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Energy Report: Coal Power Surged To A Record High In 2021, Pushing Up Emissions

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…Coal power’s sharp rebound has taken a new record in 2021, threatening net-zero goals

Olushola Okunlade Writes

International Energy Agency (IEA) analysis shows that “Rapid economic recovery is driving global coal power generation to a record this year and overall coal demand to a potential all-time high as soon as 2022, underlining the urgent need for policy action”

The amount of electricity generated worldwide from coal is surging towards a new annual record in 2021, undermining efforts to reduce greenhouse gas emissions and potentially putting global coal demand on course for an all-time high next year, the International Energy Agency said in its latest annual market report.

A coal-fired power station or coal power plant is a thermal power station that burns coal to generate electricity. The coal is usually pulverized and then burned in a pulverized coal-fired boiler. The furnace heat converts boiler water to steam, which is then used to spin turbines that turn generators.

After falling in 2019 and 2020, global power generation from coal is expected to jump by 9% in 2021 to an all-time high of 10,350 terawatt-hours, according to the IEA’s Coal 2021 report, which was released today. The rebound is being driven by this year’s rapid economic recovery, which has pushed up electricity demand much faster than low-carbon supplies can keep up. The steep rise in natural gas prices has also increased demand for coal power by making it more cost-competitive.   

Overall coal demand worldwide – including uses beyond power generation, such as cement and steel production – is forecast to grow by 6% in 2021. That increase will not take it above the record levels it reached in 2013 and 2014. But, depending on weather patterns and economic growth, overall coal demand could reach new all-time highs as soon as 2022 and remain at that level for the following two years, underscoring the need for fast and strong policy action.   

A coal-fired power station or coal power plant is a thermal power station which burns coal to generate electricity. ... The coal is usually pulverized and then burned in a pulverized coal-fired boiler. The furnace heat converts boiler water to steam, which is then used to spin turbines that turn generators.
COAL POWER PLANT
A coal-fired power station or coal power plant is a thermal power station which burns coal to generate electricity. ... The coal is usually pulverized and then burned in a pulverized coal-fired boiler. The furnace heat converts boiler water to steam, which is then used to spin turbines that turn generators.
COAL

“Coal is the single largest source of global carbon emissions, and this year’s historically high level of coal power generation is a worrying sign of how far off track the world is in its efforts to put emissions into decline towards net zero,” said IEA Executive Director Fatih Birol. “Without strong and immediate actions by governments to tackle coal emissions – in a way that is fair, affordable and secure for those affected – we will have little chance, if any at all, of limiting global warming to 1.5 °C.”

In China, where more than half of global coal-fired electricity generation takes place, coal power is expected to grow by 9% in 2021 despite a deceleration at the end of the year. In India, it is forecast to grow by 12%. This would set new all-time highs in both countries, even as they roll out impressive amounts of solar and wind capacity. While coal power generation is set to increase by almost 20% this year in the United States and the European Union, that is not enough to take it above 2019 levels. Coal use in those two markets is expected to go back into decline next year amid slow electricity demand growth and rapid expansion of renewable power.

“The pledges to reach net-zero emissions made by many countries, including China and India, should have very strong implications for coal – but these are not yet visible in our near-term forecast, reflecting the major gap between ambitions and action,” said Keisuke Sadamori, Director of Energy Markets and Security at the IEA. “Asia dominates the global coal market, with China and India accounting for two-thirds of overall demand. These two economies – dependent on coal and with a combined population of almost 3 billion people – hold the key to future coal demand.”

In 2020, global coal demand fell by 4.4%, the largest decline in decades but much smaller than the annual drop that was initially expected at the height of the lockdowns early in the pandemic, the report shows. Regional disparities were large. Coal demand grew by 1% for the full year in China, where the economy began recovering much earlier than elsewhere, whereas it dropped by nearly 20% in the United States and the European Union, and by 8% in India and South Africa.

Coal prices have been on a rollercoaster ride over the past two years. After falling to USD 50 per tonne in the second quarter of 2020, they started to climb towards the end of the year, with supply cutbacks balancing the market before rebounds in economic activity and coal demand in China started pushing prices up. In 2021, prices were lifted further by demand outstripping supply in China – the global coal price setter – as well as by supply disruptions and higher natural gas prices globally. Coal prices reached all-time highs in early October 2021, with imported thermal coal in Europe, for example, hitting USD 298 per tonne. Quick policy intervention by the Chinese government to balance the market had a rapid effect on prices. As of mid-December, European prices were back below USD 150 per tonne.

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Seplat Energy Appoints Ezugworie As COO, Executive Director Board

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Seplat Energy grows 2021 full-year gross profit by 128.9% to N114.2bn

Olushola Okunlade Writes

The Board of Seplat Energy Plc has announced the appointment of Mr. Samson (Sam) Chibogwu Ezugworie as the new Chief Operating Officer and Executive Director on the Board of the Company effective 1st July 2022.

Mr. Ezugworie comes with over 30 years of extensive industry experience. For the last 25 years was with Royal Dutch Shell in Nigeria and Overseas. Mr. Ezugworie has built a strong reputation as a business/safety/ethical leader and integrator.

Specifically, and prior to joining Seplat Energy, Mr. Ezugworie delivered exceptional business performance as Manager Geosolutions,  Manager,  Land Asset, and  General Manager Development & Subsurface for Shell Companies in Nigeria. He also served as a Director in Shell Exploration & Production Africa Limited (SEPA), Shell Petroleum Development Company of Nigeria Limited (SPDC), and Shell Nigeria Business Operations Limited (SNBO). Sam holds a B.Sc degree in Geology, obtained from the University of Nigeria, Nsukka.

Mr. Effiong Okon
Mr. Effiong Okon.

The Board also wishes to announce that Mr. Effiong Okon, the Operations Director and Executive Director on the Board of Seplat Energy will step down from the Board of Seplat Energy effective 1st July 2022. Mr. Okon was appointed as the Operations Director and Executive Director in February 2018 and has since then invested his time, experience, and skills in the growth of the Company. Mr. Okon will assume a new position as the Director of New Energy to lead the New Energy Directorate of the Company effective 1st July 2022, to significantly accelerate the development of the new energy business and advance the Company’s agenda on energy transition.

Commenting on the appointment, Mr. Basil Omiyi, Chairman of Seplat Energy said:

“The Board is pleased to welcome Mr. Samson (Sam) Chibogwu Ezugworie as the Chief Operating Officer and Executive Director on the Board of Seplat Energy and wishes Mr. Effiong Okon success in his new role as Director of New Energy which is a critical one for the future of the Company”.

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Growing Energy Demand Presents Huge Business Opportunities For Seplat, Others – McKinsey & Company

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Growing Energy Demand Presents Huge Business Opportunities For Seplat, Others – McKinsey & Company

…’ Seplat Energy has an enormous chance to explore renewable energy solutions’

… Divestment opportunities abound for Seplat Energy, others

Olushola Okunlade Writes

Seplat Energy Plc, a leading Nigerian independent energy company listed on both the Nigerian Exchange Limited and the London Stock Exchange, as well as other energy producers in Africa, is projected to grow more given the rising demand for energy in Africa. Africa’s energy demand is also expected to see increased growth over the decade amidst current realities.

Global management consulting firm, McKinsey & Company disclosed this at the Seplat Industry Lecture and Dr. ABC Orjiako send forth event held in Lagos at the weekend.

Growing Energy Demand Presents Huge Business Opportunities For Seplat, Others – McKinsey & Company

“There will be rising demand for fossil fuels in Africa driven by industrialization and population growth. Energy demand growth will be led by Nigeria, and this will create tailwinds for energy suppliers like Seplat Energy,” Oliver Onyekweli, Associate Partner and Co-Lead of West Africa Oil and Gas Practice, McKinsey & Company, said whilst making a presentation on the theme of the Lecture dubbed “The Future of African Oil & Gas: Positioning for the Energy Transition”.

“Africa’s growing energy demand also creates opportunities for Seplat to explore renewable energy solutions (e.g. solar, blue hydrogen),” he added.

Decarbonizing production and cost leadership, McKinsey explained, will be key going forward as capital providers continue to reduce exposure to oil and gas, with customers preferencing lower carbon shipments. Decarbonization of assets to the greatest possible extent, it added, will be needed to maintain “license to operate” and maintain access to capital at attractive rates. “As global oil demand peaks, maintaining cost leadership ($/bbl) will be increasingly vital.”

Indigenous producers will define the future of African oil and gas, as IOCs will continue to face pressure to reduce carbon-intensive operations and lower the cost of production, according to McKinsey, which also maintained that divestment is likely to continue.

“Companies like Seplat Energy are well-positioned to pick up producing assets going forward, provided they can maintain operational excellence. Ensuring continued access to talent will be key,” it added.

Growing Energy Demand Presents Huge Business Opportunities For Seplat, Others – McKinsey & Company

McKinsey further explained that “African energy infrastructure is a compelling opportunity. As the energy transition accelerates, gas will become more prominent as a “transition fuel”, especially in Nigeria. Significant domestic gas demand is a positive tailwind for Seplat Energy’s ANOH project and gas’ cleaner carbon profile (relative to diesel) should make gas projects easier to finance (can be paired with LPG). Investing in gas export infrastructure (e.g. FLNG) could create an opportunity to access high-value international spot market.”

Dr. ABC Orjiako, the Pioneer and immediate past Chairman of Seplat Energy, lauded all the company’s stakeholders for the huge successes recorded so far in the company since its inception, saying they were products of hard work, sleepless nights, and resilience.

Commending all stakeholders of Seplat Energy for the great achievements recorded so far, the Chairman, Seplat Energy, Mr. Basil Omiyi, said the year 2022 marks a major turning point for Seplat Energy as Dr. Orjiako retires from the Board after leading the Company to achieve monumental milestones over the last 13 years, including 9 years as a listed entity.

Notable amongst the achievements he listed were, the IPO vision, the listing, production growth, reserve addition, corporate governance, landmark acquisitions, funding strategy, and setting the stage for corporate transformation, amongst others.

In his remarks, the CEO of Seplat Energy, Mr. Roger Brown, said  Dr. Orjiako drove Seplat Energy’s long-term imperative with regards to global transition away from fossil fuels towards cleaner and renewable energies, advocating a Just Transition, which is to be conducted at an appropriate pace.

That, according to Brown, was why, the Board under Dr. Orjiako decided to re-brand the Company as Seplat Energy, which is a signal of “our intent and how we see our future”.

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Global Energy Crisis Shows Urgency Of Accelerating Investment In Cheaper And cleaner Energy In Africa

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Global Energy Crisis Shows Urgency Of Accelerating Investment In Cheaper And cleaner energy in Africa

Olushola Okunlade Writes

Today’s crippling spikes in energy prices underscore the urgency and the benefits for African countries of accelerating the scale-up of cheaper and cleaner sources of energy, the IEA says in a new special report released last week.

Russia’s invasion of Ukraine has sent food, energy, and other commodity prices soaring, increasing the strains on African economies already hard hit by the Covid-19 pandemic. The overlapping crises are affecting many parts of Africa’s energy systems, including reversing positive trends in improving access to modern energy, with 25 million more people in Africa living without electricity today compared with before the pandemic, according to the Africa Energy Outlook 2022.

At the same time, Africa is also already facing more severe effects from climate change than most other parts of the world – including massive droughts – despite bearing the least responsibility for the problem. Africa accounts for less than 3% of the world’s energy-related CO2 emissions to date and has the lowest emissions per capita of any region.

Despite these challenges, the report finds that the global clean energy transition holds new promise for Africa’s economic and social development, with solar, other renewables, and emerging areas such as critical minerals and green hydrogen offering strong growth potential if managed well. Increased international ambitions for cutting emissions are helping set a new course for the global energy sector amid declining clean technology costs and shifting global investment patterns. African countries are poised to benefit from these trends and attract increasing flows of climate finance.

“Africa has had the raw end of the deal from the fossil fuel-based economy, receiving the smallest benefits and the biggest drawbacks, as underlined by the current energy crisis,” said Fatih Birol, the IEA Executive Director. “The new global energy economy that is emerging offers a more hopeful future for Africa, with huge potential for solar and other renewables to power its development – and new industrial opportunities in critical minerals and green hydrogen.”

“The immediate and absolute priority for Africa and the international community is to bring modern and affordable energy to all Africans – and our new report shows this can be achieved by the end of this decade through the annual investment of $25 billion, the same amount needed to build just one new LNG terminal a year,” Dr. Birol added. “It is morally unacceptable that the ongoing injustice of energy poverty in Africa isn’t being resolved when it is so clearly well within our means to do so.”

The Africa Energy Outlook 2022 explores a Sustainable Africa Scenario in which all African energy-related development goals are achieved on time and in full. This includes universal access to modern energy services by 2030 and the full implementation of all African climate pledges.

With demand for energy services in Africa set to grow rapidly, ensuring affordability is an urgent priority. Increased energy efficiency is essential for this, since it reduces fuel imports, eases strains on existing infrastructure, and keeps consumer bills affordable.

Expanded and improved electricity grids provide the backbone of Africa’s new energy systems in this scenario, and are powered increasingly by renewables. Africa is home to 60% of the best solar resources worldwide, but it currently holds only 1% of solar PV capacity. Already the cheapest source of power in many parts of Africa, solar is set to outcompete all other sources continent-wide by 2030. Renewables – including solar, wind, hydropower, and geothermal – account for over 80% of new power generation capacity added by 2030 in the Sustainable Africa Scenario.

While renewables are the driving force for Africa’s electricity sector this decade, the continent’s industrialisation relies in part on expanding natural gas use. More than 5 000 billion cubic metres (bcm) of natural gas resources have been discovered to date in Africa that has not yet been approved for development. These resources could provide an additional 90 bcm of gas a year by 2030, which may well be vital for Africa’s domestic fertilizer, steel, cement, and water desalination industries. Cumulative CO2 emissions from the use of these gas resources over the next 30 years would be around 10 billion tonnes. If these emissions were added to Africa’s cumulative total today, they would bring its share of global emissions to a mere 3.5%.

Africa’s vast resources of minerals that are critical for multiple clean energy technologies are set to create new export markets but need to be managed well, with Africa’s revenues from critical mineral exports set to more than double by 2030.

A number of low-carbon hydrogen projects are underway, focused primarily on producing ammonia for fertilizers, which would strengthen Africa’s food security. Africa has huge potential to produce hydrogen using its rich renewable resources. As much as today’s energy demand could be produced at internationally competitive price points by 2030.

Achieving Africa’s energy and climate goals means more than doubling energy investment this decade. This would take it over USD 190 billion each year from 2026 to 2030, with two-thirds going to clean energy.

“Multilateral development banks must take urgent action to increase financial flows to Africa for both developing its energy sector and adapting to climate change,” said Dr. Birol. “The continent’s energy future requires stronger efforts on the ground that are backed by global support. The COP27 Climate Change Conference in Egypt in late 2022 provides a crucial platform for African leaders to set the agenda for the coming years. This decade is critical not only for global climate action but also for the foundational investments that will allow Africa – home to the world’s youngest population – to flourish in the decades to come.”

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