Rapid rollout of clean technologies makes energy cheaper: IEA

Rapid rollout of clean technologies makes energy cheaper: IEA
The International Energy Agency said that the key task for governments globally is to make clean energy technologies more accessible. Shutterstock.
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Updated 31 May 2024

Rapid rollout of clean technologies makes energy cheaper: IEA

Rapid rollout of clean technologies makes energy cheaper: IEA

RIYADH: The rapid adoption of clean technologies can enhance the affordability of energy, according to a new report.

In its latest study, the International Energy Agency said that the key task for governments globally is to make clean energy technologies more accessible to those who may otherwise struggle with the upfront costs.

The energy agency noted that additional investments in the sector are needed to meet net-zero goals by 2050.

“The report shows how putting the world on track to meet net-zero emissions by 2050 requires additional investment but also reduces the operating costs of the global energy system by more than half over the next decade compared with a trajectory based on today’s policy settings. The net result is a more affordable and fairer energy system for consumers,” said the energy think tank.

Clean technologies are cost-competitive

According to IEA, clean energy technologies are already more cost-competitive over their lifespans than those reliant on conventional fuels like coal, natural gas, and oil, with solar photovoltaic and wind the cheapest options for power generation.

“In 2023, more than 95 percent of new utility-scale solar photovoltaic installations and new onshore wind capacity had lower generation costs than new coal and natural gas plants,” said the energy agency.

It added: ‘Solar PV module prices are now exceptionally low – they declined by 30 percent in 2023 – creating affordable openings for everything from utility-scale projects to home solar systems, with their value enhanced by cheaper batteries.”

The analysis highlighted that electric vehicles, although expensive compared to their traditional counterparts, will be cost-effective in the long run due to their low maintenance prices.

“Even when electric vehicles, including two-and three-wheelers, have higher upfront costs, which is not always the case, they typically result in savings due to lower operating expenses. Energy efficient appliances such as air conditioners provide similar cost benefits over their lifetimes,” noted IEA.

Clean energy transition dependent on upfront investments

The energy think tank further pointed out that a clean energy transition hinges on unlocking higher levels of upfront investment, specifically in developing economies.

According to the report, clean energy investments are lagging in emerging economies due to actual or perceived risks that hinder new projects and access to finance.

“Moreover, distortions in the present global energy system in the form of fossil fuel subsidies favor incumbent fuels, making investments in clean energy transitions more challenging,” said IEA.

It added: “Governments worldwide collectively spent around $620 billion in 2023 subsidizing the use of fossil fuels – far more than the $70 billion that was spent on support for consumer-facing clean energy investments.”

How clean energy technologies benefit customers

According to the analysis, the benefits of a faster energy transition and growing shares of renewables such as solar and wind power will help end customers, as clean technologies are less volatile than oil product prices.

IEA added that electricity is expected to overtake oil as the leading fuel source in final consumption by 2035.

“The data makes it clear that the quicker you move on clean energy transitions, the more cost-effective it is for governments, businesses, and households,” said Fatih Birol, executive director of the IEA.

He added: “If policymakers and industry leaders put off action and spending today, we will all end up paying more tomorrow. The first-of-a-kind global analysis in our new report shows that the way to make energy more affordable for more people is to speed up transitions, not slow them down. But much more needs to be done to help poorer households, communities and countries to get a foothold in the new clean energy economy.”

Policy intervention crucial to quicken energy transition

The energy agency further noted that incentives and greater support, mainly targeted at more disadvantaged households, can improve the uptake of clean energy technologies in the coming years.

According to IEA, incentivizing clean energy technologies will help consumers fully reap the benefits of these renewables and the cost savings, along with supporting efforts to reach international energy and climate goals.

The report suggested additional measures governments can take to accelerate the use of clean technologies, including delivering energy efficiency retrofit programs to low-income households, obliging utilities to fund more efficient heating and cooling packages, and providing affordable green transport options.

“Policy intervention will be crucial to address the stark inequalities that already exist in the current energy system, where affordable and sustainable energy technologies are out of reach for many people,” said IEA.

The release added: “The most fundamental inequities are faced by the almost 750 million people in emerging and developing economies who lack access to electricity, and the more than 2 billion people without clean cooking technologies and fuels.”

However, the energy think tank warned that the risk of price shocks does not disappear in clean energy transitions, and governments should continue to be vigilant about new dangers that could affect energy security and affordability.

According to IEA, geopolitical tensions remain significant potential drivers of volatility, both in traditional fuels and, more indirectly, in clean energy supply chains.

Furthermore, the shift to a more electrified energy system could bring a new set of hazards into play that are more local and regional, especially if investments in grids, flexibility, and demand response fall behind.

“Power systems are vulnerable to an increase in extreme weather events and cyberattacks, making adequate investments in resilience and digital security crucial,” IEA concluded.

In an additional report released in May, the agency revealed that ensuring a reliable and diversified supply of energy transition minerals is crucial to achieving net-zero targets.

The study also noted that the market size of key energy transition minerals is expected to double by 2040, reaching $770 billion.

Saudi Arabia’s Dammam port records 37.4% surge in container handling in H1

Saudi Arabia’s Dammam port records 37.4% surge in container handling in H1
Updated 3 sec ago

Saudi Arabia’s Dammam port records 37.4% surge in container handling in H1

Saudi Arabia’s Dammam port records 37.4% surge in container handling in H1

RIYADH: Saudi Arabia’s King Abdulaziz Port in Dammam reported a notable 37.4 percent year-on-year increase in container handling during the first half of 2024, indicating strong growth in the maritime sector.

The port managed 1.53 million standard units in this period, up from 1.11 million units last year. Transshipment containers also surged by 87.87 percent to 37,806 units from 20,124 in 2023, according to data from the Saudi Ports Authority, also known as Mawani.

This progress aligns with Saudi Arabia’s broader efforts to enhance its logistics and transportation infrastructure, supporting the goals of Vision 2030 to diversify the economy and establish the Kingdom as a global logistics hub. Investments in maritime infrastructure, technology, and strategic partnerships are driving this transformation, solidifying the Kingdom’s role in international trade routes.

Outgoing containers rose by 39.07 percent to 624,710 units, while incoming ships increased by 34.68 percent to 872,445 units, demonstrating robust growth compared to last year’s figures of 449,219 and 647,790 units, respectively. The overall cargo volume at the port grew by 28.75 percent to 24.92 million tonnes from 19.36 million tonnes the previous year. General cargo handling also saw a significant rise, reaching 25.80 million tonnes, a 49.47 percent increase from 17.26 million tonnes in 2023.

Navigational traffic increased by 19.97 percent, with 1,430 ships docking compared to 1,192 vessels the previous year. Vehicle processing surged by 109.82 percent to 363,167 units, up from 173,086 units in 2023. However, passenger numbers declined sharply by 89.11 percent to 4,194 individuals from 38,518 the previous year.

During the year, King Abdulaziz Port initiated several strategic initiatives to enhance its infrastructure, including acquiring 21 coastal and bridge cranes to accommodate advanced, larger vessels efficiently. The port also introduced 80 electric trucks through a partnership between Saudi Global Ports Co. and Sany Global, establishing it as the largest port in the Middle East with such a fleet. The port also expanded its commercial traffic by launching six new shipping services in collaboration with major international lines.

A contract between Mawani and G4 Logistics Services Co. was also signed to establish grain silos and warehouses with an investment of up to SR200 million, covering an area of 100,000 sq. m. This initiative aims to bolster food security in Saudi Arabia.

In recognition of its achievements, King Abdulaziz Port was honored with the “Port of the Year” award at the ShipTek Awards in May, highlighting its pivotal role in the region's logistics and transportation landscape.

Egypt approves $1bn government fund to support hotel building

Egypt approves $1bn government fund to support hotel building
Updated 47 sec ago

Egypt approves $1bn government fund to support hotel building

Egypt approves $1bn government fund to support hotel building

RIYADH: Hotel construction in Egypt will receive a 50 billion Egyptian pounds ($1.03 billion) funding injection after the government approved a new initiative to boost the country’s tourism sector.

These funds are intended for the construction and operation of new rooms, including expansions of existing projects or converting closed buildings into hotels.

The initiative aligns with the Ministry of Tourism and Antiquities’ strategy to attract 30 million tourists a year by 2038. Achieving this target requires adding 240,000 to 250,000 new hotel keys to accommodate the anticipated increase in tourists.

Priority funding will be directed toward hotel rooms in Luxor, Aswan, and Greater Cairo, as well as the Red Sea and South Sinai, including Sharm El Sheikh, Taba, Nuweiba, and Dahab.

Egypt’s tourism revenue surged in the first half of 2024, which helped drive earnings for the sector up by 4.7 percent year-on-year to reach $6.6 billion, according to a report issued by the country’s Ministry of Tourism.

In a statement, the Egyptian cabinet announced that the plan will be funded by the Ministry of Finance, and the money can also be used to complete construction, equipment, or finishing work, provided the buildings have not previously obtained a hotel operating license.

The main stipulations of the new initiative, which have been agreed upon by the Ministries of Finance, Tourism and Antiquities, and Investment and Foreign Trade, include determining each company’s available credit based on its business volume and banking regulations. 

The maximum financing limit for a single client was set at 1 billion pounds, or 2 billion pounds for the client and its related parties, through a maximum of two banks.

Applications for the initiative will open within a month of its launch and be available for 12 months, with a maximum drawdown period of 16 months and a final deadline of June 30, 2026.

Beneficiary companies must obtain an operating license within six months after the drawdown period. They will benefit from a reduced interest rate of 12 percent, with the Ministry of Finance covering the difference between this rate and the Central Bank’s discount rate plus 1 percent.

In the first half of 2024, Egypt experienced a notable rise in tourist arrivals, reaching 7.06 million, which surpassed the peak figure of 6.9 million visitors recorded in 2010.

Moody’s affirms Islamic Development Bank’s AAA rating

Moody’s affirms Islamic Development Bank’s AAA rating
Updated 25 July 2024

Moody’s affirms Islamic Development Bank’s AAA rating

Moody’s affirms Islamic Development Bank’s AAA rating

RIYADH: Moody’s Investor Services has affirmed its AAA credit rating with a stable outlook for the Islamic Development Bank, driven by the financial institution’s robust asset performance. 

In a press release, IsDB said that its short-term issuer rating has been affirmed at Prime-1 by the US-based agency, the highest tier on offer. 

IsDB has been rated AAA by Moody’s since 2006, the statement added. 

According to the agency, obligations rated AAA are judged to be of the highest quality and are subject to the lowest level of credit risk, while Prime-1 denotes the best ability to repay short-term debts. 

Founded in 1973 and headquartered in Jeddah, IsDB is a multilateral development finance institution focused on Islamic finance for infrastructure development. 

“The affirmation reflects Moody’s expectation that IsDB’s capital position and asset performance will remain robust, supported by the strong liquidity and funding position, low funding costs, and the bank’s preeminent position as one of few regular issuers of highly-rated benchmark-size sukuk in the international capital markets,” said IsDB in the press statement. 

The financial institution added that its strong credit profile also benefits from the track record of member country support demonstrated through a series of general capital increases. 

IsDB also noted that its leverage ratio is expected to remain significantly below the median for AAA-rated multilateral development banks, driven by such capital increases. 

The institution currently has 57 members, with the largest single shareholder being Saudi Arabia with 22.5 percent of the financial institution’s total capital. 

Libya and Indonesia follow, holding a capital of 9.03 percent and 7.04 percent, respectively. 

Since its inception, IsDB has provided long-term sustainable and ethical financing structures to its member nations to achieve development and economic growth. 

“IsDB remains committed to supporting its member countries in achieving sustainable development and economic growth through these strategic projects. These investments not only address immediate needs but also lay the foundation for long-term resilience and prosperity,” according to its website. 

In June, IsDB allocated $165 million for the construction and operationalization of green, resilient, and sustainable schools in earthquake-affected and earthquake-prone areas in Turkiye. 

In the same month, it also provided $156.3 million to Turkmenistan to develop three oncology centers and training of health care providers. 

In June, IsDB also allocated $47.68 million to Suriname to enhance the country’s power transmission and distribution network.

Oil Updates – crude falls on weak China demand concerns, Mideast ceasefire talks

Oil Updates – crude falls on weak China demand concerns, Mideast ceasefire talks
Updated 25 July 2024

Oil Updates – crude falls on weak China demand concerns, Mideast ceasefire talks

Oil Updates – crude falls on weak China demand concerns, Mideast ceasefire talks

TOKYO/SINGAPORE: Oil prices eased on Thursday as concerns over weak demand in China, the world’s largest crude importer, and expectations of a nearing ceasefire deal in the Middle East overcame gains in the previous session after draws in US inventories.

Brent crude futures for September fell 59 cents, or 0.7 percent, to $81.12 a barrel by 8:30 a.m. Saudi time. US West Texas Intermediate crude for September slid 61 cents, or 0.8 percent, to $76.98 per barrel.

Both benchmarks settled higher on Wednesday, snapping consecutive sessions of declines after the Energy Information Administration said US crude inventories fell by 3.7 million barrels last week. That compared with analysts’ expectations in a Reuters poll for a 1.6-million-barrel draw.

US gasoline stocks dropped by 5.6 million barrels, compared with analysts’ expectations for a 400,000 draw. Distillate stockpiles fell by 2.8 million barrels versus expectations for a 250,000-barrel increase, the EIA data showed.

“Despite draws in US crude and gasoline stocks, investors remained wary about weakening demand in China and expectations of advancing ceasefire talks between Israel and Hamas added to pressure,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.

This year, China’s oil imports and refinery runs have trended lower than in 2023 on weaker fuel demand amid sluggish economic growth, according to government data.

Slumping US stock markets also reduced traders’ risk appetite, Kikukawa added. All three main indexes on Wall Street ended lower on Wednesday.

In the Middle East, efforts to reach a ceasefire deal to end the war in the Gaza Strip between Israel and militant group Hamas under a plan outlined by US President Joe Biden in May and mediated by Egypt and Qatar have gained momentum over the past month.

On Wednesday, Israeli Prime Minister Benjamin Netanyahu sketched a vague outline of a plan for a “deradicalized” post-war Gaza in a speech to US Congress and touted a potential future alliance between Israel and America’s Arab allies.

“If Middle East ceasefire talks progress, US equities continue to slide, and China’s economy remains sluggish, oil prices could fall to early June levels,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.

Additionally, clarity on US interest rate cuts is missing, said Phillip Nova analyst Priyanka Sachdeva, who does not expect robust demand given China’s economic recovery has been poor.

The US Federal Reserve is expected to cut rates just twice this year, in September and December, according to a Reuters poll of economists, as resilient US consumer demand warrants a cautious approach despite easing inflation.

Lower interest rates should spur economic growth, leading to more oil consumption.

In Canada, hundreds of wildfires are burning in the western provinces of British Columbia and Alberta, including in the area of oil sands hub Fort McMurray.

Saudi Arabia’s non-oil exports hit 2-year high at $7.70bn in May: GASTAT 

Saudi Arabia’s non-oil exports hit 2-year high at $7.70bn in May: GASTAT 
Updated 25 July 2024

Saudi Arabia’s non-oil exports hit 2-year high at $7.70bn in May: GASTAT 

Saudi Arabia’s non-oil exports hit 2-year high at $7.70bn in May: GASTAT 

RIYADH: Saudi Arabia’s non-oil exports hit a two-year high in May, reaching SR28.89 billion ($7.70 billion), an 8.2 percent increase compared to the same month in 2023. 

According to the General Authority for Statistics, this also represented a 26.93 percent growth from April. 

Strengthening the non-oil private sector remains a pivotal goal for Saudi Arabia as the Kingdom continues its efforts to diversify its economy and reduce its reliance on oil revenues. 

Merchandise exports also saw growth, with a 5.8 percent increase in May compared to the same period last year, driven by a 4.9 percent rise in oil shipments. 

Month-over-month, merchandise exports increased by 3.3 percent from April to May. 

The share of oil trade in total exports decreased slightly, dropping to 72.4 percent in May from 73 percent in the same month the previous year. 

“Ratio of non-oil exports (including re-exports) to imports increased to 41.1 percent in May 2024 from 39 percent in May 2023. This was due to an 8.2 percent increase in non-oil exports and a 2.6 percent increase in imports over that period,” stated GASTAT. 

The report revealed that chemical and allied products dominated the non-oil exports, accounting for 23.8 percent of total shipments in May. 

The Kingdom’s imports rose by 2.6 percent year-on-year in May, reaching SR70.24 billion. 

According to GASTAT, machinery, electrical equipment, and parts dominated this sphere, constituting 26.7 percent of the total incoming shipments. 

China was Saudi Arabia’s primary trading partner in May, with exports to the Asian nation amounting to SR15.91 billion, or 15.2 percent of the total. 

South Korea and India followed, with the Kingdom exporting goods worth SR10.31 billion and SR8.03 billion, respectively, to these countries. 

The UAE, Japan, and Bahrain were also among the top 10 destinations for Saudi exports, along with the US, Poland, Taiwan, and Malta. 

On the import side, China held the lead, accounting for 25 percent or SR17.55 billion of incoming shipments in May 2023. 

King Abdulaziz Sea Port in Dammam was the highest entry point for goods into Saudi Arabia in May, with a value of SR16.56 billion, constituting 23.6 percent of the overall imports.