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Capacity markets need to reduce emissions: Aurora

  • : Electricity, Emissions
  • 25/01/28

European capacity markets focus too much attention on fossil fuel-fired plants and not enough on renewable sources of security of supply, according to a report issued by research firm Aurora that was commissioned by campaign group Beyond Fossil Fuels.

Capacity markets in the six European countries that have them — the UK, France, Italy, Poland, Ireland and Belgium — have made payments totalling €89.6bn since a mechanism of this kind was first established in the UK in 2015, the report says. The mechanisms are intended to allow firm sources of generation to remain financially viable, even as increasing intermittent renewable generation reduces the number of hours that these types of plants can run profitably.

Of this, nearly half went to support gas-fired capacity and 8pc to coal-fired plants, although there is some uncertainty over precise amounts because of data unavailability. Nuclear plants, mostly in France, received 12pc of the support, while storage — located mostly in the UK and Poland — took 13pc. Renewables, interconnectors and demand-side response took only 7pc, 5pc and 2pc, respectively.

And 19GW of newbuild gas-fired plants have been funded through the schemes, with another 11GW of newbuild gas-fired plants having been awarded a contract for delivery in the next three years.

Some of the plants will continue receiving funding until the 2040s, Aurora said, putting at risk European states' plans to move towards net zero greenhouse gas emissions.

Payments for some assets in five of the countries studied continue until 2037-43, although France's unique decentralised system does not provide incentives beyond the front year.

Payments to operators of battery energy storage systems (Bess) make up only a small part of the total, even though these units can provide zero-emissions short-term energy storage.

Regulators should set up schemes to prioritise zero-emissions forms of security of supply, the report says. And alternative schemes, such as capacity reserves, in which fossil-fired capacity is kept back to resolve supply-demand imbalances but not allowed to act in wholesale markets, can ensure these plants do not lead to emissions increases.

At the same time, a lack of viable long-term storage options could mean fossil fuel-fired technologies are needed for longer periods. Bess systems too can suffer from an inability to charge during long periods of low renewables output, which prompted Polish grid operator PSE to increase the technology's de-rating in an auction held last year.

Other countries are considering setting up capacity markets, with discussions under way in Spain, Germany and Greece. Spain's planned market, which is under consultation, will allow payments for thermal generators only for a year in advance and in particular circumstances, with only renewables, storage and demand response being eligible for long-term support.

Capacity market spending by technology

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25/02/06

Ambition focus as nations to fail new GHG goal deadline

Ambition focus as nations to fail new GHG goal deadline

Edinburgh, 6 February (Argus) — Most countries and major emitters that are party to the Paris Agreement will fail to meet a 10 February deadline for sharing new climate plans. Climate policy observers have stressed that higher ambitions beat timeliness when it comes to new 2035 greenhouse gas (GHG) emissions cut targets, but challenges abound ahead of the UN Cop 30 climate summit in Brazil. Only 10 countries, including G20 members Brazil and the UK, have submitted new climate plans — or Nationally Determined Contributions (NDCs) — so far. Around 200 countries and jurisdictions such as the EU have signed the Paris agreement. They need to submit their 2035 targets to the UN climate body UNFCCC by February as part of the so-called ratchet mechanism, which requires them to review and revise plans every five years. "There have not been any signals that any major emitters will submit their NDCs before the deadline, but we may see a handful of smaller emitters trickling in," think-tank International Institute for Sustainable Development (IISD) energy policy advisor Natalie Jones said. Non-profit the World Resources Institute (WRI) associate Jamal Srouji expects around 20 countries to submit by the deadline. But most climate plans should come in the second half of this year, with the UN general assembly in September emerging as a new potential milestone followed by Cop 30 in Belem, Brazil. Countries missing their NDC deadline is not new. They were slow to submit plans in the previous 2020-21 round — although they were grappling with a pandemic — and after Cop 26, when it came to strengthening 2030 targets. Jones described the UNFCCC's non-enforceable February deadline as "arbitrary". "It is much more important to have good quality plans than NDCs handed in on a forced deadline, although of course there is no guarantee that the plans that will come later will be necessarily better," Jones said. Srouji concurred: "Higher ambitions from major countries are far more critical because we know that we are off track for meeting the Paris goals". US exit The US submitted its new NDC in December under then president Joe Biden, knowing that the new president Donald Trump would pull out of the Paris accord again. This will take effect on 27 January next year. It was important for the US to submit this NDC, Srouji said, as it will serve as "a guiding post" for what the country could achieve, at sub-national levels in particular. But the US' Paris exit could dampen momentum on global NDCs, with some fearing a spillover effect . Indonesia, which earlier signalled it would submit by February, is unlikely to do so now, after the country's climate envoy Hashim Djojohadikusumo expressed discontent. "If America does not want to comply with international agreements, why should Indonesia comply?" he asked. Argentina pulled its delegation from Cop 29 last year and may consider leaving the Paris agreement. Among other major emitters, Canada set a new 2035 climate goal in December. The country was planning to submit its new plan by February, but the resignation of prime minister Justin Trudeau and a new election due this year could put the country's climate ambitions at risk. All eyes will of course be on China, the world's largest emitter, and whether it pledges stronger targets. The country is unlikely to submit its new plan by the deadline, according to observers. Expectations are high, but "targets will likely fall short of achieving the 1.5°C goal, leaving much work to be done to accelerate emissions reduction," think tank Asia Society Policy Institute director Li Shuo said. China signalled at Cop 29 that its NDC will be "economy-wide" and "cover all greenhouse gases", while continuing to strive to achieve carbon neutrality before 2060, without providing further details. "There is a big question mark, in the absence of US leadership, if will we see China along with the EU engaging and stepping up, or if will we see the country retreating like the US," IISD's Jones said. EU climate commissioner Wopke Hoekstra, who said the bloc's NDC will come in time for Cop 30, said that Europeans will need to show more leadership. But the EU's 2035 goal will be derived from its 2040 target and German MEP Peter Liese pointed to a deadlock in discussions . The European Commission has proposed a greenhouse gas (GHG) emissions reduction target of 90pc by 2040, from 1990 levels, which Poland said is "very difficult to accept". Challenges Cop 30 host Brazil, along with the UAE Cop 29 presidency, stuck to their promise of being early movers by submitting updated goals last year, although these were met with mixed reactions. Cop 29 host Azerbaijan did not submit a new NDC in Baku, with its president signalling challenges for some developing countries in establishing new plans. Some southeast Asian countries have highlighted challenges in providing new targets , such as the lack of common models between sectors, financing and economic growth. Chile said that it will submit an emissions reduction plan by the middle of this year, as a draft document is under consultation . There are many reasons for delays. "The UNFCCC timeline is not necessarily aligned with national decision-making processes and many developing countries face resource and capacity constraints," Srouji said, adding that parties are also expected to submit other documents such as adaptation plans and long term climate strategies. The IEA can provide support on national energy transition plans. The energy watchdog has recently supported Uganda and Vietnam on transition plans, and is in the early stages of transition advisory work with Colombia and Tanzania, it said. Colombia indicated that it will submit its NDC by June as the country seeks to address the "divisive issue" of fossil fuels, on which its economy is dependent. Mixed bag The climate plans submitted so far accounted for around 16pc of global emissions as of 5 February, including commitments from the UK and Brazil, according to WRI. IISD's Jones described the current NDCs as a "mixed bag", in terms of targets and the level of details, saying that the UK emerged as a leader with commitments on oil and gas licensing, while New Zealand has put forward a weak target and no plans. The UK's plan sets out the government's manifesto pledge to phase out sales of new cars "relying solely on internal combustion engines" by 2030, and notes that it will consult on issuing no new oil and gas licences to explore new fields. But none of the countries which posted new NDCs so far — apart from St Lucia — seem to have raised their 2030 targets, despite agreeing to "revisit and strengthen" them in the Cop 28's global stocktake (GST). How countries will respond to elements of GST — which also resulted in all parties agreeing to "transition away" from fossil fuels — will be a key issue to watch, especially after they failed to build on their commitments at Cop 29 in Baku. "While NDCs may show progress on the commitments of the Paris agreement and the commitments of a lot of countries on climate action, it is not clear what they will deliver in terms of the ability to keep 1.5°C in reach", Srouji said. "This is how Cop 30 comes into play, to make sure countries respond adequately and keep on track, he said. By Caroline Varin Countries GHG 2035 reduction targets Countries Headline 2035 target Baseline UAE Cutting GHG emissions by 47pc by 2035 2019 Brazil Cutting GHG emissions by 59-67pc by 2035 2005 US Cutting GHG emissions by 61-66pc by 2035 2005 Uruguay Cutting GHG emissions by 30pc by 2035 2020-22 Switzerland Cutting GHGemissions by 65pc by 2035 1990 UK Cutting GHG emissions by 81pc by 2035 1990 New Zealand Cutting GHG emissions by 51-55pc by 2035 2005 Andorra Cutting GHG emissions by 63pc by 2035 2005 Ecuador Cutting GHG emissions by 7pc by 2035 2010 St Lucia Cutting GHG emissions by 22pc in energy sector by 2035* 2010 Canada** Cutting GHG emissionsby 45-50pc by 2035 2005 Source countries' NDCs *conditional target **Canada only submitted its headline target, not its NDC Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Equinor Norwegian gas output up on year in 2024


25/02/05
25/02/05

Equinor Norwegian gas output up on year in 2024

London, 5 February (Argus) — Norwegian state-controlled Equinor's gas output on the Norwegian continental shelf (NCS) edged up on the year, driven by record-high output from the giant Troll field and fewer unplanned outages at NCS assets, the firm said on Wednesday. The firm's Norwegian gas output rose by 4pc on the year to 758,000 b/d of oil equivalent (boe/d) or 107mn m³/d in 2024. This was driven by "strong contributions" from the Troll and Johan Sverdrup fields, Equinor said. Gas production from Troll — in which Equinor holds a 31pc stake — reached an all-time high last year at roughly 116mn m³/d, the Norwegian producer has said. And there were fewer "unplanned losses" on the NCS last year than in 2023, Equinor said. The firm was the largest producer on the NCS in 2023, accounting for more than a third of total gas output on the shelf, the latest available data from the Norwegian Offshore Directorate show. Equinor's global gas output rose by 2pc to 985,000 boe/d or 139mn m³/d last year. But the firm's combined oil and gas global output was slightly lower in 2024, with a small increase in gas production insufficient to offset lower liquids output. Equinor's equity liquids production was 1.08mn boe/d in 2024, down by 3pc on the year. Equinor expects "more than 10pc growth from 2024-27" in oil and gas production, reaching a peak at 2.3mn boe/d in 2027. And the firm estimated that hydrocarbons output would grow by 4pc from 2024 to 2025. Equinor's reported Norwegian gas prices dropped by 22pc on the year to $9.47/mn Btu, or €31.01/MWh, in 2024, using Wednesday's exchange rate. And the average reported price for its US gas decreased by 4pc to $1.70/mn Btu, or €5.57/MWh. Equinor made a profit of $8.83bn in 2024, down by 26pc on the year. Profit was $1.99bn in the fourth quarter, 23pc lower on the year. The company has cut its 2030 expected renewables capacity to 10-12GW, from 12-16GW, noting that the pace of the energy transition is slower in some markets. It did not give a new target for capital expenditure allocation to this sector. Equinor also modified some net carbon intensity goals, setting ranges rather than absolute targets. By Georgia Gratton and Jana Cervinkova Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Equinor scales back renewables plan


25/02/05
25/02/05

Equinor scales back renewables plan

London, 5 February (Argus) — Norwegian state-controlled Equinor said today it has cut by up to 25pc its target for renewables capacity by 2030, and abandoned a plan to allocate half its capital expenditure (capex) to low carbon projects by that same year. The company has cut its 2030 expected renewables capacity to 10-12GW, from 12-16GW, noting that the pace of the energy transition is slower in some markets. It did not give a new target for capex allocation to this sector. Equinor also modified some net carbon intensity goals, setting ranges rather than absolute targets. It now plans to reduce net carbon intensity — which includes scope 3 emissions, from sold products — by 15-20pc by 2030 and by 30-40pc by 2035, from a 2019 baseline. The previous targets were at the higher end of these ranges. Equinor made a profit of $8.83bn in 2024, down by 26pc on the year. Profit was $1.99bn in the fourth quarter, lower on the year by 23pc. The company's oil and gas output was slightly lower in 2024, with a small increase in gas production not quite offsetting lower liquids output. Equinor's equity liquids production was 1.08mn b/d of oil equivalent (boe/d) in 2024, down by 3pc on the year, and its equity gas production rose by 2pc to 985,000 boe/d over the same timeframe. It expects "more than 10pc growth from 2024-27" in oil and gas production, and estimated that hydrocarbons output would grow by 4pc from 2024 to 2025. Liquids and gas prices fell in 2024. Equinor's reported Norwegian and US gas prices rose by 5pc and 26pc, respectively, on the year in the October-December period, but this was not enough to assuage a decrease across the year. The average reported price for its Norwegian gas dropped by 22pc on the year to $9.47/mn Btu in 2024, and the average reported price for its US gas decreased by 4pc to $1.70/mn Btu. Equinor reported an average liquids price of $74.1/bl in 2024, 1pc lower on the year. Its reported fourth-quarter 2024 liquids price fell by 10pc from the same period in 2023, to $68.5/bl. Equinor's power generation rose in 2024, boosted by additions in Brazil and Poland in 2023 and the start of the 531MW Mendubim solar plant in Brazil in 2024. Equinor's share of power generation stood at 4,917GWh in 2024, up by 19pc on the year — but its renewables share rose faster, by 51pc to 2,935GWh. Equinor has maintained its target of 30mn-50mn t/yr of CO2 storage by 2035. Equinor trimmed 600,000 t/CO2 equivalent (CO2e) from its absolute scope 1 and 2 — or operational — emissions over 2023-4. Scope 1 and 2 emissions from its operated production stood at 11mn t/CO2e in 2024. The company's upstream carbon intensity fell to 6.2kg CO2/boe in 2024, down by 7.5pc on the year. Equinor will buy back $5bn of shares in 2025, having bought $6bn in 2024. It completed the fourth $1.6bn tranche of its 2024 programme on 14 January and will launch the first tranche — of up to $1.2bn — of its 2025 programme on 6 February. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

S Korea to invest $89.5mn in net zero, energy security


25/02/05
25/02/05

S Korea to invest $89.5mn in net zero, energy security

Singapore, 5 February (Argus) — South Korea today announced plans to invest 129.3bn won ($89.5mn) this year in new research and development projects in the energy sector, to achieve carbon neutrality and ensure domestic energy security. About W78.7bn will go to 41 projects in the first round of funding this year. These projects will focus on technologies related to "carbon-free" energy such as renewable energy, nuclear power, and hydrogen, among others, South Korea's energy ministry (Motie) said on 5 February. The ministry will also invest W46.2bn to improve energy efficiency and in power systems, especially given surging power demand driven by artificial intelligence. Motie also plans to invest W56.9bn in securing technologies such as next-generation solar power, flexible operation of nuclear power plants, and large-capacity water electrolysis facilities, to "respond to the climate crisis". South Korea's science ministry in December 2024 unveiled plans to invest W2.75 trillion in technologies this year to respond to climate change, which included renewable energy technology and "carbon-free" technologies like nuclear power. It is unclear if the latest W56.9bn commitment is part of the W2.75 trillion announced last year or a separate investment. South Korea in December 2024 also announced plans to invest W450 trillion won in green finance by 2030, then acting president and prime minister Han Duck-soo said before he was impeached later that week . This made deputy prime minister and finance minister Choi Sang-mok the current acting president and acting prime minister. President Yoon Suk Yeol was impeached on 14 December and has since been arrested. If Yoon is removed or resigns, a presidential election must be held within 60 days, instead of the original election date in 2027. By Tng Yong Li Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

California considers different paths to lower carbon


25/02/04
25/02/04

California considers different paths to lower carbon

Houston, 4 February (Argus) — California may need a different path to its climate goals but will continue to work to meet them, state Air Resources Board chairwoman Liane Randolph said today. President Donald Trump's hostility to the state's long-standing authority to drive tougher emissions standards led California regulators last month to pull proposed separate emissions requirements for vehicle fleets and locomotives. But the state will use other means to drive down transportation emissions, including from heavy vehicles, if federal authorities do not approve more direct methods, Randolph said at the BNEF Summit in San Francisco. "We are playing the long game," Randolph said. "We can't afford to let the political winds dictate too much of what we do to actually get those new technologies and build those new markets and get it out on the ground." The federal Clean Air Act allows California to set its own vehicle emissions standards, so long as they are tougher than federal requirements and receive a US Environmental Protection Agency waiver. Such regulations may be adopted by other states. California withdrew petitions for waivers for its Advanced Clean Fleets and In-Use Locomotive Standards rather than risk a denial under the new Trump administration. Advanced Clean Fleets required government fleets, drayage equipment and delivery fleets for businesses earning more than $50mn/yr in revenue to shift to zero-emissions vehicles. The locomotive regulation required rail carriers shift to lower-emission equipment and limit idling. The state also braced for challenges to previously approved regulations, including mandates requiring auto manufacturers to steadily increase the share of zero-emissions vehicles in the new vehicles offered to buyers in the state. California can use regional regulations through air quality districts in the state to help drive toward the same goals, Randolph said. Agreements with automakers and regulations already in place had already driven real change, she added. Revisions to the state's Low Carbon Fuel Standard (LCFS) and pending work on the state's cap-and-trade program could meanwhile deliver new incentives to support especially medium- and heavy-duty vehicle ZEV transitions, she said. "My plea to you all is to keep playing the long game and to recognize that these investments are paying off, will pay off," Randolph said. "If we have a clear line of sight to success, we can keep that momentum going and use that momentum to support the practical regulations that can be adopted at the state level and hopefully again at the federal level." By Elliott Blackburn Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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