INDUSTRY REPORT
Reducing gas demand by 15 %
To increase the EU ’ s security of energy supply , the Council of the EU has now adopted a regulation on a voluntary reduction of natural gas demand by 15 % this winter . The regulation foresees the possibility for the Council to trigger a ‘ Union alert ’ on security of supply , in which case the gas demand reduction would become mandatory .
“ The purpose of the gas demand reduction is to make savings for this winter to prepare for possible disruptions of gas supplies from Russia , which is continuously using energy supplies as a weapon . Member states agreed to reduce their gas demand by 15 % compared to their average consumption in the past five years , between 1 August 2022 and 31 March 2023 , with measures of their own choice ,” explained the Council .
When choosing demand reduction measures , member states agreed that they shall consider prioritising measures that do not affect protected customers such as households and essential services for the functioning of society like critical entities , healthcare and defence . Possible measures include reducing gas consumed in the electricity sector , measures to encourage fuel switch in industry , national awareness-raising campaigns , targeted obligations to reduce heating and cooling and market-based measures such as auctioning between companies .
The regulation is an exceptional and extraordinary measure , foreseen for a limited time . It will apply for one year and the Commission will carry out a review to consider its extension , in light of the general EU gas supply situation , by May 2023 .
This regulation follows other initiatives already in progress to improve the EU ’ s resilience and security of gas supply including a gas storage regulation , the creation of an EU Energy Platform for joint purchases and initiatives listed in the REPowerEU plan .
Global renewable energy market
The global renewable energy market continues to hit new highs , with most countries showing substantial commitments over the last decade . According to a new report from BCC Research , renewable energy is on track to achieve global revenues of US $ 1.5 trillion by 2027 , a significant advance from the firm ’ s US $ 932 billion forecast for 2022 .
“ Lately , it ’ s been a whirlwind ride for renewables ,” says Greg Johnson , Associate Director of Consulting , BCC Research . “ We ’ ve seen strong commitment from governments and market regulators , with strategies that have pushed the market to new peaks . Producers have seized the renewable energy opportunity , even when production costs were higher . And users are adopting the technologies instead of relying on traditional sources .
Image : Shutterstock . com .
Image : Shutterstock . com .
Renewable energy is on track to achieve global revenues of US $ 1.5 trillion by 2027
“ In 2019 , all this market action resulted in nearly 11 % of global primary energy coming from renewable energy sources . But when we focus in on global electricity generation , that figure was 23 %, jumping to 29 % in 2020 . Then , last year , we saw the fastest year-on-year growth since the 1970s ,” he continues .
There are five key renewable energy sources :
■ Hydroelectric power leads the renewable energy charge , commanding more than half of all cumulative installed capacity last year .
■ Wind power accounted for around one quarter of total installed capacity .
■ Solar power , which includes solar photovoltaic ( PV ) and concentrated solar power ( CSP ), is also a major contender , and BCC Research expects it to be one of the fastest-growing renewable technologies by volume over the forecast period out to 2027 .
■ Geothermal and biofuels are also “ playing their part in stealing a march on coal , fossil fuels and other non-renewable sources ,” according to BCC Research .
Asia-Pacific has emerged as the leading regional market , with close to half of the global installed renewable energy capacity in 2021 . BCC Research also expects the region to grow faster than any other , with a double-digit CAGR from 2022 to 2027 .
“ Tax benefits and financial incentives in nations such as the U . S ., Germany , Iceland , France , the U . K ., China and India are all expected to drive production ,” says Johnson . “ But it ’ s not just a walk in the park . We expect the comparatively high costs of renewable energy production to generate some market friction . Yet with the triple threat of climate change , energy dependence and the urgent need for sustainable economic development on a worldwide scale , renewable energy is the only clear way forward .” n
EDITOR ’ S NOTE
Part one of our energy markets report was published in the June 2022 issue of ISMR .