Estonia's Potential Big Win in the Shale Oil Market
Estonia, the birthplace of online voting and Skype, is now on a mission to lead the world in fracking technology, reports the AP.
With a population of over 1.3 million people, the small East European country gets more than 90 percent of its electricity needs from shale oil, making it the world's most shale-dependent country.
“With interest in non-conventional energy resources surging globally, Estonia wants to carve its own niche by perfecting the technology needed to produce cleaner electricity and high-grade fuel products from oil shale — know-how it wants to export to distant places such as Jordan and the US,” according to the AP.
Of course, like the US, the practice of large-scale shale mining has environmentalists concerned about the level of pollution or contamination to underground water supplies such efforts would lead to. Unlike the US, however, Estonia's oil shale resources are very different from the deposits found in America. The shale rock in Estonia contains organic matter that can be used to produce a liquid oil similar to crude, whereas the shale formations in the US contain natural gas, which can be brought to the surface and sold with minimal processing.
So long as world oil prices remain high enough to keep shale viable, Estonia could have a very valuable set of expertise to export.
"We have almost a 100 years' experience working with oil shale in Estonia. If you know something, and if there's a market, you try to sell it," Tarmu Aas, a board member at Eesti Energia, told the AP.
Until recently, the market for shale oil has been virtually nonexistent. High crude oil prices have changed that. For the most part, analysts believe oil prices will remain between $80 and $100 a barrel as countries like China, India and others increase their consumption.
In addition to the US, shale could become particularly important in Jordan, where about 97 percent of oil and gas needs are imported and the country sits on about 34 billion barrels of shale oil. So long as world oil prices stay above $60 per barrel, Eesti Energia (aka Enefit) estimates that its Jordanian venture will be profitable.
"Everything depends on the oil price. The oil price moves this train," Aas told the Ap.
Ofwat allows retailers to raise prices from April
Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.
The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.
Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.
In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue.
Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”
There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:
- Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps.
- Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold.
- Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice.
Further consultation on the proposed adjustments to REC price caps can be expected by December.
"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.
"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."
United Utilities picks up pipeline award
A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.
The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.
“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.
Camus Energy secures $16m funding
Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent Ventures, Wave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.
As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.