Reshaping Of Oil Markets Has Only Started

By Abdulnasser Alshaali

Oil prices are more volatile than they have ever been in the past 10 years, with a lot of uncertainty rising on what direction those prices will take in the future. As a result, it’s becoming ever more difficult for countries and businesses to assess projects and decide their feasibility in the near term.

It also makes it hard for countries, as well as individuals, to budget for hikes in oil prices, and to better utilise lower oil prices to remove subsidies or to support businesses.

With shifting geopolitics, supply-demand mismatch, and new entrants, volatility and uncertainty in the oil market are here to stay. Looking back at trends over the past 50 years, there were very specific major shocks to the oil market, like the 1973 embargo, leading to a sharp increase and an eventual drop to a price at which supply balanced out demand.

Similarly, uncertain supply with higher Asian demand increased oil prices post the year 2001, resulting in a pre-2008 peak and another in 2011. But this is no longer the case.

What has changed is that shifts in prices are more extreme and take place over shorter periods of time instead of taking years to flatten out.

Geopolitics and uncertain supply cannot be separated from one another. And despite the widely circulated rhetoric that countries like the US may be a major player in the oil market one day, such predictions fail to account for two points.

One, shale oil, which is what’s bringing the US to self-sufficiency in oil post-2021, requires different refining, with many oil refineries around the globe being accustomed to the type of oil that they have been importing for years. This means that we are far from witnessing dramatic changes in terms of suppliers.

Additionally, with countries having to cut down their production due to sanctions and others doing so because of turmoil, it is only expected that tightness in supply will grow further, with unfettered demand.

This brings me to the second point, which is that demand for oil is expected to outgrow supply in the long-term. Though this is yet to be observed and confirmed, a reversal in oil prices in the past five years is one indication of the same, but not one that can be taken for granted.

Such demand — if moderated by energy supplies from other sources, including biofuels and renewables — could be significantly lower than anticipated. The result would be a more balanced market with less volatility in oil prices than what we are observing today.

Furthermore, new oil production in various regions is coming online, such as Uganda in Africa and Guyana in South America. Russia, along with countries in the European Union (EU), possess significant shale oil reserves. However, France and Bulgaria, both EU countries, have banned the process of extracting shale oil, known as fracking, due to its negative environmental impact.

Though it is hard to ascertain where oil prices are headed, there are certain events taking place today and likely going to shape the oil market of tomorrow.

Firstly, countries that are able to tap into their oil resources will be able to move closer to self-sufficiency, and so will their nearby regions. As that takes shape, dynamics in the oil market will no longer be determined by straight forward demand and supply, but rather how much energy does a region require as part of its total mix of all energy sources.

Therefore, today’s players in the oil market will not necessarily be tomorrow’s players. In fact, this can be only assessed and forecast by taking into account potential and progress in oil producing regions to determine excess supply, and hence exports.

Tomorrow’s players in the oil markets will be regions with the highest exporting capacity, not countries.

Secondly, traditional oil producers and exporters are now moving up the supply value chain to safeguard against future unpredictability, with mergers taking place to consolidate operations and streamline investments.

Mubadala Investment Company in the UAE, established through the merger of Mubadala Development Company and International Petroleum Investment Company, is one example. Another is the merger of Oman Oil Co and Oman Oil Refineries and Petroleum Industries Co.

Thirdly, oil prices have been pushed to the extreme by speculation, not by a sudden surge in demand or a sudden drop in supply. When oil prices started dropping post-2014, oil supplies were stored on ships, oil tankers, rather than admitted into the oil market.

While one reason was to keep excess supply off the market and hence upward pressure on oil prices, the other was for investors and speculators hoarding oil barrels to sell them at a price that seemed destined to continue rising. This also enabled them to honour their options contracts in an oil market where prices were increasing unabated.

One general observation in the commodities’ market is that prices stay on a mild upward trajectory in the long-term, even if there were steep pitfalls along the way. But if and only if there were no major changes in the supply-demand dynamics.

Therefore, and with an overall growing demand for oil, and its by-products, it is only expected for the price of oil, taken on average every decade or two, to be higher than in preceding ones.

However, such a growing demand will not be necessarily supplied from today’s traditional players, with growing self-sufficiency from domestic and regional resources, inclusive of other sources of energy that, in net, would reduce dependence on oil.

How oil prices will be impacted is anyone’s guess.

The last thought that I want to leave you with: what about the markets for gas and Liquefied Natural Gas (LNG)?

Abdulnasser Alshaali is a UAE based economist.

 

National Energy Services Reunited Signs Agreement With Saudi Aramco

National Energy Services Reunited Corp., a national, industry-leading provider of integrated energy services in the Middle East and North Africa region, signed a land lease agreement with Saudi Aramco to build a state of the art operating facility in the newly launched King Salman Energy Park.

SPARK is a 50-square-kilometer energy city megaproject, which will position Saudi Arabia as a global energy, industrial and technology hub. Saudi Aramco will develop, operate, manage and maintain the project's infrastructure in partnership with the Saudi Authority for Industrial Cities and Technology Zones (MODON).

SPARK's role in enabling localization within the Kingdom's energy supply chain aligns with the strategic goals of Saudi Aramco's In-Kingdom Total Value Add (IKTVA) program and affirms the Kingdom's commitment to Vision 2030 by serving as an economic catalyst and advancing Saudi Arabia's strong position in the global energy sector.

When operational, SPARK is estimated to contribute more than $6 billion to the Kingdom's GDP annually and create up to 100,000 direct and indirect jobs.

Dr. Mohammed Y. Al-Qahtani, Senior Vice President for Upstream, Saudi Aramco stated, ''SPARK will emerge as a key enabler for Saudi Aramco's In-Kingdom Total Value Add Program (IKTVA) which has a mission to raise local content to 70% by 2021. Presently, the Kingdom's requirement for energy-related industries is growing and requires dedicated industrial development focused on the energy sector and SPARK will provide for the development of a world-class energy industry hub to support the same.''

Dr. Qahtani added, ''We're looking forward to collaborating with NESR, one of our first anchor partners at SPARK, and are very encouraged to see NESR take a leading role in developing the energy infrastructure of the Kingdom and the larger region at such an early stage of its journey.''

Sherif Foda, Chairman of the Board and CEO of NESR stated, ''We are very honored to be given the opportunity by Saudi Aramco to be part of this endeavor at its inception. NESR has considerable experience in local manufacturing and indigenizing the supply chain which is already being implemented in the Kingdom.

This new facility shall be NESR's flagship operating facility in the Kingdom and will host all our product lines as well as that of our technical partners. I would like to thank Saudi Aramco for reposing their faith in NESR and as a local company, we are very proud of our contributions to the Kingdom's energy industry and look forward to amplifying our efforts in this regard.''

Chinese Energy Conglomerate Convicted of International Bribery

A federal jury in New York City today convicted the head of a nongovernmental organization (NGO) based in Hong Kong and Virginia on seven counts for his participation in a multi-year, multimillion-dollar scheme to bribe top officials of Chad and Uganda in exchange for business advantages for a Chinese oil and gas company, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department's Criminal Division and U.S. Attorney Geoffrey S. Berman of the Southern District of New York.

Chi Ping Patrick Ho, aka "Patrick C.P. Ho," aka "He Zhiping," 69, of Hong Kong, China, was found guilty today after a one-week jury trial before U.S. District Judge Loretta A. Preska in the Southern District of New York of one count of conspiring to violate the Foreign Corrupt Practices Act (FCPA), four counts of violating the FCPA, one count of conspiring to commit international money laundering and one count of committing international money laundering.  Ho is scheduled to be sentenced before Judge Preska on March 14, 2019, at 10:00 a.m. EDT.

"Patrick Ho paid millions of dollars in bribes to the leaders of two African countries to secure contracts for a Chinese conglomerate," said Assistant Attorney General Benczkowski.  "Today's trial conviction demonstrates the Criminal Division's commitment to prosecuting those who seek to utilize our financial system to secure unfair competition advantages through corruption and bribery."

"Patrick Ho now stands convicted of scheming to pay millions in bribes to foreign leaders in Chad and Uganda, all as part of his efforts to corruptly secure unfair business advantages for a multibillion-dollar Chinese energy company," said U.S. Attorney Berman.  "As the jury's verdict makes clear, Ho's repeated attempts to corrupt foreign leaders were not business as usual, but criminal efforts to undermine the fairness of international markets and erode the public's faith in its leaders."

According to evidence presented at trial, Ho was involved in two bribery schemes to pay top officials of Chad and Uganda in exchange for business advantages for CEFC China, a Shanghai-based multibillion-dollar conglomerate that operates internationally in multiple sectors, including oil, gas, and banking. 

At the center of both schemes was Ho, the head of a nongovernmental organization based in Hong Kong and Arlington, Virginia, the China Energy Fund Committee (the "CEFC NGO"), which held "Special Consultative Status" with the United Nations (UN) Economic and Social Council.  CEFC NGO was funded by CEFC China.

According to the evidence presented at trial, in the first scheme (the "Chad Scheme"), Ho, on behalf of CEFC China, offered a $2 million cash bribe, hidden within gift boxes, to Idriss Déby, the President of Chad, in an effort to obtain valuable oil rights from the Chadian government.  In the second scheme (the "Uganda Scheme"), Ho caused a $500,000 bribe to be paid, via wires transmitted through New York, New York, to an account designated by Sam Kutesa, the Minister of Foreign Affairs of Uganda, who had recently completed his term as the President of the UN General Assembly.  Ho also schemed to pay a $500,000 cash bribe to Yoweri Museveni, the President of Uganda, and offered to provide both Kutesa and Museveni with additional corrupt benefits by "partnering" with them in future joint ventures in Uganda.

The Chad Scheme

According to the evidence presented at trial, the Chad Scheme began in or about September 2014 when Ho flew into New York, New York to attend the annual UN General Assembly.  At that time, CEFC China was working to expand its operations to Chad and wanted to meet with President Déby as quickly as possible.  Through a connection, Ho was introduced to Cheikh Gadio, the former Minister of Foreign Affairs of Senegal, who had a personal relationship with President Déby.  Ho and Gadio met in midtown Manhattan, New York where Ho enlisted Gadio to assist CEFC China in obtaining access to President Déby.

Gadio connected Ho and CEFC China to President Déby.  In an initial meeting in Chad in November 2014, President Déby described to Ho and CEFC China executives certain lucrative oil rights that were available for CEFC China to acquire.  Following that meeting, Gadio advised Ho and CEFC China to send a technical team to Chad to investigate the oil rights and make an offer to President Déby.  Instead, Ho insisted on a prompt second meeting with the President.  The second meeting took place a few weeks later, in December 2014.  Ho led a CEFC China delegation, which flew into Chad on a corporate jet with $2 million cash concealed within several gift boxes.  At the conclusion of a business meeting with President Déby, Ho and the CEFC China executives presented President Déby with the gift boxes.

To the surprise of Ho and the CEFC China executives, President Déby rejected the $2 million bribe offer.  Ho subsequently drafted a letter to President Déby claiming that the cash had been intended as a donation to Chad.  Ultimately, Ho and CEFC China did not obtain the unfair advantage that they had sought through the bribe offer, and by mid-2015, Ho had turned his attention to a different "gateway to Africa": Uganda.

The Uganda Scheme

According to the evidence presented at trial, the Uganda Scheme began around the same time as the Chad Scheme, when Ho was in New York, New York for the annual UN General Assembly.  Ho met with Sam Kutesa, who had recently begun his term as the 69th President of the UN General Assembly ("PGA").  Ho, purporting to act on behalf of CEFC NGO, met with Kutesa and began to cultivate a relationship with him.  During the year that Kutesa served as PGA, Ho and Kutesa discussed a "strategic partnership" between Uganda and CEFC China for various business ventures, to be formed once Kutesa completed his term as PGA and returned to Uganda.

In or about February 2016 – after Kutesa had returned to Uganda and resumed his role as Foreign Minister, and Yoweri Museveni (Kutesa's relative) had been reelected as the President of Uganda – Kutesa solicited a payment from Ho, purportedly for a charitable foundation that Kutesa wished to launch.  Ho agreed to provide the requested payment, but simultaneously requested, on behalf of CEFC China, an invitation to Museveni's inauguration, business meetings with President Museveni and other high-level Ugandan officials, and a list of specific business projects in Uganda that CEFC China could participate in.

In May 2016, Ho and CEFC China executives traveled to Uganda.  Prior to departing, Ho caused the CEFC NGO to wire $500,000 to the account provided by Kutesa in the name of the so-called "foundation," which wire was transmitted through banks in New York, New York.  Ho also advised his boss, the Chairman of CEFC China, to provide $500,000 in cash to President Museveni, ostensibly as a campaign donation, even though Museveni had already been reelected.  Ho intended these payments as bribes to influence Kutesa and Museveni to use their official power to steer business advantages to CEFC China.

Ho and CEFC China executives attended President Museveni's inauguration and obtained business meetings in Uganda with President Museveni and top Ugandan officials, including at the Department of Energy and Mineral Resources.  After the trip, Ho requested that Kutesa and Museveni assist CEFC China in acquiring a Ugandan bank, as an initial step before pursuing additional ventures in Uganda.  Ho also explicitly offered to "partner" with Kutesa and Museveni and/or their "family businesses," making clear that both officials would share in CEFC China's future profits.  In exchange for the bribes offered and paid by Ho, Kutesa thereafter steered a bank acquisition opportunity to CEFC China.

This case was investigated by the FBI and IRS-CI.  U.S. Immigration and Customs Enforcement's Homeland Security Investigations and the Department of Justice, Criminal Division's Office of International Affairs provided assistance.

Trial Attorney Paul A. Hayden of the Criminal Division's Fraud Section, FCPA Unit and Assistant U.S. Attorneys Douglas S. Zolkind, Daniel C. Richenthal and Catherine E. Ghosh of the U.S. Attorney's Office for Southern District of New York's Public Corruption Unit and the Criminal Division's Fraud Section are prosecuting the case.

GE Launches World's First 6B Repowering Gas Turbine Solution

GE's Power Services business is celebrating the 40th anniversary of its 6B gas turbine fleet by launching the world's first 6B repowering solution. 

GE also announced it has signed its first agreement for the solution with a global chemical company to repower three 6B gas turbines and save significant amounts of fuel each year at its site in Asia.

The recent announcements mark another example of GE's continued commitment to investing in its mature fleets to keep them competitive.

In Africa, GE has an installed base of 60 6B gas turbines at various locations with the most recent installation in Cabinda, Angola. The fleet is mainly used for power generation for grid supply as well as for large industrial uses like refineries.

"We're excited to mark our 40th anniversary of the 6B fleet and unveil our new repowering solution," said Scott Strazik, president & CEO of GE's Power Services business.

"This fleet is known for its dependability—a reputation earned with global fleet reliability of 98.4 percent, which is about 2 percent higher than the industry average and translates to approximately 17 more days of availability per year. At the same time, the 6B fleet has aged, and there's growing demand to improve performance. Today's announcement and our recent expansion of our Advanced Gas Path technology to the 6B fleet highlight our continuing investment in our mature fleets to help power producers and industrial operators remain competitive in today's very dynamic marketplace."

""As a company, we believe that more efficient power plants means more power available on the grid to respond to the growing energy needs of the African continent.

As a result, we are always focused on solving our customers' most complex problems with customized and innovative solutions that help optimize operational performance" said Elisee Sezan, General Manager, GE's Power Services business for Sub-Saharan Africa.

Part of GE's Fleet360* platform of total plant services solution, the new 6B Repowering Solution incorporates advanced F and H class technology to elevate the machine's performance to leading levels for its class.  

The repowering consists of a full "flange-to-flange" upgrade of all major components, including the combustion system, hot gas path and compressor, and it transforms the 6B unit into a GE 6F.01 gas turbine, which is also available as a new unit.

The new 6B Repowering upgrade, which fits into the existing 6B footprint, can advance performance in both gas turbine and combined-cycle operation.

It's capable of:

  • Increasing turbine output up to 35% simple-cycle / 25% combined-cycle
  • Improving efficiency up to 5% points in simple and combined-cycle operations
  • Achieving up to $3 million in fuel savings per unit annually
  • Achieving NOx emissions as low as 15 ppm.
  • Extending the hot gas path inspection interval to 32,000 hours (from 24,000 hours) and major inspection interval to 64,000 hours (from 48,000 hours)

Since its first installation in 1978 at Montana-Dakota Utilities' Glendive Power Plant in USA, GE's 6B fleet has accumulated more than 65 million operating hours. GE's fleet spans more than 1,150 6B turbines across all corners of the world, powering energy production facilities and industrial applications in segments such as petrochemical, oil and gas, exploration and cement production.

In 2009, GE launches the 6B Performance Improvement Package (PIP), featuring advances in materials, coatings, sealing and aerodynamics derived from its F-class technology to increase output and efficiency.

Today, PIP is installed on 200+ units, 5 of which are in Africa with 9 additional upgrades planned. It has also become the standard configuration for new 6B gas turbines.

Government Instability In Several Oil, Gas Producing Countries Set to Rise

Government instability is set to rise over the next three years in oil and gas producing countries including Russia, Kazakhstan, Egypt, Kenya and Uganda, which could impact the upstream projects of major energy companies, a new report from global risk analysis company Verisk Maplecroft has revealed.

“We don’t see increasing instability necessarily ending in coups or significant political upheaval, but a less predictable above-ground-risk environment is likely to emerge,” Verisk Maplecroft’s head of financial risk, James Lockhart-Smith, said in an organization statement.

“Arbitrary decision making, possible measures to buy off key stakeholders or an inability to pass regulatory reforms will be the main risks to projects in these countries as their governments seek to stabilize and maintain their influence,” he added.

Turning its attention to oil markets in 2018, the report highlighted the stand-off on the Korean peninsula and the ongoing ‘cold war’ between Saudi Arabia and Iran as the only two geopolitical flashpoints with realistic potential to impact oil prices if they escalate this year.

Outright war in either region is unlikely, however, according to the organization’s Interstate Tensions Forecasting Model, despite an increase in the probability of some form of military incident or show of force between the US and North Korea, which Verisk says has increased from 36 percent to 56 percent since the start of 2017. The likelihood for a direct militarized dispute between Saudi Arabia and Iran is lower at 26 percent.

“A slide into war is not in the interests of any of these countries, but the outlook highlights the aggressive posturing from all sides as intensifying the chances for tensions to escalate,” Verisk said in an organization statement.

“In the worst-case scenario, war between Saudi Arabia and Iran would hit oil supply and cause a spike in prices, while conflict on the Korean Peninsula would have serious negative consequences for the global oil and liquefied natural gas trade,” Verisk added.

SOURCE: Rigzone

 

Oil Prices: Rising Geopolitical Tensions In Middle East A Risk

Rising geopolitical tensions in the Middle East and Asia could have a major impact on oil prices in 2018, according to a new study.

Oil markets have been well supported recently, thanks to production curbs by Opec since the beginning of last year, as well as robust demand growth.

The weakness in the dollar has also supported oil prices, as it makes oil and other greenback-denominated commodities cheaper for countries using other currencies at home.

Bank of America Merrill Lynch predicts the price of Brent to average $64 a barrel this year, while Goldman Sachs forecasts it will rise to $75 a barrel in three months and average $75 in the next six to twelve months.

A report by risk analysis company Verisk Maplecroft points to a potential escalation in tensions between Saudi Arabia and Iran, as well as the stand-off on the Korean Peninsula, as two major “geopolitical flashpoints” with the potential of impacting oil markets this year.

According to Verisk Maplecroft’s Interstate Tensions Forecasting Model, outright war in either region is unlikely. It puts the likelihood for a direct militarised dispute between Saudi Arabia and Iran at 26%, but it expects a continuation of proxy conflicts in Syria and Yemen.

“Conflict between Saudi Arabia and Iran isn’t our base case, but the assertive stance adopted by both sides has increased the risk of a direct confrontation – either as a result of miscalculation or overreaction,” Torbjorn Soltvedt, principal Mena analyst at Verisk Maplecroft, told The National. “Geopolitical tensions are rife across the region, and the Middle East’s political risk premium looks set to increase this year.”

The risk is higher on the Korean Peninsula. According to the report, the probability of some form of military incident or show of force between the US and North Korea has increased from 36% to 56% since the start of 2017.

A slide into war is not in the interests of any of these countries, but the report, entitled Political Risk Outlook: Oil & Gas, highlights the chances for tensions to escalate.

In the worst-case scenario, war between Saudi Arabia and Iran would hit oil supply and cause a spike in prices, while conflict on the Korean Peninsula would have serious negative consequences for the global oil and liquefied natural gas trade.

An analysis of data from the Government Stability Index also reveals that the stability of many oil producing countries is likely to worsen by 2021. These include Egypt, Russia, Kazakhstan, Kenya and Uganda.

Source: The National

Maldives Hosts Inaugural Island Renewable Energy Initiative With IRENA

Ministers and senior officials representing 30 countries and organizations from across the world met in Malé, Maldives, signalling the determination of small island developing states (SIDS) to strengthen global efforts to address climate change and accelerate renewable energy deployment.

The inaugural meeting of the Initiative for Renewable Island Energy (IRIE) was hosted by the Government of the Maldives, in its capacity as Chair of the Alliance of Small Island States (AOSIS), in partnership with the International Renewable Energy Agency (IRENA).

Small island developing states have been early and committed adopters of renewable energy, seeking to develop their economies with cost effective, renewables-based energy systems, while enhancing energy security, national resilience and climate adaptation.

Just over two gigawatts (GW) of renewable technologies are already deployed in SIDS, and at least six GW of additional capacity is envisaged under Nationally Determined Contributions. A number of countries have plans to achieve 100 per cent share of renewables in the electricity mix.

“In the wake of a deadly hurricane season in the Caribbean and at a time when the resolve to tackle the climate crisis has been called into question, small islands are sending the world a clear message: we are seizing the promise of renewable energy to grow our economies today and build a better future for tomorrow,” said Thoriq Ibrahim, Energy and Environment Minister for the Maldives and Chair of Alliance of Small Island States.

“As Chair of AOSIS, Maldives has made leaving a lasting legacy of renewable energy infrastructure in small islands a priority and IRIE is how we are fulfilling that vision.”

“Small island developing nations have been frontrunners in the global drive to scale-up renewables,” said Adnan Z Amin, Director-General of the International Renewable Energy Agency, co-organisers of the event. “This meeting is further evidence of their collective commitment to strengthen the momentum of the global energy transition as they pursue economic growth, energy security and increased national resilience.

“This ministerial is also particularly timely as we are just a few weeks away from COP23 in Bonn, where the priorities of small island nations will take centre stage under Fiji’s Presidency,” added Mr. Amin.

“We are committed to supporting the renewable energy ambitions of our island partners, through the SIDS Lighthouses initiative, as they take their energy transformation to the next level.”

Despite progress, SIDS face financial and technical barriers as they transition their power, heating, cooling, and transportation sectors to renewable energy, many of which stem from their size, geography and limited capacity.

Greater international cooperation can help overcome these barriers by enhanced collaboration and knowledge sharing, leading to improved economies of scale, reduced transaction costs and better enabling environments for donors and investors.

IRIE works to enhance AOSIS political coordination and outreach to development partners with a view to mobilizing the resources – finance, technology, and capacity building – required for the transformation of energy systems in SIDS. IRIE also works to amplify the success of SIDS focused initiatives, such as IRENA’s SIDS Lighthouses.

“Small islands contribute a miniscule fraction of global emissions and yet we have taken the lead in committing to some of the most ambitious clean energy plans in the world,” continued Minister Ibrahim.

“IRIE is a testament to island leadership and the important role the Maldives has played in the international effort to tackle climate change for over three decades.”

AOSIS is an organization of 44 low-lying island and coastal nations from around the world that are among the most vulnerable to the impacts of climate change. The IRIE meeting was made possible by support from Italy and the European Union.

Southeast Asia Eyes Renewable Energy To Fuel Economic Growth, Climate Resilience

Governments of the Association of Southeast Asian Nations (ASEAN) and the International Renewable Energy Agency (IRENA), have established a strategic partnership to accelerate the region’s transition to low-carbon, sustainable energy and build its climate resilience. 

In a joint statement released from the ASEAN Ministers on Energy Meeting and IRENA Dialogue by IRENA and ASEAN Member States including, Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam, the Energy Ministers of ASEAN and the Director-General of IRENA agreed to develop a Memorandum of Understanding on long-term co-operation between ASEAN and IRENA to harness the region’s vast renewable energy potential and support ASEAN scale up the energy transition process. 

“Increasing investment in renewable energy across Southeast Asia’s growing populations will have significant social and economic benefits across the region, liberating them from expensive fossil fuel imports, while boosting economic growth, supporting energy security, job creation and national resilience,” said IRENA Director-General Adnan Z. Amin, who co-chaired the Dialogue. 

“Southeast Asia is key for the global energy transition and we are fortunate to have an effective regional partner in ASEAN. We fully support its efforts to achieve its aspirational target of 23 per cent of primary energy from renewable sources by 2025, and stand ready to co-develop longer-term plans in pursuit of a sustainable energy future,” Mr. Amin added. 

IRENA has worked closely with the ASEAN Centre for Energy (ACE) and ASEAN to find ways to accelerate renewable energy deployment across the region. An IRENA and ACE renewable energy roadmap report released late last year, shows that ASEAN’s renewables target is attainable, and found that renewable energy in the region can bring lower overall costs, contribute to cleaner cities, support a more secure and robust energy supply. 

The report also found that around half of the region’s renewable energy potential lies in power generation, especially in solar PV that could grow from two to almost 60 gigawatts. Furthermore, the region’s vast biomass endowment can progress end-use sectors, such as transport, buildings and industry and bring savings of up to USD 40 billion by 2025 from reduced fossil fuels expenditure, and up to USD 10 billion per year from reduced externalities caused by climate change and air pollution. 

As part of the joint statement, Ministers recognised IRENA as the global intergovernmental organisation mandated to promote the widespread and increased adoption of renewable energy, and thanked the Agency for its strong collaboration in the past in promoting and disseminating policies and measures on renewable energy in ASEAN. 

On the side lines of the meeting, the Secretary of Energy of the Philippines and the Director-General of IRENA launched Accelerating renewable mini-grid deployment: A study on the Philippines, which makes a number of key recommendations to accelerate the development of renewable mini-grids in the Philippines.

South America Plans For Its Renewable Energy Future

Energy policy makers and senior representatives from across South America met to identify steps required as they prepare to integrate increasing levels of renewable energy from variable sources, such as solar and wind, into their grids.

The four-day workshop, organised by the International Renewable Energy Agency (IRENA) in partnership with the Argentinian Ministry of Energy and Mining, is taking place in the Argentinian capital Buenos Aires and gathered representatives from countries across the continent, including Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, and Uruguay.

The workshop facilitated a dialogue involving IRENA and South American representatives, focused on exchanging best regional and global practice for planning and modelling variable renewable energy as the region looks to further develop its renewable energy generation capacity.

In recent years Latin America has seen impressive growth in non-hydropower renewables, whose installed capacity has more than tripled between 2006 and 2015, from 10 gigawatts (GW) to 36 GW. While in absolute terms most of that growth has been in bioenergy and onshore wind, solar PV has also grown significantly in Chile, Mexico, Peru and Uruguay.

“It is an honour to welcome IRENA’s representative for the first time in Argentina, so as to promote the sharing of experiences on energy planning and the long-term incorporation of renewable energies between the different countries of South America,” remarked Mr. Sebastian Kind, Undersecretary of Renewable Energy at Argentina’s Ministry of Energy and Mining.

“South America has a dynamic renewable energy market, and in many countries throughout the region, scaling up the contribution of renewable energy to the future energy mix is a major policy priority,” said Mr. Dolf Gielen, Director of IRENA’s Innovation and Technology Centre.

“Solar and wind power generation have huge potential across the continent, but their unique characteristics require adjustments in the traditional planning processes and methodologies,” added Mr. Gielen. “Getting power sector planning right is critical to securing the investment required to realise that potential.”

Ambitious national commitments, international agreements and rapid technological progress have prompted countries to increasingly turn to renewable energy to expand their power infrastructure. However, the variability of solar and wind energy — two key sources for renewable power generation — presents distinct challenges to grid integration and stability.

To address the specific challenges in scaling up and integrating variable renewables, in 2013 IRENA initiated the Addressing Variable Renewable Energy in Long-Term Energy Planning (AVRIL) project.

Building on the expertise gained through various discussions and sessions held under the AVRIL project, in January 2017 IRENA released Planning for the Renewable Future: long-term modelling and tools to expand variable renewable power in emerging economies.

Along presentations of national planning experience, the report’s contents will serve as a major input to the ongoing workshop taking place in Buenos Aires. The report offers guidance to energy decision makers and planners with an overview of key long-term issues and concerns around the large-scale integration of variable renewables into the power grid, and further guidance to technical practitioners in the field of energy modelling.

Central Asian Countries Commit To Accelerate The Uptake Of Renewables

Countries of Central Asia and the International Renewable Energy Agency (IRENA) last week released a Communiqué on accelerating renewable energy deployment in the region.

The Communiqué was released in the framework of the Energy Ministerial, Meeting the Challenge of Sustainable Energy at the Astana EXPO-2017. The meeting identified six key areas to facilitate the up-take of renewables and help diversify the region’s energy mix, reflected in detail in a regional Action Plan.

“Covering over four million square kilometers, the countries of Central Asia are endowed with rich renewable energy sources that can drive sustainable economic development and growth,” said IRENA Director-General Adnan Z. Amin.

“With renewable energy targets in place for 2020 and beyond, the region can now seize this transformative opportunity for a sustainable energy future, and the new Action Plan will help boost efforts of renewable energy uptake".

During the Energy Ministerial at the Astana EXPO-2017, countries agreed that renewable energy plays a critical role in addressing the major regional challenges identified in IRENA’s analysis, including: rising electricity demand; ageing power infrastructure; limited energy access for remote areas; and the impact of climate change on the energy systems.

“The collaboration between Kazakhstan and IRENA continues to be fruitful, and together we have made significant strides in assessing the future development of renewable energy in the region.

We recognise that renewable energy can help the region with the imperative to modernise its energy system and to meet the goals of the Paris Agreement. Kazakhstan welcomes the efforts made today. I believe the EXPO, over the next couple of months, will provide the international community with a platform for valuable discussions on expertise, innovative solutions and promising projects in the renewable energy field,” said Bozumbayev Kanat Aldabergenovich, Kazakhstan’s Energy Minister at the Energy Ministerial.

Recently, the region has made strides in diversifying its energy mix, and installed 500 megawatts of new non-hydro renewable power capacity over the last two years. However, remote areas still lack reliable power and heat, issues which renewable energy and energy efficiency together can help address.

Speaking at the Ministerial, Mohamed El-Farnawany, Director of Strategic Management and Executive Direction at IRENA said, “The Action Plan reflects the commitment of the countries of Central Asia to further their economic development, through accelerating the uptake of renewable energy. It also enables them to reduce carbon emissions and fulfil their international objectives and national ambitions in this regard.”

Countries identified the following areas for IRENA collaboration to facilitate the deployment of renewable energy in the region: resource assessments, integration of variable renewable energy into power grids, policies and regulations for renewable energy deployment, renewable energy statistics and data collection, project facilitation, and awareness raising.

IRENA will work closely with countries of the region as well as partners and stakeholders to support ongoing work to advance renewable energy development in Central Asia.

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