Investment banker Goldman Sachs is not so sure that oil will be going much above $55 a barrel anytime soon. Goldman’s says that the oil markets will be oversupplied next year due to the return of disrupted output in Libya and Nigeria; some increase in US shale oil production; and the beginning of production from several major deep-water projects that were started years ago when prices were higher.  While investment in new crude oil production has dropped dramatically in recent years, the impact of this decline is still some years away.  In the immediate future most analysts do not see a major increase in production and most do not see the possible OPEC production freeze as having much of an impact on prices. OPEC “freezes” simply have too many loopholes and are usually ignored by members who see an advantage in pumping and selling as much as they can.

Libya’s oil production has now reached about 500,000 barrels per day and is expected to climb to 600,000 b/d by the end of the month. In Nigeria, the Forcados terminal, which is capable of exporting 400,000 b/d and which has been closed since February due to a bombing, is back in operation. The increase in Libyan and Nigerian exports alone could be enough to offset the possible potential OPEC cut, leaving much of the burden of reduced exports to fall on the Gulf Arab states.

The European Union voted to ratify the 2015 Paris climate agreement this week. This action now covers 56.75% of total global emissions  and is now above the 55% threshold needed for implementation. The treaty will formally go into effect on November 4th. Seventy-two out of 195 countries have now ratified the treaty.

The US Energy Information Administration reported that solar energy generated less than 1% of US electricity over the first half of this year. Natural gas accounted for the most electricity generated (656 million kilowatt hours), followed by coal (549 million kWh), nuclear (400 million kWh), hydroelectric power (151 million kWh), wind (116 million kWh), and wood (20 million kWh). Despite the declining costs of solar panels, just 17 million kWh of electricity was generated by solar power during the first half of 2016. That equals about 0.9% of the total of 1,951,350 million kWh generated during the period.

Coal generated only 6% of UK electricity this spring, compared with 20% a year ago. The decrease in coal-fired electricity generation is largely due to the closures of multiple coal power plants along with the fact others have switched from coal to biomass. Natural gas electricity generation increased from 30% last year to 45% this year. Renewables (primarily wind) accounted for 25% of UK electricity generation.

Portugal is about to begin phasing out subsidies for utilities generating renewable power as the government tackles high electricity prices that are hampering efforts to bolster its struggling economy. The subsidies will gradually end as contracts start to expire in 2017. A recent study by VaasaETT showed that Portugal’s residential electricity prices adjusted to consumer purchasing power parity, were among the highest among the 29 European countries it looked at. The government believes high energy prices are negatively affecting the competitiveness of Portuguese companies and lowering disposable incomes for its population at a time when the country’s growth rate is meager.

Research and consulting firm GlobalData says the global wind turbine tower market is set to decline over the next several years, due to falling costs, decreasing capacity expansion, and increased tower height. While the Asia-Pacific region will maintain its dominance in the market, it will see this dominance decrease in value from $9.6 billion in 2015 to $5.5 billion in 2020. The Asia-Pacific market is expected to be heavily impacted by a lack of sufficient grid infrastructure to contain further variable wind capacity expansions. The overall wind tower market is expected to drop from $17.2 billion in 2015 to $14.5 billion by 2020, mainly due to declining prices and increased tower heights in larger turbines. Tower prices are expected to fall by 7% by 2020.

Udaipur, a city in western India, recently rolled out a massive LED streetlight replacement. The city has replaced its sodium lights with 35,000 LED streetlights. LED technology has become more attractive for street and community lighting because it uses less energy. Udaipur’s city government is also providing a 40% subsidy to individuals who put solar panels on their homes.

 

 

 

with h/t Tom Whipple

Tags: , , , , , , , , , , , , , , , , , , , ,