Nigeria: There Is No Plan To Privatize TCN – Power Ministry Debunks Rumour
Nigeria’s Ministry of Power has dismissed reports suggesting that the Federal Government is planning to privatize the country’s power transmission company TCN.
According to the Ministry, there is no plan to sell the Transmission Company of Nigeria (TCN).
“Some of the reports even falsely claimed that the said privatization is going to take place in coming months,” the Ministry of Power said in a statement issued by Malam Isa Sanusi, Special Advisor to the Minister.
According to him, these reports are untrue and are only mere misinformation aimed at spreading panic in the power sector, which is making progress towards ensuring that Nigerians enjoy an uninterrupted power supply.
He further explained that the Federal Government has no intent to sell or privatize the company and that no government official has made a statement of intent to sell the TCN.
“The Transmission Company of Nigeria (TCN) is a centrepiece in the Federal Government of Nigeria’s efforts to rejuvenate the power sector.
“Therefore, the Ministry of Power, working with key stakeholders, is continuing to evaluate, assess and upgrade TCN to make it more efficient and transparent,” he said.
He maintained that the government under the leadership of President Muhammadu Buhari focuses on upgrading, stabilizing, and modernizing Nigeria’s power industry through various interventions, including the Nigeria-Siemens partnership under the Presidential Power Initiative (PPI).
Source: https://energynewsafrica.com
Nigeria: Military Sets Ablaze Illegal Crude Oil Vessel
The Nigerian military has set ablaze a vessel named MT Deima caught loading illegal crude oil in the Niger Delta, with International Maritime Organisation (IMO) number 7210525.
The vessel while loading illegal crude oil, was on Monday set ablaze by men of the Nigerian military along the Warri River in Delta state.
The vessel was arrested by Tantita Security Services Limited, company owned by Ekpemopolo, popularity known as Tompolo, leader of the defunct Movement for Emancipation of Niger Delta (MEND).
There were eight persons on board the vessel, directly stealing crude oil from the Escravos axis in Warri South West LGA, Delta state.
Tantita Security Services Limited was recently awarded pipeline surveillance contract by the Nigerian National Petroleum Company Limited (NNPCL) to assist in curbing oil theft and pipeline vandalism in the country.
One of the security personnels who took part in the operation told journalists that, they had agreed based on a tip off, adding that they were offered a bribe of N25m to let the ship go but they turned down the offer.
On the capacity of the ship, he explained that the ship is 1,500 metric tons and had on board eight all Nigerian crew members. While noting that the captain confessed that they came in from Lagos and that if they were not arrested, the ship would have sailed back to Lagos.Grateful to the NNPC team, Government security agencies and surveillance contractor. Sea going barge arrested and destroyed for involvement in Crude oil theft. pic.twitter.com/1wtSTtoH30
— Mele Kyari, OFR (@MKKyari) October 10, 2022
French Oil Workers Vote To Continue Strike
Striking French oil workers have voted to continue their industrial action, which has led to shortages at fuel stations across the country.
They responded angrily after the government said it would use mandatory powers to force some of them to go back to work.
The strike, in its third week, has shut six of France’s seven oil refineries.
With long queues of cars now a regular sight at the pumps, the government wants to get the fuel flowing again.
Nearly a third of French petrol stations are now reported to be running short of at least one kind of motor fuel.
Unions want pay increases for their workers, which they say should take account of the huge profits being made at the moment by the oil companies.
They are seeking a 10% pay rise – 7% to cover inflation and 3% for what they call “wealth-sharing”.
The government’s latest move to head off the impact of the action is to requisition key staff at a refinery in Normandy, threatening prosecution unless they allow some lorry tankers to fill up.
French Prime Minister Elisabeth Borne said that if no agreement could be reached between the oil firms and the unions, the government would act to “unblock the situation”.
But the hard-left unions behind the stoppages see this as a threat to their right to strike and have toughened their position, calling the government’s warning “illegal” and a “choice of violence”.
A spokesman for the CGT union said it was waiting for the government’s requisition notifications and would challenge them in court.
Last Friday, French President Emmanuel Macron called on unions to end the strikes but said energy companies should listen to the workers’ “legitimate salary demands”.
The strike action has split opinion in France, with some commuters expressing exasperation over the fuel shortages and pointing out that they need their cars for work.
But at a time of growing anxiety about the cost of living and soaring profits for some energy companies, others have expressed sympathy for the strikers.
French Refinery Strikes Worsen As France Moves To Call Back Essential Workers
France said on Tuesday that it would requisition essential workers to staff Exxon’s French oil depot, and threatened to do the same for Total’s French refineries if talks failed to progress.
But workers at Total’s Donges refinery decided on Tuesday to strike beginning on Wednesday, French union CGT said.
French Prime Minister Elisabeth Borne said on Tuesday that the government would start the callback process for ExxonMobil’s staff at its oil depots in the country after talks between the oil company and two unions, CGT and FO, stalled.
The CFDT union, however, managed on Monday to reach an agreement with Exxon.
“Today some unions, despite the deal, wants to continue the strike action and blockades, we cannot accept that,” Borne said, according to Argus media.
Those comments followed weekend comments by the country’s energy minister Agnes Pannier-Runacher that the government was “doing its utmost to restore the situation to normal as soon as possible.”
The CGT and FO unions declared strikes weeks ago at Total’s 246,900 bpd Gonfreville and 109,300 bpd Feyzin refineries, along with the Carling petrochemicals plant.
The FO Now, ExxonMobil’s 219,000 bpd Donges refinery is being added to the list.
The FO union had workers striking at Exxon’s 235,000 bpd Fos-Sur-Mer refinery, as well as its 270,000 bpd Port Jerome refinery, but FO called off its strike action on Monday, Argus said.
The additional striking action comes just as France prepares to order some essential workers back to the workplace.
More than half of the country’s refinery capacity has been offline as many of the country’s gas stations suffer widespread gasoline and diesel outages.
On Monday, the CGT trade union rejected an offer from TotalEnergies, which had offered to bring forward negotiations if the union called off the strike.
Source:Oilprice.com
Kenya: President Ruto Commits To Building Tanzania-Kenya Gas Pipeline
Kenya intends to press on with the building of a natural gas pipeline from Tanzania’s main city Dar es Salaam to its coastal city of Mombasa and later to the capital Nairobi, in a bid to lower energy tariffs, Kenya’s President William Ruto has said.
Local reports put the costs of the 600km (372-mile) pipeline at about $1.1bn (£990m).
Mr. Ruto expressed commitment to the project on Monday, when he spoke to some journalists in Tanzanian, shortly after holding bilateral talks with President Samia Suluhu, on his first visit to the neighbouring country since he took office in September.
Mr. Ruto said the project would lower energy tariffs in the industrial sector, as well as for families in their homes.
In May last year, Mr. Ruto’s predecessor, Uhuru Kenyatta and Ms Suluhu signed a preliminary agreement covering the transport of gas from Tanzania to Kenya for use in power generation and, potentially, for cooking and heating.
The deal was said to be part of a longer-term plan to expand infrastructure links between the two big economies of East Africa.
Source: https://energynewsafrica.com
Ukraine War: US Taking Advantage Of Energy Crisis To Exploit EU, Selling Gas At Four Times The Price – French Minister
The French Finance Minister Bruno Le Maire has warned that the United States should not be allowed to dominate the global energy market while the European Union suffers from the consequences of the conflict in Ukraine.
Le Maire, who spoke on Monday while addressing the National Assembly, said, “The conflict in Ukraine must not end in American economic domination and a weakening of the EU.”
He described as unacceptable that Washington “sells its liquefied natural gas at four times the price than it sets for its own industrialists,” adding that “the economic weakening of Europe is not in anyone’s interest.”
“We must reach a more balanced economic relationship on the energy issue between our American partners and the European continent,” Le Maire said as quoted by RT.
Prior to the conflict in Ukraine, Russia was the EU’s largest gas supplier, responsible for about 45% of the bloc’s gas imports. However, due to sanctions imposed on Moscow in recent months, Russian gas supplies to the EU have decreased significantly.
Facing an energy crisis, EU countries have rushed to fill their storage facilities – the level of reserves in underground storages was close to 91% as of Monday, according to Gas Infrastructure Europe. The storage sites are largely filled by liquefied natural gas (LNG), and are currently at their highest seasonal levels since at least 2016, according to data compiled by Bloomberg.
However, LNG imports from overseas cost much more than gas supplied via pipeline from Russia under long-term contracts, and energy prices in the bloc continue to rise.
The EU has considered setting a cap on natural gas prices for all suppliers, but a number of countries are opposed to this. Norway, a non-EU state but a partner in the European Economic Area (EEA) and one of EU’s major gas suppliers, recently warned that a step such as this could aggravate the situation, forcing exporters to divert supplies to other markets.
Thousands of protesters are rallying in major cities of European countries over the soaring energy price and gallop inflation across the EU.
Source: Sahara Reporters
Ghana: NPA Fines 9 Oil Marketing Companies Gh₵2.2 Million For Engaging In Illegality
Ghana’s petroleum downstream regulator, the National Petroleum Authority (NPA), has fined nine oil marketing companies to the tune of Gh¢2,215,000 (equivalent of $201,343.50) for engaging in third-party trading of petroleum products and unlawful lifting of petroleum products.
The companies which engaged in the unlawful acts are Bello Petroleum, Jas Petroleum, Oval Energy, Kros Energy, Safety Petroleum and Santol Energy.
The remaining are Riseglobe Energy, Sayon Energy and Cigo Energy.
This was contained in a release issued by the NPA on Tuesday, 11th October 2022.
The NPA directed that “Cigo Energy pays a fine of Gh₵725,000.00 comprising Gh₵30,000.00 for engaging in third-party supplies for the second time and Gh₵695,000.00 for the unlawful lifting of petroleum products.”
It fined Sayon Energy Gh₵425,000.00 comprising Gh₵10,000.00 for engaging in third-party supplies for the first time and Gh₵415,000.00 for the unlawful lifting of petroleum products while Bello Petroleum was slapped with a fine of Gh₵120, 000.00 comprising Gh₵10,000 for engaging in third-party supplies for the first time and Gh₵110,000.00 for the unlawful lifting of petroleum products.
The regulator also fined Jas Petroleum Gh₵65,000.00 comprising Gh₵10,000.00 for engaging in third-party supplies for the first time and Gh₵55,000.00 for the unlawful lifting of petroleum products while Oval Energy was fined Gh₵245,000.00 comprising Gh₵10,000.00 for engaging in third party supplies for the first time and Gh₵235,000.00 for the unlawful lifting of petroleum products.
Kris Energy was sanctioned to pay a fine of Gh₵295,000.00 comprising Gh₵10,000.00 for engaging in third-party supplies for the first time and Gh₵285, 000.00 for the unlawful lifting of petroleum products.
Safety Petroleum will pay a fine of Gh₵200,000.00 comprising Gh₵10,000.00 for engaging in third-party supplies for the first time and Gh₵190,000.00 for the unlawful lifting of petroleum products.
NPA directed Safety Petroleum to pay a fine of Gh₵200,000.00 comprising Gh₵10,000.00 for engaging in third-party supplies for the first time and Gh₵190,000.00 for the unlawful lifting of petroleum products.
“Santol Energy will pay a fine of Gh₵75,000.00 comprising Gh₵10,000.00 for engaging in third-party supplies for the first time and Gh₵65,000.00 for the unlawful lifting of petroleum products.
“Riseglobe Energy pays a fine of Gh₵65,000.00 comprising Gh₵10,000.00 for engaging in third-party supplies for the first time and Gh₵55,000.00 for the unlawful lifting of petroleum products,” the release stated.
The NPA gave them up to one month to settle the fines.
Source: https://energynewsafrica.com
Kris Energy was sanctioned to pay a fine of Gh₵295,000.00 comprising Gh₵10,000.00 for engaging in third-party supplies for the first time and Gh₵285, 000.00 for the unlawful lifting of petroleum products.
Safety Petroleum will pay a fine of Gh₵200,000.00 comprising Gh₵10,000.00 for engaging in third-party supplies for the first time and Gh₵190,000.00 for the unlawful lifting of petroleum products.
NPA directed Safety Petroleum to pay a fine of Gh₵200,000.00 comprising Gh₵10,000.00 for engaging in third-party supplies for the first time and Gh₵190,000.00 for the unlawful lifting of petroleum products.
“Santol Energy will pay a fine of Gh₵75,000.00 comprising Gh₵10,000.00 for engaging in third-party supplies for the first time and Gh₵65,000.00 for the unlawful lifting of petroleum products.
“Riseglobe Energy pays a fine of Gh₵65,000.00 comprising Gh₵10,000.00 for engaging in third-party supplies for the first time and Gh₵55,000.00 for the unlawful lifting of petroleum products,” the release stated.
The NPA gave them up to one month to settle the fines.
Source: https://energynewsafrica.com ADNOC Drilling Awarded $1.53 Billion Contract To Support Expansion Of ADNOC’s Offshore Operations
Abu Dhabi National Oil Company (ADNOC) has announced the award of a contract worth $1.53 billion (AED 5.62 billion) to ADNOC Drilling.
The award supports the expansion of ADNOC’s offshore operations and its objective to responsibly increase production capacity and meet the growing global demand for reliable, lower carbon intensity oil and gas.
ADNOC Offshore awarded the two-year contract which covers the provision of 12 jack-up rigs and two island rigs and the associated Integrated Drilling Services (IDS).
ADNOC Offshore and its strategic international partners continue to maximize value from Abu Dhabi’s offshore oil and gas resources and this award will leverage ADNOC Drilling’s start-to-finish offering as well as its position as the largest drilling company in the region by rig fleet size to drive value and efficiencies while minimizing environmental impact.
Over 80% of the award value will flow back into the UAE’s economy under ADNOC’s successful In-Country Value (ICV) program, supporting local economic growth and diversification.
Yaser Saeed Almazrouei, ADNOC Upstream Executive Director, said: “Through this award, ADNOC Offshore will continue to responsibly harness the energy in Abu Dhabi’s waters, as we increase production capacity to meet the world’s growing demand for energy with lower carbon intensity oil and gas. ADNOC Drilling is a world leader in drilling and completion services. Their deep expertise and wide technical capability will maximize value and minimize the environmental foorprint of every well as ADNOC expands its production capacity. The substantial in-country value generated through this contract will support the directives of our wise leadership to grow and diversify the UAE economy.”
This award will support the expansion of ADNOC’s crude oil production capacity to five million barrels per day (mmbpd) by 2030 and gas self-sufficiency for the UAE. ADNOC Drilling has provided IDS to ADNOC Offshore since 2019. The company’s highly competitive position, integrated capabilities and technical expertise have helped increase the efficiency of ADNOC’s offshore operations.
Since ADNOC Drilling launched its IDS offering in 2018, the company has enabled more than $250 million (AED917.5 million) in savings for its customers through the successful end-to-end delivery of drilling and completion services.
Ghana: Armed Robbers Attack Star Oil Filling Station, Kill Security Man
A group of suspected armed men invaded Star Oil Filling Station at Tojeh, on the Accra-Aflao road in the Dangbe East District of Greater Accra and shot dead the security man on duty.
The robbers attacked the station on Monday, 10th October, 2022.
It is not yet clear whether the robbers made away with cash.
In a statement sighted on the Facebook page of the Ghana Police Service, it said they are currently on a manhunt for the suspects.
“The Police are on a manhunt for a group of armed men who shot and killed a security man when they attacked and robbed the Star Oil Filling Station at Tojeh on the Accra -Aflao Stretch of the main road on 10th October 2022,” the statement said.
“We will surely get them arrested to face justice,” the police said.
Source: https://energynewsafrica.com
Ghana: ACEP, IMANI Demand Cancellation Of Dubious GNPC-Genser Energy Gas Sale Contract
Two policy think tanks—Africa Centre for Energy Policy and IMANI Africa—are demanding the cancellation of the gas sale agreement GNPC signed with Genser Energy, a private company in Ghana to provide power to mining firms in the western part of the country.
According to the think tanks, their analysis of the agreement shows the West African nation is losing several millions of dollars and wants the deal to be cancelled and subjected to gas sector regulations.
The GNPC, in 2020, signed a gas sale agreement with Genser Energy Ghana Limited to supply gas to the latter at $2.79 per MMBTU when the market price of gas was $6.08 per MMBTU.
To add more salt to the injury caused to the Ghanaian taxpayer, GNPC, in a letter dated April 12, 2021, addressed to the Energy Minister, Dr. Matthew Opoku Prempeh, explained that the Corporation and Genser Energy Ghana Limited have reached a commercial arrangement to enable Genser to build 102km 20″ pipeline network from Dawusaso to Kumasi by 31st December 2021.
The letter said GNPC would discount the price of natural gas to Genser from $2.79/MMBtu to $1.72/MMBtu for 55mmscfd of gas at take-or-pay and 20mmscfd of gas at take-or-pay.
ACEP and IMANI Africa find this position by the GNPC, which was endorsed by the Ministry of Energy, shocking.
Taking into consideration the market price of natural gas of $6.08 per MMBtu before the signing of the GNPC -Genser Energy Gas Sale Agreement, ACEP and IMANI noted that the consequence of the two poor decisions by GNPC deepened the gas price deficit by $4.36 per MMBtu.
They noted that when GNPC was making a case for tariff increment in its 2022 tariff proposal to the PURC, it assumed a realistic gas market price of $7.9 per MMBtu for all power companies but Genser was exempted.
“However, the PURC approved $5.9/MMBtu2, creating an under-recovery of $2/MMBtu for the gas market. To worsen this, Genser’s heavily discounted gas price of $1.72/MMBtu at the projected gas supply of about 320mmscf/d will create a cumulative cost of about $3.6 billion for the industry in the 16 years of the agreement if the PURC does not punish the other gas consumers to pay more.
“GNPC has failed to justify the discount provided to Genser on the gas commodity except that the Corporation agrees to use Genser’s pipelines over the 16 years instead of the gas discount,” the ACEP and IMANI Africa statement said.
Source: https://energynewsafrica.com
South Africa: Eskom Reinstates Rolling Power Cuts For Three Nights
South African state power utility company, Eskom, on Monday night resumed rolling power cuts to attend to unplanned breakdowns and replenish generation capacity.
The night power outage will end on Wednesday, 12th October, 2022.
The beleaguered state utility, which is reliant on ageing coal-fired power plants that frequently break down, has been implementing rolling blackouts, locally called load-shedding in the country, for more than a decade.
The crisis has worsened this year with the high cost of diesel and the lack of availability of the product in the international market.
“To the extent possible, Eskom will endeavour to limit load-shedding to night-time to have minimal impact on the economy and population,” the utility said in a statement, adding that it would implement around two hours of power cut from 1600 local time (GMT 1400) till midnight.
“The load shedding should be used to replenish emergency generation reserves during the night to bolster generation capacity.”
Till mid-September, Eskom had already implemented more than 100 days of power cuts with several major cities seeing blackouts for more than six hours lately.
Frequent voltage surges on the restoration of power have also led to a multitude of local faults in cables and transformers, leaving some localities in the commercial capital, Johannesburg, without power for days.
Eskom currently has 5487 megawatts (MW) on planned maintenance, while another 14,061MW of capacity was unavailable due to breakdowns, the company said.
It has around 45000MW of installed capacity.
Ghana: Patrick Nyarko Appointed Deputy CEO Of Petroleum Hub Dev’t Corporation
Ghana’s President Nana Akufo-Addo has appointed Patrick Nyarko as the Deputy Chief Executive Officer in charge of Finance and Administration for the Petroleum Hub Development Corporation (PHDC) in line with Section 16(1) of the legislation that established the PHDC, Act 1053.
According to asaaseradio.com, Mr. Nyarko’s appointment letter was signed by Nana Asante Bediatuo, Secretary to the President, and he is expected to act “pending receipt of the constitutionally required advice of the governing board of the corporation, given in consultation with the Public Services Commission” or PSC.
Patrick Nyarko is also instructed to indicate, in writing, his acceptance or otherwise of the appointment within 14 days of receiving the engagement letter.
He is currently serving as a Board Member of the Public Utilities Regulatory Commission (PURC).
Profile
Patrick Nyarko is an experienced financial service and energy professional with expertise in balance sheet management, financial analysis, credit analysis, insurance, energy policy analysis and sustainability strategy.
Until this latest appointment, he was the maiden Director for Environment, Health and Safety at the Ghana Integrated Iron and Steel Development Corporation (GIISDEC), taking up the job in March 2022.
He previously served as the maiden Director for Corporate Affairs and International Relations at GIISDEC, beginning in September 2020.
From September 2019 through to August 2020, Mr Nyarko was the Director of Strategy and Policy at the Kandifo Institute, governance and policy think tank based in Accra, and simultaneously, between April 2019 and August 2020, an Energy Policy Analyst/Consultant with Baobab Energy Consult.
In the banking sector, Nyarko has worked as the Regional Sales and Relationship Officer in the consumer banking department of GCB’s regional office in Cape Coast, and as a Sales Manager/Personal banker with Barclays Ghana from 2016 to 2017, gaining experience in various departments, including retail and corporate banking as well as credit risk.
He is a member of the board of directors/commissioner for the Public Utilities Regulatory Commission (PURC), a position he has held since November 2021.
Patrick Nyarko holds a BSc in Management with Computing from Regent University College, Ghana, an MBA in Oil and Gas Management from Coventry University in the UK and an MSc in Strategy and International Business from Aston University in Birmingham, also in the UK.
Source: https://energynewsafrica.com
Patrick Nyarko is also instructed to indicate, in writing, his acceptance or otherwise of the appointment within 14 days of receiving the engagement letter.
He is currently serving as a Board Member of the Public Utilities Regulatory Commission (PURC).
Profile
Patrick Nyarko is an experienced financial service and energy professional with expertise in balance sheet management, financial analysis, credit analysis, insurance, energy policy analysis and sustainability strategy.
Until this latest appointment, he was the maiden Director for Environment, Health and Safety at the Ghana Integrated Iron and Steel Development Corporation (GIISDEC), taking up the job in March 2022.
He previously served as the maiden Director for Corporate Affairs and International Relations at GIISDEC, beginning in September 2020.
From September 2019 through to August 2020, Mr Nyarko was the Director of Strategy and Policy at the Kandifo Institute, governance and policy think tank based in Accra, and simultaneously, between April 2019 and August 2020, an Energy Policy Analyst/Consultant with Baobab Energy Consult.
In the banking sector, Nyarko has worked as the Regional Sales and Relationship Officer in the consumer banking department of GCB’s regional office in Cape Coast, and as a Sales Manager/Personal banker with Barclays Ghana from 2016 to 2017, gaining experience in various departments, including retail and corporate banking as well as credit risk.
He is a member of the board of directors/commissioner for the Public Utilities Regulatory Commission (PURC), a position he has held since November 2021.
Patrick Nyarko holds a BSc in Management with Computing from Regent University College, Ghana, an MBA in Oil and Gas Management from Coventry University in the UK and an MSc in Strategy and International Business from Aston University in Birmingham, also in the UK.
Source: https://energynewsafrica.com
Ghana: ECG Assures Akwamufie, Juapong, Others Of Restoration Of Power Supply Soon
The Electricity Company of Ghana (ECG), Tema Region, has explained that the recent power outage in parts of the Eastern Region is due to a technical challenge at its Kpong Bulk Supply Point.
Areas currently without power are Senchi, Attimpoku, Juapong, Volo, Podoe, Asikuma, Anum, Boso, Dodi, Asantekrom, Akwamufie, Asutsuare, Yilo Krobo, Lower Manya Krobo and Golden Exotics.
Other areas are Commandos, Military Training Camp, Glamour Farms, Wildlife, PW Quarries, Gokay Quarries, Recycling, Eastern Quarries and its environs.
In a statement on Monday, ECG assured the affected areas that their engineers are working assiduously to rectify the challenge and restore the power supply.
“ECG regrets the inconvenience caused to the affected customers,” the statement said.
Source: https://energynewsafrica.com
IEA Launches Tool To Track Financing Costs For Energy Projects
The International Energy Agency and several partners have launched a new tool to track financing costs for energy projects around the world to identify and address risks that impede vital investment flows to emerging and developing economies.
The Cost of Capital Observatory was developed by the IEA, together with the World Economic Forum, ETH Zurich and Imperial College London. It will be hosted on the IEA’s website and regularly updated with new data, analysis and features. The IEA website will also host an interactive Cost of Capital Dashboard to dig into data for selected countries.
A Critical Lever To Attract Capital
Despite having two-thirds of the global population, emerging and developing economies, excluding China, account for less than one-fifth of global investment in clean energy. One of the key barriers is the high cost of capital, reflecting some real and perceived risks about investment in these economies.
Bringing down the cost of capital is a critical lever to attract funds, especially private capital. Policymakers use this information to ensure that investments are remunerated in a fair manner, especially when it comes to sectors or projects that need any kind of government support.
However, there is a lack of transparency about the cost of capital, making it harder for investors to price risk and for policymakers to act. The new Observatory has been established to fill this gap.
“A high cost of capital is a roadblock for investors and the data provided by our Observatory is essential to understand how this roadblock can be dismantled,’’ said IEA Executive Director Dr. Fatih Birol.
“This will allow more capital to flow to clean energy, where it is urgently needed to tackle today’s energy crisis and reach sustainable development goals.”
Financing Costs Still A Deterrent
Bringing down the cost of capital would make a huge difference to the overall costs of energy transitions. According to new IEA estimates, reducing financing costs by 2 percentage points would bring down the investment needed to reach net-zero emissions in emerging and developing economies by a cumulative $16 trillion over the period to 2050.
The IEA estimates that global clean energy investment will increase by more than 10% in 2022 to reach a total of $1.4 trillion, but this is due almost entirely to advanced economies and China. Meanwhile, despite some bright spots, clean energy spending in emerging and developing economies outside China remains at 2015 levels.
Many countries find themselves in a trap, with underdeveloped financial markets deterring investment and a lack of projects preventing the establishment of reliable pricing benchmarks.
IEA analysis, based on surveys of investors and experts in different countries, has shown that the cost of capital for a utility-scale solar PV plant in 2021 was between two and three times higher in key emerging economies than in advanced economies and China. As a result, financing costs accounted for around half of the total levelised costs of a solar PV plant, notably higher than the 25% to 30% seen in advanced economies and China.