Energy This Week: Booming Russian crude to India, time to refreeze the Arctic, & UAE Climate Tech

“A special talent to be consistently wrong”

Saudi Arabia’s Oil Minister Prince Abdulaziz bin Salman criticised the International Energy Agency for forecasts that he accused of creating volatility last year, saying, “They have proven that it really takes a special talent to be consistently wrong and that's exactly what they have done.” Speaking to the Qatar Economic Forum, he also said the Opec+ group would be vigilant and proactive. Opec secretary general Haitham Al Ghais also warned a gathering in Dubai of the?danger of underinvestment.

The chairman of Indian Oil Corporation, India’s top refiner, told the conference in Dubai that it is?committed to its long-term purchases?of Middle East crude, despite the steep rise in imports of Russian oil. India bought 44 million tonnes of discounted Russian crude last year, up from 6.5 million tonnes in 2021, as the country vaults nearly to match China as top buyer of the country’s petroleum. Shrikant Vaidya also expressed his worries about a lack of investment in new oil and gas production, and the “practically zero” order-book for new oil tankers.

The IEA’s chief, Fatih Birol, says that?tightening the price caps?on Russian oil enforced by the G7 countries will not affect supply. “Russia did play the energy card, and it did fail. But there are some loopholes, some challenges for the better functioning of the oil price cap,” he observed.

Ben Wallace, the UK’s Defence Secretary, has warned that Russia has the “intent and ability” to target undersea pipelines and cables. Last year, Russia's Nord Stream gas pipelines beneath the Baltic Sea to Germany were sabotaged in an unexplained incident.

Oil prices notched their?first weekly gain?in five weeks, even though prices?dipped on Thursday?and Friday, with Brent crude down to $75.58 per barrel, after seeing a boost on Wednesday as hopes grew for a resolution of the US’s?debt ceiling?shambles. The news of refilling the Strategic Petroleum Reserve, albeit only in small amounts so far, was also supportive. March oil consumption reached the highest level in history, and the IEA has raised its oil demand forecasts for this year, despite the economic pessimism.

Nevertheless, Swiss bank UBS has?slashed $10 off its end-year Brent forecast, taking it to $95 per barrel, on continuing economic fears in the US and China. It sees lower demand and stronger Russian output than the IEA.

Iraq will renew its deal to?provide heavy fuel oil?for energy-starved Lebanon in exchange for services. Lebanon has to swap the fuel for diesel that it can actually use in its power stations, and it isn’t clear what Iraq actually gets in return.

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Warming to go above 1.5°C: time to refreeze the Arctic

Global average temperatures are likely to?surpass 1.5 degrees Celsius?above pre-industrial levels at least once in the next five years. The Paris Agreement of 2015 aimed to limit long-term warming to no more than 1.5°C. Exceeding it briefly would not mean failure, but it does show the ever-growing urgency of cutting greenhouse gas emissions. The El Nino phenomenon in the Pacific Ocean is expected and it boosts global temperatures temporarily in years when it occurs. On current trends, by the end of the century, more than one-fifth of people will be?exposed to dangerous heat?– especially in India and the Sahel.

The Arctic is warming three times faster than the world average. To cool it and prevent a dangerous feedback loop of melting ice, the Centre for Climate Repair at the University of Cambridge suggests sending a fleet of hundreds or thousands of ships to spray seawater in the air, forming clouds to cool and?refreeze the Arctic.

Trust in climate negotiations is in short supply. Protesters are increasingly angry: they?disrupted a private jet sales fair?at Geneva Airport on Tuesday, and activists tried to?storm the stage?at Shell’s annual shareholder meeting in London.

As host of Cop28 starting in November in Dubai, the UAE intends to?build bridges, and to focus on the least-developed economies and on human health. The lowest-income countries hold more than half the global population, but produce just 12 per cent of greenhouse gas emissions. The nation can also?encourage education?to boost sustainability and climate resilience. On Monday, Bloomberg Philanthropies announced co-operation with the International Renewable Energy Agency to?mobilise capital?in emerging and developing economies.

Drought, floods and heatwaves disrupt economies, energy systems and trade. Low water levels in Panama have?restricted transit?through the famous canal, an essential route for liquefied petroleum gas and liquefied natural gas from the US to East Asia.

Temperate rainforests have almost disappeared from Britain: environmental campaigner and writer Guy Shrubsole wants to?bring them back.

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Climate Tech leads the UAE’s clean energy ambitions

UAE Climate Tech, held in Abu Dhabi earlier this month, aims to prepare for Cop28 by progressing the?most promising technologies?that address some of the thorniest climate challenges. Solutions on show included biotechnology, carbon capture, hydrogen, drones, nuclear fusion and artificial intelligence.

Opec's Mr Al Ghais remarked on the UAE’s?climate leadership: “It is about reducing greenhouse gas emissions and not the misguided narrative of replacing one energy for another … This is why our member countries invest heavily in hydrogen projects, carbon capture utilisation and storage facilities … and there's no better place than here in the UAE that exemplifies this.”

The nation’s renewable sector continues to progress strongly. Masdar’s renewable energy capacity?reached 20 gigawatts?last year, almost double the level from two years earlier. It aims to be one of the world’s largest renewable companies by 2030 with at least 100 gigawatts of capacity, and also targets 1 million tonnes of annual hydrogen output by that year. On Friday, it signed to?develop 2 gigawatts of solar and wind projects?and 500 megawatt hours of batteries in Uzbekistan, after a string of other deals across the Caspian-Central Asian region.

One of its main shareholders, Mubadala,?invested more than $29 billion?last year across renewables and other future industries, with its assets standing at $276 billion. Key investments included $525 million in Tata Power Renewables, one of India’s biggest renewable companies, and the acquisition alongside partners of Skyborn Renewables, the world’s biggest private developer of offshore wind farms.

French energy developer Engie is keen to start?new green hydrogen projects?in the UAE, Oman and Saudi Arabia, as it targets 4 gigawatts of global capacity by 2030.

Dubai Municipality has completed a project to?turn biogas from wastewater?at its Warsan treatment plant to electricity, supplying 6 megawatts or about half of the facility’s requirements and saving 31,000 tonnes of greenhouse gas emissions annually.

The real estate management unit of Aldar Properties raised $500 million from its?debut green sukuk, to invest in green buildings, renewables, energy efficiency and water sustainability. The former US agriculture secretary praised the UAE for its?efforts on more sustainable agriculture. A team of UAE researchers recently visited the Netherlands to learn from the country’s world-leading indoor farming, which used students’ investigations to?boost energy efficiency?during last year’s crisis. And Etihad Airways?reduced its carbon emissions?almost 42 per cent from 2019 to 2022. Airlines have promised to reach net zero by 2050, requiring major changes to their fuels and operations.

The US and partners including the UAE have promised $275 million to?build a small modular nuclear reactor?(SMR) in Romania. SMRs could be faster and cheaper to install than traditional large reactors, and nuclear power is important in Europe to reduce pollution while replacing gas from Russia.

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Africa the next frontier for sustainable energy

The UAE’s privately-owned Amea Power is actively developing renewable projects across Africa. Managing director Mohamed Al Nowais sees the continent as a?future clean energy hub, with its 7,500 gigawatts of solar and 1,800 gigawatts of wind power potential and huge potential for green hydrogen.?The National’s Nick Webster travelled to Togo and Sierra Leone in West Africa to?see their energy transformation. At the African Development Bank’s annual meetings in Egypt on Tuesday, Cop28 President-designate Dr Sultan Al Jaber advocated a?major increase in climate funding?for the continent. Out of $3 trillion invested in renewable energy over the last two decades, just 2 per cent has been spent in Africa.

Saudi Arabia also has big hydrogen ambitions. On Monday, Neom Green Hydrogen, one of the world’s leading projects, a joint venture of private utility Acwa Power, the futuristic city of Neom, and American industrial gases firm Air Products,?closed $8.4 billion?in funding. Neom will produce up to 600 tonnes of hydrogen daily from 4 gigawatts of solar and wind. The city has announced that its port, at the manufacturing site of Oxagon, is now open and it is intended to be?entirely powered by renewables.

Acwa also?signed three power purchase agreements?with the Saudi Power Procurement Company, worth $3.25 billion, for solar photovoltaic plants totalling 4.55 gigawatts. The country aims to have 58.7 gigawatts of renewables operational by 2030, and Acwa’s domestic portfolio of projects active or under development currently stands at 23.4 gigawatts. On Thursday, it announced it would?supply green hydrogen to?Uzkimyosanoat, Uzbekistan’s state chemical corporation.

Globally, the IEA finds that?manufacturing capacity for renewable energy systems is surging: solar PV is ahead of net-zero targets, batteries are on-track, though wind, electrolysers and heat pumps are still lagging. The G7 meeting in Japan supported the goal of a?highly decarbonised transport sector?by 2030, and net-zero road emissions by 2050.

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Corporate deals: Adnoc L&S offers more shares to the public

Listed entity Adnoc Drilling will?focus more on unconventional oil and gas?this year, chasing the estimated 22 billion barrels of light, sweet oil resources in Abu Dhabi. Adnoc Logistics and Services, conducting its own IPO, has?increased the number of shares?available to retail investors.

UAE President Sheikh Mohamed has ordered the?provision of subsidised electricity?to low-income Emirati farm-owners.

Saudi mining giant Ma’aden saw an?81 per cent drop?in its first-quarter profits, as its cost and utility bills rose, while the selling price of its minerals other than gold fell. District cooling company Empower will?pay $299 million?for the cooling units of Dubai Airport, adding almost 8 per cent to its capacity of 1.4 million refrigeration tonnes.

Indian conglomerate Adani Group is?still in trouble?following accusations of fraud earlier this year. India’s securities regulator is to deliver a report by August 14, whose findings would be critical to a company chosen to champion India’s renewables and hydrogen ambitions.