Category: Energy

Low awareness of climate risks hampering resilience of critical infrastructure sectors claims new study

Low awareness of climate risks hampering resilience of critical infrastructure sectors claims new study

Low levels of awareness of climate risks and the availability of climate services are significant barriers to climate adaptation in the electricity sector, according to new research from Germany. However, the research also finds that the underlying market opportunity for climate services remains strong.

Damage to a critical infrastructure, its destruction or disruption by for example natural disasters, will have a significant negative impact on the security of the EU and the well-being of its citizens. Focussing on the German electricity sector, the report found that stakeholders in the sector claimed to need seasonal forecasts and decadal predictions, the latter aligning closely with energy companies’ time frames for strategic planning. However, despite this, there is currently a low level of demand for climate services from the sector.

The report found that four major barriers prevented the uptake of climate services:

  1. low awareness of the climate-related risks,
  2. low awareness of the benefits climate services can provide,
  3. mismatches between the required and the available timescales and spatial resolution of data and
  4. a lack of trust in the reliability of data.

In order to overcome these hurdles, the report recommends that considerable work needs to be done in the first instance to increase the visibility of the climate services industry and how it can contribute to the climate resilience of key sectors. It proposes that a ‘Climate Service Provider Store’ is created to provide information about where appropriate climate service providers are available.

Additionally, the case study recommends that work continues to ensure that seasonal and decadal forecast become ever-more accurate and that regional cooperation between industry networks and climate services providers are strengthened.

The case study was led by the non-profit research organization HZG under the MArket Research for a Climate Services Observatory (MARCO) programme of which Acclimatise is a proud partner. MARCO, a 2-year project coordinated by European Climate-KIC, hopes that research such as this will help to remove the barriers to the growth of the climate services industry across Europe.

Download the full case study “Critical Energy Infrastructureshere.

Download an infographic highlighting the key findings of the case study here.

Cover photo from pxhere (public domain).
Oil and gas sector confidence is soaring… and it’s down to climate change.

Oil and gas sector confidence is soaring… and it’s down to climate change.

By Will Bugler

When all is said and done, tackling climate change will require a sustained transition away from fossil fuels. Coal and oil will have to be left in the ground. So why then, in the face of this inescapable reality, does a recent study suggest that confidence levels amongst senior oil and gas executives have nearly doubled in the last 12 months?

The findings come from a survey from the Norwegian global quality assurance firm DNV GL, who interviewed 800 senior oil and gas executives and found that confidence has risen from 32 percent in 2017 to 63 percent today. This optimism is backed up by company plans to increase capital expenditure, with 66 percent of companies planning to invest in the coming year. More than a third of respondents (36 percent) also expect to increase research and development spending – the highest number in four years.

Embracing transition

The reason for the upsurge in confidence appears to be based on a belief that oil and gas companies are preparing well for the transition to a low carbon economy. Tellingly, for the first time in eight years, industry confidence is rising faster than the global oil price. High fossil fuel prices, it appears, are no longer the sole driver of industry prosperity. This suggests that many executives are confident that their businesses have evolved enough to thrive even when fuel prices are low.

Maria Moræus Hanssen, CEO of Dutch oil and gas firm DEA says that the transition is underway in the sector, “the majors will turn into energy companies – they will broaden their portfolios” she said, “partly because there are strong investment opportunities outside oil and gas, and partly to position themselves for a changing future.”

This sentiment was echoed by many respondents to the DNV GL survey, with several predicting more regulatory and social pressure for firms to make a transition to clean energy. “The greatest looming challenge for oil and gas companies is how they adapt to the energy transition,” says DNV GL’s Bente Pretlove, “there will likely be greater regulatory and social pressure forcing the industry towards decarbonisation. To succeed, the industry will need to make the right investments and harness technology and innovation more than ever.”

Opportunities for investment

While the transition to a low carbon economy is often cast as a risk to the sector, this research suggests that there will be significant opportunities for those firms who take early action to invest in low-carbon energy, and in measures to increase the resilience of their operations to climate change and its impacts. “We see the future for cost-effective, low-carbon power generation as really about renewables plus gas.” Mark Gainsborough, executive vice president of New Energies at Shell, “a challenge going forward will be to invest more consistently, to maintain our purpose over time, and not be too disrupted by short-term changes.”

The fact that oil and gas companies are taking a long-term view with regards to climate change is a promising sign. It is difficult to imagine a scenario where energy security can be maintained in the face of climate impacts that does not involve the cooperation, skill and power of the oil and gas majors. Their willingness to embrace the energy transition and drive systemic change in the sector is significant for sectoral climate resilience.

A copy of the report “Confidence and control: The outlook for the oil and gas industry in 2018″ can be downloaded here.

Cover photo by Berardo62/Flickr (CC BY-SA 2.0): Oil rigs moored in Cromarty Firth. Invergordon, Scotland, UK.
Air conditioning could wreck climate targets unless new technologies emerge

Air conditioning could wreck climate targets unless new technologies emerge

By Caroline Fouvet

Keeping cool as the mercury rises is a challenge for billions of people living in hot climates. As temperatures climb into the 40s or even 50s in many regions of the world, like the Middle East and Asia, air conditioning in homes and offices becomes a necessity. However, the increased need for cooling comes at a cost.

Since the Montreal Protocol, it has been acknowledged that cooling devices entail ozone-depleting substances such as chlorofluorocarbons (CFCs). The Protocol’s implementation after 1987 successfully resulted in their progressive phasing out, but the hydrofluorocarbons (HFCs) that replaced them, turned out to be potent greenhouse gases. Since households from both developed and developing countries are buying more and more air conditioning units and other cooling devices, this is problematic. It has been calculated that if all air conditioning equipment entering the world market uses current technology, they will be responsible for 27% of greenhouse gas emissions by 2050.

Fighting warm temperatures can also put countries’ grids under pressure and lead to power outages. In India, where people are familiar with heatwaves, the resulting surge in electricity demand causes major power disruptions and forces the government to impose power cuts on malls and street lights. In 2014, in the state of Uttar Pradesh, the energy demand reached 11,000 megawatts, which is 3,000 megawatts over the grid’s total capacity.

Providing cooling options during hot summer months at the global level is necessary to avoid substantial human and economic losses. Current adaptation methods to a hot climate are threatening to undermine climate policy goals, as they often result in higher greenhouse gas emissions. Adapting to increasingly warm summer months will require improved responses to provide efficient cooling. Green cooling technologies that are less energy intensive are desperately needed.

Cover photo by Sławomir Kowalewski/Pixabay (public domain): Air conditioning units on a building in China.
An investors’ guide to a sustainable oil and gas sector

An investors’ guide to a sustainable oil and gas sector

By Caroline Fouvet

As the oil and gas sector is today the global largest source of methane, a potent greenhouse gas (GHG), it has a crucial role to play in the implementation of the Paris Agreement. Achieving the 1.5°C objective will necessarily involve a drastic reduction in the sector’s current emissions from extraction, transportation and processing activities.

It is in this context that global investors published last month a guide to highlight which actions are required from the oil and gas sector to address climate change risks. Investor Expectations for Oil and Gas Companies: Transition to a Lower Carbon Future mainly focuses on how companies’ business strategies consider climate change-induced risks and enable their transition to a sustainable low carbon energy system.

The five areas that are reviewed, namely governance, strategy, implementation, transparency and disclosure together with public policy, bring out investors’ main concerns. Does management ensure adequate oversight of climate-related risks? Does the company engage with public policy makers to support development of cost-effective policy measures to mitigate climate-related risks and low carbon investments?

It is on these issues that the Institutional Investors Group on Climate Change (IIGCC) aims to shed light and intends to help the oil and gas sector adapt its business model to climate change and comply with international regulations. Asset owners and fund managers are concerned with the sector’s consideration of global warming’s impact and policy rules as trillion of dollars are at stake. Investors hence want the guarantee that companies are well prepared both to tackle the effects of climate change as well as to abide by the international requirements set in this respect.

The IIGCC’s guide reflects the international community’s endeavours to make of the Paris Agreement’s provisions a reality at the global level. It also highlights how the private sector has as a vital role to play as policy makers, and that large-scale actions are to be expected from businesses too.

Download the report by clicking here.

Cover photo by WerbeFabrik/Pixabay (Public Domain)