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The Year of Electricity at the IEA

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The role of electricity in our economies and societies is growing rapidly. The power sector is becoming a critical actor in the global energy system – with implications for all fuels, including renewables, natural gas, coal and nuclear, as well as most energy technologies.

The electricity sector now attracts more investment than oil and gas combined – a new milestone in the history of the energy sector. Global electricity demand doubled between 1990 and 2016, outpacing other fuels, and is set to grow at twice the pace of energy demand as a whole in the next 25 years.

For these reasons, 2018 will be the year of electricity at the International Energy Agency.

There are many factors behind the electrification of the global energy system, including the electrification of heat and transport, the growth of connected devices, and the digitalization of modern economies. Demand for energy services, especially air conditioning, is set to expand in households as incomes rise, while the use of electric motor systems drives demand growth in industry.

The vast majority of this growth will occur in developing economies, thanks in part to the success of energy access policies. China is leading the way over the next two decades, adding the equivalent of the entire power system in the United States today. India is the fastest growing market, with electricity demand increasing by over 5% per year, as it achieves universal electricity access by 2025.

At the same time, the global power supply is in a major transition, moving away from a century-old model of dispatchable fossil fuels. Wind and solar PV are on track to become the cheapest sources of electricity, providing new opportunities for decarbonisation. And as electricity demand and supply change, new business models for the power sector are being created, particularly as digitalization blurs the distinction between generation and consumption.

But this transformation of the energy system also brings fresh challenges, which are now at the top of the policy agenda in many countries. Electricity security has become a more urgent concern as ageing transmission and distribution assets cause power supply interruptions in some countries, concerns over cybersecurity become more pronounced. Integrating growing levels of variable renewables is also raising new issues for the electric grid.

Depending on how new power demand is met, the expansion may exacerbate already dangerous levels of air pollution in major cities in not only China and India but across the world. And despite a growing share of renewables, which generated 25% of electricity in 2017, the power sector still accounts for 40% of energy-related greenhouse gas emissions. This is why decarbonising the power sector needs to play a pivotal role in clean energy transition.

In this context, it is unclear what role the utilities themselves, and other power sector players, are set to play. Will the power system continue to exist as it does today? Will the business of producing and selling kilowatt hours remain a viable business model? How can policymakers take action to increase electricity security? How will the industry avoid stranded assets, create value and attract financing given these shifts? What will be the net impact on consumers and prices?

Understanding these changes in the power sector requires a global approach that includes the power system itself as well as energy efficiency, energy storage, transport, heating and cooling and the broader clean energy transition.

“The future is electrifying,” said Dr Fatih Birol, the IEA’s Executive Director. “Electricity is being transformed faster than was ever imagined – and the impact will be felt throughout the energy system. This is why electricity will be at the centre of our analysis this year and in the future, to help policymakers navigate these new challenges.”

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Maximizing Nickel as Renewable Energy Resource and Strengthening Diplomacy Role

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Authors: Nani Septianie and Ramadhan Dwi Saputra*

The development of the times and technology, the use of energy in the world will continue along with the increase of population. Global energy demand is currently recorded to have increased three times since 1950 and its use is estimated to have reached 10,000 million tons per year. Most of the energy is produced from non-renewable materials such as coal, gas, petroleum, and nuclear energy. Besides being non-renewable, fossil-based energy is also not environmentally friendly because burning fossil fuels produces CO2 gas which can cause global warming. Based on the energy used previously, the world still uses fossil energy that used in conventional vehicles that still use gasoline as fuel. Where fossil energy itself is still classified as the energy that is not environmentally friendly because it produces carbon emissions that can pollute the environment. Therefore, the world is currently flocking to make renewable energy by electric vehicles that are more environmentally friendly.

In electric vehicles, batteries play a very important role in the components of electric vehicles. Currently, there are two types of batteries that are the most common and widely used for electric vehicles. The first is a lithium-ion battery and the second is a nickel-based battery. But keep in mind for the type of lithium-ion battery itself, nickel is also the main raw material needed. Lithium-ion batteries commonly used to store power in vehicles are Lithium Manganese Oxide (LMO), Lithium Nickel Manganese Oxide (NMC), Lithium Nickel Cobalt Oxide (LTO). The reason for using nickel as a raw material for electric vehicles batteries is more environmentally friendly, nickel is also considered to be more efficient. Because nickel is a metal that has a high energy density storage and cheaper than using other types of minerals such as cobalt. As the popularity of electric vehicles continues to climb due to their increasing demand, the future of nickel production will also be brighter in future. Demand for automatic mining commodities will continue to grow, to encourage companies and producing countries to be eager to increase production.

Reporting from Investing News, Monday (10/26/2020) there are 10 largest nickel producing countries in the world, namely the United States in the tenth position with total production: 14,000 Metric Ton (MT, the ninth position Cuban countries with total production: 51,000 MT, the ninth position is Cuba the the eighth countries are Brazil with total production: 67,000 MT, the seventh position is China with a total production of 110,000 MT, the sixth position is Canada with total production: 180,000 MT, the fifth position is Australia with total production: 180,000 MT, the fourth position is New Caledonia with a total production: 220,000 MT, the third position is Russia with a total production of 270,000 MT, the second position is the Philippines with a total production: 420,000 MT, and the first position is occupied by Indonesia with the largest total production of 800,000 MT. Indonesia has been used as a benchmark by many parties regarding the seriousness of a country to enter the Nickel trend. In 2019, it was reported that nickel production will be bigger than palm oil production, which is the second largest commodity to be exported. Its relatively affordable distance from China, which is a leading country in the production of electronic vehicle manufacturers, makes the export process of this commodity very ideal. Indonesia also still has nickel reserves of 21 million MT.

Nickel is an important component in the production of electric vehicles, which can be used as raw materials for long-term sustainable battery manufacturing to create a clean environment. Where nickel as the main raw material for the manufacture and operation of electric vehicles has contributed to reducing carbon emissions. Based on the Union of Concerned Scientist explains that battery production contributes of global warming emissions and decreases to 43% where this decrease depends on the chemicals used in the manufacture of battery raw materials. Making electric vehicle batteries is indirectly appropriate with the commitments of the Paris Agreement and the Sustainable Development Goals Agenda (SDGs) at point 13 to combat Climate Change in reducing carbon emissions to achieve a climate-neutral world. Therefore, each country is needed to cooperate and maximize diplomatic strategies between countries to fulfill the source of raw materials for the manufacture of electric vehicle batteries, especially nickel.

Countries are needed to maximize diplomacy activities to create an equal distribution of electric vehicle production

Therefore, the large production of electric vehicles shows that in the future each country will need a supply of raw material for the production of batteries, namely Nickel which is the main raw material for making batteries. electricity. This phenomenon shows that the largest nickel producing countries have an important role in achieving the contribution of raw materials for the manufacture of electric vehicle batteries. However, with the large production in each country that has an abundance of nickel, the country cannot stand alone. Instead, it is also necessary to distribute nickel production in other countries by sharing raw materials, which can be carried out using a diplomatic strategy.

Therefore, diplomatic activities between countries are very important to complete all the shortcomings possessed by each country. Each country can use its negotiation skills in achieving its national interests and the needs of each country. However, countries that have a large abundance of energy resources, especially nickel, which is the main raw material for the manufacture of electric vehicle batteries, should not continue to export excessively, but countries that have these energy sources must continue to limit the number of exports. Because nickel is an energy resource, the wealth of this energy resource must be maintained to prevent the depreciation of nickel reserves. Therefore, each country is required to carry out diplomacy, including strengthening the bargaining power of each country, negotiating to create an even distribution of nickel supply, complementing the needs that each country lacks in assembling electric vehicles, and Each country is required to form a sustainable plan as a long-term strategy to ensure that electric vehicles can continue to be produced in the future, especially nickel which is the main raw material in the manufacture of electric vehicle batteries.

*Ramadhan Dwi Saputra, Chemical Engineering Research Assistant at Universitas Islam Indonesia.

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Gas doom hanging over Ukraine

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The long history of gas transit across independent Ukraine began with Kiev’s initial failure to pay anything for Russian natural gas, both intended for transit to Europe and for domestic consumption, on the pretext of fraternal relations between the former Soviet republics. Later it cost the Ukrainians a meager $25 for 1,000 cubic meters of Russian gas, and that ridiculously small sum remained unchanged for quite some time. The sizeable amount of Russian gas provided at a discount price, plus domestically available oil resources, were distributed by the country’s greedy elite the following way: domestically produced gas was used on utilities, proceeds from the transit of Russian gas went to the state budget (minus the money that lined bureaucratic pockets), and Russian gas – to the industry (plus the corruption component).

Then came the Ukrainian revolutions and Kiev’s desire to join “Euro-Atlantic structures” and the desire to “get off the Russian gas needle and prevent the Kremlin from using energy as a weapon.” Ukraine has tried and is still trying to believe in all this by playing up to the collective West and hoping that the West will compensate Kiev for the losses caused by its revolutionary endeavors and anti-Russian antics. As a result, we see gas prices going through the roof, an energy crisis in Europe, and the completion of the Nord Stream 2 gas pipeline.

Those in power in Kiev hoped for the very last moment that the West valued their country more than it did the energy security of European countries. Much to their surprise (and only theirs), this is not so. It looks like the Europeans are interested in Russian gas supplies and are not so eager to keep Ukraine as the main transit country. Moreover, having “democratized Ukraine” to the state of an openly anti-Russian country, the West turned it into a country, whose leadership the Kremlin does not really want to talk to simply because it does not see any point in doing this. This is the reason why third countries care (or rather pretend to care) about Ukraine. Thus, in July of this year, there came out the “Joint Statement of the United States and Germany on Support for Ukraine, European Energy Security and Our Climate Goals.” According to it, Germany pledged to do everything in its power to make sure that the agreement between Moscow and Kiev on the transit of Russian gas across Ukrainian territory was extended for up to ten years. The statement came when it was already obvious that the construction of Nord Stream 2 would be completed, Germany resisted US pressure on this issue, Moscow paid no attention and Washington, exhausted by the battles of the presidential elections and the search for new strategies in the Old World, was trying to pit America’s European friends against Russia.

It has never been a secret that the West needs reliable transit, and this is something that Ukraine also insists on. However, Kiev has officially labelled  Russia as an “aggressor country,” which means that this very “aggressor” must ensure this transit and bring billions of dollars in revenues to the Ukrainian budget. This looks like a kind of “Euro-schizophrenia” where Ukraine is an anti-Russian country and simultaneously serves as a reliable transit country for Russian gas. Things do not work this way, however, and it looks like Europeans are beginning to realize this. Therefore, most of the European consumers support Nord Stream 2 even though they do not show this in public. Suffice it to mention the recent conclusion of a years-long contract for gas supplies to Hungary.

Vladimir Putin’s statement, made amid soaring gas prices and growing threats to European industry, came as an energy lifeline for all Europeans.

“Russian President Vladimir Putin supported the initiative of Deputy Prime Minister Alexander Novak to increase gas supply on the market amid rising energy prices in Europe… Novak said that Russia can stabilize the situation with prices by providing additional volumes of gas on the exchange, adding that this country’s main priority is to accommodate domestic demand,” Lenta.ru reported.

Commenting on the possibility of increasing gas supplies via Ukraine, President Putin recalled that Ukraine’s gas transport system had not been repaired “for decades” and that “something could burst” there any time if gas pressure goes up.

“At the same time, it is more profitable and safer for Gazprom to operate new pipeline systems,” he added. Putin thus confirmed what is already clear to all that Ukraine is an unreliable and, in fact, an extra link, and that Europe can get gas bypassing technically and politically unreliable Ukrainian pipes. He also pointed out that Gazprom would suffer losses from an increase in gas transit via Ukrainian territory, while new gas pipelines offer cheaper transit options. He added that Gazprom is saving about $3 billion a year by using new pipelines and that Russia was ready to increase gas supplies and make them cheaper for European consumers.

Gas shortages have already forced the Ukrainian government to freeze gas prices for household consumers, but prices for gas for industrial enterprises are rising along with those on European exchanges, where on October 6, they reached a very impressive $ 2,000 per thousand cubic meters and went down only after Putin’s statement came out.

Meanwhile, the head of Ukraine’s Federation of Glass Industry Employers, Dmitry Oleinik, said that this [rise in gas prices – D.B.] would lead to an inevitable rise in prices. However, producers will not be able to jack up prices indefinitely, because at some point buyers simply will not be able to cover production costs.

“The Ukrainian consumer will not even be able to cover the cost of production. Plants and factories will slowly shut down and people will lose their jobs – this is already very serious. Budget revenues will “plummet,” and expenses will skyrocket… The issue of bankruptcies is just a matter of time,” Oleinik warned.

If Ukraine continues to follow the chosen course, it will face de-industrialization. By the way, this will suit the West, but certainly not the Ukrainian industrial oligarchs, who have long been eyeing agriculture, including the prospect of turning themselves into land barons. However, the farming sector will not be happy about the high prices on gas that bakeries, sugar factories and greenhouses run on. There will be nowhere to run.

Apart from purely practical realities, the conclusions I can draw from the current energy situation in the world and Vladimir Putin’s statements regarding the Ukrainian transit, are as follows:

  • Gas supplies through Ukraine and to Ukraine are not solely an economic issue, given Kiev’s endless anti-Russian escapades;
  • This problem affects the energy security of Europe;
  • Since there are several angles to this problem, it must be solved in a comprehensive manner;
  • At the same time, this cannot be done exclusively in the interests of the West and Ukraine to the detriment of the interests of Russia.

As you can see, it is once again up to Kiev and its shadow patrons to decide. And winter is just around the corner…

From our partner International Affairs

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Russian Energy Week: Is the world ready to give up hydrocarbons?

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In an official message to mark the opening of the Russian Energy Week international forum on 13-15 October in Moscow, Russian President Vladimir Putin stressed that there are numerous issues on the agenda related to current trends in the global energy market, including improvements to industry infrastructure and the introduction of modern digital technologies into its operation.

“The efficiency of energy production and consumption is the most important factor in the growth of national economies and has a significant impact on people’s quality of life. Many countries have already adopted policies to accelerate the development of clean energy technologies,” he wrote in the message to guest and participants.

“The forum business programme is therefore set to look in detail at the possibility of developing green energy based on renewable sources and the transition to new, more environmentally friendly fuels. I am confident that the events of the Russian Energy Week will allow you to learn more about the achievements of the country’s fuel and energy sector, and that your initiatives will be put into practice,” Putin said.

Leaders of foreign states have also sent greetings to the participants and guests. For instance, President of the Republic of Angola João Manuel Gonçalves Lourenço, Prime Minister of Vietnam Pham Minh Chinh, Crown Prince of Abu Dhabi Armed Forces Mohamed bin Zayed bin Sultan Al Nahyan, and Vice Premier of the State Council of China Han Zheng.

In their greetings, it generally noted the importance of the topics to be discussed at the forum as well as the need to build an international dialogue and consolidate efforts to achieve the sustainable development goals, including as regards climate change.

The programme covers a wide range of issues of transformation and development in the global energy market. In the context of energy transition, the issues of energy development are inextricably linked with the introduction of new technologies, and the transformation aimed at reducing greenhouse gas emissions into the atmosphere. Climate protection is a task that cannot be solved by one country; it is a global goal, which can be achieved through building dialogue and cooperation between countries.

The participants in the discussion will answer the question: Is the world ready to give up hydrocarbons? In addition, during the panel session, the participants will discuss whether oil, gas and coal are really losing ground in the global energy sector; whether the infrastructure will have time to readjust for new energy sources; how long will there be enough hydrocarbons from the field projects that are being implemented; and whether an energy transition using fossil fuels is possible.

The international climate agenda is forcing many countries to reform their carbon-based energy systems. For Russia, which holds a leading position in the global hydrocarbon markets, the transition to development with low greenhouse gas emissions presents a serious challenge, but at the same time it opens up new opportunities for economic growth based on renewable energy, hydrogen technologies, advanced processing of raw materials and implementing green projects.

The Climate Agenda included sessions dedicated to the operation of the Russian fuel and energy sector in the context of energy transition, the impact of the European green pivot on the cooperation between Russia and Europe, as well as the session titled ‘The Future of Coal in a World Shaped by the Climate Agenda: The End, or a New Beginning?’

Sessions of the ‘New Scenarios for the Economy and the Market’ track are dedicated to the global challenges and opportunities of the electric power industry; the impact of ESG on the Russian fuel and energy sector; the potential for the renewable energy sources; and other issues of the future of energy.

The Russian Energy Agency under the Ministry of Energy brings together experts from key international analytical organizations to discuss the future of world energy during the session titled International Energy Organization Dialogue: Predicting the Development of Energy and Global Markets.

The Human Resource Potential of the Fuel and Energy Sector, participating experts will discuss the prospects for developing the professional qualification system, and a session titled Bringing the Woman’s Dimension to the Fuel and Energy Sector. Optimizing regulation in the energy sector and organizing the certification and exchange of carbon credits in Russia are the basis of the Regulatory Advances in Energy. 

Anton Kobyakov, Advisor to the Russian President and Executive Secretary of the Russian Energy Week 2021 Organizing Committee, said “the level of various formats of international participation testifies to the importance of the agenda and Russia’s significant role in the global energy sector. We are a reliable strategic partner that advocates for building international cooperation based on the principles of transparency and openness. With the period of major changes in the industry, it is particularly important to engage in a dialogue and work together to achieve both national and global goals.”

The forum, organized by the Roscongress Foundation, the Russian Ministry of Energy, and the Moscow Government, brought together many local and foreign energy and energy-related enterprises. The speakers attending included  Exxon Mobil Corporation Chairman of the Board of Directors and CEO Darren Woods, Daimler AG and Mercedes-Benz AG Chairman of the Board Ola Kallenius, BP CEO Bernard Looney, and TotalEnergies Chairman and CEO Patrick Pouyanné.

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