the respective local wind strength, thereby supporting EU and German renewable energy policies. The project will make it possible to reduce CO2 emissions and will contribute to meeting the European greenhouse gas emission reduction target of at least 55% by 2030.

The route of the project will be implemented entirely underground and under the sea, meaning that the project does not fall under Annex I or Annex II of the Environmental Impact Assessment (EIA) Directive. Environmental impact studies have been carried out and appropriate measures will be taken to avoid, mitigate and compensate the impacts.

EIB Vice-President Ambroise Fayolle said: “This project is ground-breaking for the energy transition, as it makes it possible to use offshore wind energy more efficiently. Cross-border electricity trade can help redirect power to where it is most needed, and can thus contribute to the integration of renewables and the stability of the energy supply.”

Europe’s energy crisis creates a ‘trilemma’

 960 640 Stuart O'Brien
By:

HANetf recently reached out to its expert partners in the energy sector to articulate their thoughts on the ongoing energy crisis in Europe [1].

With Europe currently sweltering under extreme temperatures, cold weather is likely the last thing on the mind of many. However, with Russia dialling back supplies to Europe, the continent potentially faces an energy shock this winter.

Gabriela Herculano, manager of the iClima Global Decarbonisation Enablers UCITS ETF (CLMA) and iClima Smart Energy UCITS ETF (DGEN) comments on the difficult decisions being faced by European countries: “Countries are facing a “trilemma” during the coming energy transition, as we must decarbonize the energy industry while guaranteeing security of supply and affordability. European countries are doing two things in parallel: passing legislation that supports a massive acceleration in the energy transition, while going back to using fossil fuel for electricity generation.[2] Coal burning related emissions are thus likely to increase in Europe. The consequences of the reduced flow of natural gas from Russia that started in June are profound.

“In the long run, Germany will decarbonize its energy sources and renewable energy will replace Russian hydrocarbons, but in the short term the alternative is to replace natural gas (that can only be either liquified as LNG and then transported or sent via long pipelines) with coal (that is transportable in bulk) for electricity needs and store the natural has still being supplied for heat purposes ahead of next winter.[3] Germany, Italy, Austria, and the Netherlands have all announced plans to restart coal fired power plants; Germany’s Economy Minister Robert Habeck, a Green Party member, referring to the decision as “painful but a necessity.[4]

“However, the mid to longer term growth prospects of green solutions – from EV adoption to long duration energy storage – are extremely strong, again led by Germany in a material way. That means that longer term investors have a unique opportunity to invest in the companies leading the energy transition at a steep discount.”

Konrad Sippel, Head of Research at Solactive, the index provider for the Electric Vehicle Charging Infrastructure UCITS ETF (ELEC), expands on this issue:

“I think the interesting thing to observe is how quickly past policy decisions become obsolete in the light of a real and immediate threat of an energy shortage: discussions about increasing the use of coal power, the re-opening of a discussion on nuclear energy in Germany, just to name some examples.

“On the other hand, the short-term crisis is also likely to accelerate adoption and expansion of renewable and alternative energy sources and an affirmation of the Paris Agreement goals which should also in the mid-term benefit the Electric Vehicle ecosystem and provide an additional push for the expansion of the charging networks.”

Stephen Derkash, manager of the Solar Energy UCITS ETF (TANN) comments: “Global oil prices and European gas and electricity prices have spiked in the aftermath of Russia’s invasion of Ukraine. As the conflict in Ukraine continues, European leaders are pushing for a faster switch to renewables as part of a strategy to end dependence on Russian gas. Currently, approximately 40% of the EU’s gas and about 25% of its oil is imported from Russia. The EU’s ambitious plans now call for fast-tracking deployment of solar and tripling clean energy capacity by 2030.[5] The effects of the conflict have implications for greenhouse gas emissions and energy policy.

“Experts say that electricity has to take over from natural gas in sectors where just months ago gas seemed a secure long-term bet, which would significantly enhance prospects for solar power.[6] The European Commission believes it can replace 24 billion cubic metres (bcm) of Russian gas with zero-emissions renewable energy sources this year.[7]Furthermore, The International Energy Agency (IEA) issued a 10-point plan in March to reduce Russian gas imports by 63bcm, approximately half of what Europe imported last year, through a mixture of diversification and economy.[8]The organisation says these measures could be enacted in the next year, without building new infrastructure. Following the IEA’s statement, the European Commission announced an even more ambitious plan, the REPowerEU plan, to reduce reliance on Russian gas by two-thirds before Christmas and abolish all Russian fossil fuels – including coal and oil – by 2030.[9]

“The IEA plan would reduce Russian gas use by 33bcm by asking Europeans to turn down their thermostats by 1 degree Celsius (33.8 Fahrenheit) and increasing electricity generation from nuclear power and biofuels and renewable energy.[10] Additionally, the EU is aiming to make solar panels mandatory on all new buildings by 2029 under a new proposal aimed at rapidly replacing its reliance on Russian oil and gas.[11] The EU’s REPowerEU plan and the “solar rooftop initiative” is introducing a phased-in legal obligation to install solar panels on new public and commercial buildings, as well as new residential buildings by 2029.[12] If successful, solar energy will become the largest electricity source in the EU by 2030, with more than half of the share coming from rooftops.”

Furthermore, Europe’s energy crisis has implications far beyond the continent. Stacey Morris, manager of the Alerian Midstream Energy Dividend UCITS ETF (MMLP), comments: “Benchmark Dutch natural gas prices have reached record highs in the wake of Russia’s invasion. Unlike oil, there are no strategic reserves for natural gas, and European inventories were already tight this winter.

“Although it will take time, Europe can reduce its dependency on Russian natural gas through the ongoing shift towards renewables and by purchasing LNG. To facilitate this, additional import capacity may be needed with Germany recently committing to the construction of two LNG import terminals.

“While the near-term impact of Russia’s invasion on energy commodity prices is readily apparent, the intermediate and long-term implications for the US energy landscape are less certain. Changes in how Europe sources natural gas should have positive long-term implications for US LNG exports with direct and indirect benefits for energy infrastructure. The extent to which US producers will accelerate production growth is less clear but could result in more volumes for energy infrastructure companies to handle.”

[1] First white label ETF issuer, as confirmed in ETF Database of all ETFs: https://etfdb.com/

[2] https://www.france24.com/en/live-news/20220620-dutch-join-germany-austria-in-reverting-to-coal

[3] https://www.bloomberg.com/news/articles/2022-07-16/germany-to-do-everything-to-fight-climate-crisis-scholz-says

[4] https://www.bloomberg.com/news/articles/2022-07-07/germany-s-habeck-urges-canada-to-help-thwart-putin-s-gas-excuses#xj4y7vzkg

[5] https://www.carbonbrief.org/in-depth-qa-how-the-eu-plans-to-end-its-reliance-on-russian-fossil-fuels/#:~:text=The%20commission%20recommends%20raising%20the,for%2055%20proposals%20last%20year

[6] https://www.ftadviser.com/investments/2022/06/27/the-race-for-energy-independence-accelerating-the-green-transition/

[7] https://www.iea.org/reports/a-10-point-plan-to-reduce-the-european-unions-reliance-on-russian-natural-gas

[8] https://www.iea.org/reports/a-10-point-plan-to-reduce-the-european-unions-reliance-on-russian-natural-gas

[9] https://www.carbonbrief.org/in-depth-qa-how-the-eu-plans-to-end-its-reliance-on-russian-fossil-fuels/#:~:text=The%20commission%20recommends%20raising%20the,for%2055%20proposals%20last%20year

[10] https://www.theguardian.com/environment/2022/mar/03/turn-down-heating-reduce-need-russian-imports-europeans-told#:~:text=4%20months%20old-,Turn%20down%20heating%20by%201C%20to,for%20Russian%20imports%2C%20Europeans%20told&text=Europeans%20should%20turn%20down%20their,leading%20energy%20adviser%20has%20said.

[11] https://www.independent.co.uk/climate-change/news/solar-panels-new-buildings-eu-mandatory-b2081732.html

[12] https://www.independent.co.uk/climate-change/news/solar-panels-new-buildings-eu-mandatory-b2081732.html

Cybersecurity spending in the energy industry ‘will rise to $10 billion by 2025’

 960 640 Stuart O'Brien
By:

The rapid digitalisation of the oil and gas industry has made the industry increasingly vulnerable to cyberattacks, says GlobalData.

The leading data and analytics company notes that companies must now fortify their cybersecurity posture in line with their digitalisation strategy or risk financial and reputational harm.

GlobalData’s latest report, ‘Cybersecurity in Oil and Gas – Thematic Research’ reveals that the Colonial Pipeline attack in May 2021, which hammered home the sector’s vulnerability to cyber threats, spurred an increase in cybersecurity spending. Consequently, GlobalData estimates cybersecurity revenues for the energy industry will reach $10 billion by 2025.

Francesca Gregory, Thematic Analyst at GlobalData, said: “Demand for oil products fell 14% in Q2 2020, causing prices to plummet. To stay competitive in the face of mounting financial pressure, oil and gas companies invested heavily in digital technologies to streamline operations and cut costs, which is evidenced by an analysis of patent trends.”

Oil and gas companies increased total patent publications across artificial intelligence (AI), blockchain, cloud computing, the Internet of Things (IoT), robotics, and virtual and augmented reality by 46% between October 2019 and April 2021, according to GlobalData.

Gregory continued: “Oil and gas companies are realizing the benefits of integrating technologies into workflows, with the pandemic undoubtedly playing an instrumental role in boosting the momentum of the industry’s digitalization. However, the wider industry is largely underprepared to handle its risks. The digitalization wave creates new access points in industrial networks for hackers to exploit. As technology develops, from mobile apps to the cloud to IoT, the level of complexity needed for organizations to maintain a cyber-aware stance will rise.”

Despite the increase in cybersecurity spending, the industry is still not taking cybersecurity seriously enough. GlobalData’s recent report found that only 20% of the largest oil and gas companies by market cap had a chief information security officer (CISO) on the board. This suggests that, while companies have made room for cybersecurity in their budgets, cybersecurity is absent from companies’ central strategy.

Gregory added: “The industry’s current situation is precarious in the midst of the industry’s rapid digitalization, rising cyber risk, and the promise of maximum disruption and extortion from oil and gas companies.”

IRENA: Renewable power ‘remains cost-competitive’ amid fossil fuel crisis

 960 640 Stuart O'Brien
By:

Costs for renewables continued to fall in 2021 as supply chain challenges and rising commodity prices have yet to show their full impact on project costs – the cost of electricity from onshore wind fell by 15%, offshore wind by 13% and solar PV by 13% compared to 2020.

Renewable Power Generation Costs in 2021, published by the International Renewable Energy Agency (IRENA), shows that almost two-thirds or 163 gigawatts (GW) of newly installed renewable power in 2021 had lower costs than the world’s cheapest coal-fired option in the G20.

IRENA estimates that, given the current high fossil fuel prices, the renewable power added in 2021 saves around $55 billion from global energy generation costs in 2022.

IRENA’s new report confirms the critical role that cost-competitive renewables play in addressing today’s energy and climate emergencies by accelerating the transition in line with the 1.5°C warming limit and the Paris Agreement goals. Solar and wind energy, with their relatively short project lead times, represent vital planks in countries’ efforts to swiftly reduce, and eventually phase out, fossil fuels and limit the macroeconomic damages they cause in pursuit of net zero.

“Renewables are by far the cheapest form of power today,” Francesco La Camera, Director-General of IRENA said. “2022 is a stark example of just how economically viable new renewable power generation has become. Renewable power frees economies from volatile fossil fuel prices and imports, curbs energy costs and enhances market resilience – even more so if today’s energy crunch continues.”            

“While a temporary crisis response might be necessary in the current situation, excuses to soften climate goals will not hold mid-to-long-term. Today’s situation is a devastating reminder that renewables and energy saving are the future. With the COP27 in Egypt and COP28 in the UAE ahead, renewables provide governments with affordable energy to align with net zero and turn their climate promises into concrete action with real benefits for people on the ground,” he added.

Investments in renewables continue to pay huge dividends in 2022, as highlighted by IRENA’s costs data. In non-OECD countries, the 109 GW of renewable energy additions in 2021 that cost less than the cheapest new fossil fuel-fired option will reduce costs by at least $5.7 billion annually for the next 25-30 years.

High coal and fossil gas prices in 2021 and 2022 will also profoundly deteriorate the competitiveness of fossil fuels and make solar and wind even more attractive. With an unprecedented surge in European fossil gas prices for example, new fossil gas generation in Europe will increasingly become uneconomic over its lifetime, increasing the risk of stranded assets.

The European example shows that fuel and CO2 costs for existing gas plants might average four to six times more in 2022 than the lifetime cost of new solar PV and onshore wind commissioned in 2021. Between January and May 2022, the generation of solar and wind power may have saved Europe fossil fuel imports in the magnitude of no less than $50 billion, predominantly fossil gas.

As to supply chains, IRENA’s data suggests that not all materials cost increases have been passed through into equipment prices and project costs yet. If material costs remain elevated, the price pressures in 2022 will be more pronounced. Increases might however be dwarfed by the overall gains of cost-competitive renewables in comparison to higher fossil fuel prices.

CEBR: Risk of recession in Europe ‘rises to 40%’ as Putin turns off the gas

 960 640 Stuart O'Brien
By:

The Centre for Economics and Business Research (CEBR) estimates the risk of a recession in Europe this winter at approximately 40% as a result of Russian energy taps being closed shut as part of sanctions against the Putin regime.

Last week, Germany triggered stage two of its emergency gas plan, following a significant reduction in Russian gas exports to the Eurozone’s largest economy.

Russia’s state energy company Gazprom cut exports through the NordStream pipeline by around 60% and planned maintenance downtime July is widely considered a convenient opportunity for Putin to shut the pipeline down entirely.

The European energy crisis, which has started in the winter of 2021 and ratcheted up following Russia’s invasion of Ukraine, has thereby reached another level of escalation. The consequences of this are by no means limited to Germany. Gas flowing through the TurkStream pipeline to Bulgaria is down by 50% while exports through the Yamal pipeline to Poland have stopped entirely, making this a veritable pan-European crisis.

In the UK, too, the energy crisis could yet get worse. Rising gas prices have been a major contributor to the ongoing cost of living crisis so far. But a complete stop of Russian exports to Europe would also put the UK’s energy security at risk as the heating season starts in the winter.

While there is no Russian pipeline delivering gas to the UK directly – and indeed, the UK receives the vast majority of its gas imports from Norway – the UK is still exposed to swings in global market prices. Also, as increasing numbers of European countries are vying for a limited supply of gas from alternative sources, prices have shot up significantly.

In addition, the UK has very limited storage capacity, meaning it is less able to sit out temporary price shocks – whether these stem from Putin’s decision to turn off the gas taps or a spell of the feared ‘Dunkelflaute’ – a period of no wind and very little sunshine, preventing power generation from renewables.

The threat that Russia would use its energy exports as a weapon to exert pressure on Western countries that support Ukraine’s resistance has been clear since the beginning of hostilities, if not before. The flipside of this has been the attempt of Western allies to inflict as much economic pain on Russia as possible to make it harder for Putin to fund his war.

However, while the European Union agreed on an embargo of Russian oil at the end of last month, there was little appetite to extend similar measures to the Russian supply of gas, given the difficulties in finding alternative suppliers at short notice. Now, Putin seems intent on forcing the hand of European states, convinced that stopping gas exports will hurt Western countries more than it will cost Russia in terms of forgone foreign currency.

If gas supplies were indeed to run empty, governments will choose to shut down industrial sites first rather than reducing supply to homes. The knock-on effects on the economy therefore depend in part on the degree to which gas is used in industrial processes rather than to produce electricity or to heat homes.

In Germany, for example, industry accounted for 37% of gas consumption in 2021, a significantly higher share than in Italy at 25% or in the UK at 23%.

Despite these differences, it seems clear that in the case of European gas shortages, a severe recession will be a near certainty. This is because European countries are linked to each other not only via energy interconnectors but also through highly integrated supply chains.

The likelihood for a gas shortage emerging in Germany has been estimated at 20% in a recent joint-study by various research institutes, which is somewhat lower than a few months ago due to efforts to fill up gas reserves in recent weeks. However, from a European perspective, the risk of a recession must be estimated higher than this, given that most East and Central European countries are even more dependent on Russian gas than Germany is.

Italy and France are also on high alert as their energy supplies are equally at risk. In addition to this, a tight gas supply will lead to further increases in energy prices for consumers, adding to inflationary pressures and claiming an even greater share of households’ disposable income, which is a recession risk in itself.

Taken together, Cebr estimates the risk of a recession in Europe this winter at approximately 40%. It is therefore in everyone’s interest to use the time until winter to substitute away from gas where possible, secure additional supplies from other countries and reduce gas consumption wherever possible.