The Asian Development Bank (ADB) has approved a $300 million loan to help PT Geo Dipa Energi (GDE), an Indonesian state-owned company, expand its geothermal power generation capacity by 110 megawatts in Java, the country’s largest electricity grid and a challenging market for the development of renewable energy. ADB will also manage a $35 million loan from the Clean Technology Fund for the project.
“ADB’s geothermal project will help Indonesia combat climate change and make its electricity system more sustainable, reliable, and efficient. It will also help businesses and consumers access affordable, reliable, and modern energy,” said ADB Country Director for Indonesia Winfried F. Wicklein. “Our support is aligned with Indonesia’s long-term goals for economic growth and energy, including maximizing the use of indigenous energy resources, diversifying the fuel mix, and ensuring environmental sustainability.”
Indonesia has the world’s largest geothermal potential, with an estimated 29 gigawatts (GW), and the world’s second-largest installed geothermal capacity of 2.1 GW. ADB, through its private sector finance operations, has had a long-standing interest in Indonesia’s geothermal sector, supporting projects at Muara Laboh, Rantau Dedap, and Sarulla. But the development of geothermal power remains slow, largely because the exploration phase is costly, lengthy, and high risk.
The Geothermal Power Generation Project will support the construction and commissioning of two geothermal plants at Dieng in Central Java and Patuha in West Java by GDE, a state-owned enterprise focused on geothermal exploration, development, and power generation. It will boost GDE’s capacity to plan and execute projects and undertake government-supported drilling, which aims to attract much-needed private sector investment to develop new geothermal areas. In addition, GDE will provide direct assistance to nearby communities, including women and other vulnerable groups, and help improve livelihoods.
“The project, recognized as a National Strategic Project by the government, will provide environmentally friendly base-load electricity to the Java–Bali electricity grid, reducing CO2 emissions by more than 700,000 tons per year,” said GDE President Director Riki Ibrahim. “The project will build critical geothermal experience in Indonesia and contribute to the government’s efforts to attract private-sector investment in the sector by reducing early-stage project development risk.”
The project, approved amid the novel coronavirus disease (COVID-19) pandemic, will help ensure that Indonesia’s economic recovery will be green, sustainable, and resilient.
“ADB’s intervention will help make clean energy transition a key part of the country’s recovery from the pandemic. The project will create jobs for those supplying goods and services for drilling and construction, and will create livelihood opportunities in the local area,” said ADB Senior Energy Specialist for Southeast Asia Shannon Cowlin.
Greek shipowners do not care about the boycott of Russian oil
European sanctions against Russian oil will only lead to higher prices, it will hit the pocket of the end consumer, says Nicolas A. Vernicos, the largest Greek ship owner and president of the International Chamber of Commerce. He made this statement in connection with the decision of the European Union to impose a price cap on Russian oil.
The French ‘Liberation’ published an interview with N. Vernicos under the title “Russian oil: Greek shipowners, in whose hands half of the world’s tankers, do not care about the boycott.”
Vernicos says: “Transportation costs, which are already skyrocketing, will rise even faster, but the embargo on the transportation of Russian oil by sea will have a positive effect on shipowners, because we will become richer.”
At the same time, he warns that Greece will comply with the new conditions. The European decision on sanctions will bring a net benefit only to maritime carriers. Nicolas A. Vernicos recalls: “The Greek shipping community is the strongest in the world… Nothing can be done without it, and the Greeks will definitely find a way around the sanctions.”
And on the fact that prices will rise, Russia will also earn.
‘Liberation’ writes that in the hands of the Greeks 21% of the world’s shipping tonnage and 40% of the world’s tonnage in the transportation of oil, their trade cooperation with Russia has existed since the 19th century, and they do not intend to stop it.
The EU countries have already agreed on the issue. An agreement was reached to set the price limit at $60 per barrel. The decision came into force on 5 December.
OPEC+ agrees to stick to its existing policy of reducing oil production
Led by Saudi Arabia and Russia, OPEC+ agreed in early October to reduce production by 2 million barrels per day from November, – informs CNBC.
An influential alliance of oil producers on Sunday agreed to stay the course on output policy ahead of a pending ban from the European Union on Russian crude.
OPEC and non-OPEC producers, a group of 23 oil-producing nations known as OPEC+, decided to stick to its existing policy of reducing oil production by 2 million barrels per day, or about 2% of world demand, from November until the end of 2023.
The European Union is poised to ban all imports of Russian seaborne crude from Monday, while the U.S. and other members of the G-7 will impose a price cap on the oil Russia sells to countries around the world.
The Kremlin has previously warned that any attempt to impose a price cap on Russian oil will cause more harm than good.
Led by Saudi Arabia and Russia, OPEC+ agreed in early October to reduce production by 2 million barrels per day from November. It came despite calls from the U.S. for the group to pump more to lower fuel prices and help the global economy…
The looming Russian oil price “cap” has all the hallmarks of a historic debacle in the making, – notes “The Hill”.
For months, the United States and the G-7 have haggled over a complex plan to constrain the money that the Kremlin makes from some of its oil exports.
Despite Russian war against Ukraine and subsequent Western sanctions on his regime, Russia is swimming in petrol dollars. By the end of the year, the Russian Economy Ministry estimates that the country will have made a record $338 billion from its energy exports.
Together with America’s existing embargo on Russian crude, when the European Union’s oil embargo comes into full force on Dec. 5, policymakers fear that the move will constrain global petroleum supplies and push prices upward.
Assuming that EU and G-7 leaders can sort out their current price puzzle and fix Russian crude below what the international market would prefer to pay, who will pick winners and losers in the subsequent scramble for cheap Kremlin oil: Putin and his energy cronies?
The Russian oil “cap” would not be necessary if the Biden White House had been making it easier to open the spigots of American oil from the start. The president’s pledge of “no more drilling” in America continues to undercut his economic and foreign policy against Russia.
If the Russian oil price cap fails to materialize or work as officials intend, the United States and its allies should drop the scheme, – stresses “The Hill”.
G7 agrees oil price cap: reducing Russia’s revenues, while keeping global energy markets stable
The international Price Cap Coalition has finalised its work on implementing an oil price cap on Russian seaborne crude oil. EU Member States in the Council have also just approved in parallel its implementation within the EU.
The cap has been set at a maximum price of 60 USD per barrel for crude oil and is adjustable in the future in order to respond to market developments. This cap will be implemented by all members of the Price Cap Coalition through their respective domestic legal processes.
Ursula von der Leyen, President of the European Commission, said, “The G7 and all EU Member States have taken a decision that will hit Russia’s revenues even harder and reduce its ability to wage war in Ukraine. It will also help us to stabilise global energy prices, benefitting countries across the world who are currently confronted with high oil prices.”
While the EU’s ban on importing Russian seaborne crude oil and petroleum products remains fully in place, the price cap will allow European operators to transport Russian oil to third countries, provided its price remains strictly below the cap.
The price cap has been specifically designed to reduce further Russia’s revenues, while keeping global energy markets stable through continued supplies. It will therefore also help address inflation and keep energy costs stable at a time when high costs – particularly elevated fuel prices – are a great concern in the EU and across the globe.
The price cap will take effect after 5 December 2022 for crude and 5 February 2023 for refined petroleum products [the price for refined products will be finalised in due course]. It will enter into force simultaneously across all Price Cap Coalition jurisdictions. The price cap also provides for a smooth transition – it will not apply to oil purchased above the price cap, which is loaded onto vessels prior to 5 December and unloaded before 19 January 2023.
The EU’s sanctions against Russia are proving effective. They are damaging Russia’s ability to manufacture new weapons and repair existing ones, as well as hinder its transport of material.
The geopolitical, economic, and financial implications of Russia’s continued aggression are clear, as the war has disrupted global commodities markets, especially for agrifood products and energy. The EU continues to ensure that its sanctions do not impact energy and agrifood exports from Russia to third countries.
As guardian of the EU Treaties, the European Commission monitors the enforcement of EU sanctions across the EU.
The EU stands united in its solidarity with Ukraine, and will continue to support Ukraine and its people together with its international partners, including through additional political, financial, and humanitarian support.
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