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CPEC: The not so cool COAL corridor

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With energy comes wealth and with wealth comes prosperity! No one can doubt the veracity of this conclusion. But most of the times we forget to scrutinize the “energy” which generates that wealth and societal well-being. For a developing nation state like Pakistan, good infrastructure and plentiful energy are very necessary ingredients to grow and stabilize its economy. A friend in need is a friend indeed. China, the all time friend of Pakistan, showed the act of friendship in April 2015, when President Xi Jinping visited the country to oversee the signing of agreements aimed at building $46 billion (now worth $62 billion) China Pakistan Economic Corridor (CPEC) as a part of his One Belt One Road initiative between Pakistan’s Gwadar Port on Arabian Sea and China’s western region of Xinjiang. This multibillion-dollars project is intended to develop Pakistan’s infrastructure, transportation and very importantly will help the country alleviate chronic energy crisis. The mega project has been declared “a game changer” for Pakistan by its government, but I think that it has been failed in properly analyzing the costs and benefits of the project. There isn’t only a huge monetary cost associated with the economic corridor which Pakistan will bear- as it has to pay back the principal amount of loan with interest, that China is providing her in the name of CPEC, but will also incur hefty environmental cost .

A big portion of total cost of CPEC, nearly $33 billion will be invested in the energy sector of the country. Pakistan’s average demand of electricity (according to the International Energy Agency) is around 19000 MW, while its generation capacity is around 15000 MW, that is, a total energy deficit of 4000 MW. According to IEA’s prediction, by 2025 Pakistan’s per day average electricity demand would reach as high as 45000 MW. To help Pakistan getting out of this serious energy crisis, the multi-billion-dollar economic corridor has numerous power plant projects. Most of the energy which will be generated under CPEC will be from coal fired power plants. $5.6 billion worth of coal power projects are expected to be completed by 2019 in CPEC’s “Early Harvest” projects, but what about the environment?

There are certain compounds (mainly in the form of gas) which trap heat energy in the earth’s atmosphere, keeping the earth’s surface warmer than it would be if they were not present. Such compounds are termed as greenhouse gases. Ability of these compounds to trap heat energy is what causes greenhouse effect. Sun is the main source of heat energy on earth. Greenhouse gases allow sunlight, shortwave radiations, to pass through the atmosphere freely, where some of it gets absorbed by the earth’s surface and the remaining bounces back out towards the space in the form of heat. A portion of this is then trapped by the greenhouse gases present in the atmosphere. It is the shape of these compounds which allow them to trap and then re-emit the heat towards the ground which increases the temperature of the globe. Natural greenhouse effect maintains the temperature of the earth and makes it suitable for the life to exist. It shows that basically these gases have a great role in making the life possible on the earth – without them the average temperature on the earth would be -18 °C! But they become a source of great trouble when their concentration in the atmosphere grows to the level where they cause century-scale rise in temperature of the earth’s climate system, also known as global warming, and as a result of it we observe rise in sea level because of the melting of glaciers and ice caps, extreme weather events like cyclones, droughts and floods, increase in the rate of evaporation which causes extreme rainfalls and snow events around the globe and much more.

You may think what this explanation has to do with Pakistan, CPEC, coal and energy. The biggest problem associated with burning coal is that it releases a number of pollutants and airborne toxins which contribute to climate change and negatively affect human health. Carbon dioxide which is the major output of coal combustion is a forcing greenhouse gas! We call it forcing because it takes many years to leave the atmosphere. Methane also comes in the same category. It is not a by-product of coal combustion but is formed as part of the process of coal formation. Thus it gets released from the coal seam and surrounding disturbed rock strata when coal is mined. China Pakistan Economic Corridor, as I already have mentioned, includes majority of coal-fired power plant projects and with that it also includes project under which 1.57 billion tons of lignite coal will be extracted (3.8 billion tons per annum in first phase as “Early Harvest” stage of the economic corridor) from the allocated area of Block II in Tharparkar.

Sindh Engro Coal Mining Company (SECMC), a joint venture company with the Government of Sindh, Engro Powergen and Affiliates namely, Thal Ltd. (House of Habib), Hub Power Company, Habib Bank Limited, China Machinery Engineering Corporation (CMEC) and State Power International Mendong (SPIM) will be responsible for the extraction of this coal which will be utilized by a mine-mouth power plant (a part of CPEC) having sub-critical power generation technology (emits approx. ≥880g CO2/kWh :Adapted from IEA, Technology Roadmaps, High-efficiency low-emissions coal-fired power generation, 2012) which is being established by Engro Powergen Limited, a Joint Venture Company of Engro Powergen, China Machinery and Engineering Company, Habib Bank Limited and Liberty Mills Limited. Commercial operation date for phase one of both Projects is expected to take place by mid – 2019.

There are total 7 coal-fired power plant projects under “Early Harvest” stage of CPEC. Out of these seven, 2 are currently operational, namely Coal-fired Power Plants at Port Qasim Karachi with generation capacity of 1320 MW and Sahiwal Coal Fired Power Plant with generation capacity of 1320 MW . Both are based on super critical technology which is efficient Up to 42%, emits 800-880g CO2/kWh and consumes 340-380g of coal per kWh. Other then these 2 plants 5 are either under construction or still need approval.

Engro Thar Block II 2×330MW Coal fired Power Plant (already discussed in paragraphs above), TEL 1×330MW Mine Mouth Lignite Fired Power Project at Thar Block-II and ThalNova 1×330MW Mine Mouth Lignite Fired Power Project at Thar Block-II which are collectively classified as Thar Block- II Coal Power Projects is currently under construction. This power station will use sub-critical power generation technology.

Sino Sindh Resources Limited (SSRL) Thar Coal Block-I Mine Mouth Power Plant (under-construction) , with generation capacity of 1320 MW will also have sub-critical power generation technology which is in general efficient up to 38% , emits ≥880g CO2 (Carbon dioxide) per kWh and consumes ≥380g of coal per kWh. These figures are same for all coal-fired power plants which use sub-critical technology. 6.5 million tons of coal per annum will be extracted from Block I of Thar coal mine. Never-ending hunger of coal!

China Power Hub Generation Company 1,320MW Coal-Fired Power Plant in Hub, Balochistan (needs approval of the provincial government of Balochistan) will have super-critical technology installed which is efficient Up to 42%, emits 800-880g CO2/kWh  and consumes 340-380g of coal per kWh. Again, these figures are same for all coal-fired power plants based on super critical technology. Thar Mine Mouth Oracle Power Plant, with generation capacity of 1320 MW was elevated to the priority list of projects under the China-Pakistan Economic Corridor (CPEC) in June 2017 but is still in pre-permit development stage.

It is crystal clear that Pakistan’s romance with coal has no place for the environment. Seven priority coal-fired power projects, out of which two are currently operational and very soon all will together be polluting the environment with tons of carbon dioxide being emitted. Furthermore, coal extraction from Thar coal mines block I and II will pump bulk of methane into the atmosphere and altogether both power generation and mining projects will contribute to increased greenhouse effect in Pakistan. It shows that the environmental cost of the economic corridor is much more than its economic gains. Indeed a bitter truth. Most shocking part of the story is that China itself is putting more focus on renewable energy resources for its electricity demands but  pushing Pakistan towards a fossil-fuel dominant energy structure. In 2017, China eliminated or suspended 65 gigawatts (GW) of coal-fired capacity which exceeded the national target of 50 gigawatts! The country has vowed to improve its notorious air pollution and upgrade its coal based energy structure by reducing coal consumption and boosting clean energy use.

According to the Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report (AR5), global greenhouse gas (GHG) emissions have accelerated to an unprecedented level. The report indicates that in 21st century the global average temperature is likely to increase by 0.3°C to 1.7°C for their lowest emissions scenario, and 2.6°C to 4.8°C for business as usual carbon intense emissions. According to the report, to limit the global average temperature by 2°C, global GHG emission must have to be curtailed by 40 to 70 percent. High rate of carbon dioxide and methane emission from coal combustion and mining is posing a greater risk to the climate of Pakistan than ever before. Greenhouse gas inventory of Pakistan for the year 2011-12 show that the total carbon dioxide emission was 369 million tons of carbon dioxide equivalent (MtCO2e) . 45.9% of the total CO2 emission was contributed by energy sector, 44.8% from agriculture and livestock sector, 3.9% by industrial procedures and 2.6% from forestry sector. The situation is alarming! 90.7 % of the total emission bulk comes from energy and agricultural sector.

Now that you know greenhouse gases traps heat energy and when they re-emits it back toward the surface of the earth, results in the increase in average temperature, which we also called greenhouse effect. This effect is very prominent in Pakistan. According to the Asian Development Bank’s 2014 report, namely “Assessing the Cost of Climate Change and Adaptation in South Asia – Manila”, in the last century, warming trend of 0.57°C in the annual mean temperature was observed from 1901 to 2000 in Pakistan. From 1961 to 2007, an increase of 0.47°C, which was more accelerated, observed. According to the 2009 Technical Report by Pakistan Meteorological Department, winters got more affected as the average winter temperature for increased from 0.52°C to 1.12°C (province to province variation) . Highest increase in winter temperature was observed in the province of Balochistan. From 1960 to 2007, the average annual temperature in Pakistan got increased by 0.87°C (max) and 0.48°C (min) . The fact that winter temperature is increasing in all four provinces of Pakistan and that mean annual temperature showed an increasing trend, that is, increased by 0.57°C in 20th century makes it clear that greenhouse effect is very prominent in Pakistan and don’t forget to take into account the accelerated trend of warming, a rise of 0.47°C, from 1961 to 2007. Increasing winter temperature means more summer (warm days).

According to the Global Change Impact Studies Centre’s 2005 Final Technical Report for APN CAPaBLE Project , the annual and seasonal trends in the average annual temperature in different climatic zones of Pakistan from the year 1951 to 2000 are as follows : A) the average annual temperature has been increasing in most parts of the country. B) all the regions show an increasing trend for the pre-monsoon summer months (April-May). C) The Balochistan Plateau is getting hotter in all the seasons.

Increasing temperature affects water cycle in negative ways. A warmer climate means more evaporation from land (soil moisture) and water bodies (rivers, lakes, sea and oceans), thus it results in a rise in moisture holding capacity of the atmosphere, and when a storm passes through a warmer region holding more water, we witness heavy rainfall (an atmosphere with more moisture can produce more intense precipitations events, which is exactly what has been observed). For each degree rise in temperature, the moisture holding capacity of air goes up by 7%. Heavy precipitation doesn’t mean an increase in total rainfall over a season or over a year. This simply indicates a decrease in moderate rainfall, thus an increase in the length of dry periods. Moisture holding capacity of the atmosphere increases with increasing temperature but it doesn’t mean that increased moisture will fall evenly all over the country; rather some zones will see more extreme rainfalls while other areas will see less due to shifting weather patterns and other factors. Most immediate impact of heavy rainfall is the prospect of flooding. According to the statistics mentioned in Asian Development Bank’s 2013 report, namely, “Indus Basin Floods: Mechanism, Impacts and Management. Manila” , the super flood of 2010 in Pakistan, alone resulted in over 1,600 casualties. Furthermore, it inundated an area of 38,600 square kilometers and caused damage worth USD 10 billion! In addition to flooding, intense rainfall also increases the risk of landslides. When above-normal downpour increases the water table and saturates the ground, it results unstable slopes, causing a landslide. According to 2014 “Climate Change and Infrastructure, Urban Systems, and Vulnerabilities: Technical Report for the US Department of Energy in Support of the National Climate Assessment. Island Press”, heavy rainfall-induced landslides in mountainous urban centers have been observed in Pakistan.

Global Change Impact Studies Centre’s 2005 Final Technical Report for APN CAPaBLE Project says that annual precipitation has been increased by 61 mm in Pakistan from 1901 to 2007. Monsoon rains increased by 22.6 mm and winter precipitation got raised by 20.8 mm. The report summarized that annual precipitation has generally been increasing except coastal areas.

With increase in global temperature, it is observed that oceans are expanding (thermal expansion) and glaciers are melting, thus it results in global mean sea level rise.  Intergovernmental Panel On Climate Change (IPCC) Fifth Assessment Report (AR5) says that global mean sea level rose to 0.19 meter over the period of 1901-2010.  Sea level rise for Pakistan is estimated at 1.1 millimeter per year from 1856 to 2000 along the coast of Karachi (Arabian Sea coast). (Source: The Impact of Sea Level Rise on Pakistan’s Coastal Zones – In a Climate Change Scenario. 2nd International Maritime Conference at Bahria University, Karachi). According to IPCC’s fifth Assessment Report (AR5), mean sea level rise of 0.2 – 0.6 meter will be observed by the end of 21st century. Of course it will affect low-lying coastal areas of Karachi. Inundation of low-lying coastal areas, destruction of mangrove forests and reduction in fish and shrimp productivity (mangroves are breeding grounds for fishes and shrimps).

Let us now see the effects of climate change due to increased greenhouse effect (because of greenhouse gases emission, especially carbon dioxide and methane from coal-fired power plants and coal mining under CPEC respectively) on different sectors of Pakistan. Because of increase in annual mean temperature and precipitation, agriculture sector will be affected the most. Pakistan’s economy is agro-based, and it contributes 21% to the total GDP of the country. According to a report produced by World Wild Fund for Nature (WWF) Pakistan, by 2040, a rise in temperature (0.5°C to 2°C), agricultural productivity will decrease by 8-10 percent.(Source: A. Dehlavi et al. 2015. Climate Change Adaptation in the Indus Ecoregion: A Microeconometric Study of the Determinants, Impacts, and Cost Effectiveness of Adaptation Strategies. Islamabad: World Wide Fund for Nature (WWF) Pakistan). A study has shown that there will be a 6% decrease in wheat yield and 15 to 18% decrease in the yield of basmati rice will be observed across the country (except northern areas) by 2080. (Source: M. M. Iqbal et al. 2009. Climate Change Aspersions on Food Security of Pakistan. Science Vision. 15 (1). Islamabad.)

Due to increased greenhouse effect, increased recession of Hindu Kush- Karakoram- Himalayan (HKH) glaciers is observed. This will affect river flows in Indus River System. As Himalayan glaciers will be melting for next 50 years, water flow will raise in Indus River, but after that, because of no glacier reservoirs, flow will decrease substantially by 30 to 40 percent over the next 50 years. (Source: K. Hewitt. 2005. The Karakoram Anomaly? Glacier Expansion and the ‘Elevation Effect’, Karakoram Himalaya. Inner Asia. Mountain Research and Development: Special Issue – Climate Change in Mountains. 25 (4).). This variation won’t just affect the availability of water in upper and lower Indus but will also hit Pakistan’s overall agricultural sector. Increasing number of floods due to increase in heavy precipitation in the form of rain because of greenhouse effect, results in  high sediment inflows in artificial water reservoirs (dams) and therefore reduces storage capacity.

Greenhouse gases emission from coal-fired power plants and coal mines, which are and will increase greenhouse effect (increase temperature) will affect the energy sector as well. Hotter temperatures will increase energy demands (increase in air-conditioning requirements) in summers and as a result more dirty energy from coal will be generated and thus more greenhouse gases emission. Himalayan glaciers are melting because of high annual mean temperature, which will reduce the availability of water for hydropower generation. Floods as a result of heavy precipitation will damage power plant infrastructure. Increased atmospheric temperature increases the temperature of water bodies. Nuclear and coal-fired power plants use water for cooling purpose. Not so cool water won’t be effective for cooling purpose, thus the efficiency of these plants get reduced.

System of transportation also gets affected by greenhouse effect. Heavy precipitation events cause flooding. Because of old infrastructure of road railways and airports extreme weather events affect their quality. Landslides (as discussed before) affect mountainous transportation.

Mining of coal in Thar Block II by SECMC (Sindh Engro Coal Mining Company- as discussed above), is done by open pit mining procedure because the coal is buried inside layers of ground water . Therefore, the water has to be pumped out of the mines and then it has to be stored somewhere. SECMC has planned to build an effluent disposal reservoir (near Gorano village) in which this waste water will be stored for two and a half years (or more). In 2016, people living in this area protested to stop the construction of reservoir. The waste water will contain Total Dissolved Solids (TDS) , the quantity of which is around 5000 ppm, which is much higher than the World Health Organization (WHO) standards, that sets the maximum contaminant level for TDS at 1000 ppm. People of Gorano village are worried about the seepage from this reservoir, that will possibly damage the quality of the underground water which is being used by them for drinking, farming and other daily life purposes. Furthermore, coal mines puncture and drain groundwater reservoirs in its vicinity and thereby depriving communities living around from the precious natural resource – water! Before burning coal, it is washed to clean it from impurities. This wastewater, full of harmful toxins has to be disposed off somewhere. In Pakistan where no one cares about following rules and regulations, this water could end up being disposed in nearby lakes and rivers. On one hand it makes the water undrinkable and on the other, destroys fresh water habitat.

Combustion of coal not only pollutes air with carbon dioxide, but also with other harmful pollutants, which negatively affect human health. Mercury emissions from coal fired power plants damage nervous, digestive and immune system in human beings. 1/70th of a teaspoon of mercury deposited on a 25-acre lake can make fish unsafe to eat. Sulfur dioxide (SO2), which is produced when sulfur in coal reacts with oxygen, when reacts with other molecules in atmosphere it produces acidic particulates. When these particulates are inhaled they can cause asthma and bronchitis. Sulfur dioxide is also responsible for acid rain! These plants also emits nitrous oxides (NOx), which when inhaled can cause irritation of lung tissues and make the inhaler susceptible to chronic respiratory diseases like pneumonia and influenza.

Coal ash, which is the by-product of coal combustion and contains concentrated heavy metals, including many known carcinogenic and neurotoxic chemicals, is either buried underground or stored in open reservoirs. During heavy precipitation event, this highly toxic ash mixes with water that runs off into nearby fresh water bodies and pollutes them.

So what is the ultimate purpose of CPEC? At such hefty environmental cost, all that economic prosperity becomes meaningless. You are digging in the land of Thar for coal and at the same time depriving the communities living there of fresh water! Because of greenhouse effect, Himalayan glaciers are melting which is affecting water flow in Indus river system has been affected, crop yields are reducing, people are dying from extreme weather events like floods, droughts and heat waves, coastal land is inundating due to sea level rise, transport infrastructure is being destroyed by heavy precipitation and people are inhaling polluted air and drinking water full of carcinogenic and neurotoxic pollutants because we want energy form coal! World is progressing. Countries, including China are reducing their fossil fuel energy infrastructure and boosting the use of renewable energy resources. Protecting climate is necessary. For Pakistan burning coal for energy is like firing your own house for some heat! Stop it! Stop burning coal!

Sources:

Columnist, blogger and social activist. Studying Economics and International Relations. My writings on socioeconomic issues, foreign affairs and culture frequently get published in DAILY TIMES, ARY NEWS Blogs and DUNYA NEWS Blogs. Twitter: @an_alisalman

Energy

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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World Energy Outlook 2021 shows a new energy economy is emerging

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A new energy economy is emerging around the world as solar, wind, electric vehicles and other low-carbon technologies flourish. But as the pivotal moment of COP26 approaches, the IEA’s new World Energy Outlook makes it clear that this clean energy progress is still far too slow to put global emissions into sustained decline towards net zero, highlighting the need for an unmistakeable signal of ambition and action from governments in Glasgow.

At a time when policy makers are contending with the impacts of both climate change and volatile energy markets, the World Energy Outlook 2021 (WEO-2021) is designed as a handbook for the COP26 Climate Change Conference in Glasgow, which offers a critical opportunity to accelerate climate action and the clean energy transition. The new analysis – which the IEA is making available for free online – delivers stark warnings about the direction in which today’s policy settings are taking the world. But it also provides clear-headed analysis of how to move in a well-managed way towards a pathway that would have a good chance of limiting global warming to 1.5 °C and avoiding the worst effects of climate change.

The WEO-2021, the IEA’s annual flagship publication, shows that even as deployments of solar and wind go from strength to strength, the world’s consumption of coal is growing strongly this year, pushing carbon dioxide (CO2) emissions towards their second largest annual increase in history.

“The world’s hugely encouraging clean energy momentum is running up against the stubborn incumbency of fossil fuels in our energy systems,” said Fatih Birol, the IEA Executive Director. “Governments need to resolve this at COP26 by giving a clear and unmistakeable signal that they are committed to rapidly scaling up the clean and resilient technologies of the future. The social and economic benefits of accelerating clean energy transitions are huge, and the costs of inaction are immense.”

The WEO-2021 spells out clearly what is at stake: what the pledges to reduce emissions made by governments so far mean for the energy sector and the climate. And it sets out what needs to be done to move beyond these announced pledges towards a trajectory that would reach net zero emissions globally by mid-century – the Net Zero Emissions by 2050 Scenario from the landmark IEA report published in May, which is consistent with limiting global warming to 1.5 °C.

As well as the Net Zero Emissions by 2050 Scenario, the WEO-2021 explores two other scenarios to gain insights into how the global energy sector may develop over the next three decades – and what the implications would be. The Stated Policies Scenario represents a path based on the energy and climate measures governments have actually put in place to date, as well as specific policy initiatives that are under development. In this scenario, almost all of the net growth in energy demand through 2050 is met by low emissions sources, but that leaves annual emissions still around today’s levels. As a result, global average temperatures are still rising when they hit 2.6 °C above pre-industrial levels in 2100.

The Announced Pledges Scenario maps out a path in which the net zero emissions pledges announced by governments so far are implemented in time and in full. In this scenario, demand for fossil fuels peaks by 2025, and global CO2 emissions fall by 40% by 2050. All sectors see a decline, with the electricity sector delivering by far the largest. The global average temperature rise in 2100 is held to around 2.1 °C.

For the first time in a WEO, oil demand goes into eventual decline in all the scenarios examined, although the timing and speed of the drop vary widely. If all today’s announced climate pledges are met, the world would still be consuming 75 million oil barrels per day by 2050 – down from around 100 million today – but that plummets to 25 million in the Net Zero Emissions by 2050 Scenario. Natural gas demand increases in all scenarios over the next five years, but there are sharp divergences after this.

After decades of growth, the prospects for coal power go downhill in the Announced Pledges Scenario – a decline that could be accelerated further by China’s recent announcement of an end to its support for building coal plants abroad. That move may result in the cancellation of planned projects that would save some 20 billion tonnes in cumulative CO2 emissions through 2050 – an amount similar to the total emissions savings from the European Union reaching net zero by 2050.

The differences between the outcomes in the Announced Pledges Scenario and the Net Zero Emissions by 2050 Scenario are stark, highlighting the need for more ambitious commitments if the world is to reach net zero by mid-century.

“Today’s climate pledges would result in only 20% of the emissions reductions by 2030 that are necessary to put the world on a path towards net zero by 2050,” Dr Birol said. “Reaching that path requires investment in clean energy projects and infrastructure to more than triple over the next decade. Some 70% of that additional spending needs to happen in emerging and developing economies, where financing is scarce and capital remains up to seven times more expensive than in advanced economies.”

Insufficient investment is contributing to uncertainty over the future. Spending on oil and natural gas has been depressed by price collapses in 2014-15 and again in 2020. As a result, it is geared towards a world of stagnant or even falling demand. At the same time, spending on clean energy transitions is far below what would be required to meet future needs in a sustainable way.

“There is a looming risk of more turbulence for global energy markets,” Dr Birol said. “We are not investing enough to meet future energy needs, and the uncertainties are setting the stage for a volatile period ahead. The way to address this mismatch is clear – a major boost in clean energy investment, across all technologies and all markets. But this needs to happen quickly.”

The report stresses that the extra investment to reach net zero by 2050 is less burdensome than it might appear. More than 40% of the required emissions reductions would come from measures that pay for themselves, such as improving efficiency, limiting gas leakage, or installing wind or solar in places where they are now the most competitive electricity generation technologies.

These investments also create huge economic opportunities. Successfully pursuing net zero would create a market for wind turbines, solar panels, lithium-ion batteries, electrolysers and fuel cells of well over USD 1 trillion a year by 2050, comparable in size to the current oil market. Even in a much more electrified energy system, major opportunities remain for fuel suppliers to produce and deliver low-carbon gases. Just in the Announced Pledges Scenario, an additional 13 million workers would be employed in clean energy and related sectors by 2030, while that number doubles in the Net Zero Emissions by 2050 Scenario.

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