UK wealth fund to prioritise ‘clean energy’ investment

Market: Electricity, Emissions, Hydrogen
19/03/25

The UK government has set "clean energy" as a priority investment sector for its new national wealth fund, and set out a plan for the fund to interact with newly-formed Great British Energy to drive decarbonisation.

The two organisations will interact to provide a "strong end-to-end clean energy development and finance offer" and help the country hit its net zero targets, the government said. Great British Energy — staffed by specialists in the sector — will provide "development expertise", while the wealth fund will deliver finance, the government said.

Great British Energy "will develop, invest in, build and operate clean energy projects across the UK", including owning stakes in the projects it develops itself, the government said. The organisation will develop "clean energy assets from inception", as well as co-develop and invest in more advanced projects.

The national wealth fund "will unlock over £70bn ($90.7bn) in private investment to help deliver economic growth, make Britain a clean energy superpower, and strengthen the defence sector", the government said. The fund will prioritise investment in "clean energy, advanced manufacturing, digital technologies, and transport", and flagged likely spending on carbon capture and green hydrogen projects, as well as gigafactories and "green steel".

The government has made commitments to "clean power" deployment and hitting the UK's legally-binding net zero by 2050 target central to its approach, sticking to pledges made ahead of last July's election. The government is targeting 95pc "clean power" by 2030 and consulted on a "clean energy future" for the North Sea earlier this month.

By Georgia Gratton

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20/03/25

Canberra backs Li battery projects in Western Australia

Sydney, 20 March (Argus) — Australia's federal government will partly underwrite four lithium-ion battery projects in Western Australia (WA), boosting the state's energy storage capacity by 2.6GWh from late 2027. Canberra is supporting the projects through its Capacity Investment Scheme (CIS), which sets a revenue floor on big battery projects for up to 15 years. The government has not revealed the specific revenue floors linked to the newly underwritten projects. Australian renewable energy developer PGS Energy will build the largest of the four newly-underwritten batteries, a 1.2GWh energy storage system in Marradong. The company's Marradong battery will be co-located with a solar farm and connected to WA's South West Interconnected System (Swis), a grid stretching across its most populous regions, once it becomes operational. French energy producer Neoen is also developing a 615MWh project just outside Perth, under the scheme. The company has been building large batteries across Australia, with public support, for multiple years. Its Collie Battery Energy Storage System is connected to Swis, and has been storing and discharging 877MWh of energy since October 2024. The two other batteries underwritten on 20 March are smaller, with a combined capacity of 780MWh, and located in rural parts of the state. The Australian government's latest funding announcement comes just months after it on 11 December 2024 underwrote eight other Australian battery projects capable of storing 3.6GWh of power under the CIS. Those projects were scattered across the country, covering three states but excluding WA. Canberra will also underwrite another set of batteries, with a combined capacity of 16GWh, in September. Over 100 projects, with a combined capacity of 135GWh, have applied to be part of CIS' September funding round. By Avinash Govind Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Australia must rethink gas strategy: Grattan

20/03/25

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20/03/25

Australia must rethink gas strategy: Grattan

Sydney, 20 March (Argus) — Grattan's Orange Book 2025: Policy priorities for the federal government report suggests redesigning Canberra's future gas strategy, coordinating a shift away from gas for households and some industries while changing market control mechanisms. Australia's next federal government must act to address a shortfall of gas in the country's southeastern states by creating a demand response mechanism for the national gas market and bringing together stakeholders to permit initial LNG imports in mid-2026, according to Grattan. Australia has always been both an exporter and importer of LPG, proving it is possible to build infrastructure to ship gas to the nation's south for the next 3-4 years in line with expected shortfalls, director of Grattan's energy program Tony Wood told a Sydney forum on 19 March. Building or expanding gas pipelines would be expensive and inefficient as the nation decarbonises, Wood said, with less gas forecast to be used as Australia targets net zero emissions by 2050. Canberra should institute a working group involving producers, users, traders, terminal owners, governments and the Australian Competition and Consumer Commission — which reports on market supply — to achieve seasonal imports of LNG in winter months, according to the Grattan report. A rule change to create a demand response mechanism akin to that under national electricity market rules would assist in meeting small shortfalls, such as during severe weather or unexpected supply outages. Demand is expected to rise on the back the closure of coal-fired power stations in the 2030s, according to Canberra's future gas strategy released in 2024. Gas-fired power demand may double in the decade to 2043 because of the need to support a solar and wind-heavy grid. This requires a reworking of the future gas strategy to specify plans to reduce demand and clarify future gas requirements outside of power generation, Grattan's report said. Assistance for households and industries to electrify processes is also needed, together with optimising infrastructure to ensure residual users in power generation and industry can access gas supply. The main controls on east coast gas grids, the Australian Domestic Gas Security Mechanism (ADGSM) and code of conduct , should be revised to allow for interstate transfers of gas, Grattan said, likely from Queensland's Gladstone-based LNG projects to the southern states. The code of conduct, which mandates an A$12/GJ ($8/GJ) price on domestic gas, came into effect in 2023 amid booming global gas prices but must be reviewed in 2025. Australia's energy and climate change ministerial council met on 14 March but declined to decide on expanding the Australian Energy Market Operator's powers, to enable it to address the gas shortage possibly through underwriting LNG import terminals. More analysis will be commissioned ahead of a decision at the next meeting in mid-2025. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Swedish wind output structurally shifts Nordic hydro

19/03/25

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19/03/25

Swedish wind output structurally shifts Nordic hydro

London, 19 March (Argus) — Higher Swedish wind output is a structural supply shift that could support Norwegian hydro stocks over the long term, as recent record hydro reserves come despite below-average rainfall between October 2024 and February 2025. Combined Nordic hydropower reserves have held a surplus to the 10-year maximum for eight of the first 10 weeks of 2025, peaking at seven percentage points in week 10, as Norwegian hydro reserves unexpectedly increased from a week earlier. Reserves across Finland, Norway and Sweden closed week 10 at 55.6pc of capacity, seven percentage points above any other week in the previous 10 years and 5.1 percentage points higher than in 2008, the next highest year. Hydro production in Norway fell on the year in 2024, dropping to an average of 12.1GW, down from 12.2GW in 2023 and around 7pc below the five-year average of 12.9pc. Tighter hydro conditions in the first half of the year weighed on generation. Still, in the final six months of 2024, hydro reservoir output also fell on the year, dropping by 4pc to an average of 11.4GW, down from 11.9GW. That is despite combined Nordic reserves last year holding an average stock surplus of 5.2 percentage points to 2023 between weeks 34 and 52. At the same time, Swedish wind output increased to an average of 4.6GW last year, up by 18pc on the year from 3.9GW a year earlier and ending last year around 34pc higher than the five-year average. Higher wind generation weighs significantly on regional day-ahead prices and discourages hydro production by lowering the spot below the perceived water value of stored hydropower capacity. Rising wind capacity and its effect on the power mix is particularly notable during the first and fourth winter quarters, with generally the highest prices, with Swedish wind output averaging 5.8GW last year between January and March and October and December, up by 22pc from the equivalent periods in 2022. That displacement represents a structural supply shift in the Nordic power market that can support hydro reserves beyond rain and temperature outlook patterns going forward and during below-average precipitation periods, as the call for hydro production falls in hours when wind output is highest that — before significant wind capacity additions in Sweden — were routine output hours. Furthermore, higher run-of-river generation last year, up by 8pc in 2024 compared with a year earlier to an average of 3.4GW, captures the higher stock feed-in and water volumes that supported Nordic reservoirs in 2024 leading into 2025 and emphasises that, like wind output, run-of-river, which is generally not dispatchable undermines the regional spot price and reduces the call for reservoir hydro output. Norwegian hydro production last week peaked at 19.7GW on 13 March and averaged 17.9GW between 10 and 16 March, exceeding the monthly average of 15.9GW in March so far. Higher Norwegian hydro output was directly correlated with lower Swedish wind generation on those days, with Swedish average daily wind generation falling to 1.1GW and 1.5GW on 12 March and 13 March, respectively, while Norwegian hydro output topped 19GW on both days. By 15 and 16 March, Norwegian hydro production fell back to 16.6GW and 14.5GW, as Swedish wind generation rose to 7.6GW and 8.2GW. Unseasonably high reserves have consistently weighed on summer delivery power contracts and supported a substantial €59.20/MWh discount for Nordic June to the German equivalent on 18 March and an average discount of €59.13/MWh between 3 and 18 March. The Nordic third quarter last closed at a €66.10/MWh discount to the German equivalent and has averaged €67.23/MWh below Germany's front quarter over the previous 30 days. Reserves ended last month at 57.8pc of total capacity, some 3.4 percentage points above the 10-year maximum and in Norway, reserves were just 0.5 percentage points below the long-term national maximum, with stocks since switching to a 2.8 percentage point surplus to the maximum in week 10 and a 2.4 percentage point surplus in week 11. This was despite precipitation between October and February being up on the year, it remained below the region's seasonal norm by nearly 20.6mm, with rainfall in Bergen over the same period below the average in four of the past five years. Precipitation over the five months last exceeded the seasonal norm in 2022, totalling 1,804.8mm and registering a 422.9mm surplus to the average. But at February's close, hydro reserves in 2022 were 17.2 percentage points below the equivalent week in 2025, underscoring increased Swedish wind output's impact over the 2024-25 season. By Daniel Craig Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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EU mulls competitive metals decarbonisation

19/03/25

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19/03/25

EU mulls competitive metals decarbonisation

Brussels, 19 March (Argus) — The European Commission today presented its steel and metals action plan, setting out actions to boost the sector's decarbonisation while countering unfair competition from outside the bloc. The plan has a strong focus on combatting global market distortion, whether in terms of trade or combined with circumvention of the bloc's emissions trading system (ETS) and carbon border adjustment mechanism (CBAM). "We will strengthen the current safeguard clause. We aim for a reduction of up to 15pc in [steel] imports," said industry commissioner Stephane Sejourne. Aside from revised steel safeguard measures , trade actions include a ferro-alloys safeguards investigation "expeditiously" by 18 November. And the commission promises to assess whether the bloc's use of the lesser duty rule regime requires changes. In addition to a CBAM scheme for exported goods , the measures also cover energy prices, decarbonisation through electrification and more flexible rules for low-carbon hydrogen. The commission promises revised rules to enable more EU states to provide indirect cost compensation for steel and aluminium firms for carbon costs passed on through electricity bills. And Brussels wants EU states to lower costs for energy-intensive industries through network tariffs, facilitating power purchase agreements (PPAs) and lowering electricity taxation to zero. With direct electrification not always possible or cost-effective, the commission points to hydrogen as a key enabler of decarbonisation in the steel and metals industries. Some measures have been toned down from drafts. The commission's plan no longer mentions implementing a melt and pour clause , "effective immediately". The commission will now "assess" whether it should adapt its practice by introducing a melted and poured rule, regardless of the place of subsequent transformation and origins. But the commission now promises that the delegated act on low-carbon hydrogen will provide rules that are "as flexible as possible" to achieve greenhouse gas emission-reduction goals for low-carbon fuels in a "technology neutral way". Industry association Hydrogen Europe welcomed the commission's direct acknowledgment of hydrogen as the best route to decarbonisation for primary steel production. "Labelling schemes, sustainability criteria, and dedicated funding mechanisms are necessary first steps to incentivise the offtake of green products," said Hydrogen Europe's industrial policy director Laurent Donceel. The commission's paper sends a clear message that "a strong European Union needs a strong European steel industry", said Henrik Adam, president of European steel association Eurofer. But the association also called on the EU to implement "meaningful solutions through ambitious measures". By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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UK study sets out Grangemouth's post-refining future

19/03/25

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19/03/25

UK study sets out Grangemouth's post-refining future

Edinburgh, 19 March (Argus) — A government-funded study has identified nine potential low-carbon and renewable options for the Grangemouth site in Scotland following the planned closure of its 150,000 b/d refinery in the second quarter this year. The nine possible projects outlined in the Project Willow study centre around waste, bio-feedstocks and industries supporting the development of offshore wind. They could benefit each other through synergies and create up to 800 direct jobs, but their success "will require significant contributions from both the public and private sector", with an initial £3.5bn ($4.5bn) in capital investments needed, the study said. The £1.5mn report, paid for by the UK and Scottish governments, was commissioned by Grangemouth refinery operator Petroineos, which announced in November 2023 that it was going to close the plant and convert it into a fuel import terminal. The UK and Scottish governments have since set aside £25mn and £200mn for Grangemouth, along with other initiatives such as Scotland's £100mn Falkirk and Grangemouth Growth Deal package. The study's 'waste' pathway comprises a hydrothermal plastic recycling project, a dissolution plastic recycling facility and a bio-refining project relying on bacterial fermentation (ABE). Under the 'bio-feedstock' pathway, the study envisages a second-generation bioethanol plant on Scottish timber feedstock and an anaerobic digestion facility using organic waste to produce biomethane. Second-generation bioethanol refers to ethanol made from non-edible resources such as biomass. This pathway also suggests a sustainable aviation fuel (SAF) plant, with production made from hydroprocessed esters and fatty acids (HEFA). UK trade union Unite has been supportive of this option , but Petroineos deemed it unviable "under current regulatory conditions". The third pathway — called conduit for offshore wind — is mostly focused on hydrogen. It includes fuel switching, producing jet from e-methanol and methanol as well as producing low-carbon ammonia for the shipping and chemicals industry. The second-generation ethanol plant and the HEFA facility, as well as the e-methanol and e-ammonia projects, would have a longer 2030-40 timeline, against a 2028-30 timeline for the other projects. The projects would benefit from existing infrastructure such as Grangemouth's port, which includes container, bulk and liquid fuel terminals. "There are also opportunities to reuse existing tank storage, ethanol facilities, and other ancillary assets at the site," the study said. Unite has criticised the study's project timelines, pointing out most would start years after the refinery had closed, by which time jobs would have been lost. Many of the projects "could be fast tracked and implemented now", including converting the refinery to SAF production, the union said. "Project Willow was created by Petroineos as a fig leaf to justify its act of industrial vandalism of shutting the refinery and axing jobs. It asked the wrong questions and then failed to provide the answers that Grangemouth refinery workers need," Unite general secretary Sharon Graham said. "There are projects like SAF production which can be swiftly enacted to protect jobs and those opportunities must not be lost. This would pave the way for the UK to become a world leader in green aviation." By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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