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Houston conference stirs energy transition debate

Is the energy transition “visibly failing”, as Saudi Aramco chief executive Amin Nasser told the CeraWeek conference in Houston last week? Are solar, wind and electric cars “increasingly replacing the need for fossil fuels”, as the executive director of the International Energy Agency, Dr Fatih Birol, responded in the Financial Times? Or is the whole question of whether the energy transition is failing or succeeding a meaningless one? The International Renewable Energy Agency, meanwhile, thinks the energy transition will boost economic output and employment.

One part of the UAE’s energy sector is very definitely in transition. The fourth unit of the Barakah nuclear power plant connected to the grid on Saturday, bringing the complex close to completion. Barakah will generate 85 per cent of Abu Dhabi’s clean electricity and operate for at least 60 years.

 

Red Sea and Ukrainian attacks help boost oil prices

It might have been thought that Russian and Chinese ships would be safe from attacks by Houthi forces while transiting the Red Sea. However, a Chinese-owned oil tanker, the MV Huang Pu, was struck by a ballistic missile on Sunday. There were no casualties but the crew struggled for half an hour to extinguish the resulting fire.

The International Maritime Organisation, which is meeting in London, has complained that the longer voyages its members are forced to take to avoid the conflict zone are causing more fuel burn and damaging the shipping industry’s progress on reducing greenhouse gas emissions.

The intensification of the Russia-Ukraine conflict, including further Ukrainian drone attacks on Russian refineries, helped to push up oil prices on Monday, with Brent closing at $86.75, up $1.32 a barrel. Prices have gained about 10 per cent since the start of the year, in a long-awaited rally backed by strong demand and continuing Opec+ supply restrictions. However, prices fell a little last week, with a strengthening dollar supported by a surprise rate cut by the Swiss National Bank. Brent crude lost about $1.46 over the week to close at $85.43 per barrel.

Egyptians complained after fuel prices were raised despite hopes that a series of investment deals would bolster the currency. Petrol prices were increased by one pound a litre. Prices for 80 octane went up to 11 pounds ($0.23) while 92 octane prices rose to 12.50 pounds ($0.26) and 95 octane climbed to 13.50 pounds ($0.28).

Egypt raised the price of diesel to 10 Egyptian pounds ($0.21), from 8.5 pounds ($0.18). In comparison, diesel in the UAE currently sells for Dh3.16 a litre ($0.86). Super 98, the highest fuel grade, costs Dh3.03 ($0.83) a litre while Special 95 is priced at Dh2.92 ($0.80).

 
 

Dubai to increase green cover

Dubai has established the Environment and Climate Change Authority. Key aims are to double the vegetation cover, increase nature reserves by 60 per cent by 2040, protect biodiversity, adopt sustainable waste management and conserve water resources. This is intended to support Dubai’s goals to improve air quality by 90 per cent by 2033 and reach 100 per cent shift to clean energy by 2050. The authority will be led by Ahmed bin Thani.

Aldar Properties, Abu Dhabi’s largest listed property developer, is considering issuing benchmark green sukuk this year to support its growth and sustainability aims.

 

Earth Day and World Water Day highlight environmental problems

On Saturday, the world marked Earth Hour, when landmarks such as the Eiffel Tower, Big Ben, the Colosseum and Burj Khalifa turned off their lights. Cop28 President Dr Sultan Al Jaber has encouraged countries to raise the ambition of their climate plans to keep the goal of limiting global warming to 1.5°C above pre-industrial levels within reach. Signatories of the Paris Agreement should submit their next round of nationally determined contributions on climate action by early 2025.

Abu Dhabi will host the UAE Climate Finance Forum in June, with the intention of unlocking more funding for developing countries. This is essential, given that at least a billion people already suffer an “extreme impact” from climate change. As many as 47 per cent of Brazilians had this opinion in recent polling, compared to only 6 per cent of Germans. The main concerns were air quality and heatwaves.

Friday was World Water Day, a recognition that water scarcity is a growing threat globally. Climate change means drought in some places, melting glaciers and strong but unpredictable cloudbursts that cause flooding elsewhere. Water scarcity can encourage conflict, but more within states and between communities than internationally. The UK has committed £6 million to train Zambian farmers in “climate-smart” agriculture, while southern Africa currently suffers a severe drought.

Supplying water in arid climates can be expensive and environmentally damaging. The chief executive of Etihad Water & Electricity, Yousif Al Ali, writes that the utility he leads is tackling the problem with new reverse osmosis desalination plants, the detection of leaks and collaboration with all stakeholders to drive water conservation. Khalifa University has developed solar panels that extract water from moisture in the air.

 

Germany needs new battery factory to spark car industry back to life

In a sign of its importance to the German economy and its flagship car industry, Chancellor Olaf Scholz led groundbreaking for a new battery factory, built by Swedish company Northvolt in the north of Germany. The factory is receiving about $1 billion in state aid to help it compete with subsidies in the US. The country intends to have ten times as many electric vehicles on its roads by 2030 as it does today.

Updated: March 27, 2024, 5:15 AM