Thursday, February 16, 2023

Is The UK Investing Enough In Onshore Wind Capacity?

  • Former Conservative Prime Minster David Cameron threw a wrench in Britain’s onshore wind boom with restrictions on development.

  • Conservative MP Simon Clarke has launched a campaign against the legislation, aiming to bolster the development of new onshore wind projects. 

  • Clarke notes that onshore wind power is a vital part of the UK’s energy mix.

Onshore wind developments have dropped sharply since 2016, when former Prime Minister David Cameron pushed through new restrictions – which meant wind farm developers had to show proposed projects are located in an area designated for renewable energy in a local plan, and that they had unanimous support.

However, former cabinet minister and Conservative MP Simon Clarke secured a rare, key victory against NIMBYism two months ago.

Clarke tabled an amendment in December calling for onshore wind planning rules to be liberalised as part of the National Planning Policy Framework, which establishes development rules for building projects.

He gained the support of over 30 MPs including former prime ministers Boris Johnson and Liz Truss and had also been backed by Labour – meaning it had a real chance of progressing.

However, he later shelved the amendment – in exchange for reforms to the draft text, with the bill expected to be voted on in the House of Commons later this year.

This means the de-facto seven-year de-facto ban on new onshore wind projects, could finally be overhauled.

Energy industry raises concerns over pledges

It now turns out Downing Street is looking to ease planning obstacles by reducing requirements for new sites to be in designated land – essentially rewriting restrictive planning footnotes.

Under the reforms, government will only require developers to “appropriately” address local concerns rather than “fully.”

However, Clarke has fired a warning shot at the government, urging them not to water down proposals to ease planning laws for onshore wind developments amid industry concerns the reforms will not do enough to boost the declining industry.

He told City A.M.: “We can’t allow a vocal minority to derail projects supported by most people locally. Instead, we need a system that enables and encourages councils to designate suitable sites for wind farms and ensure these communities benefit from hosting renewables.”

Clarke’s support for onshore wind is not universally shared in the Conservative party.

Two dozen Tory MPs, led by senior backbenchers Sir John Hayes and David Davis, wrote to the Prime Minister Rishi Sunak at the time of the Clarke amendment, urging him to stand firm on the strict planning laws.

Simon Clarke secured concessions from the government after tabling an amendment to liberalise planning rules (Source: Twitter)

Meanwhile, influential BEIS Select Committee member Alexander Stafford believes offshore wind was the more “cost and space effective way” of generating wind-energy.

He told City A.M.: “Not only is there sometimes not enough wind onshore to generate any electricity, onshore turbines can disrupt communities, land, and animals. I am pleased that the government is consulting on changes to the National Planning Policy Framework, and would advocate for local communities to have full control over whether to give permission or not.

This pushback means Clarke’s approach has been collegiate – to appease divisions in the party.

He explains: “We know onshore wind is popular, including with 2019 Conservative voters, and would cut energy bills. This proposal is a step towards unlocking this cheap energy while ensuring communities get a genuine say. My colleagues and I will work with ministers to get the wording right.”

But Renewable UK did not share Clarke’s optimism that onshore wind could be revived purely through changing the wording of planning documents.

It has instead called for planning rules for new turbines to be eased in line with other building projects, to restore investor confidence in the sector.

James Robottom, head of onshore wind at Renewable UK, was disappointed that restrictive rules for onshore wind were being rewritten rather than scrapped.

He said: “After seven years of a de-facto ban in England – it is very difficult to see how the proposed changes to planning will give the industry, communities and businesses the confidence to invest in onshore wind again from a completely standing start.

“The increased complexity and ambiguity only reinforces the fact that onshore wind continues to be treated differently to any other infrastructure in England, at a time when it should be key to increasing energy security, reducing costs and our net-zero goals.”

The UK’s generation targets in the energy security strategy do not include onshore wind (Source: Gov.uk)

This outlook was shared by environmental think tank Green Alliance, which argued the proof of reforms had to be in the outcome.

Joe Tetlow, Green Alliance’s senior political adviser, said: “I think the government did this consultation on the expectation that it would increase the amount of renewables, such as onshore wind. So, if the end result is for that not to happen – that is just another couple of wasted years, which we can’t afford to have in this energy security crisis.”

When approached for comment, a spokesperson from the department for Levelling Up, Housing and Communities presented a middle-ground for new projects.

A spokesperson said: “Local communities must be at the heart of decision making for onshore wind, which is why we are consulting on changes to national planning policy that determines how these decisions are made. This consultation remains open as we seek and consider a wide range of views.”

It is easy to praise Clarke’s consistent backing of onshore wind, and commitment to easing restrictions – but the industry remains on edge, and if onshore wind is to be revived from its declining role in the UK’s energy sector, bolder action is necessary.

While the government should remain open to further insights and new ideas, the reality remains that onshore wind has stagnated, and a future of cheaper, cleaner energy bills is hugely improved by lifting the energy source from its moratorium.

As Zelensky leaves London, it is worth remembering that the energy crisis the UK has struggled through would have been considerably easier to bear with a resilient onshore wind sector.

By CityAM

WINDFALL TAX OF 99%

Global Oil And Gas Industry Sees Profits Soar To $4 Trillion

  • The oil and gas industry saw its profits saw from an average of $1.5 trillion in recent years to nearly $4 trillion in 2022.

  • Despite these record earnings, the head of the IEA has emphasized that oil nations must diversify their economies.

  • The head of the IEA believes these profits represent a unique opportunity to invest in the clean energy transition.

The combined income of the global oil and gas industry surged to nearly $4 trillion last year, up from an average of $1.5 trillion in recent years, Fatih Birol, the Executive Director of the International Energy Agency (IEA), said during a conference on Tuesday.  

Despite the record industry earnings, the major oil-producing countries, especially those in the Middle East, need to start working on diversifying their economies, the head of the IEA said via video link at an energy conference, as carried by Reuters.

“You cannot anymore run a country whose economy is 90% reliant on oil and gas revenues because oil demand will go down,” Birol said.

The next climate summit, COP28, which will be held in Dubai, “could be an excellent milestone to change the destiny of the Middle East countries,” said the head of the IEA, one of the international agencies most active in advocating for an energy transition.

The COP28 conference president-designate is Sultan Al Jaber, the chief executive of Abu Dhabi National Oil Company (ADNOC), which pumps nearly all the oil in one of OPEC’s biggest and most influential members, the United Arab Emirates (UAE). 

Sharing an IEA infographic on Twitter with the oil and gas industry’s profits for 2022, Birol said this weekend, “The sector has a unique opportunity to invest a significant chunk of this in clean energy transitions, especially in emerging & developing economies.”

The six biggest international oil majors alone posted as much as $219 billion in net profits for 2022, a new record high.

Each of Exxon, Chevron, BP, Shell, Equinor, and TotalEnergies reported record profits for last year, doubling their combined net earnings from 2021 and booking the best-ever year for Big Oil. The profits surged from around $100 billion booked for 2021, as oil and gas prices jumped last year following the Russian invasion of Ukraine, and majors raised oil and gas production to meet the growing demand for oil and limited gas supply from Russia to Europe. 

By Michael Kern for Oilprice.com

Spanish Port Denies Maersk Tanker Entry Over Russian Oil Links

A ship operated by giant shipping company Maersk Tankers has been denied entry into a Spanish port after its oil cargoes were found to have previously been carried by a vessel that was formerly Russian flagged. According to Spanish officials, Spain’s northeastern Tarragona port refused entry to the Maersk Magellan tanker after the ship picked up an oil cargo that had originated from the Cameroon-registered Nobel tanker. 

Trade in oil products linked to Russia has become complicated ever since G7 nations imposed a price cap on Russian oil in December and issued separate EU measures that prohibit the import of Russian oil products into the bloc. 

The Magellan is unlikely to be the last oil-carrying ship caught up in the Russian oil snafu 

The European Union is considering sanctions on Dubai-based SUN Ship Management Ltd on suspicions that it has been helping Russia bypass oil exports sanctions, unnamed European diplomats told Politico’s Brussels Playbook on Tuesday.

According to those sources, SUN has acquired a fleet of oil tankers from Russian state-owned Sovcomflot that had been sanctioned and continues to operate them. The fleet is said to comprise over 90 tankers. 

Oil shipping also hit another snap in December, when Turkey–a key beneficiary of Russia’s crude exports shipping–caught the markets off-guard by announcing that it would start demanding proof of insurance for oil tankers passing through the Bosphorus shipping strait. 

Ostensibly in order to comply with EU sanctions, the Turkish Ministry of Transport now requires ships hauling oil through the waterway and the nearby Dardanelles strait to provide a letter from their insurer saying that cover will be provided for that specific vessel voyage and cargo. According to the Ministry, ships sailing through the straits uninsured could result in significant damage to the waterway and vessel traffic in the event an uninsured ship has an accident. The move is likely to negatively impact Russian tankers if they struggle to obtain the necessary protection and indemnity insurance.

By Alex Kimani for Oilprice.com

Crypto Miners Blamed For Kazakhstan’s Power Problems

  • Seven regions across Kazakhstan were knocked off the country’s aging power grid due to the failure of a high-voltage insulator on a power line.

  • The incident is the latest to underline a chronic problem with the country’s Soviet-era infrastructure.

  • Authorities have placed significant responsibility for the crisis on cryptocurrency miners, many of which have tapped the grid illegally. 

Households and enterprises in seven regions across Kazakhstan were temporarily knocked off the power grid as temperatures dropped to around -14 degrees Celsius over the weekend in fresh evidence of how the country is struggling to cope with inexorably mounting demand for electricity.

State-run power grid operator KEGOC said in a statement on February 13 that the need to  effect an emergency suspension of transmissions on a high-voltage power line led to a 10 percent reduction in capacity.

Power officials said their quick work prevented a more serious outcome.

Shutdown of the power line “avoided the complete cut-off of users in southern and central regions of Kazakhstan,” KEGOC said in their statement.

Phosphorous miner and processor Kazphosphate and metals companies Arcelormittal and Kazakhmys were among the companies left without power.

Electricity supplies had been restored to the affected areas by February 13.

The Energy Ministry said the outage that triggered this breakdown was caused by the failure of a high-voltage insulator on a power line. Following an earlier breakdown in the western city of Atyrau earlier this month, officials cited a snowstorm as the cause.

The frequent recurrence of power outages is serving to underline a chronic problem. Demand is growing, Soviet-vintage infrastructure is showing its age, and refurbishments are not happening fast enough.

The issue has implications for the whole region. A blackout that plunged Kyrgyzstan and Uzbekistan into darkness, for anywhere up to several days in some areas, was blamed by the Uzbeks on a failure in the Kazakh power grid.

Since then, Kazakhstan appears to have experienced power shortages on a systemic basis.

First Deputy Prime Minister Roman Sklyar said at a meeting of the Energy Ministry in early February that they have been compelled to paper over deficits by buying electricity from Russia, and at high prices. He chided the Energy Ministry for its passivity in solving the problem.

“This situation needs to be radically changed in the near future. The Ministry and the [National Welfare Fund] Samruk-Kazyna must by February 15 address the issue of reducing the time spent commissioning new generating capacities,” Sklyar said.

The authorities have placed significant responsibility for the crisis on cryptocurrency miners. When Beijing imposed a mining ban in 2021, many farms moved from China to Kazakhstan, which at the time boasted favorable regulatory conditions and cheap electricity. By the fall of that year, Kazakhstan unexpectedly became the second largest cryptocurrency miner in the world, going from a position wherein it accounted for 1.4 percent of the global industry in September 2019 to over 18 percent in August 2021.

That fall, Kazakhstan experienced an 8 percent surge in electricity consumption, leading to severe power shortages and blackouts across the country. Soon, miners began to leave the country as well amid pressure from the government in the form of energy cuts and steep tax increases.

Sapar Akhmetov, head of the Kazakhstan Association of Blockchain Technologies, a lobbying organization, said at the Kazakhstan Blockchain Day 2023 forum in early February, that since the end of 2021, 70 percent of miners, mostly the illegal ones, had left Kazakhstan. As a result, Kazakhstan’s share in global mining has fallen from 18 percent to 6 percent, he said.

By Eurasianet.org

UK Financial Regulator Sued Over Oil Firm’s Climate Disclosures

An environmental law charity is suing the UK’s Financial Conduct Authority (FCA), alleging that the financial regulator accepted last year the listing prospectus of North Sea oil and gas operator Ithaca Energy despite the document failing to fully disclose climate change risks.

ClientEarth, which sued Shell’s directors last week, is now targeting the UK’s financial watchdog with a lawsuit in the UK High Court, the Financial Times reported on Thursday.  

The environmental law charity claims that the FCA failed in its duty to protect investors by signing off on the listing documents, which, ClientEarth says, were too general in the climate risk disclosures department.

Ithaca Energy applied to and was listed on the London Stock Exchange at the end of last year. Ithaca Energy holds stakes in 28 producing oil and gas fields on the UK Continental Shelf (UKCS) and has stakes in six of the ten largest producing fields offshore the UK. Ithaca Energy also holds a 70% operated interest in the Cambo oil field.

Environmentalists want the UK to stop the development of the Cambo field, as well as the development of Rosebank, where Ithaca Energy has 20% in the Equinor-operated field. 

“In the case of Ithaca’s listing, we believe the regulator has failed when it comes to this fundamental function by ultimately waving through Ithaca’s prospectus even though legal requirements have not been met,” Robert Clarke, ClientEarth accountable finance lawyer, told FT.  

ClientEarth grabbed headlines last week after filing a world-first lawsuit against the Board of Directors of Shell plc for “failing to manage the material and foreseeable risks posed to the company by climate change.”

“The lawsuit alleges Shell’s 11 directors have breached their legal duties under the Companies Act by failing to adopt and implement an energy transition strategy that aligns with the Paris Agreement,” ClientEarth said.

The High Court has yet to accept both lawsuits by ClientEarth and potentially decide whether to allow the cases to go ahead.    

By Tsvetana Paraskova for Oilprice.com