S Korea should meet power demand with renewables: IEEFA
South Korea should prioritise deploying renewables instead of fossil fuels to meet increasing power demand, said the Institute for Energy Economics and Financial Analysis (IEEFA) on 14 August.
The IEEFA suggests that the country meet its UN Cop 28 climate summit pledge of tripling its renewable power capacity by 2030, as this would generate an additional 113,434GWh from 2023 levels, outstripping the projected power demand increase of 53,186GWh over the same period, according to IEEFA calculations based on data from South Korea's trade, industry and energy ministry (Motie), state-owned utility Kepco and government-affiliated Korea Energy Economics Institute.
Doing this would also help the country fully meet increased demand from emerging semiconductor clusters and AI-driven data centers.
Renewable energy — which does not include nuclear power — comprises 9.64pc of South Korea's power generation mix in 2023, which is far below the world average of 30.25pc and the average of 26.73pc in Asia, according to IEEFA, citing OECD data. The country's share of clean energy rises to 40.32pc when including nuclear power, but this is still below the OECD average of 49.96pc.
Under the scenario where renewables are tripled, the share of renewables in the power mix would rise to 25.08pc by 2030, above the aim of 21.6pc in South Korea's latest 11th long-term electricity plan. Gas-fired power generation would rise by 3,008GWh to a 23.7pc share, in line with a target to cut the share to 25.1pc by 2030 and 11.1pc by 2038.
This contrasts with IEEFA's second scenario — where new LNG power plants requested by various industrial sectors, including semiconductor clusters, are built — which would result in an excess of 55,706GWh in gas-fired capacity by 2030. This means LNG would account for 30.53pc of the power mix in 2030, while renewables would make up just 19.79pc.
"Building more LNG plants contradicts the country's net-zero goal and increases the risk of stranded assets," said IEEFA. South Korea released its latest 11th long-term electricity draft in early June, which continues to prioritise gas-fired and nuclear generation, over that from renewable sources. The plan raises the share of gas-fired output to 25.1pc in 2030 and 11.1pc in 2038, up from 22.9pc and 9.3pc in the previous plan.
"South Korea's historical reliance on fossil fuels to provide energy security has hampered its renewable energy deployment," the report said. "The belief that fossil fuels guarantee stable and affordable energy has stunted the development of renewables, which are perceived as expensive and unreliable."
Economic competitiveness
South Korea's lagging renewable energy deployment could have "significant financial consequences", given international decarbonisation initiatives such as the RE100, carbon border adjustment mechanism, as well as Scope 1, 2, and 3 regulations, the report warns.
South Korea also risks missing out on potential cost reductions by delaying its transition, which may make its exports less competitive, especially with grid parity for renewables expected by 2027.
The IEEFA also asserts that embracing renewable energy is "critical to safeguard [the South Korean semiconductor industry's] economic competitiveness", as well as securing future suppliers and customers.
The EU, Japan, and China are already outpacing South Korea in renewable energy adoption, and stricter regulations could lead to environmentally conscious customers reducing the market share for South Korean chipmakers, IEEFA added. Companies across various sectors that participate in decarbonisation initiatives may also increasingly require their supply chain partners to adopt similar climate commitments.
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China seeks to achieve climate goals with new framework
China seeks to achieve climate goals with new framework
Singapore, 13 August (Argus) — China has announced new guidelines to accelerate the country's energy transition and achieve its decarbonisation goals. Under the guidelines, China expects the scale of its energy conservation and environmental protection industry to reach about 15 trillion yuan ($2.1 trillion) by 2030, according to a statement by the Central Committee of the Communist Party of China (CPC) and the State Council. The country aims to accelerate progress in carbon emission reduction, resource utilisation and green development by 2030. It targets installed capacity of pumped-storage hydropower to exceed 120mn kW by then, and the carbon emission intensity of commercial transport for each unit of turnover to drop by about 9.5pc compared with 2020. China targets to establish a green, low-carbon circular economy by 2035, with carbon emissions declining after reaching their peak. China aims to hit peak CO2 emissions by 2030 and net zero emissions by 2060. China's installed renewable capacity reached 1.653bn kW as of the end of June, accounting for 53.8pc of total installed capacity, according to the National Development and Reform Commission (NDRC). The country achieved almost double its target for non-fossil power generation additions last year at 300GW, compared with a goal of 160GW, according to state-linked China Renewable Energy Engineering Institute. In the new framework, the target for non-fossil fuels in the country's primary energy consumption remains at 25pc by 2030, unchanged from its 2021 nationally determined contribution (NDC), and up from 15.3pc in 2019. China's 2021 NDC also states that it will lower its CO2 emissions per unit of GDP by over 65pc from the 2005 level, and that it will bring its total installed capacity of wind and solar power to over 1.2bn kW. The country is expected to submit its 2035 climate targets to the UN early next year, including updates to its pre-existing 2030 targets. The framework targets five main areas. It aims to optimise land space planning for green and low-carbon developments and seeks to accelerate the low-carbon transformation of the industrial sector. This includes the steel, non-ferrous metals and petrochemical industries. It also targets to advance the low-carbon transformation of the energy sector and develop non-fossil fuel energy and promotes the green transformation of the transportation sector. Lastly it aims to advance the green transformation of urban and rural construction, including agricultural developments. Challenges ahead China's green transformation faces significant challenges despite progress, the NDRC said. The country's energy and industrial sectors remain heavily dependent on coal, straining environmental goals, the commission said. Under the latest framework, the country still aims to promote the clean and efficient use of coal and reasonably control the growth of coal consumption during the 14th five-year plan period, but to gradually reduce it in the subsequent five years. The National Energy Administration (NEA), China's energy regulator, expects the percentage of thermal generation capacity to fall to 45pc by the end of 2024, from 47.6pc by the end of 2023. China in July announced plans to explore co-firing renewable ammonia and biomass at its coal-fired plants , as well as carbon capture, utilisation and storage. These measures will be applied to a number of projects by 2025. The government also plans to develop a fiscal and taxation policy to promote low-carbon developments under the new guidelines, and aims to implement relevant tax incentives, as well as improve the green tax system. It also aims to bolster financial instruments such as green equity financing, green financial leasing, as well as central budgetary investment to provide support for key projects. The new guidelines did not provide any details on methane cuts. The country has yet to set firm methane-reduction targets although it agreed in November to set goals to cover all greenhouse gases. China, dubbed by the Paris-based IEA as the "clean energy powerhouse," is projected to spend $675bn on clean energy this year alone. Its renewable energy power generation deployment has progressed rapidly , but it remains unclear if this will prompt Beijing to raise its decarbonisation ambitions. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Genesis secures more gas to curb New Zealand shortages
Genesis secures more gas to curb New Zealand shortages
Sydney, 13 August (Argus) — New Zealand upstream firm and utility Genesis Energy has secured emergency gas supplies for its dual gas- and coal-fired Huntly power station on the North Island. Genesis has secured 3.2PJ (86mn m³) of gas to allow the 400MW No.5 unit at Huntly to reach full capacity for the first time this winter, it said on 13 August, describing the electricity grid as facing "unprecedented pressure". An agreement has been reached with Canadian methanol manufacturer Methanex, which will shut its Motunui plants in the North Island's Taranaki province until the end of October to allow for more gas-fired power generation, Genesis said. The commercial arrangements regarding the gas transfer are structured to provide Methanex with a base price for each unit of gas delivered, with further incremental value shared between the parties depending on electricity pricing over the period, it said on 12 August. Methanex's 1.72mn t/yr plant in Motunui has paused production in the past, also diverting feedstock natural gas to support electricity generation in the winter of 2021 . The 953MW Huntly — New Zealand's largest power station by capacity and the country's only coal-fired unit, has been under significant strain as dry, cold conditions have led to increased demand during winter as hydroelectricity inflows remain low. New Zealand has also experienced light winds cutting expected wind-powered generation this winter, with Genesis planning coal imports for the first time since 2022 in response to lower domestic gas output and rapidly falling coal stocks. LNG imports investigated New Zealand energy minister Simeon Brown told parliament on 7 August his administration was investigating two separate options to ease the gas shortfall in the short to medium term. Industry body the Gas Industry Company (GIC) is studying the feasibility of importing LNG, while also considering policies to increase investment in flexible gas-fired generation, Brown said. Data from upstream firms released earlier this year show a significant drop in proven plus probable reserves, falling from 1,635PJ to 1,300PJ, he added. Gas production into open access pipelines was 58.8PJ during January-June, GIC said in its April-June quarterly report, 20pc down on 73.7PJ a year earlier, while gas-fired power demand grew by 10pc against April-June 2023. New Zealand's National Party-led government is aiming to overturn a 2018 ban on new oil and gas exploration with legislation to be introduced to parliament later this year. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Q&A: Brazil's RNG needs regulated carbon
Q&A: Brazil's RNG needs regulated carbon
Sao Paulo, 12 August (Argus) — Brazil's biomethane market continues to struggle to find ways to price its green attribute. Argus spoke to Gustavo Soares, a biomethane specialist and collaborator at market-focused research and opinion publishing site Ensaio Energetico about possible solutions, including a regulated carbon market. Edited highlights follow. What is the biggest challenge to price biomethane's green attribute? The biggest challenge is the lack of a regulated carbon market. If there were a carbon market, we would have companies with reduction commitments. It would be easy to calculate their demand for decarbonization and, consequently, for renewables or energy efficiency. This would make pricing the green attribute much easier. We would move in a direction closer to the European market, where there is a reference price. Can voluntary certificates, such as Gas-Rec, be a viable solution for this pricing? [With voluntary certificates] it is up to the company to define its mandate and, if any cyclical or structural conditions change, they can simply review their commitment. Now, the certification helps in a certain way. The Gas-Rec is a traceability certificate that can meet some of the company's objectives. Customers' willingness to pay more or less for a green attribute will depend on a series of factors, such as the company's own profile. A publicly traded company must have a lot of transparency, it has creditors who are concerned about decarbonization. An exporting company is possibly serving more demanding markets regarding environmental issues, for example. In addition to creating a regulated carbon market, what other types of public policies could support Brazil's biomethane market development ? There are many possibilities. A carbon tax [where consumers would be taxed for carbon emissions, instead of having decarbonization targets] would be one possibility. Tax exemptions for biomethane are another path. Taxes on LPG and diesel are often heavy. If there is an exemption or a large tax differentiation for biomethane, it creates a competitive advantage. The government can create a target obligation for public entities to consume biomethane. Regarding infrastructure, the creation of incentives for connecting plants in distribution and to inject biomethane into transportation. We must think about a set of policies. When we think about the development of biomethane, it will not be a policy that saves us, but a set of policies that will boost this industry. By Rebecca Gompertz Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Finnish, Baltic gas demand up by 13pc on year in July
Finnish, Baltic gas demand up by 13pc on year in July
London, 9 August (Argus) — Combined Finnish and Baltic gas consumption increased on the year in July, but remained firmly below pre-2022 levels. Combined demand in Finland, Estonia, Latvia and Lithuania last month rose to 2.37TWh from 2.1TWh in July 2023, although it was still well below the 2018-21 average of roughly 3.7TWh ( see graph, data and download ). This was a second consecutive month-on-month increase following demand at a near two-year low in May. Demand increasing between May and July is an unusual pattern, as pre-2022 consumption in the region tended to decline over the course of the summer before reaching a nadir in July or August. The power sector was probably the main contributing factor to higher overall gas demand, as year-on-year increases in Latvian and Lithuanian gas-fired output more than offset lower Finnish generation ( see table ). In Latvia in particular, gas-fired generation jumped more than seven times compared with a year earlier, despite power demand remaining stable and hydropower output nearly doubling. Instead, Latvian gas-fired production displaced some net imports, which fell to 258GWh from 372GWh in July last year. Latvian gas demand peaked over the month at 27 GWh/d on 22-26 July, drastically above the average for other days of just 8 GWh/d. These were the same days that Latvia produced the majority of July's gas-fired power. Prices on the regional GET Baltic exchange averaged €37.84/MWh in July, down by 5pc on the month but up by 3pc on the year. July broke the three-month trend of consecutive month-on-month increases, with prices having fallen in all four markets. Firms traded 500GWh on the exchange, up from 358GWh in July last year. Lithuania accounted for 40pc of trades, followed by the joint Latvian-Estonian market at 35pc and Finland with the remaining quarter. Maintenance to change flows Maintenance at the pivotal Kiemenai interconnection point on the Latvia-Lithuania border for most of August will change regional flow dynamics. No capacity will be available in either direction at Kiemenai on the 3-25 August gas days, making it impossible to send regasified LNG from Lithuania's Klaipeda LNG terminal northward to Latvia for storage at the Incukalns facility. Klaipeda sendout consequently has dropped since 3 August, averaging 29 GWh/d on 3-8 August, compared with 101 GWh/d in July. Despite the maintenance and demand remaining stable, an additional LNG delivery for 10 August was added to Klaipeda's schedule . This half-cargo may be mostly destined for reloads, as four small-scale reloads are planned at Klaipeda after the 10 August delivery. Some of these reloads could potentially go to Finland's off-grid terminals at Tornio and Pori, which are no longer supplied with Russian LNG after Gasum halted its purchases in late July because of sanctions . But while maintenance at Kiemenai has started, restrictions further north on the Balticconnector have ended, enabling sendout from the Inkoo terminal to step up significantly to 85 GWh/d on 1-8 August from a much lower 32 GWh/d in July. Planned maintenance reduced capacity from Finland to Estonia on the Balticconnector to just 5 GWh/d for all of July, limiting sendout from Inkoo only to what could be absorbed by the domestic market and the small amount that could be sent southward. Maintenance also will reduce Finnish exit capacity to Estonia to zero on 14-27 October and 4-17 November. By Brendan A'Hearn Finnish + Baltic July gas-fired power generation GWh Jul-24 Jul-23 Jun-24 ± Jul 23 ± Jun 24 Estonia 2 2 2 0 0 Latvia 79 11 3 68 76 Lithuania 74 31 53 43 21 Finland 28 117 40 -89 -12 Total 183 161 98 22 85 — Fraunhofer ISE July consumption by country GWh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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