Oil, gas, nuclear, renewables, energy prices, electricity and climate issues. Scenarios, forecasts and analysis from Geopolitical Intelligence Services (GIS) experts on energy trends.
Technology exporters are the biggest beneficiaries of nuclear power
When total outlays for a nuclear energy plant are considered, from construction to accident prevention to decommissioning costs, nuclear energy is an expensive proposition. The companies that export this technology and their governments are going the extra mile to attract foreign buyers and see the deals through because their benefits go far beyond a power plant deal.
Mozambique looks for a way out of crises
Mozambique, once held up as a model country for the way it ushered in peace and reconciliation after a long civil war, now faces a new round of potential crises – from a huge corruption scandal, to fiscal instability, to a possible return of civil war. However, with new international investors in its natural resources and an incoming U.S. administration, momentum will likely be found to resolve these issues.
China modifies its lending strategy to Africa and Latin America
China has overtaken the IMF and the World Bank as the biggest provider of loans to African and Latin American governments. But that could soon change as slower Chinese growth and huge investments in Eurasian transportation networks have crimped Beijing’s finances. The inevitable cutbacks will strain what has been a mutual beneficial relationship between China and other developing countries.
The waning Indo-Russian relationship
The Indo-Russian alliance was once one of Asia’s defining geopolitical relationships. While both sides are keeping up appearances, less and less is holding them together. The most important divergence is in geopolitical outlook: Moscow wants to contain the West, while New Delhi is most concerned about a rising China.
The future of OPEC
OPEC's influence in the global oil market has greatly diminished in recent years, mainly due to the shale revolution in the United States, but also because of diverging interests among its members. It has pledged to cut production, but doing so may prove difficult. There are still some scenarios where OPEC could rise to prominence, but the most likely scenario is for it to be further marginalized.
Iraq: OPEC’s wild card
Though OPEC agreed to reduce production at its September meeting, Iraq is resisting, arguing that the data used to determine the cuts is wrong and that it must continue producing to keep its economy afloat. If Iraq wins an exemption, other countries could follow, forcing OPEC to try for a bigger reduction. That will only happen if Saudi Arabia agrees to take on the lion's share of the cuts.
Risks for China’s energy strategy
China faces three big challenges in its energy strategy: reducing pollution, mitigating the negative effects of climate change and securing overland supply. The country has made huge investments to achieve its goals, but macroeconomic and geopolitical uncertainties could yet derail Beijing’s plans. In the end, China is likely to be successful, but will have to deftly manage its energy policies and alliances.
OPEC and the scope for meaningful intervention
OPEC’s informal gathering in Algiers on September 28 has sent a signal to the international community that the organization can still act coherently. For the first time since 2008, OPEC announced a coordinated production cut. Market forces are at work to limit the impact of this intervention, however, even if it is successfully implemented. .
Sovereign wealth funds and preserving oil wealth
Sovereign wealth funds have become an important tool for stabilizing the economies of oil and gas producers. In well-governed countries with strong institutions, they can substantially mitigate long-term risks. But in some developing states, the depletion or mismanagement of such funds could pose a serious threat.
Germany’s energy policy requires correction
The German government aims to increase the share of renewable energy in the country’s total electric power consumption from some 30 percent today to 45 percent by 2025. This aggressive drive toward Energiewende has already caused serious instability in the country’s electricity generation system and pushed energy prices upward. In the longer term, the policy endangers Germany’s position as Europe’s prime manufacturing nation. Fortunately, citizens have begun to take notice.