Wealth funds can tap low-carbon economy

Updated 21 January 2013
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Wealth funds can tap low-carbon economy

Energy and finance leaders discussed ways to encourage greater private sector investment in renewable energy and low-carbon, climate-friendly projects as a tactic to mitigate climate change and diversify the global energy mix.
Specifically, leaders focused on the growing opportunities for sovereign wealth funds, development banks and pension funds to view the new energy industry as a growth opportunity, especially in developing economies.
The discussion, which was held in Abu Dhabi, was hosted by Sultan Ahmed Al-Jaber, UAE special envoy for energy and climate change and CEO of Masdar and Gregory Barker MP, UK energy and climate change minister.
The discussion took place on the sidelines of International Renewable Energy Agency’s (IRENA) third annual Assembly in Abu Dhabi.
“This is an important agenda. Not just for the environment but for business,” said Greg Barker, UK energy and climate change minister.
“The opportunities for the global, low-carbon economy are huge and growing at an exponential rate. Clean energy and a range of resource efficient projects can expect growing interest in attracting investment as new financial participants crowd into this fast developing market,” he said.
“The meeting helped to lay a foundation to better identify concrete areas of opportunity for investment in developing economies and ideas on how to scale up finance for climate solutions,” added Barker.
“This joint dialogue between the private and public sectors is absolutely vital and the UK and the UAE are working together to drive this agenda forward. I look forward to continuing this collaboration.”
A number of ideas emerged, including contract structures for power pricing, possible dimensions for the Basel rules on finance, and ways in which finance is securitized. Participants agreed to take the discussion forward and establish a working group to explore the suggested proposals more deeply.
“Increased collaboration and institutional investment are critical in diversifying the global energy mix and addressing climate change,” said Dr. Sultan Al-Jaber.
In a related development, China — the world’s largest energy producer and a leader in technology manufacturing and the use of wind, solar and hydropower — has decided join the International Renewable Energy Agency (IRENA).
The accession of China — marks a major step toward universal membership for the Agency, which currently has 160 participating states.
“China looks forward to becoming a full member of IRENA soon, as well as working alongside all countries for greater achievements in global renewable energy development,” said Liu Qi, vice-minister of the National Energy Administration of China, at IRENA’s third annual Assembly in Abu Dhabi.
China has an electrical power generation capacity of 1140 GW but increasingly turning to renewable energy to power its fast-growing economy.
China’s installed generating capacity of solar PV power has reached 7 GW, a tenfold increase over the past two years.
China is also a manufacturing powerhouse for solar PV, wind and hydro power technology.
“The decision by China to join IRENA is a milestone in international efforts to promote renewable energy,” said IRENA Director-General Adnan Z Amin.


Oil prices fall as OPEC and Russia weigh output boost

Updated 50 min 27 sec ago
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Oil prices fall as OPEC and Russia weigh output boost

  • Russian Energy Minister Alexander Novak has had talks with Saudi Energy Minister Khalid Al-Falih on an easing of the terms of the global oil supply pact that has been in place for 17 months
  • The energy ministers of Saudi Arabia, Russia and the United Arab Emirates are discussing an output increase of about 1 million barrels per day

LONDON: Oil prices fell below $78 a barrel on Friday as OPEC and Russia considered easing supply curbs to offset disruptions in Venezuela and an expected drop in Iranian exports.
Russian Energy Minister Alexander Novak has had talks with Saudi Energy Minister Khalid Al-Falih on an easing of the terms of the global oil supply pact that has been in place for 17 months, Novak said on Friday.
The energy ministers of Saudi Arabia, Russia and the United Arab Emirates are discussing an output increase of about 1 million barrels per day (bpd), sources told Reuters.
Speaking in St. Petersburg, Falih told Reuters that “all options are on the table” when asked about the targets on production cuts.
Brent crude futures were down 80 cents at $77.99 a barrel by 0914 GMT, having hit their highest since late 2014 at $80.50 this month.
US West Texas Intermediate (WTI) crude futures were at $70.18 a barrel, down 53 cents.
“The debate about a possible relaxation of the production restrictions should preclude any renewed price rise,” Commerzbank analysts said.
“The $80 mark is likely to pose an obstacle that is difficult to overcome because it would significantly raise the probability of a production increase.”
The Organization of the Petroleum Exporting Countries (OPEC) as well as a group of non-OPEC producers led by Russia started withholding output in 2017 to tighten the market and prop up prices.
Global crude supplies have tightened sharply over the past year because of the OPEC-led cuts, which were boosted by a dramatic drop in Venezuelan production.
The prospects of renewed sanctions on Iran after US President Donald Trump pulled out of an international nuclear deal with Tehran have also boosted prices in recent weeks.
As a result, compliance with the deal to reduce output by 1.8 million bpd by the end of 2018 has been at 152 percent, sources said.
Amrita Sen, chief oil analyst at consultancy Energy Aspects, said: “Addressing overcompliance was always likely to be on the agenda amid a tight market and low inventories, but the volume to bring back is still up for debate.”

HIGHER PRICES AT A COST
While Russia and OPEC benefit from higher oil prices, up almost 20 percent since the end of last year, their voluntary output cuts have opened the door to other producers to ramp up production and gain market share.
US crude oil production has risen by more than a quarter in the past two years, to 10.73 million bpd. Only Russia produces more, at about 11 million bpd.
Output from the likes of the United States, Canada and Brazil, which are not bound by the OPEC/Russian-led pact, is likely to rise further as crude prices rise.