RusHydro, the Russian hydro power company, listed its shares in London today, and set out its vision of how huge volumes of electricity could be exported to meet China’s growing energy needs.
In many ways, hydro power is the best of all energy sources: carbon free, proven technology, long-lived and with very low marginal cost. The problem is that there are not enough suitable rivers. The potential of hydro power is strictly limited by geography, and in most western countries all the suitable sites have been used. As a result, large-scale hydro has very little potential for growth.
In emerging economies, however, the position can be very different. Where France and Germany have used up about 95 per cent of their hydro power potential, and the US 82 per cent, Russia has used just 19 per cent of its potential. In Russia’s far east, including east Siberia, the scope for development is even greater. That creates a huge opportunity to export Russian electricity to China. There are, however, some daunting challenges to be overcome. Read more
Peru has just 0.1 per cent of the world’s oil reserves, but that’s nothing to be sneezed at given the country’s average per capita GDP is $8,400. Read more
Hopes are not high for any strong resolutions on climate change at the G8 meeting beginning on Wednesday in L’Aquila, Italy – one of the more significant events held in the lead-up to the Copenhagen meeting in December. To be fair, some lofty goals will probably be announced this week: the eight western member countries plan to launch an ‘aspirational goal’ of a 50 per cent cut in carbon emissions by 2050, reports the WSJ. The BBC’s Roger Harrabin says the communique will also state that countries should seek to avoid a climate rise of more than 2°C – the level seen as critical by many scientists.
The 50 per cent reduction is a huge undertaking, but then 2050 is a nice, long way off into the future. The problem is the trajectory emissions take until then. They must peak a long time before that – most estimates put it at about 2020 – for a good chance of avoiding severe climate change. Read more
Xinjiang in western China is a province rich in natural resources – a fact not unconnected with the unrest in which 140 people have died in the past few days. The region’s oil and gas riches have been a growing source of tension between the province’s original Uighur residents and the mostly Han migrants from the east, who now make up the majority of the population.
Last year the FT’s Jamil Anderlini visited the region and described the desert surrounding the city “punctuated every kilometre or two by oil and gas derricks, each of them topped with the red Chinese national flag, an assertion of sovereignty over every inch of the energy-rich ground”. Read more
Oil tumbled to a five-week low on Monday as last week’s parade of negative news, notably the US jobless rate hitting its highest level in 26 years, continued to eat away investor enthusiasm for commodities.
Data last week showing Eurozone unemployment rose to a ten year high further undermined the idea of a swift global economic recovery, with confidence in the market also knocked by the revelation that the large spike in oil seen last Tuesday was the work of unauthorised positions taken by a trader at the brokerage PVM. Read more
Risk tolerance is a strong currency in foreign oil acquisitions, but China does not have a monopoly on it.
CNPC wants to buy a stake in Repsol’s Argentinian business YPF, and fellow Chinese company CNOOC is interested in a joint venture with Repsol. But the Spanish company, which has been wanting to offload some of its exposure to the turbulent Argentinian market, apparently has other suitors: Read more
Nigeria militants attack Shell
Third attack since president’s amnesty offer (Reuters via FT)
Lex: China and Latin America
China’s oil links to the region are deepening fast (FT)