Power Up: The Age of Electricity Is Nigh
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Oct 17 -By Clyde Russell
Asia Commodities and Energy Columnist
Welcome to Power Up! The age of electricity is upon the world, with the International Energy Agency saying fossil fuel consumption will peak by the end of the decade. Slowing demand for crude oil and natural gas will free up investment for green energies, the agency said in its latest World Energy Outlook. While crude oil may face long-term challenges, it’s also under the pump currently, with prices holding near a two-week low after falling more than 7% earlier this week. Demand concerns and some easing of Middle East tensions are behind the decline in Brent futures to $74.22 a barrel on Wednesday.
IEA Sees Fossil Fuel Peak
The world is on the brink of a new age of electricity with fossil fuel demand set to peak by the end of the decade, the International Energy Agency said on Wednesday. The looming downturn in the use of fuels such as crude oil and natural gas could drive investment into green energy, the agency said in its latest World Energy Outlook.
But the IEA also flagged a high level of uncertainty as conflicts embroil the oil and gas-producing Middle East and Russia, and as countries representing half of global energy demand have elections in 2024. The IEA said such conflicts highlighted the strain on the energy system and the need for investment to speed up the transition to "cleaner and more secure technologies".
A record high level of clean energy came online globally last year, the IEA said, including more than 560 gigawatts of renewable power capacity. Around $2 trillion is expected to be invested in clean energy in 2024, almost double the amount invested in fossil fuels.
“In the second half of this decade, the prospect of more ample – or even surplus – supplies of oil and natural gas, depending on how geopolitical tensions evolve, would move us into a very different energy world,” IEA Executive Director Fatih Birol said in the release.
China, the world’s biggest importer of crude oil, is leading the charge to electrification and is doing so at such a rapid pace it’s “wrong-footing” oil producers, the IEA said. China has already achieved 50% market share for electric vehicles in new vehicle sales, a level the rest of the world is likely to reach by 2030, according to the IEA. Under this forecast, the rise of EVs displaces around 6 million barrels per day of global crude oil demand.
Essential Reading
U.S. oil mergers slowed sharply last quarter after a year-long consolidation wave emptied pocketbooks and left fewer companies on offer in the top U.S. shale field, according to analytics firm Enverus, which said there were $12 billion of deals disclosed in the third quarter.
As U.S. nuclear power companies gear up to revive old reactors and build a generation of new ones to meet burgeoning power demands for artificial intelligence, cryptocurrency and electric vehicles, they still face a daunting risk-management task: what to do with thousands of tons of spent reactor fuel.
Turkey has spent eight of the first nine months of 2024 as Europe's largest producer of coal-fired electricity, overtaking Germany and Poland as it cranked coal burning for power. As Gavin Maguire writes, its total was 28% above that of second-ranked Germany.
The U.S. has opened applications for up to $900 million in funding to support the initial domestic deployment of small modular reactor nuclear technology, part of President Joe Biden's plans to combat climate change through clean electricity generation.
Constellation Energy has ordered a main power transformer for the Three Mile Island nuclear reactor it is attempting to restart in Pennsylvania, pushing ahead with work critical to the plant's revival. The transformer is expected to be the biggest single piece of equipment that will need to be replaced and will cost about $100 million.
We hope you're enjoying the Power Up newsletter. We'd love to hear your thoughts and feedback. You can reach us at powerup@thomsonreuters.com
Editing by Marguerita Choy
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