The world in 2023 is still stumbling in the face of severe tests. Frequent occurrence of extreme weather, spread of wildfires in mountains and forests, and rampant earthquakes and floods… It is urgent to address climate change; The Russia-Ukraine conflict has not ended, the Palestine Israel conflict has started again, and the geopolitical crisis has caused fluctuations in the energy market.
In the midst of changes, China’s energy transformation has achieved remarkable results, making positive contributions to the world economic recovery and global green development.
The editorial department of China Energy Daily sorted out the top ten international energy news for 2023, analyzed the situation, and observed the overall trend.
China US cooperation actively leads global peers in climate governance
China US cooperation injects new momentum into global climate action. On November 15th, the heads of state of China and the United States met to candidly exchange views on major issues related to bilateral relations and world peace and development; On the same day, the two countries issued a Sunshine Town statement on strengthening cooperation to address the climate crisis. A series of practical measures convey the message of in-depth cooperation between the two sides on climate change issues, and also inject more confidence into global climate governance.
From November 30th to December 13th, the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change was held in Dubai, United Arab Emirates. 198 contracting parties reached a milestone consensus on the Paris Agreement’s first global inventory, climate loss and damage funding, and fair and equitable transition. China and the United States are expanding cooperation and gathering strength on climate change issues, sending positive signals to the world.
Geopolitical Crisis Continues, Energy Market Outlook Unclear
The Russia-Ukraine conflict continued, the Palestinian Israeli conflict resumed, and the Red Sea crisis loomed. Since the beginning of this year, the geopolitical situation has intensified, and the global energy supply and demand pattern has accelerated its restructuring. How to ensure energy security has become a question of the times.
The World Bank points out that since the beginning of this year, the impact of geopolitical conflicts on commodity prices has been limited, which may reflect an improved ability of the global economy to absorb oil price shocks. However, once geopolitical conflicts escalate, the outlook for commodity prices will quickly darken. Factors such as geopolitical conflicts, economic recession, high inflation and interest rates will continue to impact global oil and gas supply and prices until 2024.
Great Power Diplomacy Highlights Charm and Energy Cooperation Upgrades
This year, China’s diplomacy as a major country with Chinese characteristics has been comprehensively promoted, showcasing its charm, and promoting international energy cooperation with complementary advantages and mutual benefits at multiple dimensions and deep levels. In April, China and France signed multiple new cooperation agreements on oil and gas, nuclear energy, and “wind solar hydrogen”. In May, the first China Asia Summit was held, and China and Central Asian countries continued to build a “oil and gas+new energy” energy transformation partnership. In August, China and South Africa continued to deepen cooperation in multiple key areas such as energy resources and green development. In October, the third “the Belt and Road” International Cooperation Summit Forum was successfully held, forming 458 achievements; In the same month, the 5th China Russia Energy Business Forum was held, signing approximately 20 agreements.
It is worth mentioning that this year marks the 10th anniversary of the initiative to jointly build the “the Belt and Road”. As an important measure to promote China’s opening-up and a practical platform to promote the construction of a community with a shared future for mankind, the achievements of the initiative to jointly build the “the Belt and Road” over the past 10 years have been widely praised and have far-reaching implications. The energy cooperation under the “the Belt and Road” initiative has been deepening and achieving fruitful results over the past 10 years, benefiting the people of the countries and regions jointly building, and helping to build a more green and inclusive energy future.
Japan’s nuclear contaminated water discharge into the sea is deeply concerned by the international community
Starting from August 24th, contaminated water from the Fukushima Daiichi nuclear power plant in Japan will be discharged into the sea, with an estimated discharge of approximately 31200 tons of nuclear wastewater by 2023. The Japanese plan to discharge nuclear contaminated water into the sea has been ongoing for 30 years or even longer, posing significant risks and hidden dangers.
Japan has shifted the risk of contamination from the Fukushima nuclear accident to neighboring countries and the surrounding environment, causing secondary harm to the world, which is not conducive to the peaceful application of nuclear energy and cannot control the spread of nuclear pollution. International intellectuals have pointed out that Japan should not only take seriously the concerns of its own people, but also face the strong concerns of the international community, especially neighboring countries. With a responsible and constructive attitude, Japan should communicate with stakeholders and take seriously their legitimate demands for damage identification and compensation.
Rapid expansion of clean energy in China, leveraging its pioneering power
Under the theme of green and low-carbon, clean energy has continued to develop significantly this year. According to data from the International Energy Agency, the global installed capacity of renewable energy is expected to increase by 107 gigawatts by the end of this year, with a total installed capacity of over 440 gigawatts, marking the largest increase in history.
At the same time, global energy investment is expected to be around 2.8 trillion US dollars this year, with clean energy technology investment exceeding 1.7 trillion US dollars, surpassing investments in fossil fuels such as oil.
It is worth noting that China, which has consistently ranked first in the world in terms of wind and solar installed capacity for many years, is playing a pioneering and leading role.
Up to now, China’s wind turbines have been exported to 49 countries and regions, with wind turbine production accounting for more than 50% of the global market share. Among the top ten global wind turbine enterprises, 6 are from China. China’s photovoltaic industry is more prominent in the main links such as silicon wafers, battery cells, and modules, occupying over 80% of the global market share, effectively reflecting the market’s recognition of Chinese technology.
The industry predicts that by 2030, the world energy system will undergo significant changes, with renewable energy accounting for nearly 50% of the global electricity structure. Standing at the forefront, China Zhengyuanyuan continuously delivers green energy for global energy transformation.
Europe and America’s energy transition faces obstacles, trade barriers raise concerns
Although the global installed capacity of renewable energy is growing rapidly, the development of clean energy industry in European and American countries is frequently hindered, and supply chain issues continue to stir the nerves of European and American countries.
High costs and equipment supply chain disruptions have led to losses for European and American wind turbine manufacturers, resulting in slow capacity expansion and a series of developers withdrawing from offshore wind power projects in the United States and the United Kingdom.
In the field of solar energy, in the first eight months of this year, 15 major European manufacturers produced a total of 1 gigawatt of solar modules, only 11% of the same period last year.
At the same time, EU officials have publicly spoken out to launch anti subsidy investigations against Chinese wind power products. The Inflation Reduction Act enacted by the United States further restricts foreign photovoltaic products from entering the US market, slowing down the investment, construction, and grid connection speed of solar power projects in the United States.
Dealing with climate change and achieving energy transformation cannot be separated from global cooperation. European and American countries persistently set up trade barriers, which is actually “harmful to others rather than self-interest.”. Only by maintaining global market openness can we jointly promote the reduction of wind and solar costs and achieve a win-win situation for all parties.
Key mineral demand surges, supply security is highly concerned
The upstream development of key mineral resources is unprecedentedly hot. The explosive growth in the application of clean energy technology has driven a surge in demand for key minerals represented by lithium, nickel, cobalt, and copper. The upstream investment scale of key minerals has grown rapidly, and countries have significantly accelerated the development speed of local mineral resources.
Taking lithium battery raw materials as an example, from 2017 to 2022, global lithium demand increased by about three times, cobalt demand increased by 70%, and nickel demand increased by 40%. The huge downstream demand has spurred upstream exploration enthusiasm, making salt lakes, mines, seabed, and even volcanic craters a treasure trove of resources.
It is worth noting that multiple key mineral producing countries around the world have chosen to tighten their upstream development policies. Chile releases its “National Lithium Strategy” and will establish a state-owned mineral company; Mexico’s proposal to nationalize lithium mining resources; Indonesia strengthens its state-owned control over nickel ore resources. Chile, Argentina, and Bolivia, which account for more than half of the world’s total lithium resources, are increasingly engaged in exchanges, and the “OPEC Lithium Mine” is about to emerge.
Key mineral resources have become the “new oil” in the energy market, and the security of mineral supply has also become the key to the steady development of clean energy. Strengthening the security of key mineral supply is imperative.
Some are abandoned, some are promoted, and the controversy over nuclear use continues
In April of this year, Germany announced the shutdown of its last three nuclear power plants, officially entering the “nuclear free era” and becoming a landmark event in the global nuclear power industry. The main reason for Germany’s abandonment of nuclear power is concerns about nuclear safety, which is also the main challenge facing the global nuclear power industry at present. At the beginning of this year, the Monticello nuclear power plant, which had been operating in the United States for over half a century, was also shut down due to safety issues.
The high cost of new construction projects is also a “roadblock” on the path of nuclear power development. The severe cost overrun of the projects for Unit 3 and Unit 4 of the Vogt ö hler Nuclear Power Plant in the United States is a typical case.
Although there are many challenges, the clean and low-carbon characteristics of nuclear power generation still make it active on the world energy stage. Within this year, Japan, which has experienced serious nuclear power accidents, announced the restart of nuclear power plants in order to stabilize power supply; France, which relies heavily on nuclear power, announced that it will provide over 100 million euros in funding for its domestic nuclear power industry over the next 10 years; Finland, India, and even the United States have all stated that they will vigorously develop the nuclear power industry.
Clean and low-carbon nuclear power has always been regarded as an important tool to address climate change, and how to develop nuclear power with high quality has become an important issue in the current world energy transformation.
The fossil era of repeated super mergers and acquisitions of oil and gas is not yet over
ExxonMobil, the largest oil company in the United States, Chevron, the second largest oil company, and Western Oil Company all conducted major mergers and acquisitions this year, bringing the total amount of major mergers and acquisitions in the North American oil and gas industry to $124.5 billion. The industry expects a new wave of mergers and acquisitions in the oil and gas industry.
In October, ExxonMobil announced a wholly-owned acquisition of shale producer Vanguard Natural Resources for nearly $60 billion, marking its largest acquisition since 1999. Chevron announced in the same month that it would invest $53 billion to acquire American oil and gas producer Hess, which is also its largest acquisition in history. In December, Western oil companies announced the acquisition of a US shale oil and gas company for $12 billion.
Large oil and gas producers are constantly expanding their upstream business landscape, sparking a new wave of integration. More and more energy companies will intensify their competition for the best oil and gas assets to ensure stable supply for the next few decades. Although there has been ongoing discussion about whether the peak oil demand has arrived, it can be certain that the fossil age has not yet come to an end.
The historical turning point of coal demand reaching a new high may come
In 2023, global coal demand reached a new historical high, with a total volume exceeding 8.5 billion tons.
Overall, the emphasis placed on clean energy by countries at the policy level has slowed down the growth rate of global coal demand, but coal remains the “ballast stone” of many countries’ energy systems.
From the perspective of market conditions, the coal market has basically gone out of the period of sharp supply fluctuations caused by epidemic situation, Russia-Ukraine conflict and other factors, and the average level of global coal prices has dropped. From the supply side perspective, Russian coal is more likely to enter the market at a discounted price due to sanctions imposed by European and American countries; The export volume of coal producing countries such as Indonesia, Mozambique, and South Africa has increased, with Indonesia’s coal export volume approaching 500 million tons, setting a new historical record.
In the view of the International Energy Agency, global coal demand may have reached a historic turning point due to the impact of carbon reduction processes and policies in various countries. As the installed capacity of renewable energy exceeds the growth rate of electricity demand, coal electricity demand may show a downward trend, and the consumption of coal as a fossil fuel is expected to experience a “structural” decline.
Post time: Jan-02-2024
