Page 20 - bne_July 2021_20210602

20 I Companies & Markets bne July 2021
bne:Green
Coal bandits
bne IntelIiNews
The International Energy Agency (IEA) has said that the road to net zero by 2050 is “narrow but still achievable,” with a key requirement being no more investment in new coal projects.
The agency said that “from today” only no new investment in all fossil fuel supply projects, and no further final investment decisions (FIDs) for new unabated coal plants, would enable the world to limit global warming to 1.5 degrees.
Indeed, the agency warned a total coal phase-out in the power generation sector would be needed by 2040, with an earlier target date of 2030 for advanced economies.
In terms of coal demand, this net-zero target would see global coal demand fall by 90% from 5.25bn tonnes of coal equivalent in 2020 to 2.5bn tonnes in 2030 and to less than 600mn tonnes, an average annual decline of 7% each year from 2020 to 2050.
In other words, coal’s share of total energy supply would have to fall from 26% today to 4% by 2050, of which 1% would be unabated coal and 3% would be coal with carbon capture and underground storage (CCUS).
Europe
The dirtiest power producers in Europe are Ukraine, Turkey and the Western Balkans, who continue to make extensive use of coal-fuelled power stations to produce the electricity they need, as it remains the cheapest option for these poorer countries.
At the same time, EU countries like Germany and Poland are also among the worst for NOx emissions, a GHG that is as bad as CO2 emissions, according to the Ember Analytical Centre.
"When coal is burned for generating electricity, pollutants are released into the air which pose a threat to human health,
and are responsible for high numbers of premature deaths. With pollutants sometimes travelling thousands of kilometres, air pollution from coal power is a problem for the whole of Europe, no matter the source," a recent report by the Ember Analytical Centre says.
Burning coal produces several dangerous gases in addition to the global-warming CO2.
Put simply, any new investment in coal would be a major risk, as demand is set to plummet in order to meet the 2050 net- zero targets.
Meanwhile, global investment in fossil fuel supply should fall from $575bn on average over the past five years to $110bn in 2050. Upstream fossil fuel investment should be restricted to maintaining production at existing oil and natural gas fields.
Tussle between HC and renewables
The existing energy lobby is not happy about giving up their crown when there is still so much hydrocarbon fuel still in the ground. Countries like Russia are ramping up production of things like coal to be able to cash in on their mineral wealth while there are still buyers. Ironically Russia is planning to significantly increase its coal production in the next few years because in 20 years' time there will be no buyers left, the government says.
Likewise, Russia's Gazprom is also investing heavily in production, and forecasts gas demand will grow, contrary to
www.bne.eu
Coal's days are numbered, but not yet everywhere.
a world trend for an energy transition from fossil fuels to the employment of environment-friendly renewable sources
of energy.
Gazprom deputy chief executive Oleg Aksyutin told
a web briefing that the corporate was still considering
a carbon-neutrality scenario as a part of its 2050 low-carbon development strategy. The plan is to finish work on the strategy by May 2022.
Russian leaders and senior management have consistently described natural gas as a climate-friendly energy source, despite the fact that it is largely made up of methane and is not carbon-free. According to Aksyutin, natural gas is expected to account for nearly 40% of Russia's additional electricity production in 2020-2040, compared with 34% from renewables.
Gazprom’s presentation revealed that combined gas demand in Europe and China, the company’s major supply markets, is forecast to reach nearly 1 trillion cubic metres per year by 2030, up from 865bn cubic metres in 2020.