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    [From the left] Thomas Abanga (CEO of Abanga Farms & Food Systems), Selma Ashipala Musavyi (Namibia High Commissioner to Ghana), Dr. Benjamin Sasu (Head of Food Safety), Mrs. Chariti Gbadawo (Director at the Ministry of Foreign Affairs & Regional Integration) ), Prof Bani (Board Chairman, Abanga Farms and Food Systems) and Clarence Zamuee (MEATCO Rep)

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    Enterprise Group PLC records 37% rise in revenue in 2021

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    GHASALC laments drop on number of digital transactions following e-levy

    Italy’s top producers of agro-tech products explore opportunities in Ghana

    Gov’t to commence talks with IMF for bailout

    Financing agric sector alone not enough to grow it – GIRSAL CEO

    We’re not charging E-levy on merchant accounts – GRA

    Gov’t still plans on tabling a legislation to compel banks to lend to the Agric sector – Agric Minister

    AfCFTA Secretariat calls for accelerated dev’t for key infrastructure in Africa to boost trade

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    [From the left] Thomas Abanga (CEO of Abanga Farms & Food Systems), Selma Ashipala Musavyi (Namibia High Commissioner to Ghana), Dr. Benjamin Sasu (Head of Food Safety), Mrs. Chariti Gbadawo (Director at the Ministry of Foreign Affairs & Regional Integration) ), Prof Bani (Board Chairman, Abanga Farms and Food Systems) and Clarence Zamuee (MEATCO Rep)

    Ghana’s Abanga Farms & Food Systems and Namibia’s Meatco in big partnership

    Gov’t still plans on tabling a legislation to compel banks to lend to the Agric sector – Agric Minister

    Financial transactions will be allowed even without Ghana card from 1st July – GAB assures

    Enterprise Group PLC records 37% rise in revenue in 2021

    Prices of petrol, LPG to fall by 4% in first pricing window of July – IES

    Losses due to fraud in banking sector in 2021 up by 144%; hits GH¢61m – BoG report

    ASTM International pledges support for Ghana’s petroleum industry

    NIB MD laments cost of borrowing for private sector

    Finance professionals urged to develop strategies to boost ESG-driven business environment

  • TECHNOLOGY

    Financial transactions will be allowed even without Ghana card from 1st July – GAB assures

    Losses due to fraud in banking sector in 2021 up by 144%; hits GH¢61m – BoG report

    BoG, CSA deepen collaboration to fight cyber threats

    Dr. Bawumia unveils Ghana’s first Tier IV data centre

    ADB pioneers in global remittance services in Ghana [ARTICLE]

    Introduction of GhanaPay complements efforts to capture the unbanked into digital payments ecosystem – Veep

    #CitiBusinessFestival: How the country can take advantage of the “Ghana Opportunity”

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    Gulf central banks, Bank of England raise policy rates after Fed hike

    US Fed meets inflation surge with 75bp hike

    As Nigeria’s inflation rate accelerates to 17.71%, the World Bank warns millions could face extreme poverty

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    Ticket prices to rise following B.A schedule change on Accra-London-Accra route

    Bawumia calls for more AfDB support as African economies battle global challenges

    Stringent measures needed to deal with illicit financial transactions in Africa – Akufo-Addo

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Fossil fuel industry in survival mode: IES Analysis

July 30, 2020
in FEATURES, Top Stories
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As things stand now, fossils are in survival mode, as the momentum on consumption seems waning. The coronavirus crisis accompanied by the global economic downturn appears to have accelerated things to the point where it is prohibitively expensive to consume fossil fuels.

Fossil fuels including oil, natural gas, and coal may continue to be in demand for decades to come because they are incredibly versatile and are absorbed into a massive range of products ranging from groceries to rocket fuel.

However, the momentum gained by renewable energy sources and clean energy technologies (RETs) in recent times is likely to displace fossil fuels. This bring to the fore the theory of “Peak oil”, a conversation that has taken place for decades.

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In the traditional sense, peak oil would have been described as the theorized point in time when the maximum rate of extraction of petroleum is reached, after which it enters into terminal decline; on the basis that crude oil is non-replenishing energy resource. However, peak oil can be posited within the context of demand. On the demand side, peak oil may be brought on when it can be established that the cost of extracting the resource go beyond the price consumers are prepared to pay.

Second, when alternative sources become cheaper and more available, as we are seeing in upsurge in renewable energy sources like solar and wind. Third, when the demand for the resource falls for varied reasons, including the present coronavirus pandemic.

The current global pandemic and the rise in renewable energy investment seem to be pushing peak oil forward.

The tables are of course turning in favour of renewables with the push for greener resources to dominate the future energy architecture. Recent energy sector data seem to present a new twist to the long-standing battle between fossil fuels and renewable fuels, in terms of consumption, costs, and investments.

Since the beginning of the year, consumption of oil have seen a drop while there is an upsurge in the consumption of renewables. The Energy Information Administration (EIA) indicates that Americans achieved a key milestone in 2019 in its energy consumption, with recent forecasts pointing to renewables eclipsing coal as an electricity source in 2020.

There is also clarity in terms of the economics. New reports are indicating that wind and solar were by far the cheapest source of new power generation. For instance, a report from the International Renewable Energy Agency (IRENA) indicate that more than 50 percent of the renewable capacity added in 2019 achieved lower electricity costs than new coal. Storage batteries and other flexible sources of power generation like hydrogen needed to manage the intermittent nature of renewables are increasingly becoming cheaper too. By virtue of their lower rates, the global generation mix is expected to be dominated by wind and solar.

Also on a global scale, the International Energy Agency (IEA) could report that investors and capital are moving toward energy sectors that offer wider social benefits that create well being and wealth in the true meaning of the word.

The findings suggest that renewables share in the energy market over the past decade offered higher total returns relative to fossil fuels, with lower annualized volatility. It is therefore not strange that the Guardian found global offshore wind investment more than quadrupling in the first half of 2020 despite Covid-19 slump. It reported that investors gave the greenlight to 28 new offshore windfarms worth a total of US$35 billion this year, four times more than in the first half of 2019 and well above the total for last year as a whole.

While Governments around the globe are initiating unprecedented economic support packages to create relief for the impact of the coronavirus, they are also pledging to align their emergency measures with Green energy recovery.

Unlike post 2008 global financial crisis, which a full green economy failed to emerge for lack of investment in the sector then, the current crisis, have already seen major investments in renewable energy. The support for a green economy is now massive because of renewables becoming cheaper, compared to fossil fuels―thus presenting stronger case for economies to invest in a low-carbon, green economy.

While the party goes on for renewables, the oil and gas sector in particular is recording outstanding losses. The IEA expects investment in the upstream sector to drop from US$483 billion last year to US$347 billion in 2020; a drop of almost one-third as the industry adjusts to the sudden drop in demand.

Similarly, investment in coal production is anticipated to fall 25 percent this year. Also major oil companies including ExxonMobil, Aramco and Total have reported enormous cutbacks in upstream investment, averaging more than 25 percent compared to last year. In such low oil price environment, investors can only expect low or no returns from a resource that is associated with high risk and high carbon emission.

According to experts, the pandemic is likely to have lasting effects on the oil industry and may push peak oil forward. In the estimation of Moody’s, oil demand may not return to 2019 levels until at least 2025, and possibly will never return to pre-COVID-19 levels.

Source: Institute for Energy Security, IES
Tags: Fossil fuelIESrenewable energy
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