Although there is a tremendously powerful campaign against carbon use around the world, it remains a fact of life that not everyone can get all their power from wind, solar or water and then use the electricity generated to charge cars, trucks, scooters, houses, and smartphones.
Then there’s the dash to sell all-electric cars for the masses. Much of the battery production sector is actually built on something akin to slave labour in cobalt, zinc and lithium mining. Poor people who live in flats, or narrow terraced streets, can’t really own/lease a battery car and charge it up very easily, so it excludes the poor from having access to private car transport by 2035 or therabouts. Being green isn’t a simple path to virtuous enlightenment when you dig deep.
But politics aside, someone has to insure the risks associated with coal, oil and gas installations. Here are some developments that may interest those insurers still active in the carbon sector.
The commitment that Lloyds of London has given recently in gradually withdrawing from coal/fossil investment and insurance coverage, opens the door to competition, although rival insurers are likely to be based outside of the UK, North America or Australia for political reasons.
JERA JAPAN
Developed by JERA Co., Inc. (“JERA“) through its subsidiary Hitachinaka Generation Co., Inc., Hitachinaka Joint Thermal Power Station Unit 1 began commercial operation recently. Located on the site of JERA’s Hitachinaka Thermal Power Station, this high-efficiency coal-fired power station uses an ultra-supercritical power generation system (USC) with a generating capacity of 650MW. It also introduces state-of-the-art environmental equipment to mitigate environmental impact.
JERA will continue to employ high-efficiency coal-fired power stations and develop decarbonization technologies as part of its efforts to maintain a stable supply of electricity and reduce CO2 emissions.
VPI HOLDINGS
After a legal challenge by activists last year, Drax sold its gas turbine power asets to VPI Holdings, so it looks like this gas power station in Humberside will go ahead, although expect more climate change activist opposition at every step of the way.
FAWLEY OIL REFINERY
Expansion of the existing oil refinery complex at Fawley, near Southampton was started in 2019 and continues, with completion expected in late 2021.
COAL MINING IN CUMBRIA
It’s a little known fact that millions of tons of coal lie just under the Irish Sea, off the West Cumbrian coast. The latest news is that a plan to extract coking coal has been given the go-ahead by the local Council, but expect continued opposition to this project.
CHINA REMAINS CARBON POWERED
The biggest industrial economy in the world, and the biggest superpower after Covid, China looks keen on building more coal and coke fired power stations in the future, shrugging off any climate change criticism.
Fact is, activist groups like XR or Greenpeace would be arrested and jailed on sight in China. That leaves the way clear for any insurers who wish to underwrite all the risks associated with the carbon-based energy production, which MUST happen if China is to remain the workshop of the modern world. It is possible to envisage a situation where China controlled the supply of cheap energy to neighbouring countries as part of establishing a global trading empire, so that energy could be refined oil and gas products, solar and hydro generated electricity plus coal supplies.
Then there are exciting projects like China’s funding of Uganda’s dam on the Nile, which is of course very green, earth friendly and sustainable. But could start a war.
May you live in interesting times.
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