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So instead of emerging as a climate laggard compared to wealthier European peers, Poland is keeping pace with the cuts to coal use and power emissions seen elsewhere, and may soon force emissions forecasters to trim their future pollution projections across the region. TARGETED CUTSEmissions forecasters using planned power generation data from major economies estimate that Europe's total carbon dioxide emissions will drop by 47% from 2022's total by 2030, largely due to planned steep cuts to coal use in Germany. Over the same time frame, Poland's electricity generation from coal has dropped by roughly 20%, resulting in an equal magnitude drop in coal-fired emissions. PRICE PAINGoing forward, a key factor that will drive Poland's overall electricity demand will be the price of it. If coal prices remain stubbornly strong relative to gas, then Poland's power producers may find themselves in the unenviable position of potentially ranking among the highest cost electricity generators in Europe.
Persons: Gavin Maguire, Christopher Cushing Organizations: Poland, European Union, World Bank, COVID, Reuters, Thomson Locations: LITTLETON , Colorado, Poland, Germany, Western Europe, Europe, France, The Netherlands, Spain
However, Germany is also home to Europe's largest chemicals sector which churns out plastics, paints, acids and other key inputs that are critical to manufacturers and heavy industries that form the backbone of the German economy. Sharply lower business activity also caused a drop in chemicals consumption last year, but as economic activity recovered in 2023 a lingering shortage of key chemical products has pushed German chemicals prices to near record premiums over those supplied by other producers. DAMAGE DONEThe sustained high prices of German chemical products over international rivals have two important damaging consequences. If the German chemicals sector is to ensure its own long-term future, it must somehow win back any business lost among commodity manufacturers by driving product prices steadily lower relative to rival offerings. On its own, the chemicals sector may struggle to both cut costs and clean up its own product lines and emissions footprints.
Persons: Gavin Maguire, Christopher Cushing Organizations: German Chemicals Association, Reuters, Thomson Locations: LITTLETON , Colorado, Germany, Europe, South East Asia, Polymerupdate, United States
HOMES RULEA key driver behind America's outsized electricity consumption is the preference for single family homes over all other types of residences. For many in the United States, owning your own home is a key part of the so-called American Dream. According to the EIA's latest Residential Energy Consumption Survey 57% of electricity used by detached households is used for space heating, and 64% for air conditioning. OTHER WAYS OF LIVINGThe United States is not alone in facing rising living costs while trying to improve the efficiencies of buildings. Similarly, a vast majority of China's population lives in apartments, and apartments are more popular than individual houses in the cities of India, Japan and Southeast Asia.
Around 416 million air conditioner units are estimated to be in use in the U.S., or more than three per household. This results in the U.S. power system having a higher carbon intensity during the summer period than over winter months. Carbon intensity measures the amount of carbon dioxide (CO2) that is discharged to generate each unit of energy. US power sector emissions seasonallyThat difference in carbon intensity during the summer versus the yearly average is roughly 3%, and so may not appear to be particularly significant. However, given that production of non-emitting solar power peaks during the summer, the fact that power producers must also deploy large volumes of fossil fuels highlights just how much extra power is needed during the air conditioning season.
IN CONSTRUCTIONThe new proposals make clear that whatever coal capacity is already under construction in India will proceed. A total of 32,000 megawatts of new coal power is currently being built in India, according to the Global Energy Monitor (GEM). India coal capacity under constructionOnce completed, that would boost current operating capacity by close to 14%, and lift total Indian coal capacity to beyond 266,000 MW, GEM data shows. Alongside the widespread swell in coal capacity is even faster growth in renewables energy supply capacity across India. Proponents of immediate cuts to coal power use may be disappointed that several new coal projects will still emerge.
Texas vs California vs Rest of USA electricity generation mixSince 2018, Texas has also outpaced California and the national average in both total electricity generation additions and in cuts to power emissions, making the Lone Star state a key beacon for others looking to reduce emissions but increase power generation totals. Texas vs California electricity generation by sourceThe rapid renewable energy capacity development is also a major driver of jobs growth in the state, which is helping to offset potential concerns about stranded assets and reduced demand for energy sector workers once global energy systems transition away from fossil fuels. A heavy historic reliance on natural gas and coal for electricity generation has also meant that Texas has one of the most carbon-intensive power systems in the United States. TEXAS TEMPLATEWhile California is losing its lustre as a model for power sector planners elsewhere, Texas has shown it is possible to boost electricity generation totals while reducing emissions in recent years. But many states will be able to learn from Texas' evolving mix of generation sources that have been harnessed to push electricity generation levels higher while curbing emissions.
China on track to hit record coal use and coal power emissions levels in 2023Emissions from that record coal generation total also hit a new high, topping 1.14 billion tonnes, Ember data shows. Further increases in China's coal imports are likely as the peak demand period for air conditioning kicks in over the summer. For cost-conscious power producers, the wide price spread between thermal coal and natural gas will also be supportive for coal imports, even if cleaner-burning natural gas can also be used for power generation. In Guangdong province, home to one of China's largest manufacturing hubs, natural gas prices are currently trading around 5,500-5,700 yuan per tonne, according to data from Refinitiv. Over time, stronger global consumer demand may give China's power producers scope to switch out dirty coal for more costly but cleaner gas, which would help drive China's power emissions lower even as industrial output climbs.
(Related column: Europe raises green energy climate hurdles with red tape revamp)GREEN MOMENTUMPoland's main objections to the more aggressive EU climate goals are mainly about timing rather than any disagreement over the merits of reducing emissions. A key gauge of energy intensity measures the total amount of energy needed to generate one unit of gross domestic product (GDP), using a ratio of primary energy consumption over GDP. In 2021, Poland's energy intensity ratio was 0.086, according to data firm Enerdata. That compares with Germany's energy intensity of 0.070, and an average for the whole European Union of 0.074. A key worry for EU lawmakers is that the burden of compliance with the EU's new stiffer emissions standards acts as a drain on Poland's energy transition ambitions.
EMISSIONS TRADING TWEAKSThe European Union's Emissions Trading System (EU ETS) is the region's main device for managing emissions by providing financial incentives to cut pollution while penalising high emitters. This is designed to prevent companies moving heavy polluting parts of their supply chain to areas outside of the EU ETS catchment area, and ensure that companies cannot merely outsource the dirtiest parts of the production phase elsewhere. However, this new mechanism runs the risk of eroding the cost competitiveness of hard-to-decarbonize sectors, such as steel and chemicals producers. The key now for Europe's lawmakers is to ensure that many of these new hurdles can still be cleared by key industries without undermining the economic competitiveness of the entire region. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
However, such an upbeat projection will require North America to rapidly catch up with Greater China and Europe in terms of wind power expertise. But for wind power generation to expand by the degree needed to attain emissions targets, more substantial cost cutting and streamlining is required throughout the entire supply chain. WIND PLAYING CATCH UPSince 2015, cheap components and quick installation times have driven North American utilities to increase solar power generation at more than twice the pace of wind power, data from think tank Ember shows. Since onshore wind sites cost around 4.2 cents per kWh, and fixed offshore wind farms 4.84 cents per kWh, wind power looks like the most attractive option for year-round clean power potential. In China, the top producer of several key wind power parts, the price of key industrial inputs has risen notably since mid-2020, including steel (up 22%), aluminium (up 55%) and copper (up 64%), which are all critical in wind power products.
To combat that vulnerability, and ensure Germany's energy system can accommodate a recovery in power demand from last year's stunted levels despite lower gas-fired and nuclear output, Germany's power producers must continue to retool the country's entire power system at record pace. FIT FOR PURPOSEThe key near-term challenge for Germany's energy producers is to generate as much power and electricity as was delivered before Russia's incursions into Ukraine upended power markets. The lower electricity generation totals also indicate that power producers may be struggling to lift overall generation levels given the falling supplies of nuclear power output and continued tight availability of natural gas. The extent of coal's demand growth will be determined by overall power demand needs in Germany over the coming months. But with low-emitting nuclear power now off the table, more coal use looks inevitable, at least over the near term.
Industries in both regions were impaired in 2022 by repeated COVID-19 lockdowns in China and a power crisis in Europe, which resulted in sharp cuts to their combined industrial output. Even so, China and Europe still lifted fossil fuel power emissions of carbon dioxide (CO2) to a record 5.99 billion tonnes in 2022, Ember data shows, which is a testament to their combined polluting heft even during times of economic distress. Power sector emissions from fossil fuelsIn 2023, the economies of China and Europe are expected to return to growth paths as factories and production lines dial up output from the subdued levels of last year, resulting in higher overall energy use. That may lift emissions even higher, and confound expectations for drops in fossil fuel pollution levels going forward. German production of steel, chemicals and fertilizers have all climbed in early 2023 after having fallen precipitously during 2022 when power prices surged.
PHASED OUT & DRIED UPNuclear and hydro power accounted for an average of 40% of total electricity generation in Europe from 2000 to 2020, Ember data shows. But that proportion of electricity generation dropped to less than 35% in 2022 as a combination of drought in key hydro areas alongside planned shutdowns of outdated nuclear capacity dealt a double-whammy to hydro and nuclear generation assets. Record low snowfall and precipitation over the past winter looks set to drive hydro generation potential even lower in 2023. France, Europe's top nuclear power producer, is also struggling with sharply lower nuclear power generation. If conditions stay dry and nuclear output remains curtailed, Europe's electricity producers will struggle to increase overall electricity generation without resorting to increased use of fossil fuels.
While all manufacturing bases are equally reliant on heat during industrial processes, the source of energy used to generate that required heat varies greatly by region. Hydrogen will also become more widespread in industrial heating in China, and grow from less than 1% by 2025 to 10% of total industrial heat generation by 2050. Electricity's share of Europe's industrial heat generation is set to grow from around 4% in 2025 to 17.5% by 2050, DNV data shows. Made from an array of natural matter ranging from wood chips and crops to municipal waste and forestry residue, biomass currently generates around a quarter of Europe's industrial heat, but will generate 57% of industrial heat by 2050. In all, industries in every major economy will make significant changes to their fuel sources for industrial heat over the coming decades.
Middle East renewables capacity jumped by 12.8% in 2022 from the year before, the biggest gain in percentage terms of any region last year, according to the International Renewable Energy Agency (IRENA). The region's largest renewables producers - Iran, Israel, United Arab Emirates and Jordan - all lifted green capacity to new highs in 2022. Middle East renewable energy supply capacity increased by 12.8% in 2022 from the year beforeIn addition, Qatar, Oman and Lebanon all connected more renewable capacity in 2022 than was installed over the previous decade in those countries, IRENA data shows. In combination, these factors have fostered rapidly growing support for renewable energy development throughout the Middle East, and expectations for further accelerations in renewable capacity development in the years ahead. Asia, Middle East & Africa are the only regions that increased power sector fossil fuel emissions since 2015Asia, Africa and the Middle East are also the only regions to steadily increase power sector emissions since 2015, while Europe, North America, Latin America and Oceania have all pushed power emissions lower.
In turn, transmission lines that can ferry large power loads over long distances with minimal load loss will be key arteries that will enable transition efforts. Roughly 66% of current UHV capacity is in Greater China (36%) and the Indian subcontinent (30%), and around 10% is in North America. Ultra high voltage (UHV) line capacity by regionLatin America looks also set to rapidly increase UHV capacity, especially after 2035, to connect the region's planned solar and wind installations across Brazil, Chile, Peru and Mexico. MIDDLE EAST, AFRICA AND PACIFICWhile currently overshadowed in terms of capacity development by China, India, Europe and North America, other regions will step up their construction of transmission line capacity after 2030. In turn, that extra grid capacity should provide a powerful boost to energy transition efforts in every region, and allow global energy systems to capitalize on growing volumes of renewable energy generation.
LITTLETON, Colorado, March 30 (Reuters) - Modern electricity grids that can optimize clean power production from a constantly changing flux of renewable and fossil energy sources will play a vital role in enabling global energy transition efforts. With renewable energy supplies climbing at a record pace just as global car fleets, households and businesses supercharge electricity demand, robust grids that can bridge both sides of the energy equation will be critical. The global power sector is also a major source of carbon dioxide (CO2) emissions, and so is incompatible with international efforts to drive pollution steadily lower from all sectors over the coming decades. Many ambitious grid alteration plans are also running in to stiff opposition from powerful organisations that object to the laying of miles of new transmission lines across open areas. But if renewable energy supplies surge as expected, and if those supplies are to be made available to power-hungry customers, global grids must grow in both scale and density in every major economy - and in record time.
Total thermal coal imports through March soared 81% from the same period a year ago to 65.7 million tonnes, according to ship-tracking data from Kpler. SOUTHERN SURGEPorts feeding China's south coast saw the largest year-over-year increase in thermal coal imports. China's coal imports hit new highs in Q1 2023While China as a whole uses domestic coal production for over 90% of its coal needs, most of Southern China's coal-fired power plants rely overwhelmingly on imports. The region imported over 106 million tonnes in 2021, indicating a quarterly pace in excess of 25 million tonnes can be maintained if power needs dictate. In combination, all of China's main economic hubs are on track to steer the country's thermal coal imports to new heights in 2023, reversing the slump seen in China's coal use in 2022.
While China also added record solar and wind capacity in 2022 to widen its overall renewables lead, India's record build out of solar capacity last year has been widely celebrated by energy transition advocates. But even with such rip-roaring green energy momentum, India's utilities still struggled to keep up with the country's voracious energy demand growth, and had to crank coal use to record highs alongside the breakneck growth in renewables. Only 2.2% of total India's electricity was produced from gas in 2022, according to Ember - the lowest in over 20 years. COAL CONUNDRUMSuch low utilisation of natural gas for power generation forced utilities to burn through coal at a record pace, straining the country's domestic coal supply system and pushing coal imports to historic highs. On paper, such conflicting government stances on power sector priorities may appear to be counterproductive, and may potentially undermine India's energy transition efforts.
Very little green hydrogen, or hydrogen produced from green energy sources, exists today, as most current hydrogen is made using natural gas, and known as blue hydrogen. But several firms have committed to scaling up green hydrogen output over the coming decade, using solar or wind energy to power electrolysers that will split water into its constituent parts, hydrogen and oxygen. In turn, that should drive the cost of renewable-powered electrolysis below that of other forms of hydrogen production, and allow for a rapid global surge in green hydrogen output. FEASIBLE FUTUREWhile industry analysts can see a viable path to greater hydrogen supply, it is less clear how the demand side pans out. Such businesses are more likely to receive government support for energy system overhauls than factories due to their importance to the local and international economy.
LITTLETON, Colorado, March 20 (Reuters) - The Indian subcontinent, Southeast Asia and Sub-Saharan Africa will overtake China, North America and Europe as the key drivers of world energy use through 2050, with implications for global emissions potential and accountability. Combined primary energy use in the Indian subcontinent, Southeast Asia and Sub-Saharan Africa will grow from roughly 115,000 petajoules in 2023 to nearly 194,000 petajoules by 2050, an expansion of more than 78,000 petajoules. South Asia, Southeast Asia & Sub-Saharan Africa to be main drivers of global energy use by 2050This means that global energy consumption will continue to grow from current levels by 2050, despite the efforts of current energy transition leaders to reduce energy use by mid-century, DNV data shows. Downsizing of outdated or uncompetitive capacity is set to reduce Greater China's energy demand from manufacturing by 23% between 2025 and 2050, DNV data shows. If so, the global energy landscape of 2050 will not just have drastically different geographic concentrations of energy use, but also a cleaner emissions profile that may support energy transition efforts.
EAST ASIAN DOMINANCEChina will remain the largest wind producer and top wind capacity developer, but South Korea, Japan and Taiwan will all post faster growth rates than China through 2030, according to GEM. While no other country will match the sheer scale of China's wind power additions, many will dwarf its growth rate as they play catch up with the world's green power leader. Combined, these East Asian countries are set to account for 36.2% of world wind capacity by 2030, GEM data shows, with the region remaining the largest hub for wind power. Wind power capacity breakdownGermany, Spain, France and Sweden plan to boost their collective capacity by nearly 40,000 MW by 2030, and will all rank among the top 10 global wind producers. Saudi Arabia looks set to be the largest wind power producer in the Middle East once it raises current capacity by 125% to 900MW.
The rapid expansion in renewable energy supplies comes at a potentially critical time for the country's energy sector. Previously, those strict ownership rules limited foreign participation in the Philippines' energy sector to a handful of oil and gas majors. More clean power generation should also help the Philippines close the clean energy gap with the rest of Asia. Philippines electricity generation mix by sourceIn turn, a greater proportion of power from clean sources should help the Philippines attract more manufacturing and other industries. Vietnam, Thailand and Indonesia are all also expected to rapidly increase renewable energy supply capacity over the coming years, and may sporadically compete with the Philippines as green energy hot spots.
This chorus of support for the energy transition has ignited an almost frantic renewable energy development spree across the world, with green energy generation capacity growing at a record pace in every major economy. On January 1st, 2020, the International Maritime Organisation (IMO) implemented ship emissions standards that slashed the maximum level of sulfur allowed in shipping fuels. As sulfur levels dropped more radiation was absorbed. Old solar panels face a similar predicament, especially ones that lack the efficiency of newer models and in the eyes of resellers are not worth collecting from old sites and homes. They can also face volatile market prices for the recycled and reclaimed materials they do manage to gather.
Nuclear power generation by key regionThese divergent trends are being fuelled by contrasting and somewhat contradictory views of nuclear power's role in the global energy mix. In Western economies, nuclear power is commonly characterized as an outdated and potentially harmful component of a legacy energy system that requires urgent overhaul if ambitious climate targets are to be achievable by 2050. Similarly, the most recent expansion phase for nuclear power in the United States was in the late 1980s, meaning that many of the country's youngest plants are already in their fourth decade of deployment. China, by far the world's most aggressive renewable energy deployer, is also leading the charge in terms of planned expansions to nuclear power. The country is expected to account for 44% of the prospective total increases in nuclear capacity, which would see it handily leapfrog the United States as the global nuclear leader.
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