Mar 12, 2020

Coronavirus’ effect on the renewable energy sector

William Girling
2 min
On 11 March 2020, the World Health Organisation officially classed Covid-19 (coronavirus) as a pandemic and energy companies are feeling the strain
On 11 March 2020, the World Health Organisation officially classed Covid-19 (coronavirus) as a

On 11 March 2020, the World Health Organisation officially classed Covid-19 (coronavirus) as a pandemic and energy companies are feeling the strain.

Both renewable power projects and conventional energy operations have felt the constriction of global supply chains, which are currently being limited in a global effort to fight and contain the spread of the virus.

Many manufacturers of wind turbines and their critical components are based in Asia, such as Goldwind in China, as well as producers of photovoltaic panels and batteries (particularly lithium). 

Market reticence about bringing in products from affected areas has seen significant constriction in the importation of these materials and parts - the price of batteries has dropped by 60%, owing to the industry’s concentration in Asia.

Restricting the global supply chain

The virus may, in fact, be having a deleterious effect on the progress of renewables as a whole. Industry leader GE Renewable Energy reportedly confirmed that Covid-19 has struck off US$200mn to $300mn in profits across its business in Q1.

CEO Jérôme Pécresse was optimistic that the company could recover, although he conceded that the issue could firmly be called a ‘global issue’. “As of today, we are on track to our quarterly forecasts. We continue the positive recovery of our supply chain in China.” 

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Meanwhile, solar projects in the US are being slowed to a crawl, with some considering cancellation as the only viable economic stance in the wake of such unforeseeable circumstances. 

“I think you’re going to see a lot of force majeure claims under the coronavirus, up and down the supply chain,” said Sheldon Kimber, CEO and co-founder of Intersect Power.

Taking steps to mitigate the issue

With the end of the virus presently far out of sight, energy companies will need to take decisive measures to ensure they are able to meet targets and continue operations as close to ‘normal’ as possible. 

Legal analytics publication JD Supra recommends the following actions:

  • Maintain communications with critical suppliers and strategically plan contingencies.

  • Comb through purchase and supply contracts to determine when ‘force majeure’ rights apply.

  • Always bear in mind the specific restrictions of the jurisdiction you are operating in.

  • Keep close tabs on customer demands.

  • Be willing to reallocate quantities of scarce materials.

  • Take out corporate insurance policies. 

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Jun 7, 2021

Trafigura and Yara International explore clean ammonia usage

Shipping
fuel
Decarbonisation
ammonia
Dominic Ellis
2 min
Commodity trading company Trafigura and Yara International sign MoU to explore developing ammonia as a clean fuel in shipping

Independent commodity trading company Trafigura and Yara International have signed an MoU to explore developing ammonia as a clean fuel in shipping and ammonia fuel infrastructure.

Reducing shipping emissions is a vital component of the fight against global climate change, yet Greenhouse Gas emissions from the global maritime sector are increasing - and at odds with the IMO's strategy to cut absolute emissions by at least 50% by 2050. 

How more than 70,000 ships can decrease their reliance on carbon-based sources is one of transport's most pressing decarbonisation challenges.

Yara and Trafigura intend to collaborate on initiatives that will establish themselves in the clean ammonia value chain. Under the MoU announced today, Trafigura and Yara intend to work together in the following areas:

  • The supply of clean ammonia by Yara to Trafigura Group companies
  • Exploration of joint R&D initiatives for clean ammonia application as a marine fuel
  • Development of new clean ammonia assets including marine fuel infrastructure and market opportunities

Magnus Krogh Ankarstrand, President of Yara Clean Ammonia, said the agreement is a good example of cross-industry collaboration to develop and promote zero-emission fuel in the form of clean ammonia for the shipping industry. "Building clean ammonia value chains is critical to facilitate the transition to zero emission fuels by enabling the hydrogen economy – not least within trade and distribution where both Yara and Trafigura have leading capabilities. Demand and supply of clean ammonia need to be developed in tandem," he said.  

There is a growing consensus that hydrogen-based fuels will ultimately be the shipping fuels of the future, but clear and comprehensive regulation is essential, according to Jose Maria Larocca, Executive Director and Co-Head of Oil Trading for Trafigura.

Ammonia has a number of properties that require "further investigation," according to Wartsila. "It ignites and burns poorly compared to other fuels and is toxic and corrosive, making safe handling and storage important. Burning ammonia could also lead to higher NOx emissions unless controlled either by aftertreatment or by optimising the combustion process," it notes.

Trafigura has co-sponsored the R&D of MAN Energy Solutions’ ammonia-fuelled engine for maritime vessels, has performed in-depth studies of transport fuels with reduced greenhouse gas emissions, and has published a white paper on the need for a global carbon levy for shipping fuels to be introduced by International Maritime Organization.

Oslo-based Yara produces roughly 8.5 million tonnes of ammonia annually and employs a fleet of 11 ammonia carriers, including 5 fully owned ships, and owns 18 marine ammonia terminals with 580 kt of storage capacity – enabling it to produce and deliver ammonia across the globe.

It recently established a new clean ammonia unit to capture growth opportunities in emission-free fuel for shipping and power, carbon-free fertilizer and ammonia for industrial applications.

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