Responsible for two-thirds of the world’s carbon emissions and facing rapid urbanisation, cities are embracing new and innovative solutions to meet climate and development objectives. Vancouver, Canada’s third largest city, is leading this urban energy transformation by committing itself to 100% renewables by 2050 through an ambitious, well-defined roadmap that unifies different sectors, stakeholders and communities under its vision for a sustainable, carbon-free future.
As growing evidence confirms, sustainable energy can be promoted at the municipal level through planning, regulation, public procurement, direct investment, provision of services and awareness-raising. City planners and policy makers possess several available levers to steer urban energy systems towards renewables and reap their benefits. IRENA, in collaboration with ICLEI and the German Agency for International Cooperation (GIZ), examined Vancouver’s Renewable City Strategy in a recent case study, showcasing how bringing together different stakeholders and unifying their outlook is critical for cities to succeed with ambitious renewable energy goals.
With 69% of its energy sourced from fossil fuels, half of which is used to heat buildings, Vancouver’s Renewable City Strategy – in conjunction with the Zero Emissions Building Plan – aims to reduce 70% of emissions from new buildings by 2020, 90% by 2025 and 100% by 2030, phasing in changes to building standards that allow the construction industry to adapt over time. Twenty of the 75 largest greenhouse gas (GHG)-emitting municipal buildings will be retrofitted to a zero emissions standard over the next 25 years. This measure will contribute 20% of the GHG emissions reductions required to make all municipal buildings carbon neutral by 2040.
Furthermore, the city is looking at district energy – referred to as ‘neighbourhood energy’ in Vancouver – which can be powered by renewables and is viable in densely-settled parts of the city where capital and operating costs can be recovered at rates that are competitive with natural gas. Low-density areas, such as single family homes and low-occupancy apartments, will most likely be supplied with electricity from solar PV or solar thermal, heat pumps which utilise grid-supplied electricity, or on-site wind power.
However, using electricity for building heating and hot water in low-density areas is still expensive in comparison to natural gas. Therefore, the city is emphasizing increased density with current estimates projecting that only 10-15% of households in Vancouver will be single family homes in 2050 compared to 80% of the land in Vancouver currently dedicated to single-family housing.
To reach its sustainability goals, Vancouver is also targeting the other major emitter of carbon in cities – transportation. Three of its Renewable City Strategy priorities are focused on increasing the use of renewable transportation options, reducing motorized transportation demand and the increasing supply of renewable transportation fuels. Even though the city has limited jurisdiction over automobile standards, Vancouver has already taken steps to encourage the uptake of electric vehicles (EV).
For example, the city’s Electric Vehicle Ecosystem Strategy sets out 32 actions intended to increase the number of EV charging spots in homes, workplaces and public spaces in the period from 2016 to 2021. Because Vancouver’s electricity is almost exclusively generated from hydropower, electrification can reduce personal vehicle emissions by up to 97%. Projections show that by 2050 approximately 25% of personal vehicles in Vancouver could be fully electric vehicles, with another 45% comprising plug-in hybrids using a combination of renewable electricity and bio-methane, and the remainder being conventional hybrid vehicles running on bio-methane.
In addition to synergizing existing strategies and plans, Vancouver realises the importance of stakeholder engagement and has taken steps to introduce the public to strategy planning and implementation, collect feedback, and build dialogue between the public and the municipal government, through initiatives such as the ‘Bright Green Summer’ and “100% RE Talks”.
Beyond electric vehicles, Vancouver’s Transportation 2040 Strategy promotes sustainable transportation infrastructure and encourages increased walking, bicycling and public transit use, was key for the city to achieve its Greenest City 2020 Action Plan goal of having over 50% of trips made by walking, cycling or public transit five years early, in March 2015. With the help of the Mobi bicycle sharing programme, cycling is Vancouver’s fastest-growing mode of transport. The city exceeded its target of reducing the average annual distance driven per resident by 20% relative to 2007 levels, having already overachieved a reduction of 32%.
With great progress already being made, Vancouver is leading the urban energy transformation. In addition to ongoing efforts at eliminating its own emissions, the city is accelerating the decarbonisation of the global economy by providing examples of success that other cities can learn from, encouraging them to take on ambitious climate targets of their own. Tomorrow, the city will host Ministers from over 25 countries for the 10th Clean Energy Ministerial (CEM10) and 4th Mission Innovation (MI-4) in order to promote clean energy policy, technology and innovation globally. The Canadian host and IRENA are both expected to, among other issues, discuss gender equality and the leadership of women in the energy sector. In addition to presenting its latest report on Renewable Energy – A Gender Perspective, IRENA’s delegation, led by Director-General Francesco La Camera, will present findings from its latest innovation report and will conduct a dedicated session on long-term energy planning.
The power of Siberia heralds a landmark of Sino-Russian solidarity
Authors: Zhou Dongchen, Paul Wang
Although China and Russia have forged their comprehensive strategic partnership into a de facto alliance, it is still opined in the way of the classical geopolitics. Yet, the east-route of China-Russia natural gas pipeline which was functional on December 2 has since heralded a new milestone for deepened energy cooperation between these two Eurasian powers. The project that was signed in 2014 is a $400-billion-gas supply deal and connects the world’s largest natural gas supplier (with a total length of more than 5,000 km) and the most potential natural gas consumer market. It is the first natural gas pipeline between the two largest land powers and also the first cross-border gas pipeline in northeast China. Technically, it is scheduled to be completed in 2020.
China and Russia lost no time to show a video call on December 2 as the two heads of state, Xi and Putin, jointly witnessed the launching ceremony of the China-Russia east-route natural gas pipeline. Xi, in Beijing, hailed the pipeline as a historical deal of Sino-Russian energy cooperation, describing it as a win-win model of major powers’ cooperation. He requested to ensure the project’s safety and reliability and to promote sustainable economic and social development in areas along the pipeline.
For sure, the east-route pipeline is not only supplied to China, but also to the local consumers in Russia’s Far East. In addition, the project would insure to create jobs and bring in more income for the local Russians, further promoting the economic and social development in Russia. Due to this, Putin announced in Russia’s Sochi that inauguration of the pipeline is of historic significance and would bring bilateral strategic relations to new heights. The event itself can be perceived both historical and unprecedented because a gas route has been laid underneath the Eurasian gas space and now moving towards one of the largest geoeconomic formation. With this large-scale gas project started, a new page will open in bilateral relations not only in the energy field, but also there is enormous potential for further development and further cooperation.
Considering that China and Russia have cooperated in the fields of natural and oil projects for decades, why is the east-route gas so significant to the two sides? Firstly, trans-regional gas projects, also named as “the power of Siberia”, contribute to the development of many regions inside and outside the two countries, which subsequently invest additional infrastructure and jobs. As the Chinese market is constantly growing, and in recent years has been growing at double-digit rates, Beijing’s energy needs will continue to grow steadily. Secondly, while coal remains the main source of energy for Chinese economic leap, a further industrialization has led to increasing environmental backlash. Be aware of the plights of its dependence on coal, China has been driven by the urgent needs over the past years to have accelerated the use of clean and newer environmental standards backed up by its significant efforts to combat air pollution.
Accordingly, it is not surprising that China is keen in reducing greenhouse gas emissions, striving to reduce the use of coal and strictly implementing the Paris Accords, including China’s large investments in its research and development of large-scale energy efficiency programs, and the rapid expansion of the renewable energy and nuclear energy. Therefore, the Power of Siberia gas pipeline will not only contribute to the socio-economic development of the Far East, but will also create conditions for gas supply and gasification of the Russian regions alongside the development of modern gas processing and gas-chemical industries in Russia. Taking into account a new map of the global energy being formed, it is fair to argue that “the Power of Siberia” would create a new pipeline system in the existing transport corridor of the Siberia to the borders of the two countries and beyond in the near future.
For sure, it is necessary to note the great merit of two leaders-Chinese President Xi and his Russian counterpart Putin-under the strategic leadership of which Sino-Russian relations of comprehensive coordination and strategic partnership have entered a new era. This is characterized by the highest degree of mutual trust, the highest level of interaction and strategic consensus. In light of the current international reality where the United States has always used the difference in political systems and diplomatic philosophies to attack China Russia with a cold war mentality, the further strengthening of the strategic interaction between the two Eurasian powers is of special meaning and the impacts on the world peace and security. In the coming decades, China will have become more dependent on the energy supply and agricultural goods from its northern neighbor, while the Russian economy in the vast Siberia will be benefited by substantial FDI from China. As a result, the current discrepancy between their strong political relations and the weak economic ties would be effectively addressed, together, the pipeline could revive the prosperity of China’s north eastern provinces and Russia’s Far East region, not mention of their current close cooperation in the field of information technology and space.
Accordingly, it is fair to argue that China and Russia play a decisive role in the formation of a new energy map of the world with the launch of the “Power of Siberia” gas pipeline project which sets a prime example of how the natural gas market is becoming mobile and cross-regional. Equally in terms of the public disagreements between the United States and its European allies, China and Russia working together have moved towards more dynamic relations with European countries and in particular the member states of the European Economic Union—Russia, Belarus, Kazakhstan, Tajikistan and Armenia.
All in all, China and Russia’s foreign policy, based on the pursuit of mutual benefits, made the materialization of the power of Siberia energy deal feasible. The operationalization of the pipeline is proof that the world doesn’t just function based on a single system. Americans may believe that theirs functions well, but that doesn’t disqualify other systems from being equally functional or even superior in making and executing long-term goals that benefit the public. The pipeline has elevated the bilateral relationship to a new level and will benefit future generations. With this new linkage, Sino-Russian common interests would be more intertwined, making mutual benefits even more important going forward. This is what President Xi has reiterated as our true relationship will be of utmost importance in China’s foreign policy.
Clash of titans: Is OPEC+ deal nearing its end?
Only a few days is left before the unveiling of a big decision which will mostly determine the future of oil market in the upcoming year.
Organization of the Petroleum Exporting Countries and its allies including Russia (known as OPEC+) are going to gather in Vienna during December 5-6 for the 177th Meeting of the OPEC Conference and the 7th OPEC and non-OPEC Ministerial Meeting, to discuss the oil market and reach a decision regarding the next step for the OPEC+ cuts deal.
Many experts and analysts expect OPEC+ to decide on extending the current pact rather than deepening the cuts, however contrasting signals from the groups’ two major policy-makers indicate that the situation doesn’t seem to be unwinding toward such a decision.
Saudi Arabia and Aramco IPO
After two years of postponing and speculation, Saudi Arabia has finally announced that the kingdom is going to officially offer 1.5 percent of its oil-giant’s stakes on December 5, allowing institutional investors to submit their initial offers. Interestingly, Aramco’s initial public offering (IPO) is concurrent with the 177th gathering of OPEC.
For years, the Saudis have been announcing that they will sell about five percent of Aramco’s stock in foreign and domestic stock exchanges; and since they valued the company at $2 trillion, it was estimated that Saudi Arabia would make $100 billion on its initial offering, and will use the proceeds to build on the foundations of the crown prince’s 2030 vision for an oil-free economy.
However, in spite of the many years of advertising and effort, Aramco’s IPO didn’t receive the attention and praise that the kingdom expected. Therefore, they reduced the IPO to 1.5 percent and it seems that they have even abandoned their dreams of attracting large-cap funds from foreign exchanges, at least for the time being.
So, Aramco’s initial offering is going to be only in their domestic stock exchange, and the IPO is likely to only generate over $25 billion in revenue for Saudi Arabia.
So far, Kuwait and the United Arab Emirates are the only foreign countries that are ready to participate in Aramco’s IPO, and there are no major investors from Europe or the United States.
With all that said, and considering the fact that after holding the IPO Saudis would not need high oil prices in the short-run, it seems that the kingdom is no longer eager for shouldering other OPEC+ members’ delinquencies regarding the oil production cuts.
Preparing for the IPO in the past year, Saudi Arabia turned a blind eye to the OPEC+ group members’ violations from the agreed production levels by major producers like Russia and Iraq and shouldered the burden by cutting its own output more than agreed to offset the over-production.
However, new signals are emerging which indicate that the kingdom is no longer willing to undermine its production for the sake of higher oil prices.
Last week, Bloomberg reported that Prince Abdulaziz bin Salman, Saudi’s new oil minister who replaced Khalid Al-Falih in September, is not going to follow his predecessor’s footsteps and is expected to voice the kingdom’s intolerance regarding the violation of the cuts deal.
Russia and the OPEC+
It has been more or less three years since Russia and some other oil producers joined hands with the 14-member OPEC to balance the oversupplied oil market and prevent the oil prices from further fall which was costing their economies a great deal.
Russia, as one of the world’s top oil producers and exporters, has been consistently voicing its support for a deal reached between OPEC and non-OPEC allies for volunteer production cuts to support the oil prices, however statistics show that the country itself hasn’t been doing much in this regard.
According to Bloomberg, Russia’s shipping data for 2019 indicates that the second pillar of the OPEC+ deal has conformed to the agreed production levels only for three months, namely May, June and July and even the production cuts in those three months doesn’t seem to be voluntarily since it was during the disruption of the key Druzhba oil pipeline.
Other signatories of the deal haven’t been much helpful in this regard, Iraq, for example, was supposed to pump about 4.51 million barrels per day (bpd), but has produced on average about 4.8 million bpd. Kazakhstan accepted a 1.86-million-bpd limit, however it has produced close to 1.95 million barrels of oil and finally Nigeria agreed to a quota of 1.68 million bpd, but has regularly pumped more than 1.8 million.
These constant violations have clearly pushed the Saudis to their limit, and now with the Aramco IPO going to be no longer a motive for Saudi to offset the excess production by OPEC+ members, Russia seems to be rethinking the worth of remaining in the OPEC+ pact.
Russian officials have been recently showing some vague signals, indicating a possible abandoning of the OPEC+ deal.
Tass news agency recently quoted Russia’s oil minister as saying that his country favors postponing any decision-making regarding the new supply caps until April, which is the pact’s due.
The discrepancy between the views of OPEC+ titans has prompted some experts to speculate on the possibility of a breakup of the cuts deal; a speculation which seriously affected the oil market in the end of this month trades.
On Friday, which was the last day of November trades, U.S. crude oil fell by nearly $3, or 5 percent, to about $55 a barrel. Brent crude also experienced a $2.8 or 4.4 percent drop and returned to the $50 range.
Considering the oil markets current status, it seems that we are going to witness a very tense OPEC+ gathering in Vienna this week. One can only wait to see how the situation is going to unwind.
However, the most expected outcome would be that Russia and Saudi Arabia will agree to extend the pact for another few months to buy time in order to assess the market’s situation in the New Year and then decide how to proceed.
From our partner Tehran Times
Potential Of Renewables In The MENA Region: The Cases Of Turkey And Jordan
The potential of renewables in the MENA region is met with major challenges and opportunities. The region is home to more than half of the world’s crude oil and more than a third of its natural gas reserves thus being a global producer and exporter of energy. The MENA region is also a major energy consumer, and alongside Asia it is estimated that it will continue to represent the majority of the world’s energy demand growth. Solar power can constitute a major pillar of renewable energy due to the region’s climate conditions thus playing a significant role as a cost-competitive alternative to conventional fossil fuels.
Creating the right incentives for renewable energy deployment in the MENA region can involve a spectrum of economic policies that reduce or eliminate market distortions like access to sources of finance. The removal of distortions via the reduction of energy subsidies, for instance can be a step towards the right direction that is however met with both opportunities and challenges. The provision of low energy prices in the past few decades has helped certain regional countries to achieve key developmental and social objectives, such as protection of the income of households, promotion of industrialization and inflation control. But this policy has come at a huge cost and has led to a wide range of distortions, such as hindering economic diversification; and, low efficiency as consumers and industries have had little incentive to conserve energy.
No doubt that the increase in energy prices due to reduction of subsidies will have direct and indirect effects on the welfare of households and the profitability and competitiveness of the MENA industry. To revert negative consequences, regional governments could establish specialized funds to help industries adjust to higher costs by introducing new technologies and upgrading equipment. Also designing compensation schemes for households would be essential to avoid backlash from consumers. For instance, increases in energy prices in Jordan were accompanied with direct cash handouts to households with low income.
The main question that arises is the following: Are renewables a threat to natural gas or the other way around?
Energy markets that are competitive and resilient illustrate how natural gas and renewables are not mutually exclusive, but rather are complementary. Natural gas and renewables can gradually replace coal in power generation, thus lowering carbon dioxide emissions. In the regional setting, Turkey and Jordan present success stories in that they combine natural gas and renewables for power generation.
Jordan particularly looks for the provision of affordable and sustainable electricity from renewables and natural gas. The kingdom is on pace to exceed 20 percent of generated electricity from renewables by 2020. Jordan managed to rank first in the MENA region in renewable energy growth because there are stable political and regulatory frameworks that support investments for renewables along with clear financial schemes such as tax exemptions. However, the Energy and Minerals Regulatory Commission should ensure that the Jordanian National Electric Power Company (NEPCO) and other distribution companies receive adequate incentives to connect renewables to the grid.
The Zaatari refugee camp can be cited as the world’s largest solar power production project, which produces 23 gigawatt hours/year and supplies electricity 14 hours/day to at least eighty thousand Syrians, twenty-two schools and two hospitals. The Zaatari camp has set a precedent when it comes to executing sustainable renewable energy projects. At the same time, the kingdom has pursued three viable options of gas supply for electricity generation: (1) reliable Israeli gas imports that could strengthen Jordan’s energy security; (2) the supply of gas from the Risha field in northeast Jordan that currently covers two percent of domestic needs, and (3) Qatari gas imports via the existing LNG terminal at the port of Aqaba.
Coming to Turkey, to ensure resource diversity, Turkey generates 24 percent of its electricity from renewables, which is equal to the world average of electricity production from renewables. Turkey’s success in renewables is attributed on the one hand to the abandonment of the feed-in-tariff model that entailed high costs and on the other hand to the adoption of the Renewable Energy Resources Area Project-YEKA model that is applied to wind and solar power. The YEKA model ensures a minimum domestication rate of 65 percent and a 15-year purchasing guarantee for contractors, including plant construction and production of wind turbines. According to Turkey’s New Economic Program, the growth rate of the Turkish economy will increase rapidly from 2021 and onwards and consequently the demand for energy will increase.
The combined power generation from natural gas and renewables is a priority for Turkey that covers 60 percent of its primary energy needs from natural gas, while electricity from renewables is destined for domestic consumption. It is estimated that by 2035, Turkey will consume 55 bcm of gas, and for this reason, Ankara seeks to safeguard import capacity. This shows that a strong interest in East Mediterranean gas will likely remain regional as opposed to reaching international markets.
Practically, for the MENA region to realize its renewable potential, countries should provide stable regulatory frameworks and clear financial schemes like tax exemptions for renewable energy equipment, as well as establish Centers of Excellence for the sharing of know-how and support of investment in renewable power generation.
European and international banking and financial institutions, such as the World Bank and U.S. development agencies, such as the USAID, should be urged to provide loans or grants to foster the region’s turn to renewable energy.
When it comes to Turkey, investments for transmission and distribution grids should be accelerated, as this infrastructure is crucial if Ankara is to exploit its renewable potential. Additionally, the financing of small-scale projects should be prioritized, as opposed to large-scale energy projects, due to fluctuating currency rates that discourage foreign capital flows. Regarding Jordan, the Kingdom should continue to diversify its energy mix by combining power generation from natural gas and renewables to increase energy independence and meet high domestic demand.
It can be safely concluded that the MENA region can lead the global efforts in support of the energy transformation with the increased use of renewables benefiting economies and the livelihood of present and future generations.
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