EU to cut power use, levy energy companies

EU to cut power use, levy energy companies
Energy prices in the EU are calculated on the basis of the most expensive source, in this case gas, which has gone up around fivefold over the past year (Shutterstock)
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Updated 30 September 2022

EU to cut power use, levy energy companies

EU to cut power use, levy energy companies

BRUSSELS: EU ministers on Friday agreed cuts to peak-hour power consumption and windfall levies on energy companies in an urgent effort to bring down sky-high energy prices, according to AFP.

The decision, announced by the Czech Republic in its role holding the EU presidency, aims to mitigate energy costs sent soaring by Russia’s war in Ukraine and as the northern hemisphere winter looms.

European households and businesses are already staggering under surging energy bills, fueling record inflation that in the eurozone has hit 10 percent.

Extra drama has been injected with several unexplained leaks this week of Russia-Germany undersea gas pipelines, Nord Stream 1 and 2, that were widely seen as “sabotage.”

The EU ministers’ agreement came a day after Germany — the bloc’s export powerhouse that had long been dependent on Russian gas — announced a €200 billion  ($195 billion) energy aid package to shield its consumers.

Other EU countries have deployed smaller-scale national measures with the same aim, but several demanded European-level concertation, in part to clamp down on energy-buying competition between EU peers.

The two measures adopted were proposed by the European Commission.

The EU executive believes it can raise €140 billion from the levies on non-gas electricity producers and on energy majors that are raking in outsized profits from the global energy demand.

Its plan to cut power usage foresees a reduction of “at least five percent” during peak hours, according to a commission document seen by AFP.

Missing from the announced measures, however, was an idea espoused by 15 EU countries — among them France, Spain, Italy, Greece, Malta and Poland — for a price cap on imported gas.

The energy crisis, which had been brewing even before the war in Ukraine, took on greater magnitude when Russia severely curtailed natural gas supplies to Europe in retaliation for Western sanctions over its invasion.

Energy prices in the EU are calculated on the basis of the most expensive source, in this case gas, which has gone up around fivefold over the past year.

Several EU ministers went into the meeting wanting a gas price cap to be discussed.

“There is big disappointment that in the proposal that is on the table there is nothing about gas prices,” Polish Climate Minister Anna Moskwa said.

“This maximum price for gas would be supported by the majority of European countries” and “cannot be ignored,” she said.

But Germany resisted, fearing that a price cap would simply see liquefied natural gas shipments avoid Europe and sent to more lucrative markets, worsening the supply crunch for the EU.

The European Commission shares those concerns, although EU energy commissioner Kadri Simson said there needed to be a way to target just Russian gas — which arrives in the EU by pipeline, not in LNG form.

“We have to remove the incentives that are there for Russia to manipulate these volumes, and the answer is clear: We have to offer a price cap for all Russian gas.”

She and other participants, including Irish Climate Minister Eamon Ryan, said that, for a gas price cap to be effective other major buyers such as Japan and South Korea needed to cooperate with the EU.

German Economy Minister Robert Habeck said that, while Berlin was open to the idea of a price cap on Russian gas “as a sanction,” the broader application being called for was “treacherous.”

He insisted that “we need to bring down consumption” as a priority, and “we must not allow insufficient gas to reach Europe.”

While the measures agreed Friday were steps in the right direction, the Bruegel think tank in Brussels had warned in an analysis they were “not sufficient.”

“A more comprehensive plan needs to ensure that all countries bring forward every available supply-side flexibility, make real efforts to reduce gas and electricity demand, keep their energy markets open and pool demand to get a better deal from external gas suppliers,” it said.

Further EU measures were likely to be discussed at an informal summit in Prague next week, and another EU energy ministers’ meeting on Oct. 11 and 12.

“We need to go further on these issues and come to a rapid conclusion,” French Energy Minister Agnes Pannier-Runacher said.


Saudi Space Commission announces launch of Saudi Space Accelerator Program

Saudi Space Commission announces launch of Saudi Space Accelerator Program
Updated 05 December 2022

Saudi Space Commission announces launch of Saudi Space Accelerator Program

Saudi Space Commission announces launch of Saudi Space Accelerator Program
  • The program addresses the current state of the Kingdom's space sector and proposes proactive space solutions

RIYADH: Saudi Arabia’s Space Commission has announced the launch of its Saudi Space Accelerator Program in line with the Kingdom's innovation goals as part of Vision 2030.

According to a SSC statement, the program seeks to enhance the national space sector through the development of its infrastructure and enabling local entrepreneurs and businesses to advance innovative space solutions.

The program addresses the current state of the Kingdom's space sector and proposes proactive space solutions, and will ignite the local ecosystem and determine its maturity level.

It will also ensure that the sector remains viable for years to come, by providing an established business environment for growth and innovation for entrepreneurs to thrive in — overall improving the effectiveness of the commission's future programs and initiatives over the long-run.

The Saudi Space Accelerator Program is being supported by the Future Office for Entrepreneurship Development, that seeks to establish a new business unit within the commission dedicated to enabling the entrepreneurial space scene in the Kingdom. 

It aims to assess the current state of the sector, adopt best global practices, and develop a roadmap for local businesses. As for the Saudi Space Accelerator Program, it focuses on providing support to both local and international startups, which will enhance the promising and emerging space sector in the Kingdom. Participating entrepreneurs and startups will be supported in aligning their projects with internationally recognized best practices to achieve the Kingdom's 2030 goals.

By partnering with Techstars, the Saudi Space Commission is launching its first cohort in January 2023 to kickstart this new momentum. Through this first cohort the commission can access a niche market focused on space-related technologies, including drones, avionics, advanced structures, geospatial analytics, and a host of other technologies that contribute to the space industry development.

Aspiring entrepreneurs, both international and local, who are interested in developing their innovative solutions in the space sector are encouraged to apply for the first cohort of the Saudi Space Accelerator Program before December 12. 


Saudi budget to be announced on Wednesday

Saudi budget to be announced on Wednesday
Updated 05 December 2022

Saudi budget to be announced on Wednesday

Saudi budget to be announced on Wednesday
  • The Kingdom reported a budget surplus of SR149.6 billion ($40 billion) in the first nine months of 2022

RIYADH: The Saudi Cabinet will hold a session on Wednesday to approve the State's General Budget for the new fiscal year, Saudi Press Agency reported.

The Kingdom reported a budget surplus of SR149.6 billion ($40 billion) in the first nine months of 2022, according to data from the Ministry of Finance released in October.

Their data showed revenues amounting to SR950.2 billion, compared to expenditures of SR800.7 billion. 


Saudi Arabia’s Future Minerals Forum partners with global think tanks ahead of January conference

Saudi Arabia’s Future Minerals Forum partners with global think tanks ahead of January conference
Updated 05 December 2022

Saudi Arabia’s Future Minerals Forum partners with global think tanks ahead of January conference

Saudi Arabia’s Future Minerals Forum partners with global think tanks ahead of January conference

RIYADH: Saudi Arabia’s global conference Future Mineral Forum has partnered a host of major think tanks to drive innovation and thought leadership, according to a statement.

Launched in 2022 by the Kingdom’s Ministry of Industry and Mineral Resources, the FMF has now joined forces with the Development Partner Institute, the Center for Energy Studies at Rice University’s Baker Institute for Public Policy, Clareo, and the Payne Institute at the Colorado School of Mines.

Through these partnerships with the think tanks and research institutions, the FMF is targeting to provide dynamic insights that propel the development of the industry in line with strict environmental, social and governance principles.

This comes as the FMF is preparing for its second edition which is set to kick off on Jan. 10, 2023 and end on Jan. 12, with An estimated 200 speakers from around the world are expected to attend the event. 

Development Partner Institute is a global organization that aims to accelerate the delivery of a new future of the mining sector while maximizing the contribution of mining to economic as well as social development.

Similarly, Rice University’s Baker Institute for Public Policy is a nonpartisan, data-driven think tank, and its Center for Energy Studies works on providing new insights on the role of economics, policy, and regulation while taking into consideration the performance and evolution of energy markets.

Moreover, Clareo poses a growth and innovation firm that aids firms and entities into transforming the challenges they face in terms of innovation, value growth, environmental, social, and governance, as well as energy transition into potential opportunities and competitive advantages.

Likewise, the Payne Institute at the Colorado School of Mines is a research institute with the aim of serving clients with expert public policy advice on topics including natural resources, energy, and the environment.

The FMF’s main objective is to untap potential mining opportunities from Africa all the way to West and Central Asia.

That said, all insights extracted are set to be published in multiple research papers and will shape several discussions at the FMF event.

The FMF is anticipated to tackle several topics, including sustainability, the future of mining, energy transition, the contribution of minerals to the development of societies, digital transformation, and integrated value chains.

The conference will also tackle global bottlenecks that could potentially affect the supply of mineral and energy, the future of mining on a domestic level and worldwide, as well as the contribution of mining projects, and any growth opportunities for the sector. 

The Kingdom’s mining sector is witnessing a rapid transformation and is attracting investors from around the globe since the launch of a new mining law earlier this year. 

According to geological surveys dating back 80 years, the Kingdom is thought to have an estimated reserve of untapped mining potential valued at $1.3 trillion.

However, with the prices of valuable minerals, especially gold, copper and zinc rising, Saudi Arabia expects the value of its current mineral wealth to double from the previously estimated $1.3 trillion, CEO of the Saudi Geological Survey Abdullah Al-Shamrani said in September.


Saudi Arabia explores opportunities with Netherlands on energy, circular economy in key meeting

Saudi Arabia explores opportunities with Netherlands on energy, circular economy in key meeting
Updated 05 December 2022

Saudi Arabia explores opportunities with Netherlands on energy, circular economy in key meeting

Saudi Arabia explores opportunities with Netherlands on energy, circular economy in key meeting

RIYADH: Senior officials and business leaders from Saudi Arabia and the Netherlands have met to discuss potential collaborations regarding the energy and circular economy fields.

The Kingdom’s National Competitiveness Center hosted a meeting in its Riyadh headquarters attended by representatives from Dutch embassies across the Gulf Cooperation Council region, and officials from major firms such as global consumer goods company Unilever, multinational conglomerate corporation Philips, and lighting company Signify.

From Saudi Arabia, the Deputy Minister of Commerce and CEO of the Center Iman Al-Mutairi attended, as well as representatives from the Ministry of Energy and the Ministry of Resources Human and Social Development, and executives from the Saudi Investment Company for Recycling.

During the meeting, prospects between both countries were discussed, including cooperation between business sectors in the fields of energy and its transportation as well as discussions of partnership in the circular economy.

The meeting also shed light on potential opportunities in the Kingdom, specifically in addition to discussions on the development in the labor market and women’s participation in the workforce.

By building a Saudi economy based on inclusiveness, the NCC aims to achieve competitiveness in its broadest sense, according to Mutairi.

Moreover, companies should be aware of any offers through what is referred to as the “Istiqla” platform which allows opinions to be taken on laws and regulations prior to their approval, the CEO of the center stressed.

Through the meeting, the NCC sought to emphasize the importance of the Saudi and Dutch business sectors to enhance economic cooperation between both countries.

Since its establishment in 2019, the NCC monitors the challenges facing the Kingdom’s private sector from various channels.

It works in integration with more than 60 government entities in order to address them in line with best practices that keep pace with global developments.

The NCC also helps both the public and private sector adopt new innovations, establish sustainability, create growth methods, and effectively use their resources.


Saudi Arabia Vision 2030 ‘winners’ need more private sector funding: S&P Global

Saudi Arabia Vision 2030 ‘winners’ need more private sector funding: S&P Global
Updated 05 December 2022

Saudi Arabia Vision 2030 ‘winners’ need more private sector funding: S&P Global

Saudi Arabia Vision 2030 ‘winners’ need more private sector funding: S&P Global

RIYADH: Transport, tourism, and technology are among the sectors set to benefit from massive investments as Saudi Arabia pushes ahead with its Vision 2030 economic diversification plan, according to a report from S&P Global.

The ratings agency argues these industries, as well as healthcare and energy, will see significant spending growth over the medium and long term. 

However, in line with previous reports, S&P Global warned that the banking sector and the Kingdom’s sovereign wealth fund will not be able to provide all the investments required, with debt-capital markets needed to step in.

“It will fall to the debt-capital markets to support a large portion of these new opportunities, as the government and the banking sector alone will not be able to meet all the required funding needs,” said the report.

In its analysis of individual sectors, the report says that as one of the region’s largest countries, and with a significant young population, Saudi Arabia has planned out massive investment in the real estate sector as it continues to launch new programs to provide local housing. 

This is supplemented by a similar focus to develop the business and financial sectors through investments in commercial real estate as the Kingdom wants to become a regional industrial hub.  

On energy supply, the report says: “Utilities face the mammoth task of reducing Saudi Arabia’s fossil fuel dependency and meeting 70 percent of energy needs from renewables by 2030. We expect more public-private partnerships (PPPs) and significant investments in the country's grids.”

The Kingdom’s goal to become a technology hub will see digital infrastructure becoming a key enabler of transformational growth, with telcos staying at the heart of investments, stated the report, adding that high speed broadband, 5G, and a strategic digital hub will drive this change.  

Saudi Arabia’s push to become self-sufficient on food will see investments in the agriculture sectors as the Kingdom aims to increase local production and adopt modern farming techniques.  

“Despite strong demand and price increases, profitability in these sectors remains lower than before the pandemic, with rising input costs obscuring the path to recovery,” said the report.

The report also highlighted the developing tourism sector, “which has already received a substantial boost via aviation developments as well as projects intended to help attract 100 million visitors per year by 2030”. 

In the sector of healthcare, Saudi Arabia’s Ministry of Health will soon assume a regulatory role, stated the report, adding that the private sector is expected to play a more important part in this sector, attracting more than $65 billion in investments.  

“We do not anticipate taking any immediate rating actions on Saudi corporates — even as they carve out significant capital spending budgets over the next two-to-five years — given their healthy balance sheets and strong liquidity,” said the agency, adding: “Over time, however, we will reassess our ratings as projects are executed.”