NewBase 29 January 2024 Energy News issue - 1694 by Khaled Al Awadi_compressed.pdf

Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 1
NewBase Energy News 29 January 2024 No. 1694 Senior Editor Eng. Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE DEWA is on pace to reach Net-Zero by 2050
(WAM)
For the first time, th e world celebrates the International Day of Clean Energy this year with the
United Nation’s approval of 26th January as the International Day of Clean Energy. This date
coincides with the anniversary of the establishment of the International Renewable Energy Agency
(IRENA) in 2009. The UAE hosts IRENA’s headquarters in Abu Dhabi.
Saeed Mohammed Al Tayer, MD and CEO of Dubai Electricity and Water Authority (DEWA),
emphasised that the UAE is one of the leading countries in the transition towards clean and
renewable energy. It ranked second globally in the Energy Transition pillar of the Green Future
Index (GFI) 2023 and the 6th highest per capita consumer of solar energy in the world.
ww.linkedin.com/in/khaled-al-awadi-80201019/
UAE DEWA is on pace to reach Net-Zero by 2050
through pioneering clean, renewable energy projects

Al Tayer noted that DEWA supports the National efforts to consolidate sustainability systems and
programmes in various development sectors. The UAE aims to reduce greenhouse gas emissions
by 19 percent in 2030, 62 percent in 2040, to reach Net Zero by 2050. The UAE also aims to triple
the contribution of renewable energy and invest AED150 to AED200 billion by 2030.
Net-Zero by 2030
DEWA is on pace to achieve the vision of the wise leadership to achieve Net Zero by 2050
through pioneering projects in clean and renewable energy. He noted that the production capacity
of the Mohammed bin Rashid Al Maktoum Solar Park has reached 2,627MW using the latest
global technologies.
DEWA is on track to achieve the Dubai Clean Energy Strategy 2050 and the Dubai Net Zero Carbon
Emissions Strategy 2050 to provide 100 percent of the energy production capacity from clean
energy sources by 2050.
DEWA’s projects that support the clean energy transition
The Mohammed bin Rashid Al Maktoum Solar Park
Among DEWA’s key clean energy projects is the Mohammed bin Rashid Al Maktoum Solar Park,
the largest single-site solar park in the world using the Independent Power Producer (IPP) model,
with a planned production capacity of 5,000MW by 2030. The current production capacity of the
solar park is 2,627MW, using photovoltaic solar panels and concentrated solar power (CSP).
DEWA will add 233MW to be added by the end of Q1 of 2024, increasing its production capacity to
2,860MW. When the 1,800MW 6th phase of the solar park is completed by the end of 2026, the
solar park’s production capacity will reach 4,660MW. By then, the solar park will provide clean
energy to 1.4 million houses. When completed in 2030, the solar park will reduce more than 6.5
million tonnes of carbon emissions annually.
The solar park features a Research and Development Centre and an Innovation Centre. The
Innovation Centre is a global incubator for innovation in the energy and water sectors, and a major
landmark of Dubai that provides a pioneering experience for visitors to learn about the latest
innovations in various fields of clean and renewable energy.
The Hydroelectric Power Plant in Hatta
One of the innovative renewable energy projects currently being implemented by DEWA is a
pumped-storage hydroelectric power plant in Hatta. It will have a production capacity of 250MW, a
storage capacity of 1,500 megawatt-hours, equivalent to 6 hours of storage, and a life span of 80
years. The hydroelectric power plant will use water from the Hatta Dam and an upper reservoir
that has been built in the mountains.
During off-peak hours, advanced turbines will use clean energy to pump water from the dam to the
upper reservoir. Turbines operated by the speed of the waterfall from the upper reservoir will be
used to generate electricity through a 1.2-kilometre subterranean water canal, with high efficiency
in power generation and storage of up to 78.9 percent and with a 90-second response to demand
for electricity. With a total investment of AED1.421 billion, the project is expected to be completed
in Q1 of 2025. It is the first of its kind in the GCC region.
Shams Dubai Initiative
Through the Shams Dubai initiative, DEWA encourages customers to install photovoltaic solar
panels on the roofs of their buildings and facilities to meet part of their energy needs. This is a part
of the Distributed Renewable Resources Generation programme in Dubai. The connection
procedure consists of different stages with the support of an accredited contractor or consultant.

These stages include getting a No Objection Certificate (NOC), the design approval stage,
uploading the technical approval and notifying DEWA, site inspection and completion of the
connection process, and finally generating electricity from solar energy. By the end of 2023, the total
production capacity of solar energy projects within the initiative reached around 600MW.
The pilot Green Hydrogen Project
DEWA has implemented a pilot Green Hydrogen project at the Mohammed bin Rashid Al Maktoum
Solar Park. It is the first of its kind in the Middle East and North Africa to produce hydrogen using
solar energy. The Green Hydrogen project that DEWA has implemented in cooperation with Expo
2020 Dubai and Siemens Energy, produces 20 kilogrammes per hour of hydrogen, and the
hydrogen gas storage tank can store up to 240 kilogrammes of hydrogen.
The plant uses hydrogen through a hydrogen gas motor of about 300 kilowatts of electrical energy
capacity. The project has been designed and built to accommodate future applications and test
platforms for various uses of hydrogen.
The Green Hydrogen Project is only one stop in the journey of success that
shapes a brighter and more sustainable future for us and for our future
generations, and enhances the global transformation towards a green
economy that the UAE is able to spearhead.

US: California Plays a Risky Game With Climate and Gasoline
Says Chevron + (Bloomberg)
Chevron Corp. warns its home state of California’s climate policies are a “dangerous game” that risk
causing gasoline price spikes and shortages.
The premium California drivers pay for gasoline over the national average is likely to rise significantly
if state legislators continue enacting policies to discourage petroleum production, Andy Walz, who
leads the oil giant’s US refining division, said in an interview. While the state has the highest
penetration of electric vehicles, it’s still the country’s second-largest consumer of gasoline.
California drivers paid an average of $4.94 per gallon of gasoline in the final three months of 2023,
about $1.72 above the national average and the highest quarterly premium on record, according to
data compiled by Bloomberg. The state has the country’s toughest low-carbon fuel standards that
are encouraging refineries to convert from petroleum to renewable diesel. Such conversions reduce
gasoline supply, pushing up prices, Walz said.
“They knew it was going to happen when they wrote the legislation, he said. “The problem is the
consumer is starting to realize it. It’s becoming painful. The way politicians dealt with it was ‘let’s
blame the oil companies.’”
California Governor Gavin Newsom’s office said in a statement that the gasoline price spikes the
state has experienced have stemmed from oil companies’ own lack of planning. “Big Oil has been
ripping off consumers for decades and lying to protect their profits,” Newsom’s office said.
Chevron’s relationship with its home state has turned increasingly adversarial in recent months.
Ever-tightening regulations are squeezing profits and triggered a $4 billion write down of Chevron’s
assets, mostly in California. Governor Gavin Newsom has accused Big Oil of price gouging and
lying about climate change, both of which are now the subject of investigations and lawsuits.

Chevron denies the allegations and says it should not be punished for responding to consumer
demand for transportation fuels, which are still heavily weighted toward fossil fuels.
The latest flashpoint is a proposal to establish a maximum refining margin in California. It’s already
difficult for Chevron to justify growth projects at its two California refineries — which account for
about 30% of the state’s capacity — due to a plan to end sales of internal combustion engines by
2035, which would eviscerate the market for gasoline. But a law that effectively caps refinery profit
makes them all-but impossible, Walz said.
“If they cap the upside when conditions are good it’s going to make it really challenging to want to
put our money there,” Walz said, adding that Chevron is committed to keeping its refineries safe
and reliable. “I cannot compete internally for big capital investments. It doesn’t stack up. I’d rather
spend money at our refinery in Mississippi.”
California has long had an outsized influence on national policy, particularly on the environment.
The state’s tailpipe emission regulations in the 1970s exceeded those of the federal government
but quickly became the national standard because it was easier for automakers meet the country’s
toughest regulations set by its biggest market than tailor cars by state. It became known as the
“California Effect” and extended to consumer goods and data privacy.
Governor Newsom set a goal for California to become net zero by 2045, five years ahead of US as
a whole. Frequent droughts and wildfires mean it is already suffering from catastrophic effects of
climate change. The state now gets more than half its power from non-CO2 emitting sources, up
from 30% a decade ago and accounts for more than a third of the country’s EV sales. Almost all of
America’s renewable diesel, made from vegetable oil and natural fats, is consumed in California.
That success is one reason why
gasoline prices are so high. In part to
take advantage of state incentives,
Phillips 66 is converting its Rodeo
refinery northeast of San Francisco
to produce 50,000 a day of
renewable fuels. Before the
conversion, it produced 90,000
barrels a day of gasoline, diesel and
jet fuel, representing a 44% overall
supply cut.
Chevron and Marathon Petroleum
Corp. have made similar
conversions, contributing to an 11%
reduction in California’s refining
capacity over the past decade.
Refiners “are making decisions that are kind of putting us on a pathway where there could be a
reliability problem,” Walz said. “You may not have the supply of gasoline if things don’t turn out the
way the government wants them to. It’s a dangerous game.”
Conversions also alter the state’s product mix, which is currently awash in renewable diesel but
short of gasoline. The problem is magnified because California is essentially an island when it
comes to fuel because of a lack of pipelines connecting it with the rest of the country.
“It’s a very risk energy policy situation that we’re headed toward,” Walz said. “If there’s a problem,
resupply for California has to come from either Europe or Asia. And that takes a while.”

EU: EV makers underestimated the threat from Chinese rivals
NewBase + Bloomberg
The wave has been so large that China leapfrogged Japan in 2023 to become the largest purveyor
of passenger cars to the world for the first time, exporting 3.8 million vehicles for a staggering 62%
increase in one year alone.
“The Chinese car companies are the most competitive car companies in the world,” Tesla CEO Elon
Musk said this week. “Frankly, if there are not trade barriers established, they will pretty much
demolish most other car companies in the world.”
He should know: BYD just eclipsed Tesla as the global EV leader at the end of last year.
Now the Shenzhen-based company chartered its first cargo ship capable of carrying 7,000 cars,
which embarked this month for Europe.
Other Chinese carmakers like Shanghai Automotive have also enjoyed export success with EV
brands like MG.
But the export wave has not only been driven by pull factors like the cars' low prices and leading-
edge EV technology—China’s rapidly deflating economy has triggered the export boom as well.
The collapsing Chinese real estate bubble has necessitated the international push after everyone
from bankrupt property developer Evergrande to cell phone maker Xiaomi ploughed billions into
building automobiles that now strain to find enough domestic buyers.
Now, European and American carmakers face an intimidating question: How, if at all, can they hold
back the flood?
Western EV makers caught sleeping on Chinese rivals
Dan Ives, senior equity research analyst with Wedbush Securities, believes carmakers
underestimated the risk emerging from Asia under their collective nose.

“There was a view that Chinese carmakers would be successful domestically and there would
be Game of Thrones battles within China, but that it would be difficult for them to penetrate the rest
of the world,” Ives told Fortune. “Led by BYD, they have scaled to the point that surprised even the
naysayers and now they’re setting their sights on Europe.”
Western rivals may even be encouraging them after a number decided recently to mothball EV
spending plans and conserve their cash. In October, for example, General Motors delayed a $4
billion EV investment in its Orion truck plant by a year.
For its part, Ford is
postponing $12 billion in
spending given weakening EV
demand.
Even Tesla has abandoned its
strategy of growing
manufacturing capacity “as
quickly as possible”,
instead, holding off on
construction of its new Mexico
plant due to economic
uncertainty.
“This might be the time to strike,
because currently there are no
U.S. manufacturers or even
European transplants that are
making EVs anywhere near the cost,” says Todd Cassidy, who leads the automotive and
aftermarket investment banking practice at Brown Gibbons Lang & Company.
But these brands are not just content with merely exporting.
While Europeans were celebrating Christmas, BYD was busy finalizing plans to build cars in
Hungary in the company’s maiden enlargement of its passenger car production beyond Asia.
“Expansion into the U.S. and Western markets is more attractive if you’re looking to chase profitable
growth,” BGL’s Cassidy tells Fortune.
Years ahead of the competition
But to say Chinese EVs are only a threat because of their low price is to drastically misjudge the
state of their industry.
While Western brands focused on horsepower and handling, Chinese brands equipped their
vehicles with the latest in software features. A stylish mid-size sedan like the BYD Seal offers
enough technology to compete with the Tesla Model 3.
In a desperate move to remain competitive, Volkswagen dug deep last year to buy a 5% stake in
China’s Xpeng worth $700 million after watching BYD effortlessly supplant it at the summit after
decades in which it dominated the Chinese market.
“Next to Tesla, the innovation coming out of BYD, Nio, Xpeng and others is unrivaled,” Wedbush’s
Ives tells Fortune. “The Chinese players are years ahead when it comes to vertical integration and
battery technology.”

NewBase January 29 -2024 Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oil Climbs After Separate Attacks Escalate Middle East Tensions
NewBase + Bloomberg
Oil rose after separate attacks by Iran-backed militants that killed US troops in Jordan and hit a fuel
tanker in the Red Sea, a marked escalation of tensions in the Middle East. Oil prices jumped 1% on
Monday on fuel supply concerns after a missile struck a Trafigura-operated fuel tanker in the Red
Sea and as Russian refined products exports are set to fall as several refineries are under repair
after drone attacks.
Brent crude futures climbed 46 cents to $84.01 a barrel by 05.15 GMT after hitting a session-
high of $84.80. U.S. West Texas Intermediate crude rose 44 cents to $78.45 a barrel.
The White House said Iranian-backed militants killed three service members and wounded 25
others in a drone assault, the first American deaths under enemy attack since Israel and Hamas
went to war.
That followed a Houthi missile strike on a tanker operated on behalf of Trafigura Group carrying
Russian fuel on Friday, the most significant attack yet on an energy-carrying vessel.
Oil price special
coverage
Russia Achieves Oil Export Cuts Pledged to OPEC+, Novak Says

Brent crude jumped as much as 1.5% in early Asian trading before paring most of those gains. That
came after the global benchmark rose more than 6% last week in the biggest increase since
October. West Texas Intermediate climbed toward $79 a barrel.
The deaths of American soldiers in Jordan will put President Joe Biden under intensifying pressure
to confront Iran directly, risking a wider conflict in a region that’s the source of around a third of the
world’s oil and is a vital conduit for global trade.
The attack on the tanker was consequential as shippers had previously assumed the safe passage
of vessels tied to Russia and China after earlier assurances by Houthi militants, who mostly targeted
ships linked to Israel, US and UK.
Brent has risen around 9% this month as the situation in the Middle East became more tense, but
it’s still well below where it was shortly after Hamas attack on Israel in October. The prospect of
robust supply from non-OPEC producers and slowing demand growth is helping to keep a lid on
prices.
And while the attacks in the Red Sea have led to some re-routing of cargoes — adding to delivery
time and freight costs — it hasn’t yet led to shortages or affected production.
“Geopolitical risk has rapidly evolved into geopolitical reality,” said Michael Tran, an analyst at RBC
Capital Markets. “While global oil prices have yet to fully reflect the escalating tensions in the Red
Sea, the events of the weekend are likely to catalyze a rebasing of expected outcomes for both the
security of supply as well as for oil prices.”
Biden vowed retaliation for the killing of US troops near the Syrian border, and some Republican
lawmakers urged the president to launch strikes on Iran — a level of escalation that the US has said
it’s intent on avoiding.
A Trafigura spokesman said the vessel that was attacked by the Yemen-based Houthi rebels was
carrying Russian-origin naphtha — a product used to make plastics and gasoline — purchased
below the price cap imposed by the Group of Seven nations.
“None of the actors want a full-blown war,” said John Kilduff, founding partner of Again Capital LLC.
“The oil is still flowing, no oil fields have come into the cross hairs and we’re still seeing vessels
going through the Suez Canal.”
Russia carried out its pledged cuts in overseas supplies of oil, according to Deputy Prime Minister
Alexander Novak.
Moscow, in coordination with the Organization of Petroleum Exporting Countries and its allies, has
pledged to deepen cuts in oil exports to 500,000 barrels a day in the current quarter compared with
the average in May-June.
That includes curbs in daily exports of crude oil by 300,000 barrels and refined products by 200,000
barrels. “Of course, we reached that,” Novak said on Saturday in Moscow, Interfax news agency
reported.
The OPEC+ Joint Ministerial Monitoring Committee is set to hold an online meeting next week to
discuss oil output policy. The alliance isn’t planning to make any changes, according to several
delegates from the group.
“The oil market is balanced now thanks to OPEC+ actions,” Novak said. “That’s why the situation is
under control.”

Attack Hit on Russian Fuel Has Oil Traders Recalculating Risks
Bloomberg Alaric Nightingale + NewBase
A missile attack on Friday on a tanker taking Russian fuel through the Gulf of Aden may prove to
be a defining moment for an oil market that had previously been somewhat immune to months of
Houthi militants’ attacks on merchant trade.
Why the calm? Because much of the oil flowing through the Red Sea and Suez Canal came from
Russia and — so the theory went — it might be safe. The Houthis themselves signaled Russian
ships had nothing to fear, and Moscow is an ally of their sponsor Iran. Oil tankers generally had
been largely spared.
But Friday’s attack made one thing clear: whatever assurances Yemen’s Houthis offer, they don’t
extend to a ship’s cargo if the vessel itself has even a tenuous link to the US, UK or Israel.
The Houthis had said they were targeting Israeli assets because of the war in Gaza, and then
extended their reach to US and UK vessels after those countries launched airstrikes in Yemen.
The attack means that a greater slice of the 3 million barrels a day of Russian crude oil and fuel that
has been flowing through the Red Sea to reach customers in Asia could be at risk. And Russian
volumes matter to the global market — despite sanctions imposed because of Moscow’s own war
in Ukraine.

With oil prices popping about $2 higher on Friday, here are some of the questions that oil traders
will be considering when they return to their desks on Monday morning.
Will Red Sea Transit Stop?
This is unlikely, either for trade in general or to the flow of petroleum in particular. The decision to
transit depends mainly on four things: the willingness of the owner, that of the crew and the charterer
— and profit.
If a charterer wants to go through the Red Sea and finds a shipowner who’s willing, with a crew
that’s prepared to run the gauntlet — perhaps for extra danger money — then the trade will happen
as long as the price makes sense.
It’s true that insurance costs can be so prohibitive that some owners find it more attractive to go the
long way around Africa — following container shippers that have already made that call. But, while
Friday’s attack redefined the kinds of ships that might be viewed as targets, not all ships will fall into
that category. The most likely outcome is that the numbers willing to risk it thins out, but the route
doesn’t shut altogether.
Is All Russian Oil Now a Target?
Probably not. The international maritime database Equasis lists the manager of the Marlin Luanda
— the tanker that got attacked — as a firm called Oceonix Services Ltd. in London. For the Houthis,
that may have been enough of a link.

But the fuel on the Marlin Luanda was different to a lot of Russian petroleum in one crucial way: it
was being hauled using western service providers as it was priced within the cap allowed by US
sanctions.
Since Russia’s invasion of Ukraine and the sanctions that followed, most Russian oil and fuel is
being moved on the so-called shadow fleet. These vessels have secretive ownership structures,
almost never have published UK, US or Israeli links, rarely if ever go to those countries’ ports, and
even their insurance is opaque.
If the Houthis are profiling their targets using open-source intelligence, there will still be a lot of
Russian oil they don’t go after, at least in part because there is so little information available publicly
about those ships. Russia is an ally of Iran, which backs the Houthis, and Moscow has condemned
US and UK strikes on Yemen.
Still, there’s always the risk of getting caught up in a misfiring, or becoming collateral damage.
Will Insurance Costs Rise?
Probably. Even before the Russian fuel cargo was hit, the cost of insurance for transit had jumped
tenfold in a few weeks to about 1% of the value of a ship’s hull.
That’s as much as about $1 million for some vessels, potentially more than their additional fuel bills
to sail around Africa instead.
Shortly after the US and UK bombed Yemen to try to quell the Houthi attacks, analysts at Clarksons
Securities said that the rising cost of insurance could start to make more ships take the detour.
What Will Owners and Crews Think?
This will likely prove the biggest question of all for the global oil market, but it will take some time to
get a clear picture because what matters most is how the owners linked to Russia behave.
Some mariners were clearly nervous well before the Houthis set the Marlin Luanda alight, and many
mainstream international owners were already diverting. Even before Friday, about three quarters
of the world’s top tanker owners already appeared to be staying away.
The owners of tankers moving Russia’s cargoes and their crews appear to have been more willing
to navigate the area, at least before Friday’s incident.
If that were to change, it would be bad news for Moscow and a potential supply issue for the global
oil market.
More of Russia’s oil would have to sail the long way around Africa, straining a tanker fleet that is
already starting to look a little stressed due to a ramp up in western sanctions.
Higher oil delivery costs would ultimately hit the price of Russian oil and fuels at the point at which
it is exported. And it is not clear by any means that there would be enough vessels if most — or all
— had to go the long way around Africa.

NewBase Specual Coverage
The Energy world –January 29 -2024
CLEAN ENERGY
Renewables set to generate a third of world's electricity by next
year, IEA says
Renewable energy is set to make up more than one-third of total electricity generation by early
2025, overtaking coal, according to the International Energy Agency.
Global power demand will grow at a faster rate over the next three years as the energy
transition gathers pace, with low-emission technologies expected to meet the additional increase in
consumption, the Paris-based agency said in its Electricity 2024 report on Wednesday.
By next year, electricity produced by nuclear
power is forecast to reach a record high as output
from France climbs, several plants in Japan
come back online, and new reactors begin
commercial operations in markets including
China and India.
When the share of global power generation from
fossil fuels drops below 60 per cent, it will be the
first time in more than five decades, based on the
IEA’s records, the agency said.
“It’s encouraging that the rapid growth of
renewables and a steady expansion of nuclear
power are together on course to match all the increase in global electricity demand over the next
three years,” said Fatih Birol, the IEA’s executive director.
The Climate Edit
“This is largely thanks to the huge momentum behind renewables, with ever cheaper solar leading
the way, and support from the important comeback of nuclear power, whose generation is set to
reach a historic high by 2025,” Mr Birol said.
Growth in electricity demand eased slightly to 2.2 per cent last year due to falling electricity
consumption in advanced economies. It is projected to accelerate to an average of 3.4 per cent
from 2024 through 2026.
About 85 per cent of the increase in global electricity demand through 2026 is expected to come
from developing economies. Emissions from power generation are estimated to decrease by 2.4
per cent this year, followed by smaller declines in 2025 and 2026, the IEA said.
The agency added that low-emissions sources would account for almost half of the world’s electricity
generation by 2026. “The decoupling of global electricity demand and emissions would be
significant … with more consumers using technologies such as electric vehicles and heat pumps,”
the agency said.
Electricity accounted for 20 per cent of final energy consumption in 2023, up from 18 per cent in
2015. Achieving the world’s climate goals would require electrification to advance “significantly
faster” in the coming years, the IEA said.

By 2026, China, the world's second-largest economy, is expected to account for the largest share
of the global increase in electricity demand in terms of volume even as its economic growth slows
and becomes less reliant on heavy industry, the agency said.
The country's post-pandemic recovery has fallen short of expectations amid a domestic property
slump, weak manufacturing activity and reduced consumer spending.
Meanwhile, India's electricity demand is set to rise the fastest among major economies, with
additional demand over the next three years forecast to be roughly equivalent to the UK's current
electricity consumption.
The IEA expects electricity demand in Africa to grow annually by 4 per cent until 2026, which is
more than double the mean growth rate during the 2015-2023 period. Around 60 per cent of the
increase is to be met by expanding renewables and the remaining mostly by natural gas.
“Electricity use is a key indicator of economic development in any country, and it’s a grim sign that
it has flatlined in Africa on a per capita basis for over three decades,” Mr Birol said.
“Access to reliable, affordable and sustainable energy for all citizens is essential for African
countries to achieve their economic and climate goals,” he added.
However, to meet the continent's energy development and climate targets, investments will have to
more than double to $200 billion per year by 2030, the agency said.
Global electricity demand rose moderately in 2023 but isset to grow faster through 2026
Falling electricity consumption in advanced economies restrained growth inglobal power
demand in 2023. The world’s demand for electricity grew by 2.2%in 2023, less than the 2.4%
The Golfech nuclear power station in southern France.
Nuclear power is forecast to reach a record high

growth observed in 2022. While China, India and numerous countries in Southeast Asia
experienced robust growth in electricity demand in 2023, advanced economies posted substantial
declines due to a lacklustre macroeconomic environment and high inflation, which reduced
manufacturing and industrial output.
Global electricity demand is expected to rise at a faster rate over the next three years,
growing by an average of 3.4% annually through 2026. The gainswill be driven by an improving
economic outlook, which will contribute to faster electricity demand growth both in advanced and
emerging economies.
Particularlyin advanced economies and China, electricity demand will be supported by the ongoing
electrification of the residential and transport sectors, as well as a notableexpansion of the data
centre sector. The share of electricity in final energy consumption is estimated to have reached 20%
in 2023, up from 18% in 2015. While this is progress, electrification needs to accelerate rapidly to
meet the world’s decarbonisation targets. In the IEA’s Net Zero Emissions by 2050 Scenario, a
pathway aligned with limiting global warming to 1.5 °C, electricity’s share in final energy
consumption nears 30% in 2030.
Electricity consumption from data centres, artificial intelligence (AI) and thecryptocurrency
sector could double by 2026. Data centres are significant drivers of growth in electricity demand
in many regions. After globally consuming an estimated 460 terawatt-hours (TWh) in 2022, data
centres’ total electricity consumption could reach more than 1 000 TWh in 2026.
This demand is roughly equivalent to the electricity consumption of Japan. Updated regulations and
technological improvements, including on efficiency, will be crucial to moderate the surge in energy
consumption from data centres.

Emerging and developing economies are the engines ofglobal electricity demand growth
About 85% of additional electricity demand through 2026 is set to come fromoutside advanced
economies, with China contributing substantially even as the country’s economy undergoes
structural changes.
In 2023, China’s electricity demand rose by 6.4%, driven by the services and industrial sectors.
With the country’s economic growth expected to slow and become less reliant onheavy industry,
the pace of Chinese electricity demand growth eases to 5.1% in 2024, 4.9% in 2025 and 4.7% in
2026 in our forecasts.
Even so, the total increasein China’s electricity demand through 2026 of about 1 400 TWh is more
than halfof the European Union’s current annual electricity consumption. Electricity consumption
per capita in China already exceeded that of the European Union atthe end of 2022 and is set to rise
further. The rapidly expanding production of solar PV modules and electric vehicles, and the
processing of related materials, will support ongoing electricity demand growth in China while the
structure of its economy evolves.
China provides the largest share of global electricity demand growth in terms of volume, but India
posts the fastest growth rate through 2026 amongmajor economies. Following a 7% increase in India’s
electricity demand in 2023,we expect growth above 6% on average annually until 2026, supported by strong
economic activity and expanding ownership of air conditioners. Over the next threeyears, India will add
electricity demand roughly equivalent to the current consumption of the United Kingdom. While renewables
are set to meet almost halfof this demand growth, one-third is expected to come from rising coal-fired
generation. We also expect Southeast Asia to see robust annual increases in electricity demand of 5% on
average through 2026, led higher by strong economicactivity.
While electricity use per capita in India and Southeast Asia is rapidly rising,it has been
effectively stagnant in Africa for more than three decades. Per capita consumption in Africa
CC
BY
4.0.

even declined in recent years as the population grew faster than electricity supply was made
available, and we only expect it to recoverto its 2010-15 levels by the end of 2026 at the earliest.
Thirty years ago, a personin Africa consumed more electricity on average than someone living in
India or Southeast Asia. However, strong increases in electricity demand and supply in India and
Southeast Asia in recent decades – which have gone hand in hand witha boom in economic
development – have transformed these regions at a spectacular pace.
Meanwhile, Africa's per capita electricity consumption in 2023 was half that of India and 70% lower
than in Southeast Asia. Our forecast for Africafor the 2024-26 period anticipates average annual
growth in total electricitydemand of 4%, double the mean growth rate observed between 2017 and
2023. Two-thirds of this growth in demand is set to be met by expanding renewables, with the
remainder covered mostly by natural gas.
Electricity demand in the United States fell by 1.6% in 2023 after increasing2.6% in 2022, but it is
expected to recover in the 2024-26 outlook period. A key reason for the decline was milder weather in
2023 compared with 2022, though a slowdown in the manufacturing sector was also a factor. We forecast a
moderate increase in demand of 2.5% in 2024, assuming a reversion to average weather conditions.
This will be followed by growth averaging 1% in 2025-26, ledby electrification and the expansion of
the data centre sector, which is expected to account for more than one-third of additional demand
through 2026.
Slim chances of a quick recovery for energy-intensiveindustries in the European Union
Electricity demand in the European Union declined for the second consecutive year in 2023, even
though energy prices fell from record highs.Following a 3.1% drop in 2022, the 3.2% year-on-year
decline in EU demand in 2023 meant that it dropped to levels last seen two decades ago.
As in 2022, weaker consumption in the industrial sector was the main factor that reduced electricity
demand, as energy prices came down but remained above pre- pandemic levels. In 2023, there
were also signs of some permanent demand destruction, especially in the energy-intensive
chemical and primary metal production sectors. These segments will remain vulnerable to energy
price shocksover our outlook period.
EU electricity consumption is not expected to return to 2021 levels until 2026at the earliest. Electricity
demand in the European Union’s industrial sector fell by an estimated 6% in 2023 after a similar
decline in 2022. Assuming the industrialsector gradually recovers as energy prices moderate, EU
electricity demand growth is forecast to rise by an average 2.3% in 2024-26. Electric vehicles, heat
pumps and data centres will remain strong pillars of growth over the period – together accounting
for half of expected gains in total demand.
Electricity prices for energy-intensive industries in the European Union in 2023 were almost double
those in the United States and China. Despite an estimated 50% price decline in the European
Union in 2023 versus 2022, energy-intensive industries in the region continued to face far higher
electricity costs compared with the United States and China in the aftermath of Russia’s invasionof
Ukraine.
The price gap between energy-intensive industries in the European Union and those in the United
States and China, which already existed before theenergy crisis, has widened. As a result, the
competitiveness of EU energy- intensive industries is expected to remain under pressure.
CC
BY
4.0.

Policy makers are currently discussing new policy initiatives and financial instruments to enable the
European Union to position itself among other global industrial heavyweights. The scope and
effectiveness of these measures will likely determine the future of the European Union’s energy-
intensive industrial sector.
Clean electricity supply is forecast to meet all of the world’s demand growth through 2026
Record-breaking electricity generation from low-emissions sources – whichincludes nuclear and
renewables such as solar, wind and hydro – is set to cover all global demand growth over the next
three years.
Low-emissions sources, which will reduce the role of fossil fuels in producing electricity globally, are
forecast to account for almost half of the world’s electricity generation by 2026,up from 39% in 2023.
Over the next three years, low-emissions generation is set to rise at twice the annual growth rate
between 2018 and 2023 – a consequentialchange, given that the power sector contributes the most
to global carbon dioxide(CO2) emissions today.
Renewables are set to provide more than one-third of total electricity generation globally by early
2025, overtaking coal. The share of renewables in electricity generation is forecast to rise from 30%
in 2023 to 37% in 2026, with the growth largely supported by the expansion of ever cheaper solar
PV.
Throughthis period, renewables are set to more than offset demand growth in advanced economies
such as the United States and the European Union, displacing fossil- fired supply. At the same time,
in China, the rapid expansion of renewable energysources is expected to meet all additional
electricity demand, though the weatherand the extent to which the country’s demand growth eases
remain key sources of uncertainty for the outlook. The strong expansion in renewable power
CC
BY
4.0.

capacitymust also be accompanied by accelerated investment in grids and system flexibility to
ensure its smooth integration.
The rapid growth of renewables, supported by rising nuclear generation, is set to displace global
coal-fired generation, which is forecast to fall by an average of 1.7% annually through 2026. This
follows a 1.6% increase in coal- fired output in 2023 amid droughts in India and China that reduced
hydropower output and increased coal-fired generation, more than offsetting strong declines incoal-
fired generation in the United States and the European Union.
The major factor that will determine the global outlook is evolving trends in China, where more than
half of world’s coal-fired generation takes place. Coal-fired generation in China is currently on course
to experience a slow structural decline, driven by the strong expansion of renewables and growing
nuclear generation, as well as moderating economic growth.
Despite the commissioning of new plants to boost the security of energy supply, the utilisation rate
of Chinese coal-fired plants is expected to continue to fall as they are used more flexibly to
complementrenewables. Nevertheless, coal-fired generation in China will be influenced significantly
by the pace of the economy’s rebalancing, hydropower trends, and bottlenecks in integrating
renewables into the country’s power system.
Natural gas-fired generation is expected to rise slightly over the outlook period. In 2023, sharp
declines in gas-fired power generation in the European Union were more than offset by massive
gains in the United States, where naturalgas, which has increasingly replaced coal, recorded its
highest-ever share in power generation.
Global gas-fired output grew by less than 1% in 2023. Through2026, we forecast an average annual
growth rate of around 1%. While gas-fired output in Europe is expected to continue declining, global
growth will be supportedby significant gains in Asia, the Middle East and Africa amid rising demand
for power in these regions and the availability of additional liquefied natural gas (LNG)supply from
2025 onward.
CC
BY
4.0.

Nuclear power generation is on track to reach a newrecord high by 2025
By 2025, global nuclear generation is forecast to exceed its previous record set in 2021. Even as
some countries phase out nuclear power or retire plants early, nuclear generation is forecast to
grow by close to 3% per year on average through 2026 as maintenance works are completed within
France, Japan restarts nuclear production at several power plants, and new reactors begin
commercial operations in various markets, including China, India, Korea, and Europe. Many
countries are making nuclear power a critical part of their energy strategies as they look to safeguard
energy security while reducing greenhouse gas emissions.
At the COP28 climate change conference that concluded in December 2023, more than 20 countries
signed a joint declaration to triple nuclear power capacity by 2050. Achieving this goal will require
tackling the key challenge of reducing construction and financing risks in the nuclear sector.
Momentum is also growing behind small modular reactor (SMR) technology. The technology’s
development and deployment remains modest and is not without its difficulties, but R&D is starting
to pick up.
Asia remains the main driver of growth in nuclear power, with the region’s share of global nuclear
generation forecast to reach 30% in 2026. Asia is set to surpass North America as the region with
the largest installed nuclear capacity by the end of 2026, with a large number of plants currently
under construction expected to be completed by then.
More than half of new reactors expected to become operational during the outlook period are in
China and India. Nuclear power has seen particularly strong growth in China over the past decade,
with capacity additions of about 37 gigawatts (GW), equivalent to almost two-thirds of its current
nuclear capacity.
This resulted in China’s share in global nuclear generation rising from 5% in 2014 to about 16% in
2023. China started the commercial operation of its first fourth-generation reactor in December
2023, further underscoring the country's nuclear power advances.
Emissions from electricity gen. are entering structural decline as decarbonisation gathers pace
Global CO2 emissions from electricity generation are expected to fall by more than 2% in 2024
after increasing by 1% in 2023. This is set to be followedby small declines in 2025 and 2026. The
strong growth in coal-fired power generation in 2023 – especially in China and India amid reduced
hydropower output – was responsible for the rise in the global electricity sector’s CO2 emissions.
As clean electricity supply continues to expand rapidly, the share of fossil fuels in global generation
is forecast to decline from 61% in 2023 to 54% in2026, falling below 60% for the first time in IEA
records dating back to 1971.
Whileextreme weather conditions, economic shocks, or changes in government policiescould lead to
a temporary rise in emissions in individual years, the broader declinein power sector emissions is
expected to persist as renewables and nuclear powercapacity continue to expand and displace
fossil-fired generation.
The CO2 intensity of global electricity generation is set to fall at twice the rate recorded in the
pre-pandemic period. The forecasted average decline of 4% in CO2 intensity between 2023 and
2026 is double the 2% observed in the period between 2015 and 2019. The European Union is
expected to record the highest rate of progress in reducing emissions intensity, averaging an
improvement of 13% per year.
CC
BY
4.0.

This is followed by China, with annual improvements forecast at 6%, and the United States at 5%.
The decline in the CO2 intensity of electricity generation means that emissions savings via the
electrification of transport, heating and industry will become even more substantial.
Wholesale electricity prices remain above pre-Covidlevels in many countries
Wholesale electricity prices in many countries fell in 2023 from the record highs observed in
2022. This took place in tandem with declines in prices for energy commodities such as natural gas
and coal. There are, however, regional differences. Wholesale electricity prices in Europe declined
on average by more than 50% in 2023 from record levels in 2022.
Despite this, prices in Europe were still roughly double 2019 levels, whereas US prices in 2023 were
only about 15%higher than in 2019. Uncertainty about both the pace of France’s nuclear recovery
and natural gas prices are supporting higher futures prices in Europe for upcomingwinters. The
hydropower-dominated Nordics remain the only market in Europe with average wholesale electricity
prices comparable to those in the United Statesand Australia. Wholesale prices in Japan and India
also remained above 2019 levels in 2023.
Growing weather impacts on power systems highlightthe importance of investing in electricity security
Global hydropower generation declined in 2023 due to weather impacts suchas droughts, below
average rainfall and early snowmelts in numerousregions. Canada, China, Colombia, Costa Rica,
India, Mexico, Türkiye, the United States, and Vietnam, along with other countries, all saw
hydropower generation decline.
The global hydropower capacity factor, a key measure of utilisation rate, fell to below 40%, the
lowest value recorded in at least three decades. In certain countries, diminished hydropower output
led to energy shortages, heightened reliance on fossil sources such as coal and gas, and raised
concerns about the stability of electricity supply.
The overall trend underscores the susceptibility of hydropower to weather patterns and the potential
exposure of countries that rely heavily on hydro to generate electricity. Diversifying energy sources,
building regional power interconnections and implementing strategies for resilient generation in the
face of changing weather patterns will be increasingly important.
Extreme weather events triggered major power outages in 2023 in the UnitedStates and India. This
underlined the need to boost resilience as weather impactson power systems increase, with both
supply and demand becoming moreweather-dependent. Insufficient power capacity, fuel supply
challenges and grid- related technical issues also continued to cause significant power shortages
in many regions.
The majority of these outages were observed in emerging economies such as Pakistan, Kenya and
Nigeria, which are particularly affected by insufficient electricity supply, infrastructure problems and
strained grids in the face of rising power demand. Expanded, stronger grids would not only ensure
reliable electricity but also serve as a vital backbone for integrating renewables into power systems.
Improving data collection, digitalisation and greater data transparency regarding outages is also
essential to provide better insight into why faults occurred and to help develop preventative
measures.
Specific operating measures and new markets for ensuring the stability of power systems are
becoming more common. Countries with high shares of variable renewable generation are
implementing mechanisms to ensure a steadypower system frequency.
CC
BY
4.0.

Some regions are establishing minimum requirements for system inertia, a property typically
provided by conventional generators with spinning rotors that helps enhance the power system’s
resilience during disturbances.
Additionally, various countries including the United Kingdom, Ireland and Australia have been
introducing markets and measures such as fast frequency response and similar services that
stabilise the power system rapidly after disruptions. Battery storage systems can provide such
services for grid stability while enhancing system flexibility, thus playing a crucial role in integrating
renewable energy sources.

NewBase Energy News 29-January - Issue No. 1694 call on +971504822502, UAE
The Editor:” Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced Twice a week and sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscriptions, please email us.
About: 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 over 30 years of experience in the Oil & Gas
sector. Has Mechanical Engineering BSc. & MSc. Degrees from leading U.S.
Universities. Currently working as self leading external Energy consultant for the
GCC area via many leading Energy Services companies. Khaled is the Founder of
the NewBase Energy news articles issues, Khaled is an international consultant,
advisor, ecopreneur and journalist with expertise in Gas & Oil pipeline Networks,
waste management, waste-to-energy, renewable energy, environment protection
and sustainable development. His geographical areas of focus include Middle East,
Africa and Asia. Khaled has successfully accomplished a wide range of projects in
the areas of Gas & Oil with extensive works on Gas Pipeline Network Facilities & gas
compressor stations. Executed projects in the designing & constructing of gas pipelines, gas metering &
regulating stations and in the engineering of gas/oil supply routes.
Has drafted & finalized many contracts/agreements in products sale, transportation, operation &
maintenance agreements. Along with many MOUs & JVs for organizations & governments authorities.
Currently dealing for biomass energy, biogas, waste-to-energy, recycling and waste management. He has
participated in numerous conferences and workshops as chairman, session chair, keynote speaker and
panelist.
Khaled is the Editor-in-Chief of NewBase Energy News and is a professional environmental writer with over
1400 popular articles to his credit. He is proactively engaged in creating mass awareness on renewable
energy, waste management, plant Automation IA and environmental sustainability in different parts of the
world. Khaled has become a reference for many of the Oil & Gas Conferences and for many Energy program
broadcasted internationally, via GCC leading satellite Channels. Khaled can be reached at any time, see
contact details above.

NewBase 29 January 2024 Energy News issue - 1694 by Khaled Al Awadi_compressed.pdf

Recommended

Recommended

More Related Content

Similar to NewBase 29 January 2024 Energy News issue - 1694 by Khaled Al Awadi_compressed.pdf

Similar to NewBase 29 January 2024 Energy News issue - 1694 by Khaled Al Awadi_compressed.pdf (20)

More from Khaled Al Awadi

More from Khaled Al Awadi (20)

Recently uploaded

Recently uploaded (20)

NewBase 29 January 2024 Energy News issue - 1694 by Khaled Al Awadi_compressed.pdf