New base energy news 06 julye 2020 issue no. 1353 by senior editor khaled alawadi (1)

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NewBase Energy News 06 July 2020 - Issue No. 1353 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
U.A.E: Abu Dhabi Terminals improves global connectivity with
the MSC and 2M ‘JADE’ service
WAM/Hassan Bashir
Abu Dhabi Terminals, ADT, the managers and operators of Khalifa Port Container Terminal,
recently welcomed yet another new main line service to its growing network. The JADE service
which forms part of the Mediterranean Shipping Company, MSC, and 2M alliance networks,
provides ADT customers with additional direct coverage and fast transit times from the
Mediterranean and Red Sea into Abu Dhabi and from Abu Dhabi into South East Asia and North
Asia.
The first vessel call on this new service to Abu Dhabi took place on Monday, 8th June when MSC
Maya made her maiden call to Khalifa Port Container Terminal. The containerships deployed on the
JADE service are some of the largest containerships in the world and the largest in the MSC fleet.
www.linkedin.com/in/khaled-al-awadi-38b995b

On 23 June and 28 June ADT hosted the two largest containerships to ever call a terminal in the
Arabian Gulf, the MSC SIXIN (23,656 TEU capacity) and the MSC GÜLSÜN (23,756 TEU capacity).
Ahmed Al Mutawa, Abu Dhabi Terminals’ Chief Executive Officer commented: "Our excellent
relationship with MSC and the 2M alliance partners enables us to provide unrivalled connectivity to
global markets for our customers.
The newly added JADE service is a clear testament to the importance which MSC and its 2M
alliance partners place on being able to offer the Abu Dhabi and UAE markets the very best service
levels and connectivity to and from Khalifa Port.
The addition of new services, such as the JADE service, coupled with the ongoing expansion of
Khalifa Port Container Terminal, which will double our annual handling capacity to 5 Million TEU by
the end of this year, shows our continued commitment to offer the best possible logistics solutions
for our customers."
The service rotation for the JADE service is: Gioia Tauro, Barcelona, Valencia, Gioia Tauro, Port
Said East, King Abdullah, Salalah, Khalifa Port (ADT), Jebel Ali, Singapore, Yantian, Qingdao,
Busan, Ningbo, Shanghai, Xiamen, Nansha, Yantian, Singapore, Port Said East, Gioia Tauro.

Oman in exploration agreement with Tethys Oil for Block 58
The National - Jennifer Gnana + NewBase
Oman’s oil and gas ministry signed an agreement with Swedish energy firm Tethys Oil to develop
a concession in the southwestern part of the country. Tethys Oil will explore for oil and gas in the
Block 58 concession, which straddles the South Oman Salt basin and the Rub Al Khali desert,
according to the agreement.
The company, which focuses primarily on Oman’s oil and gas fields, has interests onshore Lithuania
and France as well.
“We are very happy to have been
given the opportunity to explore
for hydrocarbons on Block 58.
The signing of this EPSA
represents another step in Tethys
Oil’s strategy in sultanate of
Oman,” said Tethys managing
director Magnus Nordin.
Oman, the largest Gulf oil
producer outside of Opec, has
largely mature hydrocarbon
reserves. The 2014-16 oil price
crash forced the exit of many
international oil and gas firms
from the sultanate. The ministry
has since launched several bid
rounds to auction oil and gas
concessions across the country.
As per the agreement, Tethys Oil
acquired 7,600 km of 2D seismic
and 1,100 square kilometres of
3D seismic data from the block’s
previous operators. The
company also has access to the
raw logs and well reports drilled
within the boundaries of the
concession earlier.
"Both wells encountered hydrocarbon shows. Multiple play concepts are believed to exist within the
block boundaries, including plays familiar to Tethys, with several leads identified,” the company said
on Sunday.
The exploration and production sharing agreement (EPSA) will cover an initial exploration period of
three years, with the option of extending it for another three.
If Tethys discovers a commercially viable oil and gas resource, the EPSA contract will be
transformed into a 15-year production licence, with a provision to extend for another five years.
The government has rights to acquire up to 30 per cent interest in the concession, "against refunding
of past expenditure”, the company said. The first phase of exploration includes a 3D seismic
campaign and drilling of two exploration wells.

Algeria: Neptune Energy announces major milestone for Touat
gas plant facility … Source: Neptune Energy
Neptune Energy has announced a major milestone for the Touat gas facility in Algeria, with day-to-
day operations having been formally passed to Groupement Touat Gaz (GTG).
Operation of the facility has been carried out by contracting company, Técnicas Reunidas (TR),
since gas export began in September 2019. Operational handover was dependent upon the signing
of the Performance Acceptance Certificate (PAC) between GTG and TR, which took place on 24
June.
GTG is staffed by Neptune Energy and Sonatrach secondees who bring together decades of
operational experience in Europe and Algeria.
Neptune Energy’s Vice President for North Africa Asia Pacific, Philip Lafeber, said:
'The Touat plant continues to operate well, emphasising the growing importance of the North Africa
business in Neptune’s geographically-diverse and gas-weighted portfolio.'
Director General at GTG, Ian Conacher, added:
'We have built the right team to deliver operations at Touat. TR played a key role in enabling first
gas export and ramping up the plant to plateau and I would like to thank them for their efforts at site.

I look forward to continuing to work with the excellent GTG team to maintain solid production levels
from Touat as we take over the operator role.'
The Touat facility is located around 1,400 kms southwest of Algiers and close to Adrar, comprising
19 development wells, a gas treatment plant for gas and stabilised condensate with a gathering
network and export pipelines. The facility achieved plateau production in April 2020.
Production from Touat will represent around nine percent of Algeria’s total gas exports and will be
in production for more than 20 years. GTG consists of Neptune Energy Touat (65%)
and Sonatrach (35%).

India’s Oil Demand from Cars to Factories Limps Toward Normalcy
Bloomberg - Debjit Chakraborty
The world’s fastest-growing oil market is showing an uneven recovery two months after
easing demand-destroying virus-control measures.
Provisional fuel sales in June had climbed within 88% of 2019 levels from less than half in
April in the midst of the world’s biggest lockdown, the oil ministry said citing sales of the
three major state-owned retailers. But diesel and petrol, typically the two most-sold fuels
and proxies for the nation’s economic health, lagged that mark, while sales of cooking gas
surged.
The June data “comes in the backdrop of Indian economy gradually getting momentum with
the ease of lockdown restrictions and revival of economic activities that are slowly getting
back on track,” the oil ministry said in a statement. The figures represent sales by three
state-owned oil refiners and retailers Indian Oil Corp., Bharat Petroleum Corp. and
Hindustan Petroleum Corp., which together control about 90% of the country’s petroleum
fuels market.
Total fuel sales were propped up by a surge in liquid petroleum gases, which are used for
cooking and have seen increased consumption as people spend more time at home.
Sales of diesel, the country’s most-consumed fuel, were at 5.5 million tons in June, up 20%
from May but still down 17% from a year ago, according to officials with direct knowledge
of the companies’ activities, who asked not to be identified because the data wasn’t public.
Petrol also rebounded from May but was
well below 2019 levels, while aviation
fuel sales are still 67% below last year’s
figures as international flights remain
restricted, even as domestic travel has
resumed.
Crude throughput at refineries owned by
the three state-owned firms are
currently at about 85%, up from as low
as 55% in early-April, according to the
government statement dated July 1.
SOURCE: Government data; all figures in tons
Oil Minister Dharmendra Pradhan said last week that he expects fuel demand in the third-
biggest oil consumer to return to normal by the end of September. His projection was more
bullish than those by the International Energy Agency and the Organization of Petroleum
Exporting Countries, which don’t see India’s fuel demand at normal levels until the end of
this year.
India’s rebound has remained far behind that of its neighbor China, where demand bounced
back swiftly after the nation made early progress in containing the spread of coronavirus
and pledged an injection of liquidity into markets.

World:Lowest of the century! Q2-2020 discoveries total 4.9
billion boe, hit by travel bans and budget cuts - Rystad Energy
Global discoveries of conventional resource volumes reached just 4.9 billion barrels of oil equivalent
(boe) in the first half of 2020, Rystad Energy estimates, the weakest-performing first half of the 21st
century. The resource volumes were 42% lower and the number of discoveries was down by 31%
compared to the same period in 2019.
The average monthly discovered volumes so far this year are estimated at 810 million boe, a 34%
drop from the same period last year. This year could be on track to repeat the 2019 predominance
of gas discoveries, with 55% of the volumes discovered so far being categorized as gas. The top
five largest discoveries account for about 68% of the total discovered volumes.
The monthly average was pulled down primarily by June, which only saw three small onshore
discoveries, adding around 16 million boe in discovered volumes. January and May were the most
successful months in 1H20 due to significant discoveries such as Jebel Ali in the United Arab
Emirates, Maka Central in Suriname, Uaru in Guyana and 75 Let Pobedy in Russia.
'Last year we saw the highest volumes of discovered resources since the last downturn. Based on
the large number of high-impact exploration wells planned for this year, 2020 was meant to follow
the same path. But then Covid-19 struck and the oil market crashed in 1Q20, resulting in delays
and cancellations as operators cut budgets,' says Rystad Energy’s upstream analyst Taiyab Zain
Shariff.
Russia, South America and the Middle East account for about 73% of the total discovered resources
so far in 2020. Africa and Australia seem to have taken a back seat this time, with less than 1% of
the total discovered resources. It is also interesting to note that close to 70% of the resources were
discovered offshore.
There were a total of 49 conventional oil and gas discoveries during the first half of 2020, of which
27 were announced during the global lockdown and travel restriction period. While these travel bans

and the associated logistical issues didn’t have much of an effect on projects in the testing and
completion phase, they did cause delays for projects in the initial and ongoing drilling phase that
required crew changes. This could be one of the reasons for the lower number of discoveries in May
and June.
A total of 14 high-impact wells (HIWs) have been completed so far this year. Of these, three have
resulted in medium-sized to large discoveries, nine were dry or had uncommercial hydrocarbon
shows, while results are still pending for the remaining two. It is estimated that the wells that have
come up dry targeted cumulative estimated pre-drill resources of more than 2.5 billion boe.
Drilling was in progress on an additional four high-impact wells as we passed the half-year mark,
though the SAX01 well on BP’s Shafag-Asiman block in Azerbaijan has been temporarily
suspended due to the Covid-19 travel bans. Another 11 high-impact wells are expected to be drilled
before the end of 2020, including key wells in the Suriname-Guyana basin, Southern Africa, Timor-
Leste, Norway and the frontier areas of Russia.
'Although we look forward to these wells being spudded before the end of this year, a few delays
may still arise because of Covid-19-related logistical issues that may come up as a result of the
expected second wave of the pandemic,' adds Shariff.
The in-progress and planned high-impact wells have the potential to add up to 5.0 billion boe to the
global tally. But with the unpredictable oil markets, and operators’ budget cuts on top of the Covid-
19-related logistical issues, oil and gas exploration faces major challenges. It is estimated that the
global offshore exploration activity this year might reach its lowest point in 20 years, with discovered
volumes falling even lower than they were in 2016.
For more analysis, insights and reports, clients and non-clients can apply for access to Rystad
Energy’s Free Solutions and get a taste of our data and analytics universe.

NewBase July 06-2020 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices mixed as COVID spike casts shadow over U.S. demand
Reuters + Bloomberg + NewBase
Oil prices offered up a mixed market snapshot on Monday, with Brent crude edging higher,
supported by tighter supplies, while U.S. benchmark WTI futures dropped on concern that a spike
in coronavirus cases could curb oil demand in the United States.
Brent crude rose 18 cents, or 0.4%, to $42.98 a barrel by 0252 GMT after a 4.3% gain last week,
while U.S. West Texas Intermediate crude was at $40.42, down 23 cents, or 0.6%, from its previous
settlement on Thursday. U.S. markets were closed on Friday to mark July 4 holiday celebrations.
Amid rising numbers of coronavirus cases in 39 U.S. states, a Reuters tally showed that in the first
four days of July alone, 15 states reported record increases in new COVID-19 infections with parties
over the holiday weekend possibly leading to another spike.
Oil price special
coverage

“There will be some kind of decline in demand if cases were to increase as people will stay at
home,” said Howie Lee, an economist at Singapore’s OCBC bank. “The pace of U.S. demand
recovery will not be as steep as expected.”
For now, analysts at ING bank said data for several cities in affected states show no significant
reduction in road traffic week-on-week.
“We will get a better idea of what impact tighter restrictions in several states have had on gasoline
demand with the EIA (Energy Information Administration) report this week,” ING said in a note.
The implied volatility for Brent crude LCOATMIV has dropped to the lowest since prices started
collapsing in March as some in the market remain focused on tightening supplies as production by
the Organization of the Petroleum Exporting Countries (OPEC) fell to its lowest in decades with
Russian output dropped to near targeted cuts.
OPEC and allies including Russia, collectively known as OPEC+, have pledged to slash production
by a record 9.7 million barrels per day (bpd) for a third month in July. After July, the cuts are due to
taper to 7.7 million bpd until December.
U.S. production, the world’s largest, is also falling. The number of operating U.S. oil and natural gas
rigs fell to an all-time low for a ninth week, although the reductions have slowed as higher oil prices
prompt some producers to start drilling again.

Lost in Oil’s Rally: $2 Trillion-a-Year Refining Industry Crisis
Crude oil is the world’s most important commodity, but it’s worthless without a refinery turning it into
the products that people actually use: gasoline, diesel, jet-fuel and petrochemicals for plastics. And
the world’s refining industry today is in pain like never before.
“Refining margins are absolutely catastrophic,” Patrick Pouyanne, the head of Europe’s top oil
refining group Total SA, told investors last month, echoing a widely held view among executives,
traders and analysts.
Catastrophic Margins
Hydrocracking margins in Europe from processing Urals crude, past decade
Oil Analytics
What happens to the oil refining industry at this juncture will have ripple effects across the rest of
the energy industry. The multi-billion-dollar plants employ thousands of people and a wave of
closures and bankruptcies looms.
“We believe we are entering into an ‘age of consolidation’ for the reﬁning industry,” said Nikhil
Bhandari, refining analyst at Goldman Sachs Inc. The top names of the industry, which collectively
processed well over $2 trillion worth of oil last year, are giants such as Exxon Mobil Corp. and Royal
Dutch Shell Plc. There are also Asian behemoths like Sinopec of China and Indian Oil Corp., as
well as large independents like Marathon Petroleum Corp. and Valero Energy Corp. with their
ubiquitous fuel stations.
The problem for the refiners is that what’s killing them is the medicine that’s saving the wider
petroleum industry.
READ: Why Covid-19 will hasten the demise of many oil refineries

When U.S. President Donald Trump engineered record oil production cuts between Saudi Arabia,
Russia and the rest of the OPEC+ alliance in April, he may have saved the U.S. shale industry in
Texas, Oklahoma and North Dakota, but he squeezed refiners.
A refinery’s economics are ultimately simple: it thrives on the price difference between crude oil and
fuels like gasoline, earning a profit that’s known in the industry as a cracking margin.
The cuts that Trump brokered lifted crude prices, with benchmark Brent crude soaring from $16 to
$42 a barrel in the space of a few months. But with demand still in the doldrums, gasoline and other
refined products prices haven’t recovered as strongly, hurting the refiners.
The industry’s most rudimentary measure of refining profit, known as a 3-2-1 crack spread (it
assumes three barrels of crude makes two of gasoline and one of diesel-like fuels), has slumped to
its lowest level for the time of the year since 2010. Summer is normally a good period for refiners
because demand rises with consumers hitting the road for their vacations. This time, however, some
plants are actually losing money when they process a barrel of crude.
Worst Fear
Just a few weeks ago, the outlook appeared to be improving for the world’s biggest oil consumers.
Demand in China was almost back to pre-virus levels and U.S. consumption was gradually
rebounding. Now, a second wave of infections has prompted Beijing to lock down hundreds of
thousands of residents. Covid-19 cases are also on the rise in Latin America and elsewhere.
With demand in the U.S. now showing signs of heading south again as coronavirus cases flare up
in top gasoline-consuming regions including Texas, Florida and California, the margins are at risk
of deteriorating in America, which accounts for nearly two in each ten barrels of oil refined worldwide.
“The worst fear for refiners is a resurgence of the virus and another series of lockdowns around the
world that would again significantly impact demand,” said Andy Lipow, president of Lipow Oil
Associates in Houston.

Another problem is that -- where it has been recovering -- the demand pickup has been uneven
from one refined product to the next, creating significant headaches for executives who need to
select the best crudes to purchase, and the right fuels to churn out. Gasoline and diesel consumption
has surged back, in some cases to 90% of their normal level, but jet-fuel remains nearly as
depressed as at the nadir of the coronavirus lockdowns, running at just 10% to 20% of normal in
some European countries.
Refiners had resolved the problem by blending much of their jet-fuel output into, effectively, diesel.
But that, in turn, is creating a new challenge: too much of so-called middle distillates like diesel and
heating oil.
“Right now gasoline demand is barely keeping some plants alive,” said Stephen Wolfe, head of
crude oil at consultant Energy Aspects Ltd. “And with jet production shifting over to diesel and
gasoline production, that puts even more strain on product supply,” he added.
In the U.S. refining belt, processing rates are being continually tweaked in response to potential
fluctuations in demand. In April, during the height of U.S. lockdowns, Valero Energy Corp.’s McKee,
Texas, refinery cut rates to about 70%. It then raised processing to near 79% in anticipation of the
Memorial Day holiday, before finding a new low of 62% by mid June, according to people familiar
with the situation.
Disastrous Diesel
Seasonality chart for diesel cracks, past decade
ICE Futures Europe
Ultimately, if refiners don’t make money, they buy less crude, potentially capping the oil-price
recovery of the past few months for Brent and other benchmarks. Even so, the actions of Saudi
Arabia, Russia and the rest of the OPEC+ group suggest that refiners will remain squeezed for
longer, with oil prices outpacing the recovery in fuel prices.

The immediate problem is compounded by a longer-term trend: the industry has probably overbuilt
over the last decades, and older plants in places like Europe and the U.S. can’t compete with new
ones popping up in China and elsewhere in the world.
“Refinery margins in the next five years are going to be worse than the average for the last five
years, and particularly bad in Europe,” said Spencer Welch, vice president of oil markets and
downstream consulting at IHS Markit. “We already thought that refining was in for a tough time,
even more so now.”
Catalyst for Change
The weakness means that the industry’s collective earnings will plunge to just $40 billion this year,
down from $130 billion in 2018, according to an estimate from industry consultant Wood Mackenzie
Ltd. of 550 refineries around the world.
That could be a catalyst for change. The demand hit from the virus is yet to cause any delays in a
number of mega-refining projects, most of which are in China and the Middle East, that will start
operations from 2021 to 2024, according to the analysts at Goldman Sachs. This will cause global
utilization rates to be 3% lower over this period than in 2019. Plants are more likely to close in
developed countries because the bulk of demand -- and new refining capacity -- is in developing
nations, they said.
Many of the refineries that are being built in the Middle East and China will also get government
backing, a fact that only makes life more challenging for the plants in Europe and the U.S.
The industry is already moving to resolve the overcapacity: oil trader Gunvor Group Ltd. has said it
may mothball its refinery in Antwerp, and U.S. refining group HollyFrontier Corp. in June announced
it was changing its Cheyenne plant from processing crude oil into a renewable diesel facility.
For now though, there’s a more mundane reality to deal with: the market. OPEC and its allies can
constrain the supply of crude -- squeezing refiners -- but they can’t make end users consume fuel.

NewBase Special Coverage
The Energy world - Special 01- June -2020
Reaching international energy and climate goals requires a
sharp acceleration in clean energy innovation
IEA - Part of Energy Technology Perspectives
The unprecedented health emergency and economic crisis triggered by the Covid-19 pandemic
risks to be a setback for clean energy innovation efforts at a time in which faster progress is needed.
The report quantifies the needs for technology innovation and investment for a cleaner and more
resilient energy sector at net-zero emissions. It identifies key technology attributes that can help
accelerate innovation cycles.
The report also offers five key innovation principles for delivering net-zero emissions. It highlights
issues requiring immediate attention, such as the importance of governments maintaining research
and development funding at planned levels through 2025 and considering raising it in strategic
areas.
The report comes with a new ETP Clean Energy Technology Guide that encompasses around 400
component technologies and identifies their stage of readiness for the market.
Without a major acceleration in clean energy innovation, net-zero emissions targets will not be
achievable.
The world has seen a proliferating number of pledges by numerous governments and companies
to reach net-zero carbon dioxide (CO2) emissions in the coming decades as part of global efforts
to meet long-term sustainability goals, such as the Paris Agreement on climate change. But there
is a stark disconnect between these high-profile pledges and the current state of clean energy
technology.
While the technologies in use today can deliver a large amount of the emissions reductions called
for by these goals, they are insufficient on their own to bring the world to net zero while ensuring
energy systems remain secure – even with much stronger policies supporting them.

Energy efficiency and renewables are fundamental for achieving climate goals, but there are large
portions of emissions that will require the use of other technologies. Much of these emissions come
from sectors where the technology options for reducing them are limited – such as shipping, trucks,
aviation and heavy industries like steel, cement and chemicals.
Decarbonising these sectors will largely demand the development of new technologies not yet in
use. And many of the clean energy technologies available today need more work to bring down
costs and accelerate deployment.
Innovation is the key to fostering new technologies and advancing existing ones. This report
assesses the ways in which clean energy innovation can be significantly accelerated with a view to
achieving net zero emissions and enhancing energy security.
Innovation is not the same as invention. After a new idea makes its way from the drawing board to
the laboratory and out into the world, there are four key stages in the clean energy innovation
pipeline. But this pathway to maturity can be long, and success is not guaranteed:
 Prototype: A concept is developed into a design, and then into a prototype for a new device
(e.g. a furnace that produces steel with pure hydrogen instead of coal).
 Demonstration: The first examples of a new technology are introduced at the size of a full-
scale commercial unit (e.g. a system that captures CO2 emissions from cement plants).
 Early adoption: At this stage, there is still a cost and performance gap with established
technologies, which policy attention must address (e.g. electric and hydrogen-powered cars).
 Mature: As deployment progresses, the product moves into the mainstream as a common
choice for new purchases (e.g. hydropower turbines).
There are no single or simple solutions to putting the world on a sustainable path to net-zero
emissions. Reducing global CO2 emissions will require a broad range of different technologies
working across all sectors of the economy in various combinations and applications.
These technologies are at widely varying stages of development, but we can already map out how
much they are likely to need to contribute to the emissions reductions necessary to meet
international energy and climate goals.
The key technologies the energy sector needs to reach net-zero emissions are known today, but
not all of them are ready. Around half of the cumulative emissions reductions that would move the
world onto a sustainable trajectory1 come from four main technology approaches.
These are the electrification of end-use sectors such as heating and transport; the application of
carbon capture, utilisation and storage; the use of low-carbon hydrogen and hydrogen-derived fuels;
and the use of bioenergy.
However, each of these areas faces challenges in making all parts of its value chain commercially
viable in the sectors where reducing emissions is hardest. Our new ETP Clean Energy Technology
Guide2 provides a framework for comparing the readiness for the market of more than 400
component technologies.

Global energy sector CO2 emissions reductions by current technology readiness category in the
Sustainable Development Scenario relative to the Stated Policies Scenario, 2019-2070
Early-stage technologies play an outsized role. Around 35% of the cumulative CO2 emissions
reductions needed to shift to a sustainable path come from technologies currently at the prototype
or demonstration phase. A further 40% of the reductions rely on technologies not yet commercially
deployed on a mass-market scale.
This calls for urgent efforts to accelerate innovation. The fastest energy-related examples in recent
decades include consumer products like LEDs and lithium ion batteries, which took 10-30 years to
go from the first prototype to the mass market. These examples must be the benchmarks for building
the array of energy technologies to get to net-zero emissions.
If governments and companies want to move more quickly towards net-zero emissions, progress
on early stage technologies needs to be accelerated. In this report, we present a Faster Innovation
Case that explores how net-zero emissions could be achieved globally in 2050, partly by assuming
that technologies currently only in the laboratory or at the stage of small prototypes today are quickly
made available for commercial investment. There are big uncertainties around these technologies’
costs and timelines, but this theoretical case indicates what could be achieved through a global
push on innovation.
In our Faster Innovation Case, almost half of all the additional emissions reductions in 2050 relative
to current policy plans would be from technologies that have not yet reached the market today.
Relative to a case in which there is no improvement to technologies already in use today, early-
stage technologies provide about one-third of the emissions reductions in the Faster Innovation
Case.
In practice, this case would require, for example, an average of two new hydrogen-based steel
plants to begin operating every month between now and 2050. Currently, technology for these
plants is only at the prototype stage. At the same time, 90 new bioenergy plants that capture and

store their own CO2 emissions would need to be built every year. Today, there is only one large-
scale facility in operation.
Failure to accelerate progress now risks pushing the transition to net-zero emissions further into the
future. The pace of innovation in coming decades will depend on the policies governments put in
place today.
A delay in demonstration projects and a slowdown in deployment of early adoption technologies
following the Covid-19 crisis would require greater government efforts down the line, such as
supporting new technologies for longer until they are competitive. For example, capital costs of key
technologies like hydrogen electrolysers could increase by up to 10% by 2030, making it harder to
scale up production.
How innovation can help reach net-zero emissions goals faster
Aligning investment cycles with net-zero targets can create large markets for new technologies and
avoid huge amounts of “locked in” emissions. For some energy sectors, 2050 is just one investment
cycle away, making the timing of investments and the availability of new technologies critical.
Boosting spending on low-carbon research and development and increasing investments in key
demonstration projects for the most challenging sectors can be particularly effective. If the right
technologies in the steel, cement and chemical sectors can reach the market in time for the next
25-year refurbishment cycle – due to start around 2030 – they can prevent nearly 60 gigatonnes of
CO2 emissions (GtCO2).
Unlocking CO2 at the next investment point in heavy industrial sectors by sector, 2019-2060

At a time when faster innovation is sorely needed, the Covid-19 pandemic has delivered a major
setback. In the immediate future, the world’s capacity to bring new technologies to market will be
weaker as a result of the disruptions caused by the pandemic. Market and policy uncertainties
threaten to reduce the funds available to entrepreneurs.
Innovation involves a wide range of participants, but governments have a pivotal role that goes far
beyond simply funding research and development. They set overall national objectives and
priorities, and are vital in determining market expectations, ensuring the flow of knowledge, investing
in essential infrastructure, and enabling major demonstration projects to go ahead.
If governments rise to the challenge created by the Covid-19 crisis, they have an opportunity to
accelerate clean energy innovation. This can help protect the approximately 750 000 jobs in energy
research and development. And it can be a strategic opportunity for governments to ensure that
their industries come out of the Covid-19 crisis stronger and ready to supply future domestic and
international growth markets. On a path towards meeting sustainable energy and climate goals, we
project that investments in technologies that are today at the stage of large prototype and
demonstration would average around USD 350 billion a year over the next two decades.
Some areas deserve immediate attention from governments looking to revitalise economic
activity. In particular, it is important to maintain research and development funding at planned levels
through 2025 and to consider raising it in strategic areas. Market-based policies and funding can
help scale up value chains for small, modular technologies – as they did for solar panels –
significantly advancing technology progress. Synergies with other technologies across sectors is a
relatively low-cost way to innovate. Electrochemistry, which underpins batteries, electrolysers and
fuel cells is a clear example.
The Covid-19 crisis could cripple or catalyse energy innovation
For governments aiming to achieve net-zero emissions goals while maintaining energy security,
these principles primarily address national policy challenges in the context of global needs, but are
relevant to all policy makers and strategists concerned with energy technologies and transitions:
 Prioritise, track and adjust. Review the processes for selecting technology portfolios for
public support to ensure that they are rigorous, collective, flexible and aligned with local
advantages.
 Raise public R&D and market-led private innovation. Use a range of tools – from public
research and development to market incentives – to expand funding according to the different
technologies.
 Address all links in the value chain. Look at the bigger picture to ensure that all components
of key value chains are advancing evenly towards the next market application and exploiting
spillovers.
 Build enabling infrastructure. Mobilise private finance to help bridge the “valley of death” by
sharing the investment risks of network enhancements and commercial-scale demonstrators.
 Work globally for regional success. Co-operate to share best practices, experiences and
resources to tackle urgent and global technology challenges, including via existing
multilateral platforms.
As countries around the world pursue a more secure and sustainable energy future, the IEA will
continue to support governments, industry, investors and other stakeholders in advancing energy
innovation with the aim of accelerating transitions to cleaner and more resilient energy systems.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
The Editor :”Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced daily (Sunday to Thursday) and
sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscription emails please contact Hawk
Energy
Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
www.linkedin.com/in/khaled-al-awadi-38b995b
Mobile: +971504822502
khdmohd@hawkenergy.net or khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with a total of 28 years of experience in
the Oil & Gas sector. Currently working as Technical Affairs Specialist for
Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy
consultation for the GCC area via Hawk Energy Service as a UAE operations
base , Most of the experience were spent as the Gas Operations Manager in
Emarat , responsible for Emarat Gas Pipeline Network Facility & gas
compressor stations . Through the years, he has developed great experiences
in the designing & constructing of gas pipelines, gas metering & regulating
stations and in the engineering of supply routes. Many years were spent
drafting, & compiling gas transportation, operation & maintenance agreements along with many
MOUs for the local authorities. He has become a reference for many of the Oil & Gas Conferences
held in the UAE and Energy program broadcasted internationally, via GCC leading satellite
Channels.
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase 2020 K. Al Awadi

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