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Energy
The rate of renewable uptake across the world is rising sharply, but if you think we’re on the cusp of ending our reliance on fossil fuels think again.
According to a report this month from the International Energy Agency, the growth in electricity demand coming out of the pandemic could see global emissions from the electricity sector hit record levels next year.
Demand will rise 5% in 2021 and 4% in 2022 the IEA said in its semi-annual Electricity Market Report, largely from India, China and the broader Asia-Pacific region.
While renewable energy uptake is positioned to grow 8% in 2021 and more than 6% in 2022, that won’t do anywhere near enough to cover the uptick in demand, 45% of which this year is expected to be covered by fossil fuel generators (40% in 2022), with the balance from nuclear power.
Coal fired electricity generation globally will increase by almost 5% this and year and 3% next year, the IEA says.
Renewable growth did exceed demand growth twice in 2019 and 2020, although the IEA attributes that to slow demand, in particular from the impacts of last year’s pandemic.
“Renewable power is growing impressively in many parts of the world, but it still isn’t where it needs to be to put us on a path to reaching net-zero emissions by mid-century,” IEA director of energy markets and security Keisuke Sadamori said.
“As economies rebound, we’ve seen a surge in electricity generation from fossil fuels. To shift to a sustainable trajectory, we need to massively step up investment in clean energy technologies – especially renewables and energy efficiency.”
That would require a 6% drop in coal fired generation each year between 2020 and 2025 according to the pathway set out in the IEA’s Roadmap to Net Zero report.
Oil and gas tiddler Prominence Energy (ASX: PRM) has stalled its move into the hydrogen sector, saying it will not go ahead with its purchase of a 20% stake in privately-owner Patriot Hydrogen.
Victoria-based Patriot is rolling out modular units which convert biomass into biochar, syngas and hydrogen.
In a statement to the ASX today Prominence still said it was looking to transition into the green hydrogen space.
“There were a number of issues that remained unresolved between PRM and Patriot at the end of PRM’s due diligence, and the two companies could not agree terms to resolve these matters,” the company said.
“On this basis the PRM Board resolved on 24 July not to proceed with the investment to acquire 20% of Patriot.
PRM believes that oil and gas companies need to evolve to be more carbon friendly to continue to be attractive investments for shareholders.
“PRM will continue to review Green Energy investment opportunities particularly in the Green Hydrogen sector.”
Prominence is now focused on drilling its Bowsprit-1 well in Louisiana in the USA next month, an undeveloped oil sand sitting on top of a deeper gas well developed by Shell in the 1960s.
Blackstone Minerals (ASX:BSX) says it will cost US$491 million to develop its Ta Khoa nickel project in Vietnam.
The project is one of a number looking at delivering nickel designed specifically for the battery market, with Blackstone seeking to head downstream by producing nickel-cobalt-manganese precursor for battery and EV makers.
With some producers predicting there will be an ESG split in pricing for sustainably sourced and produced nickel, Blackstone has strongly promoted (and trademarked) its status as a future “Green Nickel” producer.
Ta Khoa would run on power generated from South-East Asia’s largest hydro plant, the Son La power station, and Blackstone says it is actively looking at the feasibility of producing green hydrogen to fuel its mining fleet and for sale to external customers.
According to Blackstone Ta Khoa would pay back its initial investment after 1.5 years of operations, producing 43,500t of refined nickel and 85,600t of NCM811 precursor annually from 2024, with the mine and refinery project reaching steady state production from 2026.
It would generate US$451m in operating cash flow a year at an average forecast NCM811 sale price of US$16,397/t and all in costs of US$11,997/t for a life of operations revenue of US$14 billion and LoO operating cash flow of US$4.5b.
At current Shanghai Metals Market spot prices of US$19,559/t, Ta Khoa’s post tax NPV would rise from US$2.01bn with an IRR of 67% to US$3.51b with an IRR of 98%.
A final investment decision is due in 2022 following a DFS and pilot plant testing in Vietnam.
Energy
Energy
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