Press Review 21-12-2013

Perhaps it is the spirit of the season. This past week the mainstream media burst with optimism on petroleum production in North America: the United States are going to become the world's largest producer, dispensing imports of the stuff. And then there's Mexico, where the opening of the sector to private investment should bolster production to where it never went before. The continent will soon be drowning in the black stuff.

Down here on Earth things do not look as promising, but that's not really important, what matters are the market movements these news bursts create in the short term. In the United States, contrary to the rest of the world, it is news of plenty that attract investors; scarcity is not particularly seen as a valuable thing from the stance of whom owns the resource. In the process we get some amusement.

It is definitely time to celebrate.

Photovoltaics: new policy challenges for Europe

"Photovoltaics: new policy challenges for Europe" is the title of an article of my authorship published by the Frontiers in Energy Systems and Policy journal. The abstract:

After the turn of the century governments across Europe set in place a series of programmes to expand investment on grid-connected solar power technology, especially photovoltaics (PV). But in face of rapidly declining costs most of these programmes have been tapered in recent months. Using a simple cost model this article shows that PV technologies can indeed supply electricity to the grid for less than 0.10 €/kWh in large swaths of the continent, apparently justifying this policy change. However, the roll back of fixed rates to PV suppliers will likely result in a market structure close to perfect competition, where profits are not expectable and the price should fall towards marginal generation cost: 0 €/kWh. Due to the scalable nature of PV, many consumers in Europe are now able to produce their own electricity at a cost considerably lower than the rates demanded by grid utilities. Investment on PV is thus set to continue in spite of recent policy changes, but henceforth on off-the-grid systems, conceived for self consumption. Long term this trend presents serious challenges to utilities and traditional electricity suppliers, putting at stake the existing electricity market framework.

Pess review 07-12-2013

Iran and Iraq continue to be the source of the most interesting that has been happening in the energy world. The countries face complete opposite paths at the moment. Iran is readying its full return to internal markets with haste, with most of its previous suppliers and partners happy to join along. On its hand Iraq continues to dive on a spiral of violence that at some point may come to threaten its very existence.

Ironically, a successfull ending to the process around Iran's Nuclear programme may actually invest further pressure on the internal conflicts in Iraq, by bolstering the Shiite community in that country. The future map of the region may feature a smaller Shiite Iraq at the east, a central Sunni state embracing western Iraq and eastern Syria and another small Shiite state in western Syria. None of it will happen fast, and unlikely without war.