Saturday, January 12, 2019

GWPF Newsletter - China: No More Wind Or Solar If It Can't Beat Coal On Price


Britain's Green Deal Fiasco

In this newsletter:

1) China: No More Wind Or Solar If It Can't Beat Coal On Price
Forbes, 10 January 2018
 
2) China’s Electric Car Companies Slump Amid Reports Of Subsidy Cuts
The Economic Times, 9 January 2019

 
3) Shale Revolution 3.0: Saudi Arabia Edges Toward Buying Into Booming U.S. LNG Sector
The Wall Street Journal, 9 January 2019
 
4) Green Deal Fiasco: Thousands Face 'Rip-Off' Energy Bills For Decades After Failure Of The £400m Energy Scheme
Daily Mail, 9 January 2019
 
5) China Flexes Shale Muscles Output Increases 40%
JPT Digital, 10 January 2019
 
6) Germany Wobbles On Russian Gas Pipeline As Trump Pressure Starts To Bite
Bloomberg, 7 January 2019
 
7) Swimming In Oil: BP Just Discovered A Billion Barrels Of Oil In The Gulf Of Mexico
CNBC, 8 January 2019


Full details:

1) China: No More Wind Or Solar If It Can't Beat Coal On Price
Forbes, 10 January 2018
John Parnell

China has said it will not approve wind and solar power projects unless they can compete with coal power prices.














Beijing pulled the plug on support for large solar projects, which had been receiving a per kWh payment, in late May. That news came immediately after the country’s largest solar industry event and caught everyone by surprise.

Officials are understood to have been frustrated at seeing Chinese suppliers and engineering firms building solar projects overseas that delivered electricity at prices far below what was available back home.

The country also has its own issues with grid logjams. These have caused power from wind and solar projects to be wasted due to a lack of capacity on the network to transmit and distribute it. In 2017 12% of wind generation and 6% of solar was curtailed.

In the plans announced on Thursday, the National Development and Reform Commission (NDRC), the top strategic planning authority, and the National Energy Administration (NEA) set out a series of conditions under which new solar and wind projects would be approved from now till the end of 2020.

Chief among these is that the price matches or undercuts the national coal benchmark, something that happened for the first time ever just last month.

Projects will also have to show that the grid can handle their output. Technical specifications will ensure that the highest standards are met on that front.

Local governments have been told they are free to offer their own subsidies to projects if they wish.
In the past, provincial authorities have spent heavily to bankroll uncompetitive solar manufacturers. 

Thursday’s announcement warned that any attempt to use project subsidies to invest in “local factories” or to make the use of locally made components a condition of the subsidy.

Full post

See also recent GWPF report by Patricia Adams: The Road from Paris: China’s Climate U-turn 





2) China’s Electric Car Companies Slump Amid Reports Of Subsidy Cuts
The Economic Times, 9 January 2019

Shares in China’s new energy vehicle (NEV) makers and other firms in the industry chain are pummelled, after media reports that Beijing this year could continue to cut subsidies for NEVs.

The CSI new energy vehicles index, which tracks major NEV players on the mainland, skids as much as 2.7 per cent.

Wuxi Lead Intelligent Equipment leads the decline, tumbling as much as 9.1 per cent.

Warren Buffett-backed electric car maker BYD drops 8.3 per cent at one point, and down ~0.5 per cent in Hong Kong.

Starting from Feb 2019, policies on NEV subsidy cuts could be officially implemented, with a cut of 30 pct for the transition period of Feb-June, and with an up to 50 pct cut from July 1, domestic newspaper China Times reported, without quoting sources, but added the news has not been confirmed by policymakers.

China’s biggest lithium battery maker Contemporary Amperex Technology, Eve Energy, Shenzhen Capchem Technology and Yunnan Energy New Material down in the range of 4.2-6.4 per cent.

The sharp share falls come even as China plans to introduce policies to boost domestic spending on items such as autos and home appliances this year.

Full story

3) Shale Revolution 3.0: Saudi Arabia Edges Toward Buying Into Booming U.S. LNG Sector
The Wall Street Journal, 9 January 2019

Saudi Arabia is nearing a deal to invest in U.S. liquefied natural gas, a landmark decision for the kingdom, which in the past had been a huge supplier of energy to America. America’s shale revolution has broken years of dependence on Middle Eastern oil, to the extent that the International Energy Agency expects the U.S. to become a net energy exporter by 2023.

Saudi Arabian Oil Co., known as Aramco, has narrowed its focus to a shortlist of at least four U.S. LNG projects and intends to announce a deal in the first half of this year, people familiar with the matter said.

Companies with projects being considered include Tellurian Inc., a Houston-based LNG developer known for its intention to ship gas from its planned Driftwood terminal in Louisiana, the people said. In addition, San Diego-based Sempra Energy, which is developing five LNG projects between the U.S. and Mexico, has had discussions with Aramco concerning its Port Arthur project in Texas, the people said. Aramco is considering equity stakes in the projects, the people added. It wasn’t clear what the value of the potential investments was.

Full post

4) Green Deal Fiasco: Thousands Face 'Rip-Off' Energy Bills For Decades After Failure Of The £400m Energy Scheme
Daily Mail, 9 January 2019

Thousands of homeowners face rip-off energy bills for decades after being ‘scammed’ into joining a state-backed £400million eco-energy scheme that ‘utterly failed’.

The Green Deal – which ministers trumpeted as the ‘biggest home improvement programme since the Second World War’ – was abandoned after two years as MPs admitted it had been a ‘complete fiasco’ that brought almost no environmental benefits.

But more than three years after its collapse, families remain trapped repaying loans of up to £21,000 which they unwittingly took out for solar panels, replacement boilers and insulation.
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The repayments are added to monthly utility bills which in some cases have quadrupled once the loans were added to the cost of their usual fuel and will take more than 20 years to pay back.

In some of the worst cases, the scheme was allowed to be ruthlessly exploited by Government-approved ‘gangster companies’ who conned the elderly and vulnerable, including those with dementia, MPs told the Commons.

Because loans were attached to a property, many victims are unable to sell their home and are effectively ‘imprisoned’ in them for the rest of their lives. The result has been ‘years of agony’ for people fighting for compensation.

MPs have now called for urgent action, saying the scandal showed the UK’s system of regulation is ‘simply not fit for purpose’. 

When the Green Deal was launched by the Coalition Government in January 2013, climate minister Greg Barker said it would make 14million homes more energy efficient by 2020 and upgrade the UK’s entire building stock by 2030.

Full story

see also GWPF coverage of the Green Deal Fiasco

5) China Flexes Shale Muscles Output Increases 40%
JPT Digital, 10 January 2019

China National Petroleum Company (CNPC) reported that shale gas production from its Sichuan Basin project increased by 40% between 2017 and 2018. 

Total gas output was pegged at 4.27 billion cubic meters (bcm), with daily output amounting to 20 million cubic meters (mcm). The figures are record highs, the company said.

The daily production of 20 mcm is equivalent to about 0.7 Bcf/D. In comparison, the US state of Pennsylvania averaged about 15 Bcf/D production in 2017.

Located in the southwestern region of China, the Sichuan Basin is considered to hold the largest shale resources in the country and has been the focus of several years of research and development.

CNPC says it accelerated its unconventional resource activity last year to “unprecedented” levels in terms of dedicated capital and personnel. The company also noted that it is recycling more than 85% of the fracturing and flowback fluids.

Full story

6) Germany Wobbles On Russian Gas Pipeline As Trump Pressure Starts To Bite
Bloomberg, 7 January 2019

Support in German Chancellor Angela Merkel’s coalition for a major new Russian gas pipeline is slipping as frustration with the Kremlin’s brinkmanship grows and pressure from U.S. President Donald Trump starts to bite.

Nord Stream 2, an $11 billion project that will double the natural gas supply under the Baltic Sea to Germany, faces growing skepticism among German officials who had previously defended it against criticism from Trump and some European Union allies, according to senior lawmakers. The shift could translate into pressure on Merkel’s government to back down on the controversial pipeline and possibly delay its implementation.

Social Democratic lawmaker Nils Schmid, whose party has been a reliable supporter of the project, said too many decision-makers in Berlin had been slow to factor in Nord Stream’s geopolitical significance. It will reduce the volume of gas pumped through Ukraine as Russia attempts to stifle its neighbor’s economy by depriving it of lucrative transit fees.


 

The 1,220 kilometer (758-mile) Nord Stream 2 undersea link to Germany initiated by Russia in 2015. Source: Gazprom

“The debate in Germany has become more critical,” Schmid, the junior coalition party’s point man on foreign policy, said in an interview, adding that the project shouldn’t go forward until Russia and Ukraine reach a transit accord. “It would have been better to take this political dimension into account.”

Russia’s ‘Captive’

The 1,200-kilometer (750-mile) undersea pipeline — being constructed by Russia’s Gazprom PJSC to bolster German supplies as Norwegian, Dutch and domestic sources dry up — has been pilloried by some of the country’s allies, who say it bolsters Europe’s reliance on Russian energy and bypasses key partners such as Ukraine. Trump has blasted the project as holding Germany “captive” to Russia.

The ground is shifting, with an ever more fraught relationship with Russian President Vladimir Putin, particularly since the November seizure of two dozen Ukrainian sailors near the Sea of Azov. Merkel, who has sparred with Putin since the 2014 annexation of Crimea from Ukraine, is demanding the release of the naval personnel.

The Azov incident in the Kerch Strait has soured prospects that Merkel’s diplomacy can scale back the conflict in eastern Ukraine, according Juergen Hardt, a lawmaker in Merkel’s Christian Democratic Union who speaks on foreign affairs.

Unfulfilled Hopes

“The events on the Kerch Strait at least showed me that these are unfulfilled hopes,” Hardt said in an interview. “Russia, in my view, isn’t moving a millimeter from its objectives.”

Hardt said Germany’s governing parties need to find consensus with the European Commission on energy diversification and reliance on Russian gas. He also questioned the economic viability of Nord Stream, poking holes in the government’s previous defense of the project.

Merkel shifted her position on Nord Stream last April, acknowledging the political dimensions of the pipeline and departing from her previous insistence that it was solely a business venture by private investors. The project must not weaken Ukraine by disrupting its gas transmission system, she said at the time.

Richard Grenell, the U.S. ambassador to Germany, welcomed the more skeptical view in Berlin, saying the pipeline project undermines the EU’s energy and security objectives.

Russian Influence

“There is not only Russian gas coming through the pipeline, but also Russian influence,” Grenell said in a statement to Bloomberg News. “Now is not the time to reward Moscow.”

The U.S. administration has indicated that sanctions on the pipeline are imminent. Trump brought tensions over Nord Stream into full view at last July’s NATO summit, raising the issue as he attacked Merkel over Germany’s slack defense spending.

Full story

7) Swimming In Oil: BP Just Discovered A Billion Barrels Of Oil In The Gulf Of Mexico
CNBC, 8 January 2019

BP discovers 1 billion barrels of oil at its Thunder Horse field in the Gulf of Mexico.

The oil giant also says it will spend $1.3 billion to develop a third phase of its Atlantis offshore field south of New Orleans.

BP credits its investment in advanced seismic technology for speeding up its ability to confirm the discoveries.

BP’s investment in next-generation technology just paid off to the tune of a billion barrels of oil.

The British energy company has discovered 1 billion barrels of crude at an existing oilfield in the Gulf of Mexico. BP also announced two new offshore oil discoveries and a major new investment in a nearby field.

BP is the Gulf of Mexico’s biggest producer, and it’s making strides to hold that title.

BP now expects its fossil fuel output from the region to reach 400,000 barrels of oil equivalent per day by the middle of the next decade. Today, it produces about 300,000 boepd, up from less than 200,000 boepd about five years ago.

Executives are crediting their investment in advanced seismic technology and data processing for speeding up the company’s ability to confirm the discoveries at Atlantis and Thunder Horse. BP says it once would have taken a year to analyze the Thunder Horse data, but it now takes just weeks.

Full post

The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.thegwpf.com.



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