Global Energy Growth

Rising energy consumption complicates net zero.

AME forecasts global energy demand to increase by 6% in 2021 to 14,869Mtoe, more than offsetting the 3% contraction in 2020 and pushing demand 2.9% above 2019 levels. As economies and energy markets recover from the impact of the pandemic, the fundamental transition towards decarbonising energy systems will continue, and look to accelerate rapidly over the coming decades.

Growth in energy demand this year will be driven by renewable energy, with solar photovoltaic (PV) and thermal jumping 38% from 2020 to 142Mtoe, and wind increasing by 17% to 156Mtoe. Demand for geothermal energy is forecast to rise by 7% on-year to 111Mtoe, while nuclear output will increase by 9% on-year to 762Mtoe.

Demand for all fossil fuels has grown significantly in 2021. AME expects oil demand to rise by 4% on-year to 4,215Mtoe, but 5% below 2019 levels. Gas demand is forecast to increase by 5% on-year to 3,384Mtoe, surpassing 2019 level by 0.5%. Coal demand is expected to rise 9% on-year to 4,259Mtoe, 10% higher than 2019.


To meet the ambition of net zero emissions while simultaneously satisfying growing demand for energy services, production from zero-emission sources would have to be scaled up 9-13 times in 30 years. Hydro and nuclear power production are unlikely to increase by anything like this amount, implying the need for even faster growth in wind, solar and other renewables.

The problem becomes more manageable if coal, oil and gas remain a significant part of the energy mix by coupling them with carbon capture and storage technology or other ways to offset their emissions. Even so, the implied deployment of zero-emissions energy technologies will be exceptionally difficult within the time frame.

In addition to the net zero target, global policymakers have committed themselves to ensuring universal access to affordable, reliable and modern energy services, as part of the United Nations Sustainable Development Goals. Across much of sub-Saharan Africa, as well as parts of Asia and Latin America, even the most basic energy needs for cooking and heating have still not been met. In urban areas, most households now have access to electricity, even in developing countries, but one-fifth of rural households worldwide still lack this basic service, according to the World Bank.

One-third of the world's population still relies on traditional cooking fuels such as wood, coal and kerosene, according to the World Health Organization. Household fuel combustion is responsible for significant indoor air pollution, contributes to poor outdoor air quality, and was one the world's leading causes of mortality before the Covid-19 pandemic. The WHO estimates household air pollution was responsible for almost 4m deaths in 2016.

Beyond satisfying basic needs, over time households in developing countries are likely to want to use more advanced energy services for lighting, heating, air-conditioning, television, computing and transport, including aviation.

In 2019, the average person in the advanced economies in the Organization for Economic Cooperation and Development (OECD) used more than three times as much energy as their counterparts in the rest of the world. But developing countries have been steadily closing the energy consumption gap, which has narrowed from 7:1 in 1969 and 6:1 in 1979 to 5:1 in 1989 and 4:1 in 2009.

If developing countries continue to close even part of the gap, the increase in primary energy use will be huge. Rising living standards and energy consumption in developing countries explain why most projections show big increases in global energy demand by 2050, even if energy efficiency can be improved.

In the IEA'S net zero by 2050 pathway, global energy demand is around 8% smaller than today, but it serves an economy more than twice as big and a population with 2bn more people. Almost 90% of electricity generation comes from renewable sources, with wind and solar PV together accounting for almost 70%. Most of the remainder comes from nuclear power.

New energy security challenges will emerge on the way to net zero by 2050 while longstanding ones will remain, even as the role of oil and gas diminishes. Growing energy security challenges that result from the increasing importance of electricity include the variability of supply from some renewables and cybersecurity risks. In addition, the rising dependence on critical minerals required for key clean energy technologies and infrastructure brings risks of price volatility and supply disruptions that could hinder the transition.

"AME forecasts global energy demand to rise by 6% in 2021 to 14,869Mtoe, more than offsetting the 3% contraction in 2020."

"Growth in energy demand this year will be driven by renewable energy, with solar jumping 38% and wind increasing 17%."

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Daily Briefing
Selection: Oil, Gas, LNG, Pipelines, Unconventional, Regasification, Oil Refineries, Hydrogen, Renewables, Coal... ; This Month (Jan);
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Yancoal’s ROM Coal Production Drops 2% YoY to 16.9Mt in 2021Q4
25 Jan 2022
Yancoal has announced that it produced 16.9Mt of ROM coal (100% basis, hereinafter) in the December quarter of 2021, down 2% year on year and 1% quarter on quarter due to increased rainfall and Covid-19-related issues. Saleable coal production dropped to 12.3Mt during the period, down 3% year on year and 5% quarter on quarter. The company produced a total of 63.2Mt of ROM coal and 48.5Mt of saleable coal in 2021, down 7% and 6%, respectively, year on year.

Yancoal has said that its Moolarben open cut coal mine in NSW will be expandedto 16Mtpa within 18 months. It has begun to increase the capacity of CHPP at the mine.
Venture Global's Calcasieu Pass Prepares to Begin Production
25 Jan 2022
Venture Global LNG's Calcasieu Pass has doubled feedgas deliveries from a week earlier as the liquefaction facility in Louisiana prepares to start production.

Once online and fully ramped up, the seventh major US LNG export facility will have a capacity of 10Mtpa.

US terminals continue to operate at or near full capacity on the back of strong demand, with no cancellations reported at Gulf Coast facilities in recent months.

Gas deliveries to Calcasieu Pass totaled 77.36MMcfpd on 24th January, up from 47.56MMcfpd the previous day and 34.71 MMcf/d a week earlier.

All 18 liquefaction modules have been received at the Louisiana terminal from Italy and set on foundations, Venture Global said. Earlier in January, the company was granted US regulatory approval to begin commissioning the first two-train block with feedgas.

It is not yet known whether a cargo will be imported to the terminal for the purpose of cooling down the storage tanks before the facility's first export. Cheniere Energy brought in a cool-down cargo before its Sabine Pass terminal, the biggest US liquefaction facility, began exports in 2016.
South Korea to Subsidise World's Largest Hydrogen Bus Order
25 Jan 2022
The South Korean government will subsidise the purchase of 624 hydrogen buses which will hit the roads in the Busan, Ulsan and Gyeongnam provinces by the end of 2025.

The Ministry of Environment and local authorities will each contribute KRW150m (US$125k) towards every KRW630m (US$527k) fuel-cell bus, with Korean auto manufacturer Hyundai offering a KRW10m (US$8k) bulk-purchase discount on each unit. 

The deal for the 624 buses will be the world's largest-ever order for hydrogen-powered buses. The subsidies for the project add up to KRW187.2bn ($157m).

South Korea currently has 112 hydrogen filling stations in operation across the country. In 2022, 38 more filling stations will be added, according to local media.

“Through this agreement, the Ministry of Environment is planning to gradually expand the target and scale to other regions by using it as a model example of leading city bus pollution-free leadership,” the ministry said in a statement.

Environment minister Han Jeong-ae added: “This business agreement is a promise to realise the future hydrogen economy in the present.”

South Korea is aiming to achieve net-zero emissions by 2050, but because of its limited available land for renewables projects, it is planning for 33% of its energy to come from hydrogen by 2050—60% of which will be imported.

It also plans to have 5.3m fuel-cell electric vehicles on its roads by 2050, powered by at least 2,000 hydrogen filling stations.
Vietnam's Largest Oil Refinery Hit by Cash Squeeze, Cuts Processing
25 Jan 2022
Nghi Son, Vietnam’s largest oil refinery, has cut processing rates and may be forced to close next month after a cash squeeze led to a halt in crude imports from Kuwait, according to sources.

Nghi Son Refinery & Petrochemical LLC is seeking financial assistance from the Vietnamese government, and the plant could be shut if the company is unable to secure funding, sources said.

The refinery is running at 80% of capacity, down from 105%, and crude imports were halted about a week ago, they said.

Vietnam imported 1.098Mt of crude oil in December, up 13.96% from a year earlier, with most of the shipments coming from Kuwait. In 2021, the country imported 9.94Mt of crude oil, down 15.4% on-year, with imports from Kuwait slumping 8.8% to 8.76Mt.

Nghi Son, which cost US$9bn, started commercial operations in late 2018 and has a capacity of 200kbpd. 

The Nghi Son refinery and the 130kbpd Dung Quat refinery, which started production in 2009, together meet about 70% of Vietnam’s demand for refined oil products.

The refinery, located 260km (160 miles) south of Hanoi, is 35.1% owned by Japan's Idemitsu Kosan Co, 35.1% by Kuwait Petroleum, 25.1% by PetroVietnam and 4.7% by Mitsui Chemicals Inc.

Vietnam exported 218,111t, or 51,573 bpd, of crude oil in December, down 17% from a year earlier. Full-year 2021 exports fell 32.8% to 3.13Mt, according to customs data.
TotalEnergies and Chevron to Exit Myanmar, Citing Investor Pressure
25 Jan 2022
Energy majors TotalEnergies and Chevron, partners in a major gas project in Myanmar, said on Friday that they are withdrawing from the country amid investor pressure to stop cooperating with the country’s ruling military junta.

TotalEnergies said it was responding to a deterioration of the human rights situation and the “rule of law” in Myanmar since the military coup last February. The situation had reached a point, the company said, where it could no longer “make a sufficiently positive contribution in the country”.

TotalEnergies operates Myanmar's largest offshore gas field, Yadana, in which it holds a 33.2% stake. The project, which is a critical source of energy for both Myanmar and neighboring Thailand, is also owned by Chevron (28.3%) and Thailand’s PTT Exploration and Production (25.5%), along with the state-owned Myanmar Oil and Gas Enterprise, known as MOGE (15%). 

Located in the Gulf of Martaban, the Yadana field produces around 6Bcmpa of gas, about 30% of which is supplied to MOGE for domestic use, with the remaining 70% exported to Thailand.

TotalEnergies has said that its stake in Yadana accounts for less than 1% of its total production, and that the project “is not material in terms of revenues or profits.”

Chevron and TotalEnergies previously argued that shutting off the flow of gas would increase hardship to the people in Myanmar. Gas from Yadana generates electrical power for roughly half the population of Yangon, Myanmar’s largest city, according to Chevron. 

Total said it would withdraw after six months without compensation. Chevron said it was reviewing its interest to “enable a planned and orderly transition that will lead to an exit from the country.”

Shell, an equity holder in offshore Block A7 with partners Woodside Energy and Myanmar Petroleum Exploration and Production Co, said it had relinquished its exploration licences in Myanmar last year.

Neither the US nor European governments have sanctioned Myanmar’s energy sector, but they have been under pressure from lawmakers and human-rights groups to do so.
China's Imports of Mongolian Metallurgical Coal Drop 41% YoY in 2021
25 Jan 2022
In 2021, China imported a total of 14Mt of metallurgical coal from Mongolia, down 9.7Mt or 40.9% year on year. The decline in imports occurred as China suspended multiple check stations on the border with Mongolia several times to control the spread of Covid-19.

The average import CIF price (US$/t) of Mongolian metallurgical coal in 2021 was calculated to be US$135/t, an increase of US$57.50/t (73.8%) from the prior year against the background of a skyrocketing export market for metallurgical coal.
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