Exceptionally mild temperatures in the early part of the winter in Japan, Europe and the United States – alongside weak economic sentiment in China, Brazil, Russia and other commodity-dependent economies – saw global oil demand growth flip from a near five-year high in the third quarter of last year, at 2.1 million barrels per day (mb/d), to a one-year low in the fourth quarter of 1.0 mb/d, the IEA Oil Market Report (OMR) for January informed subscribers. Persistent oversupply, bloated inventories and a slew of negative economic news pressured prices so that by mid-January crude oil touched 12-year lows.
The OMR outlook for 2016 has demand growth moderating to 1.2 mb/d. Global oil supplies expanded by 2.6 mb/d last year, following hefty gains of 2.4 mb/d in 2014. By last December, however, growth had eased to 0.6 mb/d, with lower non-OPEC production that pegged below year-earlier levels for the first time since September 2012. OPEC crude output eased by 90 000 barrels per day (90 kb/d) in December to a still-lofty 32.28 mb/d, including newly rejoined Indonesia. Iran, now relieved of sanctions, insists it will boost output by an immediate 500 kb/d. Our assessment is that around 300 kb/d of additional crude could be flowing to world markets by the end of the current quarter.
Global inventories rose by a notional 1 billion barrels in 2014-15, with the fundamentals suggesting a further build of 285 mb over the course of this year. Despite significant capacity expansions in 2016, this stock build will put storage infrastructure under pressure and could see floating storage become profitable. Global refinery runs averaged 79.5 mb/d in the fourth quarter of 2015, down 0.3 mb/d from the estimate in last month’s OMR due to lower-than-expected throughput in non-OECD Asia except China and a very high maintenance schedule in October. Global refinery margins weakened in December as middle distillate cracks fell and overwhelmed the resilience of gasoline and naphtha.
In addition to these highlights and detailed analysis of demand, supply, prices and refining developments, and their short-term outlook, the January OMR features an article that details the effects of Iran’s post-sanctions return as a full player in the oil markets. Another looks at how warmer early-winter weather in parts of the Northern Hemisphere has suppressed demand for OECD oil, while a third examines the surge in global oil storage capacity foreseen for this year and beyond. A fourth in-depth feature reports that floating storage is “slowly sailing away”, while a fifth assesses the dampening effect of subsidy cuts on the already weaker Saudi Arabian demand outlook.
Source: www.iae.org
Germany has another five years to reach 18 percent renewable energy by 2020. From 2011-2015, the increase was a very modest 1.8 percentage points. Adding on that amount for the five remaining years up to 2020 only brings us to 14.4 percent, far short of the target. But there’s a problem with this calculation – it’s based on primary energy, whereas the EU targets for renewable energy are based on final energy. (Primary energy is a lump of coal or a tank of gas; final energy is the electricity from that coal or the motive energy from that gasoline.) When we adjust for this difference, we find a much different outcome. In terms of final energy, the share of renewables grew from 11.9 percent in 2011 to 15.3 percent in 2015, an increase of 3.4 percentage points over five years.
The progress in 2015 – an increase of possibly 1.8 percentage points – would be the largest in history if our calculation proves accurate. (To produce our estimate, we merely took the ratio of final to primary energy from 2012-2014, in which no nuclear plants were shut down – any such change would affect the ratio, which we found to be fairly close to 2:3 for those years). It is not completely unprecedented, however. In 2007, the share rose by 1.6 percentage points, mainly because bioenergy grew strongly that year; in addition to growth in the power and heat sectors, biofuels were at at 47 TWh that year (they have since fallen to around 35 TWh).
Stora Enso Timber Ab and KPA Unicon Oy have signed a contract of a biomass-fired hot water boiler plant delivery to Stora Enso sawmill Ala in Ljusne, Sweden. The new Unicon Biograte 15 MWth boiler plant will utilize bark and wood residues from the Ala sawmill as fuel, and it will produce hot water to the sawmill´s drying kilns. The new biomass boiler plant is scheduled to be in operation in November 2016. The value of the contract will not be disclosed.
Are you working on an innovative and effective energy efficient or renewable energy project? Tell us about it and you could win an EU Sustainable Energy Award at the EU’s Sustainable Energy Week (EUSEW) and become Sustainable Energy Leader!
Vestas chief Runevad says UK rules shut out the latest hi-tech turbines, leaving Britain behind as the global wind boom spreads. The world’s biggest producer of wind turbines has accused Britain of obstructing use of new technology that can slash costs, preventing the wind industry from offering one of the cheapest forms of energy without subsidies. Anders Runevad, chief executive of Vestas Wind Systems, said his company’s wind turbines can compete onshore against any other source of energy in the UK without need for state support, but only if the Government sweeps away impediments to a free market. While he stopped short of rebuking the Conservatives for kowtowing to ‘Nimbyism’, the wind industry is angry that ministers are changing the rules in an erratic fashion and imposing guidelines that effectively freeze development of onshore wind. “We can compete in a market-based system in onshore wind and we are happy to take on the challenge, so long as we are able to use our latest technology,” he told the Daily Telegraph.
“The UK has a tip-height restriction of 125 meters and this is cumbersome. Our new generation is well above that,” he said. Vestas is the UK’s market leader in onshore wind. Its latest models top 140 meters, towering over St Paul’s Cathedral. They capture more of the wind current and have bigger rotors that radically change the economics of wind power. “Over the last twenty years costs have come down by 80pc. They have come down by 50pc in the US since 2009,” said Mr Runevad. Half of all new turbines in Sweden are between 170 and 200 meters, while the latest projects in Germany average 165 meters. “Such limits mean the UK is being left behind in international markets,” said a ‘taskforce report’ by Renewable UK. The new technology has complex electronics, feeding ‘smart data’ from sensors back to a central computer system. They have better gear boxes and hi-tech blades that raise yield and lower noise. The industry has learned the art of siting turbines, and controlling turbulence and sheer. Economies of scale have done the rest. This is why average purchase prices for wind power in the US have fallen to the once unthinkable level of 2.35 cents per kilowatt/hour (KWh), according to the US energy Department.
At this level wind competes toe-to-toe with coal or gas, even without a carbon tax, an increasingly likely prospect in the 2020s following the COP21 climate deal in Paris. American Electric Power in Oklahoma tripled its demand for local wind power last year simply because the bids came in so low. “We estimate that onshore wind is either the cheapest or close to being the cheapest source of energy in most regions globally,” said Bank of America in a report last month. A study by Bloomberg New Energy Finance concluded that the global average for the ‘leveled cost of electricity’ (LCOE) for onshore wind fell to $83 per megawatt/hour last year compared to $76-$82 for gas turbine plants in the US, or $85-$93 in Asia, or $103-$118 in Europe. Yet the size of the new wind turbines is precisely the problem in Britain, though the industry says they are less intrusive than more numerous smaller towers. Rural activists vehemently oppose further onshore expansion for a mix of reasons, often to protect the countryside and migrating birds. One application was turned down on fears that blade-noise would startle race-horses. It is understood that up 100 backbench Tory MPs wish to stop development of onshore wind altogether and that is effectively now happening. While there is no fixed height limit, the guidelines for local governments imply a 125 meter cap. This is often beaten down to nearer 100 meters, and the planning obstacles have become a nightmare for the industry.
Amber Rudd, Secretary of Energy and Climate Change, drastically revised policy last year, announcing that support for onshore wind would be cut from April 2016. She said 250 wind farms in the planning phase were unlikely to be built as a result but insisted that Britain was “reaching the limits of what is affordable, and what the public is prepared to accept”. Mr Runevad has other fish to fry in a booming global wind market. The Vestas share price has soared twentyfold since 2012, when the company flirted with bankruptcy after a debt-driven expansion, and faced cu At the time, critics said the wind bubble had played itself out, but the epitaphs were premature. The company’s plant in the Isle of Wight producing blades – shut in the crisis – has opened again. Vestas has raised its revenue guidance for this year to a record €8bn to €8.5bn, with a profit margin (EBITDA) of 9pc to 10pc. It has a mounting backlog of orders for South Korea, China, Brazil, India, Turkey, the US, Finland, and Greece. The world added a record 51 gigawatts (GW) of wind power capacity last year. Almost 40pc of this was in China, where the vast plains of the “three Norths’ have become the epicentre of the global industry – though the US midwest from the Dakotas to Iowa and Texas is no slouch either.
