Latest news with #WoodMackenzie
Yahoo
20 hours ago
- Business
- Yahoo
Wood Mackenzie sees extended ‘sunset' for costly coal power
This story was originally published on Utility Dive. To receive daily news and insights, subscribe to our free daily Utility Dive newsletter. Dive Brief: Rising electricity demand and a slowdown in the buildout of alternative sources of power generation could extend the use of coal globally and displace 2,100 GW of gas and renewables by 2050, Wood Mackenzie said in a report earlier this month. Under a high demand scenario, coal-fired power generation could peak in 2030, four years later than the analysis' 'base case' forecast. The economics and politics of coal are strongest in Asia. In the United States, coal is more expensive than gas or solar and storage, but the cost of building new gas power plants has nearly doubled and long-duration energy storage technology is not yet mature enough to convert solar and wind into true 'baseload' resources, the report said. Dive Insight: In Asia, national security concerns and economics favor coal for now, said Anthony Knutson, global head of thermal coal markets at Wood Mackenzie, although when it comes to just levelized cost, hybrid solar and storage remain cheaper than coal or gas. 'While the long-term trajectory towards renewables remains intact, the path is proving far more complex than many anticipated as countries grapple with energy security and affordability concerns,' Knutson said in a statement. Wood Mackenzie expects the levelized cost of unabated coal-fired power in the Asia and Pacific region to remain below $100/MWh in 2030, lower than the expected levelized cost of gas-fired power there. Coal-fueled power in the United States will cost about $230/MWh in the United States and about $270/MWh in Europe in 2030, according to the report. By then, gas-fired power will cost about $100/MWh in the United States and about $150/MWh in Europe, it said. Hybrid solar and storage will undercut coal and gas in all three regions, coming in around $60/MWh in Asia, $70/MWh in Europe and $80/MWh in the United States. Though the economics of gas-fired generation are more favorable in the U.S. than in Asian and European countries that rely on liquefied natural gas imports, its ability to match surging AI load growth forecasts is limited, the report said. While long-duration energy storage technology has advanced significantly in recent years, it cannot provide baseload power yet, it said. It's also becoming more expensive to replace aging coal plants with gas and renewables, causing 'sticker shock' for power producers looking to make the switch, the report said. It blamed tariffs, reshoring of production and infrastructure delays for pushing up the cost of new solar while noting a near-doubling of U.S. costs for new gas power plant builds.
Reuters
a day ago
- Business
- Reuters
China's coking coal prices hit daily limit again on chatter about government mine inspections
BEIJING, July 22 (Reuters) - Prices of coking coal futures in China hit their ceiling for a second successive session on Tuesday, amid market chatter about potential government inspections in China's major coal production hubs that might lead to supply disruptions. The most active China coking coal contract on the Dalian Commodity Exchange jumped nearly 8% to its highest price since March 19 at 1,048.5 yuan ($146.19) a metric ton. A document purported to be from the National Bureau of Energy calling for inspections at coal mines in eight provinces to determine whether production exceeded licensed capacity played a part in the price rise, said Simon Wu, a senior consultant at Wood Mackenzie. "This could potentially reduce the effective supply to the market," he said. Reuters could not verify the authenticity of a document circulating on social media from the Henan provincial government which contained inspection orders from the NBE. A phone call to a number in the document was answered by someone who said they were following instructions from the NBE and not to call again. The NBE did not immediately respond to a request for comment. Coking coal prices have gained 28% so far in July after a visit to Shanxi, China's top coal production hub, by President Xi Jinping earlier this month sparked speculation about a fresh wave of supply reform. ($1 = 7.1723 Chinese yuan)
Libyan Express
a day ago
- Business
- Libyan Express
Libya opens doors to 40+ oil firms
Oil and gas revival gains momentum. Photo via Reuters Libya has attracted participation from over 40 international oil and gas companies in its latest licensing round, signalling renewed global confidence in the country's energy sector. The companies represent a wide geographical range, including North America, Europe, Southeast Asia, and the MENA region, reflecting increasing investor interest in Libya's upstream potential. The ongoing licensing round is part of a broader effort to reposition Libya as a competitive destination for energy exploration. It follows recent steps to align financial and contractual frameworks with international standards, aiming to make the country's energy environment more attractive and predictable for global investors. As part of these efforts, Libyan authorities have conducted a comprehensive review of past contracts through internal auditing and external benchmarking led by the consultancy firm Wood Mackenzie. The review identified the need for more competitive financial terms and clearer mechanisms for sharing investment risks—both of which are being incorporated into the current licensing strategy. In parallel with oil exploration, Libya is also intensifying its focus on natural gas, particularly in support of regional energy demand. A major development is the Structures A&E offshore gas project, carried out in partnership with Eni. The project is expected to contribute approximately 750 million standard cubic feet per day, helping to compensate for declines in offshore output and enhancing the country's export and domestic supply capacity. Libya has also reaffirmed its commitment to ending routine gas flaring by 2030. This environmental goal aligns with broader international climate strategies and supports Libya's positioning as a responsible energy supplier in the context of Europe's shift toward low-carbon fuels. The country's energy strategy further includes investment in solar power, with the aim of reducing dependence on diesel and heavy fuel oil for electricity generation. This transition will allow for more efficient use of natural gas reserves and open new opportunities for export. Additionally, carbon capture and storage (CCS) is emerging as a priority area for investment, with estimated potential in the range of US $1 billion. The integration of CCS technologies complements Libya's commitment to sustainable development and climate-resilient growth. Overall, the licensing round and accompanying reforms mark a broader shift in Libya's energy policy—balancing the redevelopment of traditional oil fields with a long-term vision for cleaner, more diversified energy sources.
Yahoo
2 days ago
- Business
- Yahoo
New energy realities could extend coal's role in global energy markets
Wood Mackenzie new Horizons report shows how energy security concerns, unprecedented power demand, and technological advances could extend coal's life and reshape the global energy transition Global coal demand could remain stronger for longer, with coal-fired power generation potentially staying dominant through 2030, well beyond current projections for peak coal, according to a new Horizons report from Wood Mackenzie. The report titled 'Staying power: How new energy realities risk extending coal's sunset' suggests that a confluence of factors, from a rapidly electrifying global economy to energy security priorities rising from geopolitical and cost shocks to Asia's young and evolving coal fleet, could extend coal's role as a vital power source well into the next decade and beyond. 'Extending coal's prominence through 2030 would fundamentally alter the global energy transition timeline. We're talking about delaying the phase-out of the world's most carbon-intensive fuel source during a critical decade for climate action,' said Anthony Knutson, global head, thermal coal markets at Wood Mackenzie. 'While the long-term trajectory towards renewables remains intact, the path is proving far more complex than many anticipated as countries grapple with energy security and affordability concerns.' In Wood Mackenzie's base-case Energy Transition Outlook, coal-fired power generation is projected to decline by nearly 70% between 2025 and 2050. This decline is driven by decreasing renewable energy costs, advancements in battery storage technology, a resurgence in nuclear energy, and an increase in natural gas capacity. However, Wood Mackenzie's latest Horizons report highlights the potential for coal to remain demand to be stickier than expected. A 'high coal demand' case that offers a significantly different perspective: coal generation could average 32% higher than the base case through 2050. Under the high coal demand case, output from global coal fleets is optimized to help meet steep and rapid load growth expectations, leading to significantly less renewable and gas energy deployment. This equates to 2,100 gigawatts (GW) less global wind, solar, energy storage, and natural gas capacity between 2025 and 2050. Without carbon capture and storage investment, unabated emissions from the coal sector would increase by two billion tonnes compared to the base case scenario. Total global coal electricity generation, unabated, terawatt hours (TWh) Source: Wood Mackenzie Investment headwinds and shifting market forces The latest Horizons report notes that a higher coal demand case will expose investment gaps in replacement coal supply, potentially raising prices by 2030. 'Private equity and sovereign wealth funds will be needed to fund greenfield and brownfield mine expansions,' said Knutson. 'We expect most Western financial institutions to continue limiting thermal coal investments, with the strongest impact on supply growth from 2025-2030 and longer-term market implications if supply replacement momentum is not maintained.' According to the report, lack of commensurate investment is the largest risk facing coal markets now. Wood Mackenzie expects higher coal prices to erode the fuel's core cost advantage if demand increases without a supply response. 'While we understand coal demand may remain resilient in coming years, eventually supply constraints will emerge, and this could accelerate price increases globally and erode future demand,' said Knutson. Reimagined coal power offers potential pathways The potential for carbon capture, utilisation, and storage (CCUS) offers a pathway to extend coal's operational life in a decarbonising world. 'CCUS could theoretically transform coal's environmental profile by capturing carbon dioxide emissions before they enter the atmosphere, but the economics remain challenging without substantial policy support and capital investment,' said David Brown, director, energy transition practice at Wood Mackenzie. 'Higher coal utilisation rates would improve the investment case, but we're still years away from cost-competitive deployment at scale, particularly in Asia, where carbon storage costs are likely to limit widespread adoption,' he added. As governments and asset owners reposition for a low-carbon future, technologies that reduce the carbon intensity of coal must be prioritised. Without innovation in areas like CCUS, co-firing and flexible, load-following coal capacity to work in concert with renewables, a high coal demand scenario becomes increasingly difficult to justify. Where CCUS is deployed, pairing it with gas-fired generation may offer a more efficient path, given the lower CO₂ capture requirements per unit of electricity produced. A new paradigm for global energy planning While increased coal consumption represents neither an inevitable outcome nor an optimal scenario, current market trends indicate a significant transformation in global energy priorities. As nations develop comprehensive energy planning strategies, they are increasingly prioritizing energy sovereignty and domestic resource control to support their long-term objectives. This shift reflects countries' efforts to accelerate electrification initiatives that are both cost-effective and dependable for their populations, while maintaining greater autonomy in their energy planning decisions. 'Despite potential higher coal demand, we have the tools to phase it out,' Brown concluded. 'Without urgent actions, the world faces a growing risk of drifting towards a 3°C pathway. Our high coal demand case is not a forecast, but it's a warning of what inaction could bring, and a reminder of what can still be prevented.'Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Analysis-Europe's chemical industry seeks a lifeboat to stay in business
By Francesca Landini, Pietro Lombardi, Mohi Narayan and Arathy Somasekhar MILAN/NEW DELHI/HOUSTON (Reuters) -Europe's petrochemical industry is unravelling under a wave of plant closures after years of losses and a rapid expansion of global capacity led by China. High production costs and ageing plants have left European producers struggling, making the region increasingly dependent on imports of primary chemicals such as ethylene and propylene, the building blocks for plastics, pharmaceuticals and countless industrial goods. "While the rest of the world is building over 20 new crackers, Europe is sleepwalking into industrial decline," Jim Ratcliffe, founder of INEOS said during a recent event, referring to a unit in petrochemical plants. The billionaire made his money buying up petrochemical plants from BP and others, and along with other industry leaders has criticised a lack of political action. The European Commission responded this month with a pledge to support domestic production of chemicals deemed strategic for its industries, such as ethylene and propylene. It plans to expand state aid to modernise plants and require public tenders give preference to goods made in Europe - similar to the EU's 2023 legislation for metals and minerals. But the move may be too late to reverse the damage. "It's like being on the Titanic — you can't stay in denial. You must go and find a lifeboat," said Giuseppe Ricci, head of industrial transformation at Italian energy group Eni. Eni's chemical business Versalis accumulated over 3 billion euros ($3.5 billion) in losses in the last five years, Ricci said, as the firm shuts down Italy's last two steam crackers and invests 2 billion euros in bio-refineries and chemical recycling. Other global groups Dow, ExxonMobil, TotalEnergies, and Shell are also closing or reviewing their European chemical assets. Most of the planned closures target crackers - a unit that turns hydrocarbons into ethylene, propylene or other primary chemical materials. A document issued by eight EU countries on petrochemicals in March said that 50,000 jobs could be at risk due to potential closures of more crackers in Europe by 2035. The EU's plants are mainly small and mid-sized and have been running at an average utilisation rate below 80% - a level considered uneconomical. Up to 40% of the EU's ethylene capacity — which totals 24.5 million metric tons — is at high or medium risk of closure, including shutdowns announced since late 2024, according to consultancy Wood Mackenzie. "The proportion of European crackers at risk is much higher than in other regions," said Robert Gilfillan, head of plastics and recycling markets at Wood Mackenzie. While older European plants use naphtha as a raw material, the United States and the Middle East use cheaper feedstocks like ethane — a by-product of shale gas. NEW DEPENDENCY North America's ethylene capacity will grow to 58 million metric tons by 2030 from 54 million currently, according to consulting firm ADI Analytics. China, meanwhile, will add 6.5% to its ethylene capacity every year between 2025 and 2030, when it will produce nearly 87 million metric tons of ethylene annually, China National Chemical Information Centre CEO Huang Yinguo said in May. That's more than triple the EU's current capacity. Chinese producers are also building outposts in Southeast Asia to export to Europe and North America to bypass carbon taxes and Western tariffs on China-made goods. Japanese and South Korean firms, unable to compete, have kept utilization rates low since 2023, the countries' petrochemical industry bodies said in reports in May. European policymakers now face a stark choice: intervene decisively or watch the continent's chemical backbone erode. In their March document, countries including France, Italy and Spain called for a "Critical Chemicals Act", as latest EU data shows the region was a net importer of ethylene and propylene each year in the period 2019-2023. EU Industry Commissioner Stéphane Séjourné said Brussels will identify strategic supplies and production sites. "First and foremost, this is about sovereignty — keeping our steam crackers," he told reporters this month. But sovereignty comes at a cost. Most European crackers are over 40 years old, compared to just 11 years in China, according to Citi analyst Sebastian Satz. And ethylene production in Europe using naphtha costs $800 a metric ton, versus less than $400 a metric ton in the U.S. if ethane is used, and around $200 a metric ton in the Middle East with ethane, Eni said in a presentation published in March. 'SLEEPWALKING INTO DECLINE' Some companies are betting big on survival. INEOS, which operates one of Europe's most advanced petrochemical facilities in Cologne, is building a 4 billion euro ethane cracker in Antwerp — the first new cracker in Europe in roughly 30 years, with production capacity of 1.45 million metric tons a year of ethylene. The plant, due online in 2026, aims to rival Chinese production and meet local demand with a lower carbon footprint. In the Middle East, consolidation is creating new global giants. A $60 billion merger between Abu Dhabi National Oil Company and Austria's OMV will form Borouge Group, the world's fourth-largest polyolefins producer. The company plans to export polymers to Europe, competing directly with U.S. and Asian firms. Analysts say Europe's petrochemical production won't disappear entirely but will become the domain of a few dominant players. "Only major European companies with the market share to set competitive prices will continue to produce ethylene," said Enzo Baglieri, professor of operations and technology management at SDA Bocconi School of Management in Milan. ($1 = 0.8604 euros) (Additional reporting by America Hernandez in Paris, Shadia Nasralla in London, Marek Strzelecki in Warsaw, Julia Payne in Brussels; editing by Susan Fenton) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
