Sorry State of the Union

 This publication rarely ventures into geopolitics – especially that of the USA – but the rapidly shifting world order warrants a record of where things stand, two months into the term of the new administration.Many have referred to the current events as a tectonic or seismic shift. We are beyond that now with the destruction of long-held relationships with allies, institutions, and the foundations of democracy. We are in paradigm shift territory. The world has enjoyed, and newer generations have taken for granted, the hard-fought peace since...

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The Problem with the UK Hydrogen CFD

 The principle of a Contract-for-Difference or CFD is to provide pricing stability (or at least visibility) on the hydrogen being produced and sold. The government is typically the counterparty on CFDs.The producer of the electricity or hydrogen negotiates and agrees a "strike price" with the government under the CFD. When the producer sells hydrogen below this agreed strike price, the government will top it up to the strike price. Conversely...

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Ithaca Energy and Eni UK merge to create UK North Sea powerhouse

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UK Offshore Wind CFD Strike Prices for AR6/2024

The UK has increased offshore wind maximum strike prices to £73/MWh for fixed-bottom offshore wind installations for the 2024 AR6 Allocation Round.This is a substantial increase from the £44/MWh set for the AR5 round in 2023 which was too low to attract bids with no capacity being awarded to offshore wind.The higher price is designed to compensate for a higher cost and interest rate environment.Source: S&Phttps://www.spglobal.com/marketintel...

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EU (and UK) faces headwinds on higher hanging decarbonisation fruits

EU is ontrack to fully decarbonise power by 2050The EU is making good progress and remains the leader on decarbonisation. Focus over the past decade has been on renewable power installation which has been a massive success - only 61% of EU electricity was from renewable sources in 2022 with only 39% from fossil fuels. Power generation accounted for c.25% of emissions in 2021. With continued roll-out of renewables, which is now cost competitive with...

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Chart of the week: Bilateral Hydrogen Trade Agreements and MOUs

 Source: IRENA, as of November 2...

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Jersey Oil & Gas next in line to be Canned?

 Following the UK Government's rejection to approve the Cambo development in the West of Shetlands, leading to Shell's exit from the field, and the scrapping of the Rosebank development by Equinor, it is clear that the UK Government is increasingly turning its focus away from North Sea Oil & Gas. The UK Government is laser focused on the Energy Transition and is supporting the renewable energy development, hydrogen and carbon capture.Against...

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