Oxford Institute for Energy Studies

Oxford Institute for Energy Studies published a series of papers, podcasts, presentations in June on various aspects of #energy and #energytransition 💡 List of selected papers: 💠 The Uniper-Gazprom Arbitration Ruling: Is the final curtain coming down on remaining long-term Russian gas supply contracts to Europe? 👉 https://lnkd.in/eSJ-2dw3 💠  Potential Regulatory Frameworks for Cross-Border CO2 Transport between the EU and UK 👉  https://lnkd.in/ec69Hx4Q 💠  How proper measurement of low carbon hydrogen’s carbon intensity can reduce regulatory risk 👉 https://lnkd.in/eyn2SKbK 💠  Analysing the EU Methane Regulation: what is changing, for whom and by when? 👉 https://lnkd.in/eVgsTkdt 💠 Can Hydrogen and Carbon Capture and Storage (CCS) help Decarbonize the coal power plants in Asia? 👉 https://lnkd.in/ddX95m_q 💠 2024 State of the European Hydrogen Market Report 👉 https://lnkd.in/eDG_rf9w 💠 OIES Oil Monthly-Issue 35 👉 https://lnkd.in/dRqJ8MD3 💠 OIES China Energy Monthly-Issue 2 👉 https://lnkd.in/ewhAdrmh 🎧 List of selected podcasts: 💠 Contracts for Difference: The instrument of choice for the energy transition 👉 https://lnkd.in/e4K64fNi 💠 Are US efforts to de-risk and decarbonise its battery supply chains incompatible? 👉 https://lnkd.in/evNkqDCw 💠 Fact and fiction of clean innovation in China 👉 https://lnkd.in/ekwjrwJh 💠 Virtual Barrels, Financial Players and Oil Price Volatility 👉 https://lnkd.in/ePWDXYs3 💠 The outlook for LNG in Japan, Korea and Taiwan 👉 https://lnkd.in/e9fg8WFU 💡 List of presentations 💠 Planning, Building and Regulating Hydrogen infrastructure in the EU: Focus on networks 👉https://lnkd.in/eugPjQ4u 💠  Energy Transition Scenarios: Impact on Natural Gas 👉 https://lnkd.in/dTqTzJgv 💠 Evolution of the Middle East oil scene: Transformations in refining and oil flows 👉 https://lnkd.in/ezFtzyef 💠  Contracts for Difference (CfDs) for clean hydrogen projects   👉 https://lnkd.in/e67JZuEx 💠  Rethinking Reliability to Ensure Resource Adequacy 👉 https://lnkd.in/eNCHHBNv 💠  Some lessons from the electricity sector for the emerging hydrogen industry  👉 https://lnkd.in/eukf3s6E #energy #energytransition #oil #gas #ccs #hydrogen #electricity #methane

New Oxford Institute for Energy Studies presentation discusses the impact of energy transition scenarios on natural gas 👉 Link to presentation: https://lnkd.in/dTqTzJgv 💠 OIES has developed three scenarios considering the impact of the energy transition on natural gas 1️⃣ The control scenario Declared Policies (DPS) sees global gas demand peaking around 2040; this is not a decarbonisation scenario. 2️⃣ Net Zero scenario achieves net zero across the board everywhere by 2050 but with a significant volume of carbon capture and storage (NZwthCCS) supporting gas demand at higher level than in IEAs net zero scenario (IEA NZE) 3️⃣ Fragmented scenario (FRAG) envisions a multi-paced world with some countries/regions more committed to decarbonization than others. There is still significant CCS which is required to maintain a reasonable level of gas demand. 💠 Global gas demand rises in all three scenarios between 2022 and 2030. From a level of just under 4,100 bcm in 2022, demand reaches some 4,584 bcm by 2030 in DPS (12% growth), 4,392 bcm in FRAG (7% growth) and 4,322 bcm in NZwthCCS (6% growth). This is in marked contrast to IEA NZE where demand is down to 3,442 bcm by 2030 (16% decline). 💠 In DPS scenario gas demand peaks around 2040 and declines slowly after that. In FRAG and NZwthCCS, gas demand peaks around 2030 in both. Decline thereafter is more rapid in NZwthCCS with gas demand falling below 3,000 bcm in early 2040s, whereas in FRAG it doesn’t fall below that level until later 2040s. By 2050, gas demand is 2,596 bcm in FRAG and 2,282 bcm in NZwthCCS. IEA NZE drops below 2,000 bcm in late 2030s and reaches 1,129 bcm by 2050. 💠Power generation accounted for some 40% of global gas demand in 2022, with industry (including non-energy use) at some 25%. Residential and commercial are at 21% and transport at 4%. 💠As electrification proceeds rapidly in NZwthCCS and to a lesser extent in FRAG, residential and commercial share (essentially buildings) falls to 2% in NZwthCCS and 6% in FRAG. 💠Power generation share rises in FRAG to almost half global gas demand by 2050 and declines a little in NZwthCCS to 35%. 💠Industry share (including non-energy use) maintained in both FRAG and NZwthCCS but volume of gas demand in both industry and power generation is lower in 2050 than in 2022 since total gas demand is much lower. 💠Key change is in other transformation )essentially blue hydrogen) with a share of over 30% in NZwthCCS with little competition from green hydrogen and 10% in FRAG, where green hydrogen is relatively more important. Hydrogen use is predominantly in high temperature “hard-to-abate” sectors and focused around large industrial sites. #gas #lng #energytransition #decarbonization #scenarioanalysis #power #residential #buildings #hydrogen #ccs #netzero

New presentation on planning, building and regulating hydrogen infrastructure in the EU: Focus on networks presented at this year's Oxford Institute for Energy Studies Hydrogen Sponsors' Meeting held in Oxford in June 👉 Link to H2 Day programme: https://lnkd.in/e6kyGuXR Key points: 💠 Renewable and Natural Gas and Hydrogen (RNGH) Directive and RNGH Regulation (otherwise known as Decarbonised Gas and Hydrogen Package) together with TEN-E Regulation provided the new EU regulatory framework for natural gas and hydrogen market development 💠 As future EU hydrogen network topology is highly uncertain, this framework must be sufficiently flexible to enable the development of any kind (regional or pan-European) of network and allow for coordinated network development 💠 RNGH Directive and RNGH Regulation have largely preserved the main provisions governing the natural gas market, while making some (but not most interventionist) ‘emergency’ measures, adopted during the energy crisis, permanent 💠 They have also facilitated access of renewable and low carbon gases to the natural system and placed a hard stop for contracting unabated fossil gas post-2049 💠 RNGH Directive and RNGH Regulation have largely extended main rules governing the mature natural gas market (such as unbundling and regulated access to networks) on the nascent hydrogen market (with few differences) 💠 Although this framework provided some in-built flexibility (transition period for regulated access, indefinite application of Independent Transmission Operator model, exemptions and derogations for existing and new hydrogen networks) it might prove to be insufficiently flexible 💠 Yet the framework is evolving, with more rules to be provided in the EU hydrogen network codes before 2030, and more flexibility could be added 💠 Lack of clear mechanism for ensuring coordinated network development at Member State and EU levels potentially undermining the security of natural gas supply 💠 The framework appears certain about fast phase-out of natural gas in the EU but provides little safety support should such phase out be a longer process 👉 Link to OIES Hydrogen Research programme: https://lnkd.in/ehtwA3iw #hydrogen #h2 #infrastructure #networks #regulation #eu

New Oxford Institute for Energy Studies Energy Comment discusses the Uniper-Gazprom Arbitration Ruling. 👉 Link to Energy Comment: https://lnkd.in/eSJ-2dw3 Key points: 💠 This comment explains the factual background of this month’s Uniper-Gazprom arbitral tribunal ruling which terminated the long term gas supply contracts between the parties, and its potentially seismic implications for European gas markets. 💠 According to Uniper, the arbitration tribunal awarded the company the right to terminate its long-term gas supply contracts with Gazprom Export; and more than €13 billion in damages for the gas volumes not supplied by Gazprom Export since mid-2022. 💠 The potential for similar arbitral decisions to terminate the remaining Russian long-term contracts will give other suppliers – particularly LNG suppliers – more confidence that EU countries will need their gas imports for a longer period of time. European sanctions imposed on Russian LNG supplies and trans-shipment will add to this confidence. #arbitration #Contract #damages #enforcement #forcemajeure #Gas #Gazprom #injunction #LNG #Nordstream #OMV #termination #Transit #Ukraine #Uniper

New Oxford Institute for Energy Studies podcast discusses Contracts for Difference and the energy transition. 👉 Link to podcast: https://lnkd.in/ehbYWFPp 👉 Link to related research paper: https://lnkd.in/ede2vKsX 🎙 In this latest OIES podcast, Michal Meidan talks to Agniezska Ason, senior visiting research fellow at the OIES, and Julio Dal Poz, managing director at FTI consulting, about contracts for difference and how they can be used in the low carbon energy transition. 🎙 They discuss how Contracts for Difference (CfDs) are currently used to support the decarbonisation of electricity generation, their contribution to providing predictable revenues for operators but also their limitations: the regulatory and market risks associated with them. 🎙 They talk about the lessons from the UK experience and efforts to use CfDs in Europe before assessing their current and potential uses for CCS as well as for hydrogen. All of our #podcasts are also available on #spotify and #applemusic #CCS #ContractsforDifference #EnergyTransition #Hydrogen #Offshorewind #Wind

Enjoyed participating in an evening energy seminar hosted by the Arab Bankers Association in London discussing the role of hydrocarbons in the energy transition with Sebastian Vismara, Gido van Graas and Antonio Nicotra.

The second China Energy Monthly looks at April data and the outlook for the next few months: 🔹 Rising activity in a number of gas consuming industries, but weaker momentum in the "new three" industries (batteries, EVs, solar panels). 🔹Weak oil and coal data, both seasonal and likely to recover over the summer. 🔹Ongoing surge in gas demand that could start to slow. 🔹Strong increase in power demand but more hydro as well as large solar additions tempered thermal consumption. 🔹Appetite for reform also seems to be losing steam. Will the government now prioritise efforts to catch up on lagging environmental targets, or will it look to protect growth?

New Oxford Institute for Energy Studies Energy Insight evaluates potential regulatory frameworks for cross-border CO2 transport between the EU and UK 👉 Link to research paper: https://lnkd.in/ec69Hx4Q Key points: 🔹 #CCS developments have accelerated over the last few years in Europe, with several projects spanning capture, transport and storage expected to come online by 2030. 🔹 The #NorthSea has emerged as the main hub of CO2 #storage activity in Europe, hosting most of the sites under development. 🔹 New CO2 #pipelines and CO2 #ships are in advanced stages of development, while the potential to repurpose natural gas pipelines and LPG ships provides optionality. 🔹 However, while cross-border #transport of CO2 is necessary, producers are limited in their ability to leverage the entire network under current regulations. 🔹 The London Protocol and respective Emissions Trading Systems (ETS) in the UK and EU are hurdles that must be addressed for #crossborder CO2 transport to be feasible. 🔹 For the #LondonProtocol, this would require collaboration on a proposal to specifically exclude CO2 from coverage by Article 6 or bilateral agreements between interested EU countries and the UK. 🔹 For the #ETS, a more formal linking between the EU and UK systems would be needed. Such linking would allow for mutual recognition of emitted CO2, allowing producers in the UK to retain ownership of allowances for CO2 stored in the EU and vice-versa. 🔹 Regulations would also need to be backed by strict cross-border #monitoring guidelines to minimise the likelihood of carbon #leakage, both physically and for accounting purposes. 🔹 Overcoming challenges requires a realisation from EU members that there is little economic value in developing storage sites at significant cost if sites in the UK present a better economic proposition, also ensuring that they are not dependent on Norway alone. 🔹 For the UK, it offers an opportunity to share T&S costs with CO2 producers in EU, without adding liability to the latter. #CCUS #CO2transport #carbonmanagement #netzero #decarbonisation #energytransition To learn about OIES's Carbon Management research programme, please visit: https://lnkd.in/e92AsGkz

New Oxford Institute for Energy Studies presentation discusses the impact of energy transition scenarios on Natural Gas. 👉 Link to presentation: https://lnkd.in/dTqTzJgv Key Points: 💠 OIES has developed three scenarios considering the impact of the energy transition on natural gas. 💠 The control scenario – Declared Policies – sees global gas demand peaking around 2040, but this is not a decarbonisation scenario. 💠 The Net Zero scenario achieves net zero across the board everywhere by 2050 but with a significant volume of carbon capture and storage (CCS) supporting gas demand at a higher level than in the IEAs net zero scenario (IEA NZE). 💠 An alternative Fragmented scenario envisions a multi-paced world with some countries/regions more committed to decarbonization than others. There is still significant CCS which is required to maintain a reasonable level of gas demand. 💠 At COP28, the prospect of the use of fossil fuels as transitional fuels was recognised. In that respect, it could be argued that the fragmented scenario is much closer to the COP28 outcome, with natural gas being a transitional fuel. In all three scenarios LNG trade peaks around 2030. 💠 In Declared Policies, LNG trade declines gradually in the 2030s and 2040s, principally due to China demand peaking and declining. 💠 In the Net Zero and Fragmented scenarios LNG trade falls significantly impacting LNG exports from North America, ASEAN and Australia disproportionately. 💠 A key conclusion is that if natural gas is to remain a major fuel in a rapidly decarbonising world, then the industry needs to invest in an enormous quantity of CCS. The alternative is rapid decline, as in IEA NZE. #gas #CarbonCaptureandStorage #ccs #decarbonisation #energytransition #gasdemand #LNG #netzero

A new Oxford Institute for Energy Studies paper looks at Reforming Capacity Markets and How to Incorporate the Flexibility of Residential Consumers through priority pricing contracts 👉 Link to Publication: https://lnkd.in/dQDGNjUD Key points 💠  Idea behind priority pricing contracts is to bridge the gap between retail and wholesale prices but maintain, at the same time, the simplicity, independence and privacy of residential consumers 💠 Priority pricing theory is based on the differentiated continuity of supply and prices 💠 Consumers have different valuations for different reliability levels but retailers are not aware of which consumers are characterized by higher valuation 💠  By facing different prices for different reliability levels consumers reveal their valuation for reliability 💠 This results in higher efficiency in both normal and tight system operations 💠 Several examples of differentiated service exist in non-electricity industries 💠 Telecommunication companies offer different plans for data with different monthly subscription fees and network speeds 💠 Transportation and postal systems offer express and regular services 💠 Thus customers have experience with choosing between alternative service contracts 💠 The idea behind the implementation of priority service pricing is to offer residential consumers a menu of reliability and price pairs 💠 For example, it is possible to define three pairs that the consumers may choose from 💠 Figure uses a colour coding system to differentiate the different levels of reliability:  1️⃣ green indicates cheap power that can be interrupted frequently  2️⃣  yellow indicates power that can be interrupted under emergency conditions;  3️⃣ Red indicates expensive power that cannot be interrupted 💠 Load is divided into three strips that correspond to different levels of reliability and an example of what appliances are associated with a given reliability level 💠 Consumer can change the colour code of an appliance at their desire #electricity #electricitymarkets #consumers #reliability