UK Edition
Russia's state controlled energy giant Gazprom has collected €33m (£28m) from operations in the North Sea in defiance of the Government's efforts to curb the Kremlin's revenues through sanctions and import bans.
Gazprom International UK, which holds interests in the Sillimanite gas field in the North Sea alongside partners, revealed it made profits of €41m during 2021, accounts filed last week at Companies House show. Following a vote in September, it paid out a dividend of €33m to its parent company Gazprom International Projects BV, whose ultimate parent is understood to be the Russian state-owned gas giant.
The British-registered company said in its accounts that the profit was driven by a surge in gas prices, which averaged €45.7 per megawatt hour during 2021 compared to €9.26 per megawatt hour during 2020. Gas prices started climbing in the summer of 2021 amid shortages as economies re-opened from the pandemic.
Russia is suspected of contributing to those shortages by restricting spot sales to Europe, even before its invasion of Ukraine in February 2022 triggered more wide-scale disruption.
It comes as global coal consumption is to hit an all-time high this year as the war in Ukraine and soaring demand in Europe and China drives a surge in demand.
Demand is forecast to grow by 1.2pc, passing eight billion tonnes for the first time, according to a report by the International Energy Agency (IEA).
The rise has been driven by an increase in burning coal to generate electricity in Germany, India and China, offsetting a fall in the United States.
The IEA now expects coal demand will not start falling until 2025, propped up by strong demand in emerging Asian economies.
“This means coal will continue to be the global energy system’s largest single source of carbon dioxide emissions by far,” it said.
Keisuke Sadamori, director of energy markets and security at the IEA, added: “The world is close to a peak in fossil fuel use, with coal set to be the first to decline, but we are not there yet.
“Coal demand is stubborn and will likely reach an all-time high this year, pushing up global emissions.”
Restrictions in Russian supplies of gas to Europe have pushed up gas prices and created concern over gas shortages, pushing countries, particularly Germany, to burn coal to generate electricity instead.
Outages on France’s nuclear power station fleet as well as low hydropower output from Norway have added to the pressure on European electricity supplies.
Meanwhile, a heatwave in China dented output at its hydropower plants, with coal power generation increasing by 15pc in August 2022 in China compared to the previous August.
Coal demand in 2022 is expected to grow 7pc or 70 million tonnes in India, 6pc or 29 million tonnes in Germany, and 0.4pc or 18 million tonnes in China.
The rise in India came on the back of strong economic growth, with its GDP forecast to expand by 7.3pc this year, the IEA said.
The increase in coal use in power stations comes despite a commitment reached at the Cop26 international climate summit, hosted by the UK in Glasgow in November 2021, to phase out coal over the next 20-30 years.
However, the IEA says it expects the return to coal in Europe to be temporary because of efforts to expand wind and solar power and improve energy efficiency.
The IEA added that, despite the surge in demand, banks and investors continue to show “in general, a lack of appetite for investment in coal,” given climate goals.
China accounts for more than half of global coal demand, but the IEA expects coal consumption growth to remain “relatively stagnant” there, at 0.7pc per year until 2025.
This is partly because of the growth of renewable power in the country, with the IEA expecting it to add renewable capacity by 2025 equivalent in size to Japan’s total power generation.
The UK has also fallen back on coal, with National Grid asking power plants which were due to close in September 2022 to stay open over winter to provide back-up power supplies if needed.
The IEA added: “Coal markets have been shaken severely in 2022, with traditional trade flows disrupted, prices soaring and demand set to grow by 1.2pc.”