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Producción y mercados energéticos 28/05/19

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Latest Energy News 28 May 2019
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South Africa’s carbon tax becomes law and will apply on 1 June 2019

South Africa’s proposed carbon tax has been passed into law and will thus apply as of 1 June 2019. The tax will be applied in two phases: the first phase will go from June 2019 to December 2022 and will impact sectors with a thermal capacity above 10 MW (except the agriculture forestry and other land use and waste), also called scope 1, while the second phase will go from 2023 to 2030. After the first phase, a study on the impacts in emissions will be conducted.

For the first phase, the carbon tax was set at ZAR120/tCO2eq (US$8.3/tCO2eq) but due to many tax-free allowances, the effective tax will range from ZAR6/tCO2eq (US$0.41/tCO2eq) to ZAR48/tCO2eq (US$3.3/tCO2eq). Tax-free allowances will be provided ranging from 60% to 95% of the tax amount depending on the economic sector and company involvement to fight climate change. The scheme includes a basic tax-free allowance of 60% for all activities, a 10% process and fugitive emissions allowance, a maximum 10% allowance for companies that use carbon offsets to reduce their tax liability, a performance allowance of up to 5% for companies that reduce the emissions intensity of their activities, a 5% carbon budget allowance for complying with the reporting requirements and a maximum 10% allowance for trade exposed sectors. Tax-free allowance could be eliminated as from 2022. The government foresees no electricity price increase related to the carbon tax during the first phase of the scheme.

The first carbon tax system was proposed in 2010 but has been delayed at least three times over concerns of profit losses and higher electricity prices claimed by state-owned power utility Eskom, mining and steel companies.. According to South Africa’s Nationally Determined Contribution (NDC), the country committed to unconditionally keep its GHG emissions between 398 MtCO2eq and 614 MtCO2eq by 2025 and 2030. These efforts will lead GHG emissions to peak between 2020 and 2025, plateau for a ten-year period from 2025 to 2035 and decline from 2036 onwards.

Companies

Algeria plans to oppose Anadarko’s sale of Algerian assets to Total

The Ministry of Energy of Algeria plans to block the sale of Anadarko’s energy assets in Algeria to Total, which was announced earlier in May 2019.

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Czech ČEZ may sell power assets in Bulgaria, Romania, Turkey, Poland

The Czech state-run power group ČEZ is considering shifting its strategy, focusing on its domestic market in the Czech Republic and divesting some assets in Bulgaria, Romania, Turkey and Poland. This strategic move will be reviewed by the annual general meeting in late June 2019. …

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Policy & Regulatory

Massachusetts (US) launches new 800 MW offshore wind round

The Department of Energy Resources of Massachusetts (United States) has issued a Request for Proposals (RFP) for the development of up to 800 MW of offshore wind projects. This is the second solicitation of this kind in Massachusetts, as part of the State’s plans to reach 1,600 MW of offshore wind capacity by 2027. …

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Malaysia plans to increase palm biodiesel requirement

The Ministry of International Trade and Industry of Malaysia is working on a «B20/B30-ready» specification for vehicles, as part of plans to double the share of palm biodiesel blends from 10% to 20% over the next decades. …

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Infrastructure & Investments

Indonesia and Inpex reach agreement on Masela gas block development

The Indonesian upstream oil and gas regulator SKK Migas has reached an agreement with the Japanese energy group Inpex on the framework for a revised development plan for the Masela gas block. Around US$20bn would be invested in the development of the block and the Indonesian government would have a share of at least 50% in the production from the block. …

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Iberdrola inaugurates 350 MW Baixo Iguaçu hydropower project in Brazil

Neoenergia, the Brazilian subsidiary of Spanish energy group Iberdrola, has inaugurated the 350 MW Baixo Iguaçu hydropower project in the state of Paraná, in Brazil. The €500m project consists of three turbines supplied by Alstom (now GE). It is expected to generate enough power to supply 1 million Brazilians and to cover nearly 8% of the annual electricity consumption in Paraná. …

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ADMIE starts tender process for power transmission projects in Greece

The Greek power grid transmission operator ADMIE has launched two tenders for the construction of two 500 MW undersea cables to connect the southern island of Crete to the mainland, and to build two converter stations and one substation.

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