Dec-21 Energy Market News

It is hard to keep pace with all the developments and so we have tried to be as concise as possible and sample the articles to provide a wide-spread an insightful update.  

The sections are listed on the left of the page to assist in any navigation.

Climate

1. How satellites are challenging Australia's official greenhouse gas emission figure (3 Dec) Using satellite imagery from the European Space Agency combined with meteorological data and atmospheric models, it has been able to measure methane leaks from the fossil fuel industry around the world. "We found that emissions for all the 50-odd mines in that basin in total add up to about 1.5 million tonnes of methane per year," Mr Lelong told the ABC. According to federal government figures for the same period, only a third of that amount of methane was reported in the area.
2. Doubts raised over emissions cuts at Santos CCS project receiving government subsidies (8 Dec) New analysis produced by The Australia Institute suggests the Moomba carbon capture and storage project, being developed by Santos at the gas hub, could end up using the storage of carbon emissions to assist the extraction of more fossil fuels, using a process called “enhanced recovery”. The enhanced recovery processes use carbon dioxide, injected into an oil or gas deposit to aid the further extraction of remaining reserves in the deposit. Such methods have been a common way for companies to boost fossil fuel yields.
3. Woodside Petroleum to spend $7bn on new energy bet covering hydrogen, solar, carbon capture (8 Dec) Woodside Petroleum plans to spend $US5bn ($7bn) on hydrogen and carbon capture on clean energy, but has conceded the move will deliver lower returns with a longer payback period. The new energy plan consists of 3000 megawatts by 2030 reducing Woodside's emissions by 30 per cent. Returns will be targeted at 10 per cent or more with a payback period of a decade compared with over 15 per cent and five years for oil and at least 12 per cent and seven years for gas investments.
4. Ontario Teachers’ joins KKR at Sydney carbon credits business GreenCollar (9 Dec) The KKR-Ontario Teachers’ have joined KKR to acquire a stake in GreenCollar, a Sydney-based carbon credits player. GreenCollar develops green projects with land managers (farmers, companies, traditional owners) to harvest carbon credits for sale. KKR, has been a significant shareholder in GreenCollar since April, 2020 when it tipped in about $100 million.
5. Kerry Schott appointed as NSW Net Zero chair (14 Dec) NSW Energy and Environment Minister Matt Kean said Ms Kerry Schott, who stepped down from the Energy Security Board in October, will lead a high-profile board advising the NSW state government on implementing its climate change plan to achieve 50 per cent emissions reduction by 2030 and net zero by 2050.
6. Power giants AGL, Origin, EnergyAustralia lay down climate challenge (15 Dec) Australia’s most powerful energy companies have demanded a dramatic hike in the nation’s response to climate change, calling for a 55 per cent cut in emissions by 2035 across the economy to ensure the country can meet its net-zero target by the middle of the century.
7. ESG poised to drive more energy mergers and acquisitions (29 Dec) M&A advisers in the energy sector preparing for another busy year, after the unprecedented $100 billion-plus wave of deals and the shock exit of CEOs under huge pressure from the transition to low-carbon energy during 2021. Driving much of the restructuring is the rise of environmental, social and governance (ESG) concerns, overwhelmingly focused on environmental.
8. Voluntary Cerificate Market creates windfalls (31 Dec) The voluntary demand for Large Generation Certiifcates (LGCs), driven by major companies looking to offset emissions is driving up LGC prices, and creating upside for organisations holding long trading positions. It was reported the overwhelming majority of LGCs are held by electricity retailers such as Origin, AGL and EnergyAustralia; and the LGC market has also attracted some of Australia’s largest financial institutions such as Commonwealth Bank and Macquarie.