Uganda aims for net zero energy sector by 2062

Spanish Market: Crude oil
18/04/24

Uganda has brought forward its target for net zero carbon emissions from its energy sector by three years, to 2062, energy ministry permanent secretary Irene Batebe told an oil and gas conference in Kampala.

This new deadline is still lagging some way behind a 2050 "net zero operations" target pledged by 40 oil and gas firms, including African state-owned ones such as Libya's NOC and Sudan's Nilepet, at the UN Cop 28 climate summit. Signatories to the Cop 28 charter also pledged "near-zero upstream methane emissions" by 2030.

Uganda's CO2 emissions from fuel combustion were 5.7mn t in 2021, according to most recent IEA data, but this will probably increase with the development of a 230,000 b/d crude project in its western Lake Albert region. The crude project had been scheduled to begin production in late 2025 — although the head of TotalEnergies' Ugandan operations recently said the company may miss this long-standing target.

Batebe said the Ugandan government has plans to increase hydroelectricity capacity to around 52GW by 2050, to increase use of solar wind and nuclear power, and has a budget of $8bn by 2030 to finance these. The IEA estimates hydroelectricity accounts for around 90pc of Uganda's generating capacity. But this installed capacity is only around 1.5GW currently. The country's nuclear ambitions remain at the planning stage, and biomass — wood and charcoal — dominates energy consumption.

"We want to phase out use of coal, but… countries that produced oil and gas should get out first and we shall follow," she said. "We cannot afford to remain poor. We shall produce our oil and gas responsibly, use LPG from the [planned] refinery and then connect more than the current 57pc of our population to electricity with affordability to use it for cooking and other uses other than lighting then meet our emissions targets."

Batebe said the world's longest heated crude export pipeline, which will connect its oil fields with to the port of Tanga on Tanzania's Indian Ocean coast, will be insulated to "three layers" to limit emissions. TotalEnergies' Ugandan general manager Philippe Groueix said the two Lake Albert projects, Tilenga and Kingfisher, are designed to produce crude at 13kg of CO2/bl, far below the world average of 33 kg/bl. TotalEnergies is developing the 190,000 b/d Tilenga field and and Chinese state-controlled CNOOC the 40,000 b/d Kingfisher.

By Mercy Matsiko

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16/11/24

Cop: UN’s Stiell urges G20 to make climate its priority

Baku, 16 November (Argus) — Leaders at next week's G20 summit should make the climate crisis "order of business number one" as negotiations on a new climate finance goal continue at the UN Cop 29 climate conference in Baku, Azerbaijan, UN climate body chief Simon Stiell said today. "Stepping it up on climate finance globally requires action both inside our Cop process and outside of it," Stiell said, and the G20's role is "mission critical". Stiell called on G20 leaders meeting in Rio de Janeiro, Brazil, on 18-19 November to ensure the availability of more grant and concessional finance, make progress on debt relief, and push for additional multi-lateral development bank reforms. Some delegates at Cop have noted that the outcome of the G20 meeting will be key for climate finance . G20 in India last year recognised the need to increase global climate investments to trillions of dollars from billions, from all sources, highlighting that $5.8 trillion-5.9 trillion is required before 2030 for developing countries to implement their climate plans. The communique had called on "parties" to set an ambitious goal from $100bn/yr floor, which developed countries committed to mobilise through 2025. Brazil this year is looking to use its G20 presidency to advance agreement on energy transition finance , having set fighting climate change as one of its G20 priorities. The country called for a global finance governance that includes rules for financing a "just and equitable" energy transition in developing economies and for an easier access to climate funds. Brazil has also pushing for a 2pc tax on billionaires that could generate up to $250 bn/yr in revenue. Stiell said today that there is a "long way to go" on talks to agree a new climate finance goal for developing nations in Baku. A round of informal consultations on a third draft text took place late yesterday , but the document was still far off striking a compromise between developed and developing countries on central aspects including the amount of funds to be given, which countries should contribute, and how the money should be used. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: German opposition pushes for Article 6

14/11/24

Cop: German opposition pushes for Article 6

Berlin, 14 November (Argus) — Germany's main opposition parties have welcomed the progress achieved on Article 6 of the Paris Agreement in at the UN Cop 29 climate summit in Baku, Azerbaijan. They have called on Germany and the EU to make better use of the instrument to allow for more cost-efficient climate action. Germany's dominant opposition party, the right-of-centre CDU/CSU, on 14 November commended the framework under Article 6 as an efficient way of reducing greenhouse gas (GHG) emissions. Article 6 of the Paris accord aims to help set rules on global carbon trade. The Article 6 mechanism allows for reductions to happen where they are quickest, cheapest and easiest to be carried out, the CDU head of the working group on climate action and energy, Andreas Jung, said in a debate in the lower house of parliament, the Bundestag. The deputy head of the FDP faction Lukas Koehler, also speaking in the Bundestag on 14 November, called on Germany and the EU to "finally" integrate the Article 6 in their climate action plans. Koehler argued that if for instance Germany's progress in emissions reduction should turn out to be too slow, the country could temporarily shift its efforts — and the associated finance — to where more rapid mitigation might be achieved, such as Brazil. The EU, of which Germany is a member state, will not make use of Article 6 credits, at least until 2030, to reach its so-called nationally determined contribution (NDC) – its climate action pledge — under the Paris climate accord. The EU has been seeing progress on ongoing Article 6 negotiations at Cop 29, the European Commission's principal advisor for international aspects of EU climate policy Jacob Werksman said today, "mostly because parties are now agreeing with the EU and others that were concerned about the transparency and accountability of the bilateral markets that operate under Article 6.2". Werksman believes there is enough momentum for negotiations to be concluded next week, noting that the atmosphere has "improved" compared with previous negotiations, which echoes the sentiment expressed by a number of negotiators earlier this week . Werksman pointed in particular to the US now agreeing with others and helping to broker compromises. Koehler also warned German government representatives in Baku to refrain from "expensive" pledges which may strain the country's budget. Developed countries agreed in 2009 to deliver $100bn/yr in climate finance to developing nations, and Cop 29 is focused on the next iteration of this — the new collective quantified goal (NCQG) . In a statement, Germany — represented by Scholz despite his absence at the Cop — and other G7 members like Canada, France, or the Netherlands agreed that "developed countries must continue to take the lead and live up to existing finance commitments". Germany faces early elections as the government lost its majority last week following the sacking, by chancellor Olaf Scholz of the Social Democrat SPD, of finance minister Christian Lindner of the pro-business FDP party and the FDP's subsequent withdrawal from the ruling coalition. Polls suggest that the CDU/CSU group will easily win the next federal elections which are scheduled to take place on 23 February. The FDP's persistent refusal to allow Germany to take on more debt to enable more public funding, including of clean technologies, was the main reason for Lindner's sacking. By Chloe Jardine and Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Guyana hires floating generators to avert outages

14/11/24

Guyana hires floating generators to avert outages

Kingston, 14 November (Argus) — Guyana is lifting its floating power capacity to 111MW with the rental of plants that the government says will prevent widespread power cuts over the next two years. The government has contracted a 75MW power barge from Turkish firm Karpowership that installed a 36MW barge in May, finance minister Ashni Singh said on Wednesday. The government has not released the terms of the contracts for the floating plants that are being fired by imported heavy fuel oil. Karpowership has been given a two-year contract that the government says will expire with the scheduled commissioning of a $2bn natural gas project that includes a 300MW power plant. The project will be fed by gas from a deepwater block being worked by US major ExxonMobil. The agreements with Karpowership "will take us just beyond the period when the new plant comes on stream," Guyana's vice president Bharrat Jagdeo said. The growing oil producer in northern South America faces a widening power deficit as state power utility GPL cannot meet demand created by a rapidly expanding oil-fired economy, the government said. Power demand in the country of 750,000 people has grown from 115MW in 2020 to 175MW currently and is projected to reach 205MW by year-end, the government said. GPL's fuel oil-fired output of 165MW "does not allow for a comfortable reserve so we need adequate redundant capacity," an official told Argus . Guyana's contract for power barges from Karpowership is the company's third in the region. Six of the company's floating plants are supporting Cuba's faltering power system, while another is stationed in the Dominican Republic. By Canute James Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: EU ETS volatility problem for corporate CCS case

14/11/24

Cop: EU ETS volatility problem for corporate CCS case

Baku, 14 November (Argus) — Price fluctuations in the EU emissions trading system (ETS) make it difficult for carbon capture and storage (CCS) projects to attract finance, delegates at a UN Cop 29 climate conference side event in Baku, Azerbaijan, heard today. Fluctuations in the EU ETS price make it more difficult to model the support provided to CCS projects through avoided compliance costs, law firm Latham & Watkins partner Jean-Philippe Brisson said. These ups and downs are "very difficult for corporates", Japanese bank MUFG director Yukimi Shimura said. The benchmark front-year EU ETS contract has closed at an average of €66.20/t ($69.82/t) of CO2 equivalent (CO2e) so far this year in Argus assessments, compared with €85.30/t CO2e last year. While carbon pricing is an "absolute must" for CCS, if ETS cost avoidance is your only revenue stream it is very difficult to convince financials or board members to support projects, Swiss cement major Holcim vice president Pavan Chilukuri said, as the long-term viability of projects is not guaranteed. Additional funding is therefore needed to accelerate project implementation, Chilukuri said. This could be in the form of revenues from carbon dioxide removal credits — generated when plants run on biogenic energy and the carbon captured — or carbon contracts for difference. The CCS hub concept — where a number of sites capturing CO2 are located near each other to make use of the same transportation and storage infrastructure — can also help to limit costs, he said. But hubs come with their own cross-chain risks, Shimura said, including uncertainty surrounding liability for issues such as delays. The UK government — which is developing two CCS clusters — is doing an "excellent job" to minimise such risks, Shimura said. But more needs to be done in the US and Asia, with a role to be played by governments, she said. Most CCS activity remains concentrated in the US because incentives there are very strong and fixed for 12 years, Brisson said, referring to the $85/t tax credit for CCS offered under the country's Inflation Reduction Act. But even this is now "not good enough", Shimura said, as inflation has pushed costs up since the figure was set. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

IEA sees wider oil market surplus next year

14/11/24

IEA sees wider oil market surplus next year

London, 14 November (Argus) — The IEA is predicting a global oil supply surplus of over 1mn b/d next year, which it says will provide "much-needed stability" to the market. The Paris-based agency's latest Oil Market Report (OMR) shows a 1.15mn b/d supply surplus next year, the highest since it first started projecting supply and demand levels for 2025 in April this year. It is 40,000 b/d higher than its estimate last month. "With supply risks omnipresent, a looser balance would provide some much-needed stability to a market upended by the Covid pandemic, Russia's full-scale invasion of Ukraine and, most recently, heightened unrest in the Middle East," the IEA said. The IEA's projected supply surplus could be much higher if Opec+ members push ahead with a plan to start unwinding 2.2mn b/d of "voluntary" production cuts from January over a 12-month period. But this is not guaranteed. Weaker-than-expected demand has already forced the Opec+ members to delay their plan to start increasing output by three months. Opec+ ministers are set to decide on their output policy for 2025 and beyond in a meeting on 1 December. The IEA's oil demand growth forecasts for this year and next remain below 1mn b/d — a steep drop compared with 2mn b/d last year and 2.5mn b/d in 2022. For this year, the IEA has raised its oil demand growth projection by 60,000 b/d to 920,000 b/d, mostly because of higher-than-expected consumption in Europe. Its forecast for next year has been nudged down by 10,000 b/d to 990,000 b/d compared with last month's OMR. Much of the slowdown in global consumption centres on China, where the economy is not growing as fast as it once did. The IEA has kept its oil demand growth for China unchanged at 150,000 b/d for this year, but this is far below the 710,000 b/d it was forecasting in January. The agency said Chinese oil demand contracted for a sixth straight month in September, pushing consumption in the third quarter 270,000 b/d below year-earlier levels. For next year, the IEA has lowered its Chinese demand growth forecast by 30,000 b/d to 190,000 b/d. China's slowing oil demand is also due to an increased uptake of electric vehicles, LNG-powered trucks and high-speed rail, the IEA said. On global supply, the IEA has trimmed its growth estimate for this year by 20,000 b/d to 640,000 b/d. But for next year, it sees supply growth accelerating to more than 2mn b/d, led by the US, Canada, Guyana, Brazil and Argentina. The agency said global observed oil stocks declined by 47.5mn bl in September to their lowest level since January. It also said preliminary data show stocks fell further in October. By Aydin Calik Supply and demand balance Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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