Institute for Energy Economics and Financial Analysis (IEEFA)

In recent years, liquefied natural gas (#LNG) markets have been highly unstable due to geopolitical disruptions, severe weather, supply outages, and other factors. For emerging countries in #Asia, an inability to secure affordable LNG supplies resulted in fuel and power shortages. Rising LNG supply will lower prices this decade, but fuel costs are unlikely to fall enough to compete with other electricity sources in #Cambodia. ? A new Institute for Energy Economics and Financial Analysis (IEEFA) report by Sam Reynolds and Christopher Doleman explains why LNG imports will increase?Cambodia’s fuel import bill and potentially hinder government efforts to reduce #electricity tariffs. Recent LNG prices have been more than double imported #coal prices, demonstrating the high costs of switching from coal to LNG. ? “The case of Cambodia reveals the clear challenges of developing an LNG-to-power value chain from scratch. Since gas has historically not played a role in the country’s #energy system, the introduction of imported LNG and its associated infrastructure could result in high fuel and power bills for the Cambodian economy,” says Reynolds. ? “Without a carefully planned strategy, the introduction of LNG could undermine the achievement of government macroeconomic and power sector targets and challenge Cambodia’s ability to meet its longer-term energy objectives," adds Doleman. ? https://lnkd.in/gn79d6FD #oilandgas #energytransition ?

Carbon capture and storage (#CCS) is proposed as a means for addressing a portion of anthropogenic carbon dioxide (CO2) #emissions by the #oilandgas industry, along with other high carbon-emitting industrial processes. CO2 disposal is not one activity but a string of separate projects that include CO2 capture from effluent streams; separation, purification, and compression for transport; transportation; compression for well injection, and geologic disposal underground or, in most cases, use for forcing more oil and gas out of older production fields in a process referred to as "enhanced recovery." Each of these steps in the disposal chain entails its own set of challenges and risks. Read more about this fact sheet by Grant Hauber, Institute for Energy Economics and Financial Analysis (IEEFA)'s Strategic Finance Advisor, Asia: https://lnkd.in/gsp3dkBg #carboncapture #energytransition

Credit agencies are sounding the alarm on climate change, making it harder for companies and investors to ignore #climaterisk.? ? In response to this climate risk, commentators have traditionally theorized two options: exit or voice. A growing body of evidence suggests that the choice is not so binary in practice.? ? A recent briefing note by IEEFA’s Dan Cohn and Connor Chung summarizes ongoing developments in investor practice and standard-setting that illustrate how investors do not need to choose between meaningful portfolio-wide engagement and intentional deployment of #divestment.?? ? Read it here ? https://lnkd.in/d32pEjmz?

Japanese companies resold a record volume of liquefied natural gas (LNG) to overseas markets in fiscal year 2023. #LNG resales reached 38.25 million tons (mt) in the fiscal year, surpassing a previous high of 38.11 mt in FY2021. Meanwhile, Japan’s own demand for the fuel fell to 64.89 mt, down 8% from FY2022, according to the Institute for Energy Economics and Financial Analysis (IEEFA)'s latest commentary. Although Japan’s own demand is declining, government policies have directed companies to maintain their current level of total LNG transactions and preserve the country’s influence in global markets. Authors Sam Reynolds and Christopher Doleman explain that Japan’s resales and domestic consumption trends have important implications for global LNG markets, which are currently experiencing an unprecedented buildout of new LNG export capacity. The rapid growth of LNG supply, combined with falling demand in key markets like #Japan and #Europe, is likely to result in a global LNG glut later this decade. “Amidst this oversupply, Japanese companies reselling LNG are likely to find themselves increasingly in competition with other exporters, putting downward pressure on prices and exacerbating financial risks for LNG traders. In other words, Japan’s efforts to maintain long-term LNG dominance may not pay off.” https://lnkd.in/ehCy8Mev #oilandgas #energytransition

CCUS for Steelmaking Rapidly Losing its Lustre Key Takeaways: ??Six commercial-scale carbon capture, utilisation and storage (CCUS) projects for iron and steelmaking are in the development pipeline, up from three in 2023. However, the lack of available detail casts doubts over their development status and timelines. ??The Al Reyadah project in the UAE is still the world’s only operational commercial-scale CCUS project for steelmaking. It captured only 26.6% of the gas-based steel plant’s emissions in 2023. There are still no commercial-scale CCUS plants for blast furnace-based steelmaking in operation anywhere in the world. ??Despite mounting evidence to the contrary, major steelmakers and miners such as Nippon Steel, ArcelorMittal and BHP continue to insist to their investors that CCUS will play an important role in meeting their decarbonisation targets. Hailed as the solution to reducing greenhouse gas emissions from steelmaking, carbon capture and storage’s prospects in the industry look increasingly bleak, according to the Institute for Institute for Energy Economics and Financial Analysis (IEEFA). Nonetheless, major steelmakers and iron ore miners such as Nippon Steel Corporation, ArcelorMittal and #BHP continue to insist to their investors that the flawed technology will play a significant role in meeting their decarbonisation targets despite growing evidence to the contrary, say IEEFA analysts Simon Nicholas and Soroush Basirat in their briefing note?Steel CCUS update: Carbon capture technology looks ever less convincing. Behind the hype, the reality is few if any of these projects will likely enter operation. “CCUS is predisposed to major financial, technological and environmental risks,” the authors say. “Low capture rates is a key ongoing issue that is often under-appreciated. “The amount of carbon targeted for capture at a project tends to be significantly below its overall emissions. Furthermore, CCUS projects consistently struggle to meet even these low capture targets.” For example, the world’s only operational commercial-scale CCUS plant for steelmaking is the Al Reyadah project in the UAE. In 2023, it captured only 26.6% of the gas-based steel plant’s emissions. Since the previous report in April, the technology has suffered further setbacks, such as: ??A C$2.4 billion CCUS proposal for power generation near Edmonton, Canada, was cancelled in May on the grounds it was not financially viable. ??Revelations the flagship Sleipner CCUS project off Norway had been grossly over-reporting its carbon capture rates for years due to faulty monitoring equipment. Of the six CCS projects in the global pipeline according to the Global CCS Institute, fundamental details remain undisclosed, unknown or “under evaluation”, casting doubt over their prospects. Should any reach completion, they face a host of technical, financial and site-specific challenges. https://lnkd.in/dgmPGs83

Four Ways to Cut Consumer Energy Costs and Alleviate Cost-of-Living Pressures ?? As energy costs continue to rise, there are significant untapped opportunities to reduce household energy bills – and provide much-needed relief for Australian consumers. Key Insights ? 1?? High-Efficiency Appliances: The shift to heat pumps for space and water heating can cut energy use dramatically. Each year of delay in adopting heat pumps costs Australians $3.4 billion in unnecessary expenses. Fast-tracking this transition through improved appliance standards is crucial. 2?? Flexible Water Heaters and Air Conditioners: By shifting when these appliances are used – such as running water heaters during the day on cheap solar power – households could save up to $6.7 billion by 2040. Flexible use could also reduce grid pressure and cut system costs. 3?? Supernormal Profits by Networks: Electricity networks have generated $15 billion in supernormal profits since 2014. In 2023 alone, network profits reached a staggering $4.35 billion – four times their allowed level. Urgent action is needed to address these profits and improve accountability and transparency in the regulatory process. 4?? Electricity Distribution Networks: Network costs represent 45% of a typical electricity bill, and there’s a high risk of over-investment in networks driving future bill hikes. A review of revenue regulation and smart integration of distributed energy resources (#DER) could help prevent this, reducing costs for consumers. ?? Institute for Energy Economics and Financial Analysis (IEEFA) recommends several solutions to accelerate change, including flexibility standards for new appliances, better use of DER, and a reevaluation of regulatory frameworks. Download factsheet ? https://lnkd.in/gdmzcnWR Also read IEEFA analyst Jay Gordon's commentary on supernormal profits ? https://lnkd.in/guz5GhnQ #EnergyEfficiency #CostOfLiving #ClimateSolutions #EnergyTransition #Australia #RenewableEnergy #PolicyReform

?? Key Highlights from #COP29 in Baku ??? ? In a live session with Kunal Shankar, Deputy Business Editor of The Hindu, IEEFA Asia Pacific's Vibhuti Garg shared her insights on the pressing issues surrounding climate finance and the challenges facing the Global South.? ? Here are the key takeaways ? ? G77 Demand for US$1.3 Trillion in Climate Finance: The G77, representing developing countries, has demanded US$1.3 trillion annually for climate adaptation, mitigation, and loss and damage. This is a significant increase from the US$100 billion annual pledge made by developed countries in 2009. However, there are concerns about whether developed countries will meet this new, ambitious target given past failures to fulfil previous pledges.? ? ? Investment Gaps and Financial Commitments: The global investment required to limit global warming to 1.5°C is about US$5 trillion annually, with developing countries needing US$2.4 trillion. Despite progress in renewable energy and energy efficiency targets, there is still a huge financial gap. The real challenge is ensuring developed countries provide the necessary funding to meet these goals, especially amid political uncertainties such as the stance of the US on climate finance.? ? ? China’s Dominance in Renewable Energy and Trade Friction: China leads in renewable energy production, particularly solar, but growing protectionism (e.g., tariffs and restrictions on Chinese exports) could create short-term price shocks. While there may be short-term disruptions in supply chains, it is an opportunity for India to ramp up domestic manufacturing to meet renewable energy demand.?? ? ? Carbon Border Adjustment Mechanism and Developing Countries: The European Union’s Carbon Border Adjustment Mechanism, which will be implemented by 2026, could have significant implications for developing countries. Industries, especially small and medium-sized enterprises, may struggle to meet carbon emission reduction standards due to lack of investment and technology. This could lead to higher costs or loss of competitive pricing in international markets. Developing countries, including India, are advocating for more time and financial support to enable these industries to transition to cleaner energy.? ? ?? Listen to the full dialogue on The Hindu’s channel on YouTube ↙ https://lnkd.in/g67UKYUp ? #COP29 #ClimateFinance #RenewableEnergy #GlobalSouth #SustainableDevelopment?

?? #IEEFA Highlights Funding Urgency for Renewable Energy at #COP29?? IEEFA has issued a call to action at COP29 to bridge a massive funding gap to meet 2030 renewable energy goals. ?? Here are some key takeaways: ?? $400 Billion Annual Gap: IEEFA stresses the need for an additional $400 billion in annual investments to hit global renewable energy targets by 2030.?? ?? Shift in Bank Lending Needed: In 2022, fossil fuels received $967 billion, compared to $708 billion for renewables.? ?? Policy & Collaboration Focus: Local policy support, global cooperation, and mandatory emissions disclosures are crucial for effective clean energy financing. ?? Incentives for Banks: IEEFA suggests that credit guarantees and climate-focused lending policies can encourage banks to prioritize renewable projects over fossil fuels.???? #RenewableEnergy #SustainableFinance #ClimateAction #EnergyTransition #COP29 #IEEFA #VibhutiGarg #ShafiqulAlam #dailynews #RenewableEnergyNews https://lnkd.in/gCxeSMXr

Transitioning from coal to clean energy isn’t just good for the planet—it’s a profitable path forward ? Latest findings by Institute for Energy Economics and Financial Analysis (IEEFA) reveal that renewable energy assets not only generate substantial profit margins and cover the costs of coal plant closures. This means power facility operators can embrace a greener future without compromising profitability. ? As we move towards a net-zero world, this shift underscores how sustainability and profitability can work together to drive impactful change. Let’s keep pushing for an energy transition that’s both financially viable and environmentally essential.

Steel #CCUS – Carbon Capture Technology Looks Ever Less Convincing The future of steel #decarbonisation has been closely tied to the potential of carbon capture, utilisation and storage (CCUS) technology. However, a new briefing note from IEEFA Australia analysts Simon Nicholas and Soroush Basirat raises serious concerns about the effectiveness and feasibility of CCUS in steelmaking. ?? Key Findings ? 1?? Limited Progress in CCUS for #Steel ? While six commercial-scale CCUS projects are in the pipeline, there’s a significant lack of transparency and clear timelines, casting doubts over their viability. ? The UAE's Al Reyadah remains the only operational steel CCUS project, capturing only 26.6% of emissions from a gas-based plant. No commercial-scale CCUS has been implemented for blast furnace-based steelmaking. 2?? Troubling Track Record ? Across sectors, CCUS projects have underperformed. The Equinor Sleipner CCUS project was recently revealed to have over-reported its performance due to faulty monitoring equipment. ? Other CCUS efforts, like the Boundary Dam project in Canada, have failed to meet expectations, while large-scale projects like the C$2.4 billion Edmonton CCUS proposal were scrapped for financial reasons. 3?? Industry Promises vs. Reality Despite the growing evidence that CCUS is not delivering, major steelmakers and miners such as ArcelorMittal, Nippon Steel and BHP continue to claim CCUS will be central to achieving their decarbonisation goals. ?? The Verdict ? With mounting evidence of CCUS’s struggles and high risks – financial, technological, and environmental – it is becoming clear that CCUS is unlikely to play a central role in #decarbonising steel. For more detailed insights, check out the full briefing note ↙ https://lnkd.in/ghb7nMxg #Steel #Decarbonisation #CCUS #GreenTech #CarbonCapture