Oxford Institute for Energy Studies

New Oxford Institute for Energy Studies podcast with Ole Henrik Ree discusses the carbon dioxide removals market. 👉 Link to podcast: https://lnkd.in/efuu2iJT 🎙 In this OIES podcast, Hasan M. speaks to Ole Henrik Ree at Microsoft about the latest developments in the carbon dioxide removals (CDR) market. 🎙 The podcast discusses the role and importance that CDR plays as part of corporate climate strategies, challenges faced by companies when procuring CDR solutions, and the makeup of the existing market and how it may evolve in the future. 🎙 The podcast also evaluates different CDR technologies, such as direct air capture, bioenergy with CCS, and biochar, including quality metrics and the need for public acceptance to take projects through final investment decisions. 🎙 The podcast highlights the urgent need to deploy CDR solutions today to realistically reach stated corporate net-zero targets. All our #podcasts are also available on #applemusic and #spotify #Carbonremovals #CDR #voluntarycarbonmarket #climateaction #carbonmanagement

New Oxford Institute for Energy Studies Energy Comment discusses gas monetization in Turkmenistan. 👉 Link to paper: https://lnkd.in/eHZt8Qkh Key points: 💠 Turkmenistan’s weak investment climate has made transforming the country’s solid gas reserves base into export earnings beyond the existing sales to China more difficult. 💠 Barriers to foreign capital and a reliance on public finance to support major national investment projects are additional headwinds. While external factors are out of Turkmenistan’s control, some of the internal challenges can be solved. 💠 There is now a growing understanding in Ashgabat that the country needs to look into less capital-extensive resource monetization tactics. 💠 The expansion of export-oriented fertilizer and petrochemical industries, as well as the more active use of existing pipeline interconnectors with Iran to facilitate gas swaps are likely to gain momentum as Turkmenistan’s new gas monetization strategy evolves. #Azerbaijan #Caspian #China  #FDI #Fertilizer #GasExports #GasReserves #Gazprom #Iran #Kazakhstan #Petrochemicals #Russia #Swap #Turkmengaz #Turkmenistan #Uzbekistan

A recent Oxford Institute for Energy Studies paper looks at Contracts for difference CfDs and their role in energy transition: 👉 Link to OIES Paper: https://lnkd.in/eyygPVPF Key insights: 💠 Countries within EU and other regions have shown growing interest in two-sided CfDs model used in the UK due to its success in reducing investment risks while protecting consumers from market price rises 💠 Conventional CfDs (the two-sided model) have key advantages in stabilizing revenues and increasing the #bankability of renewable energy projects 💠 Despite advantages they present certain challenges that need to be addressed 💠 Traditional CfDs share aspects with financial derivatives but their binding to specific assets is distinct; this linkage restricts secondary market trading without associated asset sales and may lead to asset dispatch manipulation to influence payments 💠 Conventional CfDs present two main challenges: incentivising a ‘produce-and-forget’ mentality; and causing intraday and balancing market disruptions 💠With revenues per MWh always matching the strike price there are some distortions as follows: 1️⃣ CfDs do not encourage the selection of system-friendly renewables such as high-efficiency wind turbines or adaptable solar panels 2️⃣ Traditional CfDs do not drive generators to amplify production during high-price durations (if it is a dispatchable resource) or to curtail during low-price intervals. For instance, wind, solar, and nuclear plants should reduce outputs when prices fall beneath their operational costs but with conventional CfDs, they might continue production, even when prices go negative 2️⃣ This is especially problematic for technologies with fluctuating variable costs with thermal power plants, reservoir hydropower, and storage plants are especially vulnerable as these adaptable generators need price-driven operation for viability; encouraging consistent electricity production can nullify their worth as adaptable resources. This problem magnifies when CfDs dominate more of the market #CfDs #energytransition #powergeneration #renewables #negativeprices

New Oxford Institute for Energy Studies Podcast discusses China's economic downturn and what is means for energy. 👉 Link to Podcast: https://lnkd.in/e93F8aud 🎙 In this latest podcast from the OIES China Energy Programme, Michal Meidan, Anders Hove and Philip Andrews-Speed take stock of the macroeconomic environment, the government’s recent efforts to support activity and what it means for energy demand. ⬇ See also below our September OIES China Energy Monthly for more data points. All of our #podcasts are also available on #applemusic and #spotify #carbonmarkets #CBAM #China #electricvehicles #EnergyPolicy #Gas #LNG

New Oxford Institute for Energy Studies Podcast discusses China's economic downturn and what is means for energy. 👉 Link to Podcast: https://lnkd.in/e93F8aud 🎙 In this latest podcast from the OIES China Energy Programme, Michal Meidan, Anders Hove and Philip Andrews-Speed take stock of the macroeconomic environment, the government’s recent efforts to support activity and what it means for energy demand. 🎙 They discuss oil and gas consumption, rising electric vehicle penetration as well as the rapid deployment of renewables. 🎙 They also take stock of recent policy announcements on new nuclear plant approvals as well as carbon and power market reform. All of our #podcasts are also available on #applemusic and #spotify #carbonmarkets #CBAM #China #electricvehicles #EnergyPolicy #Gas #LNG #Nuclear #Oil #powersectorreform #Renewables #solar #Wind

Graeme Bethune article in latest Oxford Institute for Energy Studies Energy Forum on  LNG prospects in North Asia 👉 Link to OIES Energy Forum: https://lnkd.in/eMBZ_Y3f Key conclusions 💠 Japan, Korea and Taiwan are often lumped together in considering the outlook for energy demand, including LNG, in North Asia 💠 While Japanese energy demand has been falling, it is growing in the other two countries 💠 And while gas is losing market share to coal in Japan it is gaining market share in Korea and Taiwan 💠 All three countries are committed to significant reductions in emissions by 2030 but are also highly reliant on fossil fuels for electricity generation 💠 Only in Korea is there strong support for increased nuclear while renewables are facing challenges particularly offshore wind 💠 In these circumstances there will likely be recourse to LNG rather than higher-emission coal 💠 This appears to be borne out by the active LNG investment and contracting currently underway by companies in all three countries #gas #lng #renewables #coal #northasia #korea #japan #taiwan #energytransition #energydemand

New Oxford Institute for Energy Studies Energy Comment from our Energy Quantamentals series by Ilia Bouchouev summarizes the outcomes of unprecedented release and subsequent repurchases of stocks from the US Strategic Petroleum Reserves (SPR), challenges conventional statistical analysis used to assess its impact on gasoline prices, and provides some suggestions on how the SPR can be managed more effectively in the modern oil markets where prices are determined in global futures and heavily impacted by quantitative algorithmic traders. 👉 Link to Energy Comment - https://lnkd.in/eyz7EmgX Key Points: 💠 2022 SPR sales was three time larger than all of the previous emergency sales combined. The sale should be viewed as a highly profitable oil trade. The execution of the SPR program has improved by shifting from the fixed price to basis quotations, setting price caps, and extending purchases forward to capture oil backwardation.   💠 The most valuable contribution of the SPR buybacks was the cancellation of 140 million barrels of Congress-mandated sales. However, the resulting $10.4 billion transfer to other governmental programs allows SPR to repurchase only less than one-third of the previously sold barrels. An additional 100 million barrels mandated by the US Congress to be sold in 2028-2031 has not been cancelled yet. Its cancellation would be the most important step to be taken towards the restoration of the SPR.   💠 The claim that the SPR sales have decreased US retail gasoline prices by $0.40 per gallon is challenged. Since such a claim was made prior to the actual decline of prices, the statement is based entirely on theoretical considerations. The econometric analysis supporting such a statement is extremely murky, and we discuss numerous gaps and highly controversial assumptions used in this analysis.   💠 The impact of speculation driven by other financial factors is ignored, despite the fact that correlation between oil prices and hedge fund positioning during that period exceeded 50%, while the correlation between changes in oil prices and inventories was practically zero.   💠 Suggestions are provided on how the SPR program can be managed more efficiently in the world dominated by quantitative traders, similarly to how storage is managed by commercial traders. The cost of maintaining the SPR can be covered by systematizing the program of oil exchanges and capturing the benefits of oil backwardation.   #oott #oil #strategicpetroleumreserve #spr #us #gasolineprices #backwardation

New Oxford Institute for Energy Studies research paper discusses the outlook for Gazprom. 👉 Link to research paper: https://lnkd.in/eF8-eapV Key points: 💠 The financial losses recorded by Gazprom in 2023 driven by collapsing gas export revenue point to a wider transition in the role of the company, which has been at the heart of Russia’s energy economy since the Soviet period. 💠 In the pre-crisis period, Gazprom was able to subsidize gas supply to domestic consumers thanks to its monopoly on lucrative Russian gas exports. 💠 But the 2023 results point to a new set of trends, with liquids making up the bulk of revenue and the strategic importance of gas fading as the company works to establish new eastern markets to replace its lost European buyers. 💠 Furthermore, higher domestic gas prices are serving to feed additional revenue to the state budget in the form of tax, reducing the company’s capital budget and squeezing its cost base. 💠 With Gazprom now becoming more of a de facto government revenue collector than a rent distributor, and with the company’s much weaker financial position, highlighted by the deterioration in its balance sheet as well as its profit and loss account, this report asks what the outlook for the company is in terms of both internal financial reform or a potential breaking up of its business model in favour of domestic competitors like Rosneft and Novatek. #Capital #China #Exports #Gas #Gazprom #LNG #MET #Novatek #Profit #revenue #Rosneft #Russia #Subsidy #tax

New Oxford Institute for Energy Studies paper discusses natural hydrogen and its potential role in a net-zero carbon future 👉 Link to research paper: https://lnkd.in/etEcnTCg 💠 Growing attention to the exploration of naturally occurring hydrogen is not particularly surprising, since native H2 enthusiasts claim that it can potentially be produced with almost no carbon emissions and at a cost below 1 USD/kg, which is very similar to or even lower than the conventional manufacturing of ‘grey’ and ‘brown’ hydrogen 💠 In theory, it can be significantly cheaper than other forms of ‘clean’ hydrogen and, if extracted in a way similar to natural gas, would not have the intermittency challenge of green H2 and could therefore become a more suitable option for the ultimate off-takers 💠 The US Geological Survey estimate in their unpublished report that there are as much as five trillion tonnes of natural hydrogen around the world, a tiny percentage of which could meet the entire world’s energy demand for centuries 💠If these estimates were to be true, we may not even need to engage in challenging process of manufacturing H2 anymore but rather pursue the quest of finding and producing naturally occurring hydrogen that would help us decarbonise our economies faster and at a lower cost 💠Despite ambitious projections and enthusiastic aspirations, significant uncertainties remain regarding the feasibility of native H2 becoming an important component of the energy transition and consequently, its future potential is still unclear #hydrogen #netzero #energytransition #naturallyoccurringhydrogen #nativeh2

Dr Katja Yafimava has recently interviewed by Energy Intelligence on prospects of continued post-2024 transit of gas across Ukraine. 👉 Link to article: https://lnkd.in/eMYHV2bX Key points 💠 The EC has largely maintained a laissez-faire attitude to post-2024 transit, guided by its political aim of phasing out Russian gas, but its own REPowerEU document states it must be ensured that such phase out is ‘achievable and affordable for all Member States’ – a proposition that could be undermined if the transit stops on 1 January 2025. 💠 There is a clear commercial incentive for continued transit as if it stops, several countries (Slovakia, Austria, Moldova, and Ukraine) would have to pay more for their gas because of the tightened European gas balance and increased transportation costs; transit revenue would be lost as well