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#FORATOM highlights need for investment in all low-carbon technologies to meet climate challenges

EU Reporter Correspondent

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The world is facing a major challenge – in order to prevent irreversible climate change, global warming needs to be kept below 1.5 degrees.  For Europe, this means a full decarbonization of its economy.  And this, in turn, requires adequate financing and investment in ALL low-carbon technologies. 

The EIB Energy Lending Policy consultation came to a close on 29 March 2019.  In FORATOM’s opinion it is important to ensure coherence across EU legislation and for policy to be in line with the objective of achieving a carbon-free Europe by 2050.  At the same time, such policy must ensure that:

  • Europe has access to the energy it needs when it needs it;
  • new environmental problems are not created, and;
  • it supports jobs and growth in Europe.

To achieve this, EU legislation must support ALL low carbon technologies, rather than cherry-picking one technology over another. Basing decisions on political acceptance rather than objective criteria will make it much harder for Europe to achieve its goals, with the risk of a lock-in effect if it were to rest too much on CO2-emitting technologies.

Last week, the European Parliament adopted its text on the European Commission’s proposal for a sustainable finance taxonomy[1] Unfortunately, MEPs have failed to take an objective approach on what “sustainable” actually means, assuming that only technologies which are renewables-based should be eligible for such finance.  In this respect, the text adopted goes against:

  1. The European Commission’s 'A Clean Planet for All' strategic vision which recognises that, nuclear, together with renewables, will form the backbone of a carbon-free power sector in 2050.
  2. The latest Intergovernmental Panel on Climate Change (IPCC) report (Global Warming of 1.5°C, 8 October 2018) according to which nuclear power is essential if the world is to keep global warming to below 1.5 degrees.

Also, in its current form, the adopted text raises two problems:

  • The exclusion of future potential low-carbon breakthrough technologies which are not renewables-based – thereby preventing them from ever coming to market.
  • The risk of creating new environmental problems. While renewables such as wind and solar are low carbon, they require significant volumes of raw materials, critical raw materials and rare earths. They also come with a significant land footprint, which can lead to the loss of biodiversity.

FORATOM’s response to the EIB Energy Lending Policy Consultation can be found here.

The European Atomic Forum (FORATOM) is the Brussels-based trade association for the nuclear energy industry in Europe. The membership of FORATOM is made up of 15 national nuclear associations and through these associations, FORATOM represents nearly 3,000 European companies working in the industry and supporting around 800,000 jobs.

[1] Proposal for a regulation on the establishment of a framework to facilitate sustainable investment

Electricity interconnectivity

Commission approves €400 million Danish aid scheme to support production of electricity from renewable energy sources

EU Reporter Correspondent

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The European Commission has approved, under EU state aid rules, a Danish aid scheme to support electricity production from renewable sources. The measure will help Denmark reach its renewable energy targets without unduly distorting competition and will contribute to the European objective of achieving climate neutrality by 2050. Denmark notified the Commission of its intention to introduce a new scheme to support electricity produced from renewable energy sources, namely onshore wind turbines, offshore wind turbines, wave power plants, hydroelectric power plants and solar PV.

The aid will be awarded through a competitive tendering procedure organised in 2021-2024 and will take the form of a two-way contract-for-difference premium.. The measure has a total maximum budget of approximately €400 million (DKK 3 billion). The scheme is open until 2024 and aid can be paid out for a maximum of 20 years after the renewable electricity is connected to the grid. The Commission assessed the measure under EU state aid rules, in particular the 2014 Guidelines on state aid for environmental protection and energy.

On this basis, the Commission concluded that the Danish scheme is in line with EU state aid rules, as it will facilitate the development of renewable electricity production from various technologies in Denmark and reduce greenhouse gas emissions, in line with the European Green Deal and without unduly distorting competition.

Executive Vice President Margrethe Vestager, in charge of competition policy (pictured), said: “This Danish scheme will contribute to substantial reductions in greenhouse emissions, supporting the objectives of the Green Deal. It will provide important support to a wide range of technologies generating renewable electricity, in line with EU rules. The wide eligibility criteria and the selection of the beneficiaries through a competitive bidding process will ensure the best value for taxpayers money and will minimise possible distortions of competition.”

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Energy

Kazakhstan will continue to increase oil production under OPEC+ agreement

Astana Times

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Kazakhstan will continue to increase oil production in May, June and July of 2021 following the 15th meeting of OPEC (Organisation of the Petroleum Exporting Countries) and non-OPEC ministers meeting that took place virtually, the Kazakh Ministry of Energy press service reported, writes Abira Kuandyk in Business.   

“On 1 April, a ministerial meeting of the countries participating in the OPEC+ agreement took place. Collectively countries decided to increase the current production level of OPEC+ countries by 350,000 barrels per day in May and June and by 450,000 barrels per day in July,” said the Kazakh Ministry of Energy in a press statement. 

Kazakhstan’s obligation under the OPEC+ agreement states that oil production will amount to 1.46 million barrels per day for May and June and 1.47 million barrels per day for July. 

The data on the trading platform illustrates that the cost of Brent crude oil has risen in price by almost 3.6 percent and rose to US$65 per barrel. 

The Meeting welcomed the positive performance of participating countries. “Overall conformity reached 115 per cent in February 2021, reinforcing the trend of aggregate high conformity by participating countries,” said OPEC in a press statement.  

On 4 March, Kazakh Energy Minister Nurlan Nogayev participated in the 14th meeting of OPEC and non-OPEC ministers after which Kazakhstan and Russia were allowed to increase oil production to 20,000 barrels per day and 130,000 barrels per day, respectively, in April. 

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Energy

Azerbaijan unearths first gas condensate in Shafag-Asiman

Energy Correspondent

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Azerbaijan’s SOCAR has made the first gas condensate discovery in Shafag-Asiman fields, the company reported.

According to the statement: “As we reached a depth of 7,189 metres in an exploration well drilled in the Shafag-Asiman block, part of the Azerbaijani sector of the Caspian Sea, the first gas condensate was found. That meant the successful completion of the drilling of the Fasila formation in the gas field. At the same time, to fully grasp the extent and size of the reserves, appropriate technical design will be needed to drill an extra lateral appraisal well towards the structure’s arch.”

Exploration at the Shafag-Asiman block is underway as part of the SOCAR-BP venture. In accordance with the Production Sharing Agreement (PSA), the well was drilled by BP at a depth of 623 meters, using the Heydar Aliyev semi-submersible rig operated by the Caspian Drilling Company (CDC). The drilling kicked off on January 11, 2020.

Shafag-Asiman, a complex of offshore geological structures that was discovered in 1961, lies 125km south-east of Baku and covers an area of 1,100 square meters. Here the water depth ranges from 650 to 800 meters. On October 7, 2010, SOCAR and BP entered into a 30-year agreement on exploration, development and production sharing of the Shafag-Asiman offshore block in the Azerbaijani sector of the Caspian Sea. Under the contract, BP conducted a 3D seismic survey at the Shafag-Asiman block in 2012. Having examined the data, the two partners identified the location of the first exploration well and spudded it in 2020.

SOCAR is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, marketing petroleum and petrochemical products in domestic and international markets, and supplying natural gas to the industry and the public in Azerbaijan.

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