Insights Login

Category: Sustainability

Sunshine Beyond the Peaks of the Energy Transition
Sunshine Beyond the Peaks of the Energy Transition

Wesley Johnson, January 2024 Can we power a planet hungry for electricity without succumbing to the dark allure of fossil fuels? Can we build a future where the wind whispers electricity through our homes and sunshine dances on our streets? The answers lie not in denial, but in innovation, collaboration, and a healthy dose of green grit. Leading up to the Global Energy Transition Congress taking place in Milan in July of this year, I have been sitting down with Europe’s leading energy professionals to dive into what is keeping them up at night concerning the Energy Transition. From the many challenges presented, I have highlighted my top three below with potential solutions. Who is going to fund the energy transition? Although renewable energy projects have low operating costs and can produce clean energy for many years, the high upfront cost can often be a barrier to investment, especially in developing countries. The energy transition is happening at a time when many countries are facing economic challenges. Although inflation rates are decreasing in some parts of the world, financial recovery from COVID-19 and the war in Ukraine have caused energy prices to soar and have put a strain on government budgets. This could make it difficult for governments to invest in clean energy, even though they are committed to climate action. As we know there are technical challenges that need to be addressed before clean energy can be deployed at scale. We need to develop better ways to store renewable energy and integrate it into the grid. These challenges are being addressed by researchers and engineers, but they will require additional investments. Regulatory hurdles Regulatory frameworks need to support the development and deployment of low-carbon technologies in industrial sectors, such as carbon capture and storage (CCS), hydrogen-based fuels, and energy-efficient industrial processes. Complex and outdated regulations can hinder the adoption of low-carbon technologies. Permitting processes for renewable energy projects may be lengthy and bureaucratic, and regulations may not adequately address the challenges of integrating renewable energy sources into the grid. NIMBYism (Not in my backyard) NIMBYism can hinder the energy transition in several ways, it can lead to delays or cancellations of renewable energy projects. Despite local communities seeing the broader benefits of the project, there is a growing concern about noise, visual impact, and property values. Furthermore, NIMBYism can increase the cost of renewable energy projects, as developers may need to invest more in mitigation measures to address local concerns or face permitting processes. It can also create a negative public perception of renewable energy, making it more challenging to gain widespread support for the energy transition. Possible solutions

  • Collaboration is key, especially across the hard-to-abate and energy sectors. Sharing expertise, knowledge and resources can expedite the development and implementation of innovative low-carbon technologies, such as CCS, advanced energy storage solutions, and low-carbon fuels including the likes of Hydrogen and Ammonia. Furthermore, there are additional benefits including the likes of cost reductions and maximizing efficiency when sharing existing or developing new infrastructure assets.
  • Governments can establish supportive policies and regulatory frameworks, such as carbon pricing, tax incentives, and renewable energy mandates, which can encourage investments in clean energy technologies.
  • Multilateral development banks can not only provide financial support but also technical support for clean energy projects in developing countries.
  • The private sector can invest in more clean energy projects including investment funds, venture capital firms and pension funds.
  • New financial products and services can be developed to support the energy transition, including the likes of green bonds, sustainability-linked loans, and carbon capture and storage investment funds.
  • Engaging the public in discussions about the energy transition and providing clear information about the benefits and potential impacts of new technologies can help to build trust and acceptance regarding NIMBYism.
It is evident that the role of innovative technologies and funding from both the public and private sectors will be key for us to ensure an efficient and cost-effective transition. However, what surfaced as a key component to our energy transition success was cross-sector collaboration and the fact that we are not seeing enough of it. I appreciate that there are cons including the likes of lack of trust and limited capacity, especially in developing countries and smaller businesses, but the pros are vast and strongly outweigh the cons. They include a long list such as accelerated innovation, reduced costs when sharing resources and expertise, and increased equity. By breaking down silos, fostering trust and investing in capacity-building, we can leverage the collective power of diverse stakeholders to build a clean, just, and sustainable energy future.

Related Posts

Copyright © 2024 Energy Knect. All Rights Reserved.

Africa’s gas industry receives a fast-track pass from Europe
Africa’s gas industry receives a fast-track pass from Europe

Monthly Deal Round-up for September 2022 –  Oil, Gas & Energy deals by Wesley Johnson
Europe’s frantic scramble to replenish its gas reserves following disruptions in the energy market as a result of Russia’s invasion of Ukraine has presented a golden opportunity for some African nations. Historically Europe has imported around 62% of its gas supply from Russia with Africa chipping in with a steady average of about 18% over the past decade. As Europe desperately tries to wean itself off Russia’s supply, Africa has surfaced as a promising alternative and we are expected to see a drastic increase in exports from the continent in the upcoming years, according to Rystad Energy. According to the IEA, Africa has the potential to replace as much as one-fifth of Russian gas exports to Europe by 2030, and resource-rich nations on the continent could see billions in investment in the upcoming years. Early this year, the European Commission outlined its REPowerEU Plan to make Europe independent from Russian fossil fuels well before 2030 by accelerating renewable energy development and diversified gas supplies. As a result of the above, this has triggered a plethora of new LNG supply partnerships being forged across Africa. Amongst the front runners include the likes of Senegal and Mozambique. Germany for example has been working with Senegal since May this year to assist in the completion of the BP-led Greater Torture Ahmeyim LNG project. Furthermore, Germany has also expressed an interest in Senegal’s Teranga offshore gas field which is expected to recover 456.51 Mmboe, comprised of 2,739.07 Bcf of natural gas reserves. Italy, one of Russia’s core clients has turned to the likes of Algeria, Libya, Egypt, Angola, Mozambique and Congo for alternatives. Although Italy already imports gas from Algeria, they had recently signed a deal to augment their imports by 9 million tons of LNG by 2024. This much-welcomed capital boost for many African nations presents a valuable opportunity beyond the likes of economic prosperity and energy security. African nations who are in high demand for their resources should see this as an opportunity not just for short-term financial gain, but for longevity by re-deploying some of their returns into developing renewable energy technologies to set themselves up for sustained success. Furthermore, African nations should also look to capitalise on the Intellectual capital that these new partnerships can offer from the likes of leading technology nations like Germany. One option that could potentially support the above is by including provisions within new partnership agreements that aim to mobilise either monetary or intellectual capital into the development of renewable technologies within the country. An example of this could be the inclusion of a local content policy that sets fair obligations for foreign investors to support the development of endogenous technology and infrastructure. African nations that see this exciting opportunity as a long-term prospect will not only see benefits such as energy security and economic prosperity but will also organically find themselves in a position to join the world stage in our journey to achieve Net Zero. Returning to the monthly deal round-up below, I have highlighted my top oil, gas and energy deals closed off for September.

Renewable Energy deals

  • Brookfield to invest up to $2 billion in Scout Clean Energy and Standard Solar
Brookfield Renewable has agreed to acquire Scout Clean Energy (“Scout”) for $1 billion with the potential to invest an additional $350 million to support the business development activities ($270 million in total net to BEP). Furthermore, on the same day, Brookfield also announced the acquisition of Standard Solar for consideration of $540 million with the potential to invest an additional $160 million to support the business’ growth initiatives ($140 million in total net to BEP) Read more  
  • Intersect Power closes $3.1 billion in project financing to complete near-term portfolio totalling 2.2GWDC
Intersect Power announced the closing of an aggregate of $2.4 billion of new financing commitments and the allocation of $675 million of previously announced commitments for the construction and operations of four solar energy projects totalling approximately 1.5GWdc PV + 1.0GWh BESS. Read more  
  • Iberdrola sells 49% of Wikinger to EIP for $700 million
Iberdrola has signed an agreement with Energy Infrastructure Partners (EIP) for the sale of a 49% stake in Wikinger offshore wind farm in Germany. The transaction is valued at around €700 million, and Iberdrola will maintain a majority stake of 51%. The transaction further advances Iberdrola`s asset rotation plan to finance new renewable projects under development. Read more  
  • Glennmont Partners 250-million-euro green credit fund
Clean energy fund manager Glennmont Partners has launched a 250 million euro ($241 million) green credit fund to invest in clean energy and infrastructure assets. Glennmont Partners raises long-term capital to invest in low-carbon power generation projects, such as wind, biomass, solar and small-scale hydropower plants. Read more  
  • Shell makes their first African renewable energy deal by acquiring Daystar Power
Shell Plc’s renewable energy division has acquired Nigerian solar energy provider, Daystar Power in its first acquisition of a power firm on the continent. This acquisition comes as part of Shell’s efforts to reduce its Co2 emissions and focus on renewables. The takeover, which awaits regulatory approval, will enable Shell’s renewable and energy solutions business to deliver carbon emission reductions and power cost savings to commercial and industrial businesses across Africa, according to an emailed statement from Daystar. Read more  
  • Enbridge acquires Tri Global Energy for $270 million to boost renewables platform
Enbridge has bought Tri Global Energy, a renewable power project developer for $270 million in cash and assumed debt. The company will also pay up to an additional US$50 million contingent on the successful execution of TGE’s project portfolio. TGE is the third largest onshore wind developer in the U.S. with a development portfolio of wind and solar projects representing more than seven gigawatts of renewable generation capacity. Read more  
  • Amazon invests in another 71 renewable energy projects, totalling 2.7GW
Amazon has invested in another tranche of renewable energy projects as part of its aim to reach 100% renewable energy across its entire business by 2025. Their latest investments include renewable energy projects in South and North America, India, Poland, France and Germany. Read more  

Oil & Gas deals

  • Repsol sells 25% of oil and gas unit to EIG for $4.8 billion
Repsol is selling a 25% stake in its oil and gas exploration division to U.S fund EIG for $4.8 billion to free up some capital and deploy it into renewable energy projects in support of a lower-carbon future.  Its upstream business has set the strategic goal of reducing its carbon intensity by 75% by 2025. Read more  
  • Shell and Exxon sell Aera to IKAV for $4 billion
Shell and Exxon Mobil had owned the California oil joint venture Aera. German asset manager, IKAV has acquired Aera for a sum of $4 billion. Exxon and Shell have moved out of mature energy properties at a time when gas and oil prices are directed towards new deals and opportunities. Read more  
  • Sitio Royalties has agreed to acquire Bringam Minerals for $4.8 billion
The acquisition brings together two of the largest public companies in the oil and gas mineral and royalty sector and is expected to generate approximately $15 million of annual operational cash cost synergies and to reduce Sitio’s 2Q 2022 pro forma cash G&A per Boe by 19% to approximately $1.72 per Boe for the combined company. Read more  
  • EQT agrees to acquire Tug Hills THQ Appalachia for $5.2 billion
EQT Corp, the largest natural gas producer in the US, has announced that it has agreed to acquire Quantum Energy and Tug Hill Operating-backed THQ Appalachia I LLC and associated pipeline infrastructure in a deal worth $5.2bn. Read more  
  • Talos Energy has agreed to acquire EnVen Energy for $1.1 billion
Talos has acquired a plethora of energy companies, including Stone Energy to capitalise on higher oil prices. The acquisition of oil-weighted, deepwater assets, with significant infrastructure, is expected to increase Talos’ production capacity by 24,000 barrels of oil equivalent per day. It will also double the firm’s operated deep water facility footprint. Read more  
  • Tamarack acquires Deltastream Energy for $1.1billion
The acquisition positions Tamarack as the largest Clearwater producer with considerable scale and upside across Nipisi, Canal, Marten Hills, Greater Peavine, Perryvale and Jarvie. Read more    

Related Posts

3 Simple ways your business can work towards a greener future
3 Simple ways your business can work towards a greener future

Wesley Johnson, Energy Knect Adapting a green practice is rapidly becoming a leading trend for companies of all sizes. According to the KPMG Survey of Sustainability Reporting, 80% of companies worldwide are now reporting on sustainability, around 40% of companies now acknowledge the financial risks of climate change and one in five companies are reporting climate risk in line with TCFD recommendations. Research is indicating that businesses who are adopting sustainability practices are taking advantage of a plethora of benefits including the likes of a competitive advantage over their peers, reduction of costs, new revenue opportunities and forging stronger relationships with clients, according to McKinsey. I have highlighted a few popular “green” practices below that companies are currently adopting. Calculate your carbon footprint Calculating your carbon footprint at the first instance is a great place to start in order to obtain an idea of what areas need improvement and where you can prioritize your efforts. Thanks to the growing trend in businesses wanting to do their part to save the planet, there are now many useful and user-friendly online tools available for companies to calculate their carbon footprint. A few popular options amongst businesses right now are the Carbon Footprint, WWF Carbon Footprint Calculator and Climate Care. Depending on the complexity and size of your business, another option would be to seek support from an environmental and sustainability consultancy. They will not only calculate your net carbon output but also help you develop a plan to decrease it by providing you with a tailored and easy to follow management system to achieve your objectives. Furthermore, they typically provide the necessary training and are able to either request or offer you sustainability and environmental certifications to enhance your marketing efforts. According to a recent survey by KPMG, GRI remains the most commonly used reporting standard or framework used by businesses for sustainability. If you do decide to go down the consultancy route, it’s advisable to research firms that specialise in your field or market segment, as they are typically better equipped to understand your situation and needs. For example, the SME Centre is an advisory firm that supports SME’s with sustainability and carbon management systems and certifications. Their management systems are already tailored to suit SME’s which in turn could save your business time and money from unnecessary consulting fees. For the larger, more complex business types, top tier firms like Accenture, Bain and PWC are well-positioned to offer your business sustainability and carbon management support. Renewable energy source One of the most effective and easiest ways in which your business can reduce its carbon footprint is by switching to a green or renewable business energy tariff. As companies start to embrace their shift towards a lower-carbon future, the process of opting for a greener energy provider has become more efficient and cost-effective than ever before. Research suggests that this is a result of many challenger brands competing for their place in the market as well as the likes of low carbon technology advancements, accelerated investment into infrastructure, and concerns around climate change and fossil fuels. According to research by Forbes, right now, the big six “green” energy suppliers in the UK are British Gas, EDF Energy, E-ON, Npower, Scottish Power and SSE. There are also a few smaller, independent providers such as Bulb, Ecotricity and Octopus Energy that provide renewable business energy tariffs. The smaller independents often market cheaper tariffs for your business which as a result, could help your business save on your existing tariffs. If your business is interested in making the switch there are plenty of online comparison tools like U switch or Forbes Advisor that can help you explore what options are best for your business, budget and needs. Carbon offsetting Whilst most businesses do their very best in trying to reduce their carbon footprint, some forms of emissions are just unavoidable in order to remain competitive. As a solution to this roadblock, businesses can offset their unavoidable emissions, by purchasing carbon credits, which are then used to support environmental projects around the world that either reduce greenhouse gas emissions or absorb carbon dioxide from the atmosphere. Despite some controversy around the lack of transparency and concerns over the quality and integrity of offsetting schemes there still seems to be a growing trend of companies around the world flocking to purchase offsets. Gold Standard, for example, issued 151 million carbon credits from over 900 projects in 2020 according to their most recent market report and Bloomberg quoted that the number of offsets sold in the past two years has doubled. Perhaps the reason for the increased uptake is the growing perception that voluntary carbon credits can play a vital role in accelerating the transition to a global decarbonized economy and that avoiding emissions is typically the most cost-efficient way to address atmospheric greenhouse gas concentrations, according to McKinsey. The verdict In the past, companies typically shied away from green initiatives, as the return on investment was often difficult to quantify. However, with more companies incorporating green initiatives, it is now becoming evident that we are seeing positive and measurable impacts including the likes of improved efficiency, employee retention, cost savings and revenue growth, along with a competitive advantage and good brand reputation. Is your business taking advantage of the "green opportunity"?

Related Posts

4 Reasons to join the Green Revolution
4 Reasons to join the Green Revolution

Wesley Johnson, Energy Knect The pressure to shift towards a low carbon future is certainly not a novel concept. Pressures to save our planet from ‘doomsday’ has been around for decades and the discovery of global warming dates back to the late 18th century. So why the sudden change? The events of the past year have sharpened investors interests in sustainable and resilient assets, including renewables, according to the International Renewable Energy Agency.  Moreover, climate change has now been listed among the top 10 risks to global businesses according to the Allianz Risk Barometer 2021. Consequently, carbon management and ESG( Environmental, Social and Governance) has now become a crucial strategy for any business that is looking to remain competitive and stay ahead in today’s economy. Deploying effective ESG and carbon management strategies boasts a plethora of benefits and opportunities for companies including the likes of accessing large pools of capital, robust relations with clients, development of a stronger brand and achieve sustainable long-term growth. We have listed a few of our favourites below. Gives your company a competitive advantage According to a report by KMPG, companies with a higher ESG performance are likely to have better financial performance, talent retention and long-term value creation. 3M’s Pollution Prevention Pays initiative(3P) is a great example of how companies can gain a competitive advantage through the deployment of effective ESG strategies. 3P prevents pollution at the source, in product and in manufacturing. 3P was introduced in 1975 and to date, has resulted in the elimination of more than 3 billion pounds of pollution and saved them nearly $1.4 billion. Supports revenue growth An effective ESG strategy that differentiates your business in the market by providing climate leadership, can lead to new client acquisition, an increase of profitability and the development of new products and services which will allow your business to tap into new markets. According to McKinsey, they found that upward of 70 per cent of consumers would pay an additional 5 per cent for a green product than for a comparable non-green alternative. Furthermore, according to multiple research reports, it is evident that sustainable investing and superior investment returns are positively correlated. Reduces costs According to McKinsey, effectively executing an ESG strategy can help reduce rising operating expenses including the true costs of raw materials, water or carbon. One of their studies found that by reducing resource costs, businesses can improve operating profits by up to 60 per cent. Brewing company Heineken, for example, is heavily reliant on quality water for their products and to sustain their business. Their latest finance and sustainability report revealed that they reduced their water consumption by 33 per cent in water-stressed areas since 2008 including a 51 per cent drop in carbon emissions from production. Consequently, this has saved the company €15 Million since 2009. Mitigates risks ESG has become an essential management tool for businesses to identify and proactively mitigate risks. According to EY, Investors increasingly believe that companies that perform well on ESG are less risky, better positioned for long growth and better prepared for uncertainty. For investors, ESG reporting is helping them avoid companies that might pose a greater financial risk due to their ESG performance. For businesses, ESG reporting is helping them shift away from traditional compliance-based thinking and reactive mindsets, helping them focus on a more proactive risk mitigation approach. Furthermore, according to KPMG, ESG reporting is challenging organisations to be more transparent about the risks and opportunities it faces which in turn pushes for more robust processes and enhances the credibility of what’s been reported. Ignoring these risks can be detrimental to businesses in the long term, as it can lead to a lack of funding, have an adverse effect on brand reputation, stagnate business growth and potentially see yourself fall behind your peers. With the increasing pressures from investors and stakeholders for businesses to disclose consistent, comparable and reliable data and the plethora of benefits attached to joining the green revolution, it probably doesn’t seem like a bad idea to hop onto the ESG train to set your business up for a fruitful and long-term growth journey, like so many businesses are already doing.

Related Posts