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$150 Million Investment by Clean Energy Financier to Reduce Emissions

infrastructure-770x529.jpgAustralia is about to see a huge amount of money flow into its largest infrastructure fund thanks to the Clean Energy Finance Corporation (CEFC). The corporation is investing $150 million into the fund in a bid to reduce emissions from a number of Australia’s airports, ports and electricity infrastructure assets.

This marks the first time that the CEFC has invested in an infrastructure fund. The money will go towards the reduction of emissions in the airports of Melbourne and Brisbane as well as Port Botany in Sydney and the Port and Brisbane and Ausgrid.

According to the CEFC, reducing the emissions coming from those places would prevent around 69,000 tonnes of CO2 equivalent from entering the atmosphere every year. This is the same as taking 14,775 cars off the roads each year or roughly how much electricity 7,450 homes use in a year. It is clear that this reduction would make quite a difference.

The National Greenhouse Gas Inventory has stated that in Australia over half of the country’s total greenhouse gas emissions are infrastructure related. The Inventory estimates that around 35% of the emissions come from the electricity sector and 17% come from the transport sector.

The mission of the CEFC is to decrease these emission levels. The corporation is a financier that specialises in clean energy and aims to increase the flow of money into renewable energy. It also wants to drive energy efficiency and fund the development of low emissions technologies.

The CEFC chief executive, Ian Learmouth, said that: “infrastructure assets are central to our economic and social wellbeing.” He went on to explain that the $150 million investment into the Australian Infrastructure Fund would lead to emission reductions. These reductions, enabled by the fund, which already holds $12 billion, would benefit the communities in which these infrastructure assets are based.

He went on to say: “With this investment the CEFC will work with IFM Investors in targeting comprehensive and sustained improvements to the carbon footprint of some of our most important infrastructure assets.”

IFM Investors is owned by 27 industry super funds in Australia and has to date invested on behalf of around 6 million Australians. In addition to this, it has invested for 15 million pension fund members from around the world. After starting up just 20 years ago, it now has a total of $100 billion under management.

The global head of infrastructure at IFM Investors, Kyle Mangini, believes that the boardrooms of the companies involved will be the hubs of.

“We’re represented on the boards, so we’ll propose to the board and the other investors the various programs that might be implemented across each one of the assets,” he said.

He carried on by explaining that the board will need to work on a cost and return basis but noted that this could be done through the regular governance process. Meanwhile, IFM Investors is going to be right there making sure there is an appropriate and consistent level of focus on reducing emissions.

Julia Hinwood, the infrastructure lead at CEFC, said that they are looking at pursuing a number of various initiatives design to reduce emissions. These include on-site solar panels and batter storage solutions as well as a drive to use more electric vehicles.

“They are also likely to involve using smart management systems, which monitor asset performance and assist with reducing energy consumption and optimising logistics and supply chains,” she said.

Finally, Mangini has explained how he plans on keeping IFM Investors accountable. There are plans to report emissions levels from each of the assets on a new website, along with targets and progress made towards those targets.

 

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Ten Headlines that Summarise Energy in 2017

1C67A385-4410-437F-91EC4E71A92030C5.jpg2017 was an interesting year for the energy world – and one that will be looked back on as we move ever closer towards a sustainable future. Here is a round up of the most important energy stories that happened in 2017 and how they shaped the energy landscape.

  1. Pipelines Put in Motion

Not long after Trump became president, he signed executive orders on two pipelines whose construction had been stalled. Trump told the Keystone XL Pipeline’s backer to reapply for a permit, which the company successfully did. The other pipeline in question is the Dakota Access Pipeline, which was stalled by Barack Obama after protestors expressed their aversion. Trump gave orders to cut through the red tape and restart the project, which was inaugurated in May.

  1. No More Clean Power Plan

No-one in the world would think it is a good idea to scrap the Clean Power Plan. No-one except President Donald Trump. In March, Trump signed an executive order that would start dismantling the Clean Power Plan, which was put in place by the Obama administration and required carbon emissions to be reduced by 30% from 2005 levels by 2030.

  1. A Move Away From Canada’s Oil Sands

Big players in the oil world such as Statoil, Shell and Conoco Phillips have sold off around $24 billion worth of assets in Canada’s oil sands sector. The reason they gave for this was that there were better, cheaper opportunities in the USA with shale oil. It looks likely that other major oil companies will do the same in the near future.

  1. USA Quits Paris Climate Agreement

Just when you thought it couldn’t get worse, it does. Trump continues along his path of destruction and undoes yet another of Obama’s environmental achievements by pulling out of the Paris Accord. The agreement was designed to lower global carbon emissions. Trump said that the agreement was unfair to the U.S. and would harm the coal industry he was trying to revive.

  1. Records for Renewables

The 2017 Global Status Report and BP statistical Review of World Energy both showed that record levels of renewable energy are being consumed – particularly wind and solar. But, it also showed new records for oil and natural gas production and for carbon emissions. Furthermore, despite record sales of electric vehicles, gasoline consumption in the U.S. is at an all-time high.

Hurricane Harvey Wreaks Havoc

This wild storm closed down oil production in various locations and idled around 30% of the country’s refining capacity. As a result, gasoline prices soared and shortages were widespread.

U.S Shale Production Bounces Back

Oil production struggled through 2015 and 2016, dropping by about one million barrels per day (bpd). In 2017, however, we saw it surge again to produce record-breaking numbers. December of 2017 saw the highest monthly production of oil since 1971 at around 9.8 million bpd.

Oil Prices Rebound

As oil production boomed so it seems did the price of oil. After resting below $50/bbl for West Texas Intermediate, the price finally moved towards the $60 mark and rested there comfortably. Highs were reached in December.

Future Oil Supplies Uncertain

There have been warnings from the International Energy Agency (IEA) about the low number of new drilling projects that are being approved. This number is the lowest it has been in 70 years and this leads to fears that oil shortages may occur and prices may soar.

Energy Sector Boosted by Tax Reform

The latest tax reform will reduce corporate tax from 35% to 21% and will allow deduction of capital expenditure in the year they are incurred. Indeed, it is the energy companies that stand to gain a lot from this.

 

US solar power likely to suffer at hands of tariffs imposed by Trump

The United States is likely to install far less solar power than was anticipated in the coming years. This forecast comes as a result of President Donald Trump’s decision to impose tariffs on basic solar equipment, which will inevitably pose challenges to big solar projects.

This tax on solar cell and panel imports was announced earlier this year and is already reducing demand alongside other obstacles the industry faces. These include slow expansion in pivotal state markets and an emphasis on growth over balance sheet discipline.

However, not all is doom and gloom for the solar industry. 2017 was a good year for solar with it being the second year in a row of double-digit gigawatt growth. The sector added 10.6 gigawatts of solar capacity in the form of photovoltaic technology.

Abigail Ross Hopper, SEIA President and CEO, was encouraged to see the growth in solar across the country. In a press release she said “the solar industry delivered impressively last year despite a trade case and market adjustments. Especially encouraging is the increasing geographic diversity in states deploying solar, from the Southeast to the Midwest, that led to a double digit increase in total capacity.”

Despite being double-digits, the increase in 2017 was still 30% less than the astonishing addition of 15 gigawatts in 2016. This record-setting figure came as a result of buyers frantically purchasing equipment before tax credits expired. However, the tax credits were extended in the end.

Over the next five years we can expect to see solar develop in a far less exciting manner.

GTM Research, a clean tech analysis firm, altered its forecast by 13% with regards to solar installation that will take place between 2018-2022. The revision has been put down to various factors, such as changes in federal and state policies, corporate tax reform impacts, and, of course, the consequences of Trump’s solar panel tariffs.

In 2018, GTM expects growth in the United States to stay flat at 10.6 gigawatts. Fortunately, many solar projects already bought their equipment before the tariffs were put in place. This means that the effects won’t be felt too much in 2018.

This is particularly true in the utility-scale segment, which constructs large solar facilities that work like power plants and feed into electric power markets. In fact, GTM predicts that this section of the market will actually expand more this year than it did last year.

However, growth in this segment is not going to last for long as stagnation looks likely between 2020 and 2022 as a result of the tariffs, which will undoubtedly delay or even kill off some projects.

The tariffs could also cap gains in installations for residential homes, despite the surge that has been seen so far in 2018. It is hoped, however, that solar for residential homes could bounce back by the 2020s if companies can sort out their finances and push into new markets.

Similarly, solar for businesses could shrink over the coming years before surging again.

To end on some good news, solar has seen notable growth of installations in the Southeast and Midwest parts of the country where renewables are yet to make much of a footprint. We also saw, in 2017, a rise in community solar. This allows neighbourhoods to benefit from community projects rather than having their own rooftop panels installed.

Surprise Oil and Gas Stocks Cause Ripples in the Market

Last week, oil prices dropped in the wake of official data showing that U.S crude inventories have increased beyond what was expected. The same went for the nation’s gasoline stocks.

The week ending on February 23rd saw crude inventories in the United States increase by 3 million barrels. This can be compared with predictions by analysts that believed the rise would sit around the 2.1 million barrels mark. Again, the rise in gasoline stocks was also a surprise to analysts.

“We had another pretty sizable build, and with that it kind of seemed like this recent bull market had the carpet pulled out from underneath it,” commented a senior market strategist, Phillip Streible, from RJO Futures, based in Chicago.

Furthermore brent crude futures continued to tumble for a second day after a steady increase over the last 6 sessions straight. Indeed, West Texas Intermediate also fell, dropping $1.37 to sit at $61.64 a barrel. The most active Brent crude futures sent out for delivery in May had fallen $1.79 and were resting at $64.73 a barrel.

The April contract settled down 85 cents, or 1.28 per cent, at $65.78 a barrel ahead of expiration.

Fortunately, prices reduced losses after the Energy Information Administration of the United States provided data that indicated the production of crude in December dropped down to 9.95 million barrel, a decrease of 108,000 barrels per day compared with November.

Prices continued to dip following the release of this data, in which the EIA took another look at the crude production numbers for November and altered it to a record 10.057 million barrels per day.

An analyst at Price Futures Group, Phil Flynn, commented on the situation, “The market did attempt a late day rally but because it’s the end of the month, a lot of hedge funds decided to try and take some profits.”

Despite OPEC’s production cuts, the huge increase in U.S. production, which has gone up by a fifth since the middle of 2016, have kept oil prices low this year.

Streible explained that the U.S. has no intention of slowing down its production and is likely to hit 11 million barrels per day far sooner than anyone expected.

Lower gas futures led the entire energy complex following a surprise increase in gas stocks in the United States. These stocks were expected to suffer a 190,000 barrel drawdown but instead got a boost of 2.5 million barrels. The most active gas futures fell in price to just over $1.9 a gallon.

The rise in inventories came even as refineries boosted activity in the most recent week.

Although refiners were undergoing maintenance, they were still able to produce more crude than had been in former years, which adds to supply of gas and diesel. This was commented on by Andrew Lipow, who is the president at Lipow Oil Associates based in Houston, Texas.

Finally, the market was under pressure by the rising dollar and stock markets. On Wednesday, equities markets weakened but the United States dollar shot up to the highest it has been in a month. The consequence of this is that oil becomes more expensive for holders of currencies that are not the dollar. This price pressure came from a slow down in monthly factory activity by three of the biggest crude consumers in the world: China, Japan and India.

General Electric Makes Poor Call Over Fossil Fuels

About a year ago, the executives at General Electric’s power plant business predicted that the company would have a great year. Although the demand for new natural gas power plants did not seem to be moving, the company was forecast a huge rise in revenue and profit.

Data from a range of sources indicated that gas, coal and nuclear power plants were far lower in cost than wind or solar. In fact they are the cheapest producers of electricity on earth.

Despite this, GE Power’s profit took a serious dip as it fell 45%. This forced the company to cut its overall profit outlook and slash its dividend. This is only the second time this has occurred since the Great Depression. Since the March forecast, the shares have dropped over 50% and the CEO was replaced last August.

The new chief executive of GE, John Flannery, has said that this bullish forecast, as well as serious mismanagement have been notable factors in the meltdown of the power business. At the start of 2018, Flannery said that this trend could continue this year and possibly even get worse.

Furthermore, the cost of wind and solar power is dropping every day and they are now considerably less expensive than gas and other energy sources. This seems to have been the case for years according to research published in a Lazard energy cost report in 2008.

The company says that it has in place a meticulous and rigorous financial planning process but the market seems to suggest otherwise. The company is now vulnerable to the drop in demand for conventional power plants. This is intrinsically linked to a notable surge in the sale of wind and solar power. Gas turbines just don’t seem to be pulling their weight and the market, in that respect, is down.

But power is only one of GE’s problems. Its finances aren’t looking to sharp either after its $10 billion loss in the last quarter. However, power is GE’s main business and accounts for around 60% of the conglomerate’s profit. However, GE is now cutting 12,000 jobs, which totals almost 20% of the work force.

Another huge reason why GE is struggling is because of its purchase of Alstom, which cost the company $10.3 billion. While this gave the company far better exposure to gas, coal and nuclear, it came just at the wrong time as solar costs drop below those of gas-powered plants. This meant that GE was trying to save money where it could, just as 65,000 new workers were added to the payroll.

The gap in cost between renewable power and conventional power is forever widening and it is understood that old fossil fuel plants are fast becoming obsolete. Indeed, many power companies are already retiring them, or revamping them in preparation for the renewable revolution.

The market is changing and giants like GE need to evolve with the times if they want to maintain their position in the power sector. GE’s public voice does not seem worried about the threats to fossil fuels. Although wind and solar are increasing at an unprecedented rate, GE believes that 2/3 of power will still come from gas coal and nuclear plants for at least the next decade.

Top News Stories in the World of Offshore Energy

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The world of offshore energy is seeing a rapid increase in research and development. This includes underwater oil and gas extraction as well as wind farms in coastal waters. This article will take a look at a round up of the most important stories regarding offshore energy in the news this week.

 

Eni Makes Important Discovery Off the Coast of Cyprus

 

The Italian oil company Eni has announced that it has made a lean gas discovery off the coast of Cyprus. The company has said that its discovery is ‘Zohr-like’ – Zohr is the largest gas field in the Mediterranean. The company has said that this new discovery has excellent reservoir characteristics.

 

Transocean to Take Discoverer India Out of Retirement

 

Transocean, the largest offshore drilling company in the world, is planning to reactivate its ultra-deepwater drillship Discoverer India. The ship has been out of use since December 2016 after Reliance ended its contract with Transocean 5 years early – incurring a heavy $160 million fine. But now the vessel is set to start a new contract on June 1st of this year.

 

Statoil Plans to Drill 40 Exploration Wells in 2018

 

The Norwegian oil company Statoil has unveiled plans to drill 40 more wells in 2018, to increase its capacity from 2017. This is expected to cost the company around $1.5 billion. Presenting its fourth quarter and full-year 2017 results the company said it expected its organic capex to be around $11 billion for 2018. Organic capital expenditure in 2017 was $9.4 billion.

 

 

Exxon wants bigger FPSO for Phase 2 of Liza development in Guyana

 

Exxon has announced that it wants to use a Singapore-built FPSO (Floating Producation Storage and Offloading) to explore the Liza oil site off shore of Guyana. The company is already thinking about phase two of the discovery, which includes the use of the FPSO and subsea systems. The plans for the Liza oil field indicated that phase one should be online by March 2020.

 

Allseas’ Newest Vessel Will Trump Colossal Pioneering Spirit

 

Allseas is an offshore services provider that owns the world’s largest platform installation/decommissioning and pipelay vessel. However, the company is now thinking about building an even bigger vessel, which will be called Amazing Grace. The owner of Allseas has revealed that plans to build this behemoth vessel were in play when Pioneering Spirit first left its dock in Korea back in 2014. The ship is expected to cost around $4 billion.

 

Shell Transforms Oil Platform into Artificial Reef

 

Oil giant Shell has turned its oil platform in the Gulf of Mexico into an artificial reef. This comes as part of the decommissioning process of Cougar, Shell’s final fixed leg platform in the Gulf. The aim of this transformation is to sustain “a healthy, vibrant Gulf of Mexico ecosystem as an artificial reef.” The reef is already home to a number of reef-dependent marine species.

 

Sapura Energy Scores Huge Offshore Contracts

 

Malaysian energy services and production company Sapura Energy won big with its contract recently, contracting a total of $232 million spread out over five different contracts. The contract work scope involves the removal of existing HP compressors and reinstallation of refurbished LP Compressors at EWDP-A.

 

 

 

Five renewable energy trends to watch in 2018

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Renewable energy is definitely one of the most interesting spaces to watch at the moment. There have been huge developments in the sector, such as China exceeding its target for solar installations, but also some major setbacks, including Trump’s withdrawal from the Paris Deal.

The price of renewable energy will continue to drop

This is encouraging news for a world working towards a clean energy future. The price of solar is down over 60% since 2009, while wind costs have halved in a similar time frame. This has caused governments to witness record low prices for solar and wind at power auctions.

Experts believe that the number of country-level power auctions will continue to rise in 2018 and this will drive down prices in India and other producing countries. Meanwhile, investment in renewables stayed steady throughout 2017 but did not increase by much and this trend looks like it will stay the same for 2018.

China will carry out its ambitious energy plans

 

Despite China’s pollution being the worst of any country on the planet, the nation is also the global leader when it comes to solar power generation. Over the last ten years, the country’s capacity for solar PV generation has increased by a factor of almost 800. This means that China has already surpassed its 2020 solar PV targets, which shows phenomenal progress.

 

Currently, eight huge carbon capture and storage projects are underway in China as part of China’s pledge to invest almost £300 billion in renewable power by 2020. This comes along with a commitment to cap coal burning and thus improve the air quality in its cities.

 

Companies will step up

 

Target took the limelight at the end of 2016 when it was announced that it had solar panels installed on 300 of its stores. This made it one of the leading corporate players on the solar power scene, but Target is not alone in this game.

 

Apple has opened a brand new campus in California, which is 100% dependent on green energy, while Goldman Sachs has joined RE100, a cluster of huge companies who are committed to becoming 100% dependent on renewables. There is also a push from investors for companies to disclose their exposure to climate change.

 

More jobs will be churned out thanks to the renewables industry

 

A report by the International Renewable Energy Agency has revealed that almost 10 million people across the globe work in the renewables sector. What’s more, the occupations of solar photovoltaic installer and wind turbine technician are the fastest growing in the US.

 

The renewables industry is relatively labour intensive, meaning it requires a significant amount of man power to keep it all functioning. We should expect to see thousands more jobs being created in this sector in the foreseeable future. However, the demand is for skilled workers, so individuals hoping to tap into the sector should think about getting qualified now.

 

There will be more competition in the battery market

 

Tesla is hoping to complete the construction of its Nevada battery factory (the biggest of its kind in the world) by the end of 2018. More huge battery factories are also expected to crop up in China, Sweden, Hungary, Poland and Germany.

 

The UK also has big plans for energy storage and is investing £246 million into research and development to put the nation ahead of the game. It has also been proposed by researchers that countries look at other ways of storing energy besides lithium-ion batteries.