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HOUSTON (ICIS)–DG Fuels has secured an option for land in Louisiana where it may build a $3.1bn biomass-to-fuels plant that will rely on a suite of technologies to bring the site’s carbon emissions close to zero, the state said on Tuesday. The site covers 3,000 acres (1,200 ha), and it is in St James Parish. If built, the complex would produce up to 178m gal/year (674m litres/year) of sustainable aviation fuel (SAF), the state said. It would remove 1.65m tonnes/year of CO2 from the atmosphere. DG Fuels is conducting front-end engineering design at the site, which should be completed by August 2023. The company could make a final investment decision (FID) by the end of 2023, the state said. If DG Fuels pursues the project, construction and commissioning should take three years. The complex plans to gasify biomass to produce hydrogen and carbon monoxide (CO). In addition, it will rely on electrolysers to produce green hydrogen and oxygen from water. Gasification produces plenty of carbon dioxide (CO2). The CO2 produced from complex will be combined with the green hydrogen in a catalytic CO2 reforming unit. That unit will convert the CO2 and hydrogen into additional carbon monoxide. The resulting CO and hydrogen will be processed in a Fischer-Tropsch reactor, which will produce synthetic crude. The synthetic crude will be upgraded to produce SAF. Byproducts from the upgrader will be fed into a partial oxidation reformer (POX). The POX unit will process the hydrocarbons with the oxygen to produce more carbon monoxide. The following chart shows how the different units in the complex will work to convert biomass into SAF with almost no carbon emissions. Source: DG Fuels “DG Fuels’ baseline process differs from other systems by having little or no environmental emissions either to the atmosphere or waters, while at the same time providing a customer for all forms of agricultural waste to the region’s agricultural community,” according to a statement by Michael Darcy, CEO of DG Fuels. Thumbnail shows an airplane, which can burn SAF. Image by Shutterstock.
SAO PAULO (ICIS)–Chemicals and other energy-intensive industrial sectors must increase the use of carbon, capture and storage (CCS) technologies to mitigate some of the worse effects of global warming, the UN panel on climate change said this week. The Intergovernmental Panel on Climate Change (IPCC) latest report on progress in the fight against global warming again pointed to methane emissions – mainly emanating from oil and gas production – as a key reason for global warming. “In contrast to the oil and gas sector, CCS is less mature in the power sector, as well as in cement and chemicals production, where it is a critical mitigation option,” said the IPCC. The report said global greenhouse gases (GHG), which include gases such as CO2 and methane, have risen by 12% since 2010 and by 54% since 1990. “The largest share and growth in gross GHG emissions [are] occurring in CO2 from fossil fuels combustion and industrial processes, followed by methane, whereas the highest relative growth occurred in fluorinated gases,” the report added. The IPCC added that around 80% of global GHG emissions in 2019 came from the sectors of energy, industry, transport and buildings, while around 20% came from agriculture, forestry and other land use. The UN’s body drew a damning assessment about global warming, but it also added that the lower cost across the board for most renewable energies still made possible to lessen the worse effects of climate change. It added that to reach net zero emissions, “deep and rapid reductions” in gross emissions are immediately required. “Global modelled mitigation pathways reaching net zero CO2 and GHG emissions include transitioning from fossil fuels without CCS to very low- or zero-carbon energy sources, such as renewables or fossil fuels with CCS, demand-side measures and improving efficiency, reducing non-CO2 GHG emissions,” said the IPCC. “In most global modelled pathways, land-use change and forestry (via reforestation and reduced deforestation) and the energy supply sector reach net zero CO2 emissions earlier than the buildings, industry and transport sectors.” INDUSTRY, TRANSPORTThe report went on to say that for industry to reduce its emissions, coordinated action throughout value chains to promote mitigation options would be required, including demand management, energy and materials efficiency, circular material flows and implementation of abatement technologies to change production processes. The IPCC said the transport sector will be at the centre of those changes, with shipping, aviation and heavy-duty land transport increasingly taking on sustainable biofuels and low-emissions hydrogen and its derivatives, including ammonia and synthetic fuels. It said advances in battery technologies could facilitate the electrification of heavy-duty trucks and compliment conventional electric rail systems. The environmental footprint of battery production and growing concerns about critical minerals could be addressed, said the IPCC, by material and supply diversification strategies, energy and material efficiency improvements and circular material flows. FAR FROM TARGETCountries signatories to the 2015 Paris Accord committed to limit global warming to 1.5°C, compared with pre-industrial levels, by 2100. Most scientists agree that, at current emissions rates, the world is on course for a 2.5-3°C rise in temperatures, which the UN has warned would have dramatic consequences for people in all continents. “More than a century of burning fossil fuels as well as unequal and unsustainable energy and land use has led to global warming of 1.1°C above pre-industrial levels. This has resulted in more frequent and more intense extreme weather events that have caused increasingly dangerous impacts on nature and people in every region of the world,” the IPCC said this week. “Every increment of warming results in rapidly escalating hazards. More intense heatwaves, heavier rainfall and other weather extremes further increase risks for human health and ecosystems. In every region, people are dying from extreme heat. Climate-driven food and water insecurity is expected to increase with increased warming.”
LONDON (ICIS)–The decline in urea prices has continued for over six months, with the market showing no sign of recovery because buyers remain wary about stepping in. If demand does not recover soon, several producers may be forced to go under maintenance, although this is expected to lend support to prices in Q2. In this podcast, ICIS managing editor Julia Meehan discusses current trends and the market outlook with urea editor Deepika Thapliyal and ammonia editor Sylvia Traganida.
SAO PAULO (ICIS)–A hike in Brazilian imports tariffs for some polymers and tyres will “restore” competitiveness to the country’s chemicals sector, trade group Abiquim said on Tuesday. The Brazilian Foreign Trade Chamber (Camex) has hiked import tariffs, saying that pervious low tariffs for some plastics had “harmful consequences” for the chemical sector because imports were rising and domestic prices were falling. In a written response to ICIS on Tuesday, the executive president of Abiquim said the hike will “restore the real competitive conditions” to Brazil’s chemicals industry in global terms, but asked the government to go further. Andre Passos also said the chemical sector needs to re-implement the Special Regime of the Chemical Industry (REIQ) and tax imports of thermoplastic resins by removing them the List of Exceptions to the Common External Tariff (LETEC). REIQ lowered tax rates that the chemical industry paid for some imports, but the regime was suspended by the Brazilian Congress in 2022. At the time, Abiquim said the suspension of REIQ would cost the sector nearly Brazilian reais (R) 2.0bn ($380m). The new Brazilian government said it aims to keep REIQ, and on 15 December Congress agreed, although the executive still must pass regulation to implement it. “Brazil has an important window of opportunity to attract a significant amount of investments in decarbonisation, but for this it is essential to build an environment of political, legal and regulatory stability,” said Passos. “Reinvigorating REIQ and resuming the import tariffs on thermoplastic resins are emergency and indispensable measures to re-establish the legal security needed… to guarantee the preservation of the domestic market from external vulnerabilities at this moment.” However, some players in the sector, notably in distribution, are not happy about the decision. NOT TO EVERYONE’S TASTEOn Tuesday, Abiquim did not respond to questions about how the import hike will affect smaller players in the sector, such as distributors who often turn to Asia for cheaper material. Abiquim has not shied away from praising the new cabinet presided over by Luiz Inacio Lula da Silva who they see as more inclined to protect domestic producers – three of the largest Brazilian producers Braskem, Unigel, and Unipar are Abiquim members. A source that imports a large amount of polymers from Asia said the measure had been expected but the timing of its implementation had come as a “negative surprise” before adding that more clarity in tax policy would benefit smaller players. “The previous government believed in more in open trade. The current one has a different mindset and they think they must protect domestic producers. They think imposing higher tariffs on imports will benefit the Brazilian economy in the longer term,” added the source. ($1 = R5.24)
Updated on 21 March. On this topic page, we gather the latest news, analysis and resources, to help you to keep track of developments in the area of sustainability in the fertilizers industry. LATEST NEWS HEADLINES India’s IFFCO and CIL to manufacture nano DAP for three years By Chris Vlachopoulos 20-Mar-23 15:35 LONDON (ICIS)–The Indian Union Minister of State for Chemicals and Fertilisers, Bhagwanth Khuba, has confirmed that Fertilizer cooperative IFFCO and Coromandel International Ltd (CIL) will manufacture nano diammonium phosphate (DAP) for a period of three years. USDA awards Ostara funds to boost sustainable phosphate fertilizer output By Chris Vlachopoulos 15-Mar-23 11:48 LONDON (ICIS)–The US Department of Agriculture (USDA) has awarded Ostara $7.6m as part of its initiative to increase its domestic fertilizer production, with a focus on sustainability and innovation. Canadian prime minister confirms fertilizer emission goal is voluntary By Erica Sesay 07-Mar-23 14:26 LONDON (ICIS)–Canadian prime minister Justin Trudeau assured farmers this week that the fertilizer emissions reduction target proposed by the government is voluntary, not mandatory. US fertilizers industry increases carbon capture in 2021 – TFI By Erica Sesay 20-Feb-23 17:10 London (ICIS)–The US fertilizers industry captured 31% of all CO2 generated per tonne of nutrient produced in 2021, up from 9% captured in 2013 according to The Fertilizers Institute (TFI’s) 2022 sustainability report. Indian president calls for reduction in chemical fertilizer use By Erica Sesay 13-Feb-23 11:54 LONDON (ICIS)–Indian president Droupadi Murmu has called for a reduction in chemical fertilisers use in order to protect the country’s soil health. IFFCO plans to export nano urea to 25 countries By Sylvia Traganida 10-Feb-23 16:06 LONDON (ICIS)–Indian Farmers Fertiliser Cooperative Limited (IFFCO) is planning to export nano urea to 25 countries and expects its output to reach 300m bottles by December 2024, according to local media reports. Amman selects Elessent Clean Technologies for Indonesia sulphuric acid plant By Mark Milam 08-Feb-23 21:46 HOUSTON (ICIS)–Indonesian mining company Amman Mineral Industri (AMIN) has selected Elessent Clean Technologies to provide the process technology for the new smelter off-gas sulphuric acid plant equipped with wet gas scrubbing technology that it will construct in Sumbawa, Nusa Tenggara Barat, Indonesia. Lotte Chemical forms clean ammonia consultative body with RWE and Mitsubishi Corporation By Mark Milam 08-Feb-23 23:32 HOUSTON (ICIS)–Lotte Chemical announced it has formed a clean ammonia global consultative body with RWE, a German energy company, and Japan’s Mitsubishi Corporation, with a goal to cooperate and jointly develop a large-scale clean ammonia production and supply chain in Asia, Europe and US. Global 2020-2021 specialty fertilizer demand growth led by north America, Asia By Sylvia Traganida 08-Feb-23 10:19 LONDON (ICIS)–Global demand for specialty fertilizers has grown by 5.7-6.7% in 2020-2021, according to the International Fertilizer Association (IFA). BASF and Cargill extend enzymes business and distribution to US By Morgan Condon 25-Jan-23 12:59 LONDON (ICIS)–BASF and Cargill are expanding their partnership by rolling out their enzyme solutions to animal protein producers in the US, the German major announced on Wednesday. Saudi Aramco awards sulphur facilities overhaul contract to Technip By Erica Sesay 24-Jan-23 12:50 LONDON (ICIS)–Saudi Aramco has awarded a contract to engineering firm Technip Energies to upgrade the sulphur recovery facilities at its Riyadh refinery, Technip announced on Tuesday. The contract covers improving the performance of the existing three sulphur recovery units to comply with more stringent regulations for sulphur dioxide emissions, with recovery efficiency at more than 99.9%. India sets green hydrogen targets for shipping, oil & gas, fertilizer sectors By Priya Jestin 16-Jan-23 09:42 MUMBAI (ICIS)–As part of its aim to achieve its net zero carbon emission goal by 2070, the Indian government has released a blueprint for its National Green Hydrogen Mission which has set consumption targets for various industries, including the oil and gas and fertilizer industrie Germany misses climate target despite lower energy consumption By Stefan Baumgarten 06-Jan-23 16:00 LONDON (ICIS)–Germany missed its 2022 carbon dioxide (CO2) emissions reduction target despite declining energy consumption and an increase in the use of renewables, according to a study this week. EU CARBON BORDER ADJUSTMENT MECHANISM (CBAM) EXPLAINED What is it? The risk of carbon leakage frustrates the EU’s efforts to meet climate objectives. It occurs when companies transfer production to countries that are less strict on emissions, or when EU products are replaced by more carbon-intensive imports. This new mechanism would counteract this risk by putting a carbon price on imports of certain goods from outside of the EU. How will it work? EU importers will buy carbon certificates corresponding to the carbon price that would have been paid, had the goods been produced under the EU’s carbon pricing rules. Conversely, once a non-EU producer can show that they have already paid a price for the carbon used in the production of the imported goods, the corresponding cost can be fully deducted for the EU importer. This will help reduce the risk of carbon leakage by encouraging producers in non-EU countries to make their production processes greener. A reporting system will apply from 2023 with the objective of facilitating a smooth roll out and to facilitate dialogue with non-EU countries. Importers will start paying a financial adjustment in 2026. How is the fertilizer industry affected? The fertilizer industry is one of the sectors to fall under the CBAM. The more energy-intensive nitrogen fertilizers will be affected most in the sector by the mechanism. DEFRA CONSULTATIONS EXPLAINED The UK’s Department for Environment, Food & Rural Affairs (DEFRA) launched a consultation at the beginning of November 2020 on reducing ammonia emissions from urea fertilizers. The consultation ran until 26 January 2021. It set out three options for tackling ammonia emissions: A total ban on solid urea fertilizers A requirement to stabilise solid urea fertilizers with the addition of a urease inhibitor. A requirement to restrict the spreading of solid urea fertilizers to between 15 January and 31 March of a given year. Liquid urea is excluded from any new rules or restrictions. DEFRA is currently analysing the feedback received. In March 2022, DEFRA announced that it had delayed introducing restrictions on the use of urea by at least a year to support farmers with fertilizer availability and keep their costs down Should DEFRA decide to restrict the use of urea in the future, growers would be left with just ammonium nitrate-based fertilizers. PREVIOUS NEWS HEADLINES TFI reacts to US Congress passing the Water Resources Development ActHelm becomes a shareholder in UK bio-fertilizer company Unium Bioscience Yara inks deal to deliver fossil-free green fertilizers to Argentina Canadian firms plan fuel cell generator pilot using green ammonia Deepak Fertilizers awards contract to reduce emissions, increase productivity Saudi Aramco launches $1.5bn sustainability fund to support net zero ambition CF Industries and ExxonMobil plan CCS project in Louisiana Canada’s plan to cut fertilizer emissions is voluntary – minister Canada’s fertilizer emission goal raises food production concerns Uniper, Vesta to cooperate on renewable ammonia site in the Netherlands German Uniper to work with Japan’s JERA on US clean ammonia projects ADNOC ships first cargo of low-carbon ammonia to Germany US Mosaic and BioConsortia expand collaboration to microbial biostimulant IMO deems Mediterranean Sea area for sulphur oxides emissions control Canada’s Soilgenic launches new enhanced efficiency fertilizers technology for retail Austria’s Borealis aims to produce 1.8m tonnes/year of circular products by 2030 European Parliament rejects proposed carbon market reform IFA ’22: southern Africa looks to bio-fertilizer as cheaper, sustainable option IFA ’22: Indian farmers will struggle to embrace specialty fertilizers – producer Canadian Nutrien plans to build world’s largest clean ammonia facility in Louisiana Japan’s JGC Holdings awards green ammonia plant contract to KBR Bayer to partner with Ginkgo to produce sustainable fertilizers Australia Orica and H2U Group partner on Gladstone green ammonia project Canada sets tax credit of up to 60% for carbon capture projects UK delays urea restrictions to support farmers as fertilizer costs at record high EU states agree to back carbon border tax Yara to develop novel green fertilizer from recycled nutrients USDA announces plans for $250m grant programme to support American-made fertilizer Canada seeks guidance to achieve fertilizer emissions target Fertilizer titan Pupuk Indonesia develops hydrogen/blue ammonia business India launches green hydrogen/ammonia policy, targets exports Canada AmmPower to develop green hydrogen and ammonia facility in Louisiana US DOE awards grant to project to recover rare earth elements from phosphate production Fertiglobe, Masdar, Engie to develop green hydrogen for ammonia production Czech Republic’s Spolana enhances granular AS production India’s Reliance to invest $80bn in green energy projects Yara, Sweden’s Lantmannen aim to commercialise green ammonia by 2023 Novatek and Uniper target Russia to Germany blue-ammonia supply chain Fertz giant Yara goes green with electrification of Norwegian factoryCanada Arianne Phosphate exploring use of phosphate for hydrogen technology FAO and IFA renew MoU to promote sustainable fertilizer use Sumitomo Chemical, Yara to explore clean ammonia collaboration Sri Lanka revokes ban on imports Tokyo scientists convert bioplastic into nitrogen fertilizer Aramco plans Saudi green hydrogen, ammonia project China announces action plan for carbon peaking & neutrality Saudi Aramco targets net zero emissions from operations by 2050 Fertiglobe goes green with Red Sea zero-carbon ammonia pro Australian fertilizer major Incitec Pivot teams up for green ammonia study INTERVIEW: BASF to scale up new decarbonisation tech in second half of decade – CEO India asks fertilizer companies to speed up production of nano DAP Japan’s Itochu set to receive first cargo of blue ammonia for fertilizer use Norway’s Yara acquires recycled fertilizers maker Ecolan Bayer Funds US start-up aims to cut nitrogen fertilizer use by 30% BP: Green ammonia production in Australia feasible, but needs huge investment Origin and MOL explore shipping green ammonia from Australia India’s IFFCO seeks to export nano urea fertilizer Sri Lanka reinstates ban on import of chemical fertilizers Nutrien to cut greenhouse gas emissions 30% by 2030 RESOURCES IFA – Fertilizers and climate change TFI – Sustainability report
LONDON (ICIS)–The European polyethylene (PE) and polypropylene (PP) market has slowed down slightly this week, after a stronger start to March. Contract discussions are ongoing, with sellers initially pushing for monomer and beyond, results are varied by grade, and this is largely connected to supply levels. Not all discussions have begun but it is not expected that the drop in crude and naphtha will have an effect this month as it is now too late to impact downstream prices. The drop in crude prices, as a result of the state of the banking sector, has caused PE players to pause. Earlier March expectations were for stability in the monomer in April but now there is possibility of a similar drop to the one seen in naphtha in this week. As such, buyers are minded to hold their position on any extra purchases. Demand is still below the average for this time of year, although it has improved month to month. More pressure has been applied to linear low density polyethylene (LLDPE) due to supply constraints. PE imports remain limited in fresh offers, but some material was made available this week – possibly as a response to the drop in crude and naphtha. Traders could now expect that polymer prices to fall in April, so they consider now the best time to sell. Talk of unconfirmed PP production issues in Europe, combined with turnarounds in the Middle East, has put pressure on availability. While there are some shortages, there is not any significant tightness yet due to weak demand. However, some players expect healthier demand in April for some sectors like construction. The automotive sector, however, saw a boost earlier in the year, but some players see signs that this industry is starting to weaken heading towards April. Thumbnail picture source: Manfred Bail/imageBROKER/Shutterstock
LONDON (ICIS)–Moldova has reached another milestone opening a new transit route linking Ukraine to the EU. Victor Binzari, director general of the state electricity and natural gas wholesaler Energocom, told ICIS that the company had carried out the first test for electricity exports from Romania to Ukraine on 18 March. The company bought 1MWh on the Romanian electricity exchange OPCOM and transited it to Ukraine on Saturday. Although the transit was done in test mode, Energocom plans to expand it. The company joined JAO, Europe’s single trading platform for cross-border transmission capacity rights, earlier in March. By joining JAO, Energocom has now an opportunity to trade with many European companies, booking capacity for imports or transit into its market or to Ukraine. EFET CONTRACTS Binzari said Energocom was pushing to sign 15-20 master agreements developed by the European Federation of Energy Traders (EFET). “Our intention is to cast the net wide and trade with as many European companies as possible,” he said. “Right now we are looking to sign EFET contracts with companies in Bulgaria and Hungary,” he added. “Last year, we bought electricity from the Ukrainian hydro producer Ukrhydroenergo. Now we wanted to test the opposite direction and export electricity. Right now, Ukraine has a surplus of electricity but it was important to test both directions in case there is a need to transit or import electricity later this year,” he said. He said the test was also necessary to understand the regulatory and technical issues that may occur. Binzari said Moldova already has seven EFET contracts for natural gas but would like to sign more in the upcoming weeks and months to ensure it can purchase more volumes from different sources. Energocom was tasked by the Moldovan government to find and develop new sources and routes of electricity and gas supplies in a bid to break the country’s dependence on Russian deliveries. In less than year, the company managed to tighten up links with Ukraine by increasing injections in local storage facilities. It also started buying natural gas on Ukraine’s borders with EU neighbouring countries and has also been storing gas in Romania, which it can import in case of high demand.
HOUSTON (ICIS)–Canadian potash developer Sage Potash Corporation, which recently acquired a potash land portfolio in Utah consisting of over 83,000 acres of leases and prospecting permit applications, announced its common shares have commenced trading on the TSX Venture Exchange. The company said it based on historical exploration, which includes an important discovery drill hole by a previous operator with core samples identifying two flat potash beds it has defined a mineral resource of 159.3m tonnes in the upper potash bed with a potash grade of 42.67 % with the lower potash bed at 120.2m tonnes with a grade of 35.77 %. The resource is situated in the Paradox Basin of Utah, known to host extensive underdeveloped world-class potash resources, approximately 2bn short tons according to the government surveys, and will benefit from close proximity to modern infrastructure, low-cost power and electricity, skilled workforce and development supplies and services. Next for Sage potash will be to complete a step out geological hole that will further define the resource estimates and may double as a possible cavern development test well, to advance preliminary engineering and preliminary economic assessment for the project. “Given the current sanctions against Russia and Belarus, which together constitute 40% of the world’s potash supply, the US currently imports nearly all its annual potash requirements from Canada. Having its own domestic supply only makes sense for the US,” said Peter Hogendoorn, Sage Potash CEO. “Reliable and local supply chains are key to achieving national food security in this post-COVID and inflationary era. Even with what appears to be a somewhat more rational market this year over last, shipping costs from Saskatchewan and lower barge capacity due to low water levels of the Mississippi River, can still add $150 – $225/ton that would not be incurred by having local production.”
LONDON (ICIS)–Throughout March – the oxo-alcohols and derivative markets in Europe have experienced weak spot demand, ample supply, and thin import opportunities. The key theme currently is uncertainty about what next quarter may bring in terms of demand. Butyl acetate (butac) editor Marion Boakye speaks to oxo-alcohols editor Nicole Simpson, acrylate esters editor Mathew Jolin-Beech and glycol ethers editor Cameron Birch about the current market dynamics.
LONDON (ICIS)–A severe snowpack deficit on the Italian Alps is set to hamper water reservoirs stocks and the Po river’s levels over the summer, experts at the International Center for Environmental Monitoring (CIMA) Research Foundation told ICIS. This could increase power supply risk in the third quarter – the hottest of the year – in two different ways. Lower hydro generation would need to be compensated by other generation sources, while low water levels on the Po could put at risk the cooling systems of the combined-cycle gas turbine (CCGT) plants located along the river basin, resulting in unplanned outages as it was the case last year. According to market operator GME, nearly 5GW of CCGT capacity experienced outages related to water availability in the Po valley region in June and July 2022. The snow water equivalent (SWE) deficit for the Italian Alps stood at -67% as of 16 March, CIMA’s data provided to ICIS showed, meaning that the missing snow – compared to previous years – will result in lower water volumes available over the coming months. CIMA said that 4 March is typically the peak accumulation day for snow levels in Italy. Although further snow precipitation could still occur in the coming weeks, it is unlikely that it would meaningfully support the snowpack level as the snowmelt would accelerate over the remainder of the season. ITALY SNOW DEFICIT “For the Po river basin we have almost one third of the snow water equivalent level seen over the last 12 years,” Francesco Avanzi, hydrological researcher at CIMA told ICIS. “The [snow] season started later than usual and in this ‘marathon’ to have as much snow as possible for the remainder of the year we have lost ground,” Avanzi said. Moreover, Italy has already experienced two years of record-low precipitation, which took a heavy toll on hydro reservoirs. This means that even if snow levels were to be similar to 2022, the hydrological picture is much more critical this year, the expert added. “The snowmelt period happening earlier than usual in recent years also adds more risks on hydro margins, with water demand [from both the energy and agriculture sectors] spiking when the snowmelt has already come to an end,” CIMA’s president, Luca Ferraris, added. “We are entering a perfect storm,” explained Ferraris, noting that multiple factors, including rising water demand amid warmer temperatures, would also come into play this summer. CIMA indicated that just one quarter of typical snow volumes were recorded in the Triveneto area, which includes the northern Italian regions of Veneto, Friuli-Venezia Giulia and Trentino-Alto Adige/Sudtirol. Together, the Po river basin and the Triveneto area account for 90% of Italian water resources. POWER RISK Italian power demand historically peaks during the months of June and July, when hot temperatures cause a surge in the usage of domestic and retail cooling appliances. This incentivises hydro generators to hold back on releasing water flows until the height of summer, when power prices typically peak. Snowmelt from the Alps is crucial to Italian power generation: – Water is collected in hydro reservoirs that feed the country’s hydropower plants. These historically accounted for up to 20% of the Italian generation fleet – After flowing down to the Po valley, the water is used to cool down natural-gas power plants ENTSO-E data showed that hydropower reservoirs in week 10 were nearly as full as in 2022 at 27%. This was well below the 2011-2022 average of 38%. An earlier snowmelt period and low snowpack levels in the Alps in 2022 led to lower river levels during the peak summer power demand months of June and July. Additionally, daily average power demand surged by 1.5% over the same period due to hot temperatures raising air conditioning demand, which put significant stress on the power grid. Both factors, combined with tight supply margins caused by below-average hydro reservoirs, led to several power outages during the period. Andrea Battaglia and David Battista Note: Snow water volume’s graphs published with the permission of CIMA Research Foundation
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