South Korea Bets Big On Nuclear Energy At The Expense Of Renewables

By Tsvetana Paraskova - Jan 12, 2023

South Korea will rely more on nuclear power generation in its efforts to reach net zero by 2050, according to its latest plan, which envisages a lower share of renewable power generation in the electricity mix.  

South Korea will aim to have nuclear energy account for nearly one-third of its electricity generation capacity by 2030, while renewables are set to meet 21.6% of power demand, down from a previous forecast of just over 30%, per government documents released on Thursday and quoted by Bloomberg.

In earlier plans, South Korea was targeting a 24% share of nuclear power generation capacity.

Currently, 25 reactors provide about one-third of South Korea’s electricity from 23 GWe of plant, according to the World Nuclear Association.

President Yoon Suk-yeol, elected in March 2022, scrapped his predecessor’s policy to phase out nuclear energy over some 45 years. The new president has set a target for nuclear to provide at least 30% of the country’s electricity in 2030.

South Korea’s latest plan also calls for a lower share of LNG in the power generation mix as part of the country’s net-zero targets, as many countries have moved to bolster their energy security after the Russian invasion of Ukraine and the market turmoil that followed.

Since the Russian invasion of Ukraine, many Western allies of the U.S. and the EU have stepped up efforts to ensure energy security and depend less on energy commodities. Many of those have chosen to rely more on nuclear energy.

Just this week, Sweden’s government proposed changes in the current legislation to allow the construction and operation of more nuclear reactors as it looks to strengthen its energy security.

Even Japan is bringing back nuclear power as a key energy source, looking to protect its energy security in the crisis that has led to surging fossil fuel prices. The Japanese government confirmed in December a new policy for nuclear energy, which the country had mostly abandoned since the Fukushima disaster in 2011. A panel of experts under the Japanese Ministry of Industry decided that Japan would allow the development of new nuclear reactors and allow available reactors to operate after the current limit of 60 years. 

WHY GAS RATES AND INFLATION INCREASE

UK

Centrica Predicts Almost Eightfold Increase In Full Year Profits

By City A.M - Jan 12, 2023

British Gas owner Centrica has predicted a near eightfold increase in its full-year profits, powered by soaring energy prices last year following Russia’s invasion of Ukraine.

The energy giant now anticipates earnings of 30p per share, way above analyst expectations of 22p per share compiled by Bloomberg.

Centrica attributed its strong uptick in performance to robust trading across its electricity generation assets alongside gas production from fields in the North Sea.

Investors have responded positively to the bullish update, with shares up 5.12 per cent on the FTSE 100 in this morning’s trading – rising to levels not seen since May 2019.

This also makes it the fastest riser on London’s premier index and follows Centrica’s shares gaining 53 per cent during 2022

Centrica’s anticipated mega earnings reflect a sharp turnaround in performance since the pandemic.

Alongside rival energy firms, it suffered billions in losses in 2020 when the pandemic struck – which left raw energy prices at lows not seen in modern times, with oil dipping below $0 per barrel.

It showed signs of recovery the following year, as the energy firm generated earnings of four pence per share and a pre-tax profit of £761m in 2021.

The company now predicts closing net cash for 2022 to be above £1bn and said that it had “continued to deliver strong operational performance” since its last trading update in November.

Last November, Centrica launched a £250m share buyback – its first since 2014, cementing its return to conventional operations.

This reflects soaring oil and gas prices following Russia’s invasion of Ukraine, amid a Kremlin-backed supply squeeze on the continent alongside shortages driven by Western sanctions on Moscow.

Prices have since eased but remain historically elevated compared to pre-crisis levels.

Centrica has enjoyed a sharp upturn in performance on the FTSE 100 over recent months (Source: London Stock Exchange)

British Gas struggles remain amid industry crisis

While Centrica’s energy production has powered bumper earnings, its retail energy arm British Gas has not been raking in profits – with margins still tight amid record wholesale costs over the past 12 months.

The retail arm has suffered from the rise in wholesale costs, and Centrica’s business supplying homes with gas and electricity is widely expected to make a loss in the second half of the year.

British Gas last year revealed it would donate 10 per cent of its profits to help its poorer customers manage rising gas and electricity bills for the “duration of the energy crisis”.

Centrica does face key headwinds this year, such as a 45 per cent levy on electricity generators which began this month.

This levy will hit both its green energy projects and its 20 per cent stake in Britain’s nuclear fleet.

It also has now sold its Norwegian oil and gas assets to Spirit Energy and will no longer be able to raise revenues from assets it has previously banked on.

Centrica is set to unveil its fourth quarter and full-year results next month.

The third quarter profits of the world’s biggest oil and gas companies (Source: Reuters)

By CityAM

Dutch Power Grid Warns Of Shortages By End Of Decade

By Julianne Geiger - Jan 12, 2023

Electricity shortages are possible in the Netherlands by the end of this decade, Dutch power grid operator TenneT said on Thursday, in what is just the latest forecast for power outages.

While media has spoke of near-term power outages in Europe that could hit this winter or next, TenneT is eyeing energy shortfalls near the end of the decade—a side effect of the ongoing switch away from fossil fuels and towards renewables.

TenneT said that while the switch away from fossil fuels will drive power demand, power generation is growing increasingly weather dependent, with disruptions likely.

As production processes switch to electric and Europe sees to the closure of many of its flexible power plants that run on fossil fuels, including coal, international supply will become more uncertain, TenneT said on Thursday, according to Reuters.

TenneT sees domestic supply as sufficient to meet the demand for the next couple of years. But towards the end of the decade, the power landscape looks increasingly shaky.

Tennet said these shortages could be prevented by increasing the flexibility of electricity supply and demand, for starters. Other measures that will be required to stave off power outages are technological advancements in finding ways to store power from renewable energy such as wind and solar, and expanding connections with British and Scandinavian grids.

The Dutch Council of Ministers approved plans to build two new nuclear power plans last month, with completion scheduled for 2035. The nuclear power additions are expected to supply between 9 and 13% of the Netherlands’ total electricity needs. The plants have a combined price tag of $5.34 billion. The notion of small modular reactors in the Netherlands also hasn’t been entirely dismissed.

Head Of Saudi Wealth Fund Will Not Testify In Defense Of Elon Musk

By Michael Kern - Jan 13, 2023


The governor of the Public Investment Fund, Saudi Arabia’s $620-billion sovereign wealth fund, will not testify in defense of Elon Musk in an upcoming trial brought by Tesla investors alleging Musk defrauded them with the 2018 tweet that funding for taking the EV maker private is “secured.”

Last week, lawyers for Musk tried to subpoena Yasir Al-Rumayyan, the governor of the Public Investment Fund (PIF), to force him to testify in the trial slated to begin in San Francisco on January 17.

Investors in Tesla are suing Musk for misleading and defrauding them after tweeting in August 2018, “Am considering taking Tesla private at $420. Funding secured.” The tweet sparked wide speculation and wild swings in the share price of Tesla, while a deal never happened, although Musk has claimed he had a handshake deal with the Saudis to help fund taking Tesla private.

Now lawyers for Al-Rumayyan and other PIF officials said that the ‘subpoena’ from the Musk lawyers doesn’t have any bearing and in no way obliges the Saudis to be in court to testify in the trial.

Subpoenas “need not be complied with,” according to a filing by the lawyers for the fund, cited by Bloomberg. Those documents are “legally deficient,” they say, and they are not in the jurisdiction of the San Francisco court.

The request for testifying was voluntary, lawyers for the Saudi sovereign wealth fund said.

“In other words, even defendants describe the subpoenas as having no force or effect,” they wrote in the filing.

Text exchanges between Musk and Al-Rumayyan, revealed in court filings last year, showed that Tesla’s chief executive believed he had the “funding secured” to take the company private. But Al-Rumayyan told Musk that the Saudi fund couldn’t commit to an investment without sufficient information and that the fund and managers had been waiting for more details.

Big Oil Is Eyeing India For Big Investments

By Julianne Geiger - Jan 13, 2023

U.S. oil majors Exxon Mobil Corp and Chevron Corp—along with France's TotalEnergies, are taking a long, hard look at upping their investments in India's oil and gas exploration and production sector, India's oil minister said in a Friday speech, carried by Reuters.

ExxonMobil said back in December that its 2023 spending plans include $23 billion - $27 billion in capital investments to maintain its current production level of 3.7 million boepd. Longer-term, ExxonMobil said it would spend between $20 billion and $25 billion on growing the U.S. supermajor's production by 500,000 boepd within the next four years—with 70% of that capital being put into the U.S. Permian Basin, Guyana, Brazil, and LNG projects, and $17 billion of it into lower-emissions investments. 

U.S.-based Chevron increased its capex for 2023 by 25%, with $17 billion planned on capital projects this year. Chevron said that $8 billion of this would go to developing U.S. oil and gas production assets—about half of which would be thrown into the Permian. $2 billion would be sunk into its other U.S. assets, and 20% of its upstream capital would be spent on projects in the GoM. Another $2 billion was earmarked for lower-carbon projects. It also set aside money for its projects in Kazakhstan and its chemicals JV with Phillips 66 in Texas.

India is the world's third-biggest oil importer, leaving the nation to purchase 84% of all the oil it consumes, according to Retuers. It has been taking advantage of discounting Russian crude oil since Russia's invasion of Ukraine but has been looking to develop its own reserves to move away from its heavy reliance on costly imports.

"India is ready to explore opportunities for joint development production of oil and gas assets for mutual benefit and also invites investment in our domestic E&P sector," Hardeep Singh Puri said on Friday.

JP Morgan CEO: The U.S. Must Revamp Its Domestic Energy Policy

By Tsvetana Paraskova - Jan 11, 2023, 9:21 AM CST

• Jamie Dimon, CEO of JP Morgan, has warned of the danger Russia’s war in Ukraine poses to the global energy system going forward.
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• Dimon said that the U.S. needs a comprehensive policy regarding energy that includes pipelines and permits for all energy sources.
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• As well as oil and gas, Dimon said that even getting permits to build solar was difficult, and regulations need to be improved

The United States needs permitting for oil and gas drilling and pipelines, and a streamlined permitting process for renewables in a comprehensive new policy, JP Morgan’s chief executive Jamie Dimon told Fox Business in an exclusive interview.   

Dimon doubled down on his previous comments that banks shouldn’t cut off investments in oil and gas supply despite the ongoing criticism toward financiers of fossil fuel projects.

“So if I can stop financing a good oil company, that isn’t going to help. What we need is pipelines, permits. We can’t even get the permits to build solar,” Dimon told the ‘Mornings with Maria’ program on Fox.

“We need very comprehensive policy, and I don’t think we have that right yet.”

According to Dimon, the permitting process, even for renewable projects such as offshore wind, take five or seven years, and this shouldn’t be the case with the regulatory system in the U.S. 

“I think we’re spending too much time just yelling and screaming at each other as opposed to what we need to accomplish these very important goals of climate sustainability and resiliency, and efficient and effective oil price and delivery,” JP Morgan’s CEO said.

During a congressional hearing in September, Dimon said that cutting off investments in fossil fuels would be the road to hell for the United States.

The energy crisis gripping Europe could get much worse over the next years as the fallout from Russia’s war in Ukraine extends over time, Dimon warned in an interview for CBS last month.  

“The danger of this war is extraordinary,” Dimon told CBS, adding that it could last for years.

“But this oil and gas thing, it looks like the Europeans will get through it this winter. But this oil and gas problem is going to go on for years. So if I was in the government or anywhere else, I’d say, I have to prepare for getting much worse. I hope it doesn’t. But I would definitely be preparing for it to get much worse,” the chief executive of JP Morgan also said.  

 NOT GREEN NOT SUSTAINABLE

The Global Mining Boom Will Only Accelerate In 2023

By Felicity Bradstock - Jan 11, 2023

• As the global energy transition accelerates, demand for the metals and minerals involved in clean energy technology is only going to increase.
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• In 2022, the growth of the global metals and minerals industry was hindered by price swings, high production costs, and supply chain disruptions.
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• There will likely be greater market stability in 2023, but several challenges will persist due to the global financial crisis, energy insecurity, and concerns over the environmental impact of mining.

As energy companies worldwide expand their renewable energy portfolios, in a bid to ensure their longevity in the global green transition, an increasing number of firms are investing heavily in metals and minerals to support their green energy output. More extensive mining for metals and minerals is vital for an eventual shift away from fossil fuels to renewable alternatives; with the demand for lithium, zinc, and other resources growing rapidly as electric batteries and renewable energy technologies become more commonplace. The industry grew in many parts of the world in 2022, and this trend is just beginning, with several major mining developments planned around the globe for 2023. 

While the metals and minerals industry experienced growth in 2022, it was also hindered by price swings, high production costs, and ongoing supply chain disruptions. An end-of-year report from Fitch Solutions suggests that the mining and metals industry will be more stable in 2023 as these challenges settle. Although the ongoing Russian-Ukraine conflict will likely cause longer-term energy insecurity, which will affect inflation levels worldwide.

The ongoing global financial crisis means that metal prices could be slightly lower in 2023, but the commodities market is expected to achieve greater price stability. The metals and minerals market is expected to grow steadily over the next decade, as demand continues to rise in line with the adoption of renewable power and related technologies. Disruptions to mining caused by the pandemic are gradually being overcome and activities are expected to pick up across several global locations over the next decade. The Surface mining market is expected to achieve a value of $39.7 billion by 2030, with a CAGR of around 3.20 percent.

China continues to be the world’s biggest consumer and producer of most minerals and metals. Its ‘zero-Covid’ policy, which has only recently been lifted, had a detrimental effect on the supply and demand of these resources in 2022, with greater stability expected for the coming year. Demand in China is expected to pick up in line with the re-opening of several key industries, although this could be challenged should another break-out of Covid take place.

Several countries are developing new policies around mining and the security of their metals and minerals markets. This is largely in response to the greater nationalization of these resources, as seen in Mexico, and the pressure to decrease reliance on certain world powers, such as Russia, for the supply of high-demand metals and minerals. Some of these policies include the U.S.’s Inflation Reduction Act, the U.K.’s Critical Minerals Strategy, and several Lithium triangle agreements between Argentina, Bolivia, and Chile. Many countries are establishing roadmaps to ensure the development of strong supply chains, as some metals and minerals remain scarce and can only be mined in specific regions of the world. 

An analysis from S&P Global foresees supply constraints across critical commodities as early as 2024, due to the anticipated sharp uptake of electric vehicles (EVs), the shift to renewable energy technologies, and related transmission and distribution requirements. Due to concerns about the scarcity of metals and minerals needed to support a green transition, governments worldwide are likely to offer greater funding and incentives for new mining developments, to ensure the necessary supply to meet the growing global demand. 

In the case of nickel, Indonesia is increasing its supply to meet the rising demand, which is expected to delay the anticipated deficit until 2026. Nickel is a vital component in batteries, and the demand for nickel for use in batteries is expected to increase from 7.1 percent in 2021 to 17.6 percent in 2026. The S&P analysis also demonstrates how the global demand for lithium and cobalt will likely outstrip supply by as early as 2025 or 2026. While the supply of iron ore and zinc is expected to remain stronger than demand. However, copper demand is expected to rise more rapidly than new mining projects become operational. 

Discussions around mining for a green transition being at odds with the environmental degradation and destruction of ecosystems associated with this mining will continue in 2023 as new projects emerge. Worldwide efforts to decarbonize will see the demand for metals and minerals increase sharply over the next decade, as governments and energy firms accelerate plans for renewable energy operations. In addition, ESG will likely be a major consideration in the development of new projects, paying greater attention to the effect of mining on the local environment. Further, companies will have to take more consideration over the social aspect of projects, particularly working conditions, due to the greater risk of strikes due to rising inflation and increasing consumer costs. 

The metals and minerals mining industry is set to continue growing throughout 2023 and beyond, as the global demand for these resources increases in line with the green transition. While there will likely be greater market stability in 2023, several challenges will persist; with mining companies continuing to battle with uncertainties due to the global financial crisis, energy insecurity, and concerns over the impact of mining operations on climate change.