This weekly round-up brings you the latest on developments in the global energy sector.
Top energy stories: US scientists announce breakthrough in nuclear fusion; HSBC says it will stop financing new oil and gas fields; Global coal consumption set to reach an all-time high.
For more on the World Economic Forum’s work in the energy space, visit the Shaping the Future of Energy, Materials and Infrastructure Platform.
1. News in brief: Energy stories from around the world
HSBC will no longer finance new oil and gas fields or related infrastructure. The bank is among the biggest financiers of fossil fuels companies, providing $111 billion of debt since the Paris climate agreement was signed in late 2015, according to data compiled by Bloomberg.
The European Parliament has voted for faster approval deadlines for renewable energy installations, Euractiv reports. The move, which would boost the EU’s clean energy production capacity, now needs to be approved by EU member states.
The G7 group of industrialized nations has agreed a $15.5 billion deal with Viet Nam to help it transition away from coal. It is the third agreement of this type that the G7 has reached, as pressure mounts on rich nations to help poorer countries cope with climate change and the transition to cleaner energy.
Germany's lower house of parliament has passed legislation worth an estimated €100 billion ($106 billion) to help keep down electricity and gas bills for households and businesses from January. The package also includes a levy on energy producers' excess profits, as well as measures to promote renewable energy.
Australia has opened up its first offshore wind power zone off its southern coast. The A$9 billion ($6 billion) project off the state of Victoria could start producing renewable power by the end of the decade.
Australia's parliament has passed legislation setting a price cap on natural gas for a year and providing A$1.5 billion ($1.03 billion) in relief for households and small businesses hit by soaring energy costs. The Green Party supported the legislation after the government agreed to provide funding to help low-income households switch from gas to electricity.
Three major German pipeline companies say they have agreed to transport low-carbon hydrogen from the Baltic Sea to the south of the country by 2025. The 1,100 kilometre hydrogen corridor is part of a European push to reduce dependence on natural gas.
Nigeria expects its oil production to rise to 1.6 million barrels per day (bpd) by the first quarter of next year. The country’s output fell to less than 1 million bpd in August, the lowest in years, due to increased crude oil theft and vandalism of pipelines, which forced some companies to curtail or stop production.
Utility regulators in California have voted to reduce the rate at which households with rooftop solar panels are credited for exporting surplus power to the grid. They say the move will be fairer to low-income ratepayers, however the solar industry has criticized the decision.
The UK’s fourth largest energy supplier, Octopus Energy, has signed a power purchase agreement with Shell Energy for up to 2.4 terawatt hours per year from the Dogger Bank offshore windfarm project. The long-term deal covers the power demand of around 24% of Octopus' current customer base, or around 800,000 households.
2. US scientists say clean nuclear fusion power is within reach
Scientists in the United States have announced a breakthrough in fusion energy that could help curb climate change if companies can scale up the technology to a commercial level in the coming decades. Nuclear experts say the achievement is a major stepping stone, but there is much more science to be done before fusion becomes commercially viable.
Scientists at the Lawrence Livermore National Laboratory in California briefly achieved a net energy gain in a fusion experiment using lasers. They focused a laser on a target of fuel to fuse two light atoms into a denser one, releasing the energy.
Tony Roulstone, a nuclear energy expert at the University of Cambridge, told Reuters that he estimated that the energy output of the experiment was only 0.5% of the energy that was needed to fire the lasers in the first place. "Therefore, we can say that this result ... is a success of the science – but still a long way from providing useful, abundant, clean energy." In order to make fusion commercially viable, a power plant would have to produce enough energy to power the lasers and to achieve ignition continuously.
The electricity industry cautiously welcomed the fusion breakthrough, but said it should not slow down efforts on building out other clean energy sources such as solar and wind power, battery storage and nuclear fission. "It's the first step that says 'Yes, this is not just fantasy, this can be done, in theory,'" said Andrew Sowder, a senior technology executive at EPRI, a nonprofit energy research and development group.
3. Global coal consumption predicted to reach all time high
Global coal consumption is set to rise to an all-time high in 2022 and remain at similar levels in the next few years, if stronger efforts are not made to move to a low-carbon economy, says a new report by the International Energy Agency (IEA).
High gas prices following Russia's invasion of Ukraine and consequent disruptions to supply have led some countries to turn to relatively cheaper coal, the IEA says. Heatwaves and droughts in some regions have also driven up electricity demand and reduced hydropower generation, while nuclear generation has also been very weak, especially in Europe, where France has had to shut down reactors for maintenance.
The IEA's annual report on coal forecasts global use rising by 1.2% this year, exceeding 8 billion tonnes in a single year for the first time. It also predicts that coal consumption will remain flat at that level until 2025. This means coal will continue to be the global energy system’s largest single source of carbon dioxide emissions.
Global coal consumption is pushing new highs. Image: IEA.
The report says the world’s three largest coal producers – China, India and Indonesia – will all hit production records this year. However there is no sign of surging investment in export-driven coal projects. The IEA says this reflects caution among investors and mining companies about the medium- and longer-term prospects for coal.
"The world is close to a peak in fossil fuel use, with coal set to be the first to decline, but we are not there yet," said Keisuke Sadamori, the IEA’s Director of Energy Markets and Security.
4. More on energy from Agenda
In March 2022, leaders of the 27 EU member states said they wanted to move toward energy independence and agreed to phase out Russian fossil fuels as soon as possible. New EU data suggests a start has been made, but there is still some way to go.
How do you reduce the carbon impact of flying? For many, electric planes are the answer but, until now, it’s not been possible to apply the technology to airliners. Now, a Swedish start-up says it’s found a way to make electric airliners a reality.
A new study from MIT has found that the health benefits associated with wind power have the potential to significantly increase. But that depends on operators prioritizing turning down output from the most polluting fossil-fuel-based power plants when energy from wind is available.
Senior Writer, Formative Content
Head of Shaping the Future of Energy and Materials; Member of the Executive Committee, World Economic Forum