1) UK govt. fails to block sale of North Sea oil & gas assets to Russian investors
The Journal’s Selina Williams reports that UK government concerns over the sale of a group of North Sea oil and gas fields by German firm RWE to Russian investor Mikhail Fridman have failed to stop it going ahead today.
The $5.6bn deal is also likely to see former BP executive Lord Browne take the role of executive chairman of the new Russian-backed energy investment outfit, L1 energy.
The British government has raised concerns about the deal because Mr Fridman may well be covered by future sanctions on Moscow. Energy Secretary Ed Davey suggested he may be “minded to require” the Russian’s sell off the UK fields whilst RWE said it reserved the right to challenge any UK decision.
2) Glencore, China face problems with coal over-supply & falling prices
Scott Patterson (WSJ again) looks ahead to global commodity and mining giant Glencore’s results on Tuesday and predicts their huge 2013 investment in coal group Xstrata (aka largest mining deal ever) is looking decidedly peaky.
The coal price has fallen by 25% since then, Glencore’s market value has fallen 10% and it’s had to write off around $7.5bn in largely Xstrata assets.
Part of the problem is a decline in coal demand from China. The Telegraph’s Andrew Critchlow examines the problem arguing it could go beyond Glencore creating a global risk of “stranded assets” in coal stocks.
On Energydesk energy analyst Lauri Myllyvirta argues it’s even a problem in China itself, where the rampant construction of coal plants combined with declining coal use is at risk of creating a bubble in the sector.
The news comes as a group of UK campaigning organisations – including Greenpeace – wrote to the three main party leaders urging them to specify when and how they plan to phase out coal. It comes after all three parties made a joint commitment to end coal use for power generation.
3) UK slips in clean energy league table amidst subsidy scheme confusion
The Telegraph’s Alan Tovey reports that a “lack of clarity” in energy policy has hit the UK’s place in a “renewable energy attractiveness” league table compiled by accountants Ernst and Young
It comes after the government’s first attempt to auction clean energy subsidies through its contracts for difference scheme apparently led to firms winning at costs which made building the projects impossible.
“The CfD regime as it stands does raise some questions. The very slow passage of market reform and the late introduction of the CfD regime has made it very difficult for developers to sanction investment in new projects,” said EY’s Ben Warren.
In other news
– Plans for world’s first lagoon power plants unveiled in the UK – reports the BBC’s Roger Harrabin. The plans, widely trailed, could generate 8% of the UK’s power for around £12bn: “I can’t make a decision on this yet because discussions are ongoing. But I’m very excited by the prospect of tidal power,” said energy secretary Ed Davey.
– Labour could build more power plants in Scotland, reports The Times’ Hamish Macdonnell.
– The price of oil fell after the first monthly gain since June as Saudi Arabia stepped up production, lifting OPEC’s output beyond its collective quota for a ninth month – reports Bloomberg’s Ben Sharples.