Markets tumble on another bad day for energy companies
Braving the snow in New York City, Wall Street traders were met with more grim news as they turned up for work on Monday morning.
Oil prices slumped 6% yesterday, with markets reacting poorly to news that Iraq output reached record levels last week.
Elsewhere, the New York Times reports that the slump in oil prices poses a major threat to the success of the Paris climate deal.
To date, the paper says that investments in clean energy and electric cars in China and the US have held firm so far.
But in Spain, the development of renewable energy has slowed since the economic downturn of 2009, while in the UK the clean energy sector has been damaged by government subsidy cuts.
With oil now consistently below $30 a barrel, the temptation in many countries could well be to keep going with fossil fuels.
UK power supply warning over coal plants plans
Britain’s decision to close coal-fired power plants by 2025 has come under scrutiny after a report by the Institution of Mechanical Engineers warned that the country could experience electricity shortages.
Coal plants provided almost a quarter of Britain’s electricity last year. The government has announced power stations would be closed in nine years and replaced by gas fired stations, as part of a bid to reduce carbon emissions.
The report warns that the shutting of coal plants, combined with problems posed by the UK’s ageing nuclear infrastructure could leave a supply gap of 40-55%, based on current normal supply.
In more bad news for the UK’s energy mix, the FT carries a story this morning about a late legal challenge by a French union that poses a threat to the planned nuclear power station at Hinkley Point.
The much delayed multi-billion pound project by EDF could supply as much as 7% of UK energy when it is eventually completed, but the CFE-CGC energy union, which is represented on EDF’s board, has drawn up a list of 15 questions for the company which centre on “significant” financial issues posed by the deal.
The challenge comes days before the company was to make a final investment decision about the project. A decision about whether the deal will go ahead is expected to be made on Wednesday at a company board meeting.
In other news