Weekly News Review - 28th April 2023
European countries pledge huge expansion of North Sea wind farms
Nine countries from western Europe have pledged to increase North Sea offshore wind capacity to 120GW by 2030 and 300GW by 2050 in a bid to reduce carbon emissions. The plan was announced at a summit in Ostend, Belgium, on Monday by The French president, Emmanuel Macron, the German chancellor, Olaf Scholz, and the European Commission chief, Ursula von der Leyen.
Also at the summit were the prime ministers of Belgium, the Netherlands, Norway, Ireland, Denmark and Luxembourg. Energy security minister, Grant Shapps, also confirmed the UK’s commitment to the target which will involve building more wind farms, developing “energy islands” and investing in carbon capture projects.
The declaration states that: “Underlining that energy security and the fight against climate change are crucial to the future of Europe, we need to strengthen our cooperation to ensure affordable, secure and sustainable energy, while at the same time, continuing our efforts to protect the marine ecosystem.
“In response to Russia’s aggression against Ukraine and attempts of energy blackmail against Europe we will accelerate our efforts to reduce fossil fuel consumption as well as dependence on fossil fuel imports and promote the rapid upscaling and deployment of renewable energy for an energy resilient Europe.”
Belgian energy minister, Tinne van der Straeten, said: “We are unlocking our offshore energy ambitions. Coordination is absolutely essential. If each of the nine countries acts alone, we’ll collectively fail. Planning is at the core of everything.”
At the summit in Ostend, plans were also announced to build a 1.8GW interconnector between the UK and the Netherlands. The LionLink project is being developed by the National Grid and Dutch electricity network TenneT and could be running by the early 2030s. The electricity cable would connect to offshore wind farms in the North Sea and transfer electricity between the two countries.
Drax pauses BECCS investment and announces £150m share buyback
Power company Drax has paused investment into its Bioenergy with Carbon Capture and Storage (BECCS) plant as it waits for further subsidy details from the government. The company also announced it would buy back shares worth £150m following its highest-ever annual profits.
The government updated its plans for carbon capture and storage projects in March which confirmed that Drax was not included in the initial Track 1 process. However, the government confirmed that it will set out a process for the expansion of Track 1 later this year and has also launched a Track 2 process. As a result Drax has decided to delay plans to invest £50m in carbon capture technology at its biomass units.
During their annual general meeting on Wednesday, Drax also announced that they are in line to hit record annual profits due to continued good operational performance so far this year. The company has benefitted from the high electricity prices resulting from the Russian invasion of Ukraine. Their healthy financial position has allowed the company to announce a share buyback programme that will return up to £150 million to shareholders.
Drax Group CEO, Will Gardiner said: “In the first quarter of 2023, we have delivered a strong system support and generation performance, providing renewable, secure, dispatchable power for millions of homes and businesses across the UK.
“We remain excited about the opportunity to do BECCS in the UK. Whilst the project is not currently in the Track 1 process, we have commenced formal discussions with the Government to facilitate the transition to BECCS at Drax Power Station by 2030.”
Drax also confirmed the closure of its two coal units that were on standby over the winter but were eventually not needed. Mr Gardiner added: “At the end of March, we formally closed the remaining two coal units at Drax Power Station. This is a significant moment for the business and I’d like to thank the many hundreds of people involved in making this happen and transforming Drax into a global leader in biomass power generation.”
BP faces rebel shareholders over new climate goals
Oil giant BP faced a shareholder backlash at their annual general meeting on Thursday following the scaling back of climate targets. In the meeting, which was also disrupted by climate protestors, a number of the UK’s biggest pension funds voted against reappointing BP chairman, Helge Lund, as they raised concerns over the financial viability of future fossil fuel projects.
In 2022, BP initially set a target to reduce greenhouse gas emissions by 35-40% by the end of the decade. However, in February they announced that the target had been reduced to a 20-30% cut in emissions as it intended to extend the life of existing fossil fuel projects following the Russian invasion of Ukraine.
The five pension funds – Nest, the Universities Pension Scheme, LGPS Central, Brunel Pension Partnership and Border to Coast – decided to vote against Mr Lund as a protest against the company’s actions. Together the pension funds have £440m invested in BP, which represents less than 1% of the company’s total shares. However, they manage the pensions of more than a third of the UK’s workers so are an influential voice.
Despite the rebellion, Mr Lund was reappointed as BP chairman after receiving 90% of votes, although this was down from 97% last year. The pension funds also voted in favour of a resolution put forward by climate group Follow This, which called for BP to align its emissions reduction plans with the 2015 Paris agreement. The resolution received slightly more backing with 16.75% of BP shareholders voting in favour.
Mark Van Baal, the founder of Follow This, said: “Science and responsible investors are clear: to achieve the goal of Paris to limit global warming to 1.5C, the world must almost halve emissions by 2030. BP has many aims, but none of these covers BP’s total emissions by 2030 in absolute terms. Promises for 2050 are empty without meaningful interim targets. Therefore, BP’s overall aims are not Paris-aligned yet.”
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