China strengthens 2024 energy efficiency target, and other top energy stories to read this month

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Roberto Bocca, Head of Centre for Energy and Materials; Member of the Executive Committee, World Economic Forum

• This round-up brings you the key news from the energy sector over the past month.
• Top energy stories: China ramps up energy target ambitions for 2024; Bangladesh ends Bay of Bengal oil & gas moratorium; Energy-sector methane emissions reach record high.
• For more on the World Economic Forum’s work in the energy space, visit the Centre for Energy and Materials.

1. Stronger 2024 energy efficiency target for China

China has set a stricter energy intensity target for 2024 as part of renewed efforts to get back on track with its five-year climate plan, which ends in 2025.

The country’s energy intensity – or the amount of energy per unit of economic growth – fell by 0.5% in 2023, well below its 2% goal. As a result, China now aims to cut its energy intensity by 2.5% in 2024, Reuters reports.

“Due to the rapid growth of industrial and civilian energy consumption, reductions in energy and carbon intensity … fell short of expectations”, China’s National Development and Reform Commission said in a report.

China had been aiming to cut energy intensity by 13.5% in the 2021-2025 period as part of its climate plan, but it only fell by 2% between 2020 and 2023, according to research by Global Energy Monitor and the Centre for Research on Energy and Clean Air.

It estimates that to meet its targets China would need to cut energy intensity by 6% and carbon intensity by 7% in both 2024 and 2025.

2. Bangladesh ends oil & gas exploration hiatus

Bangladesh has ended its moratorium on oil & gas exploration in the Bay of Bengal as it opened bidding on 24 offshore blocks spread across 15 deep and nine shallow waters.

The eight-year pause on exploration tenders was brought to an end with Dhaka opening the bidding process to national and international companies.

The new contracts will offer a revenue-sharing model, a 5% higher share of production and better pricing mechanisms, PetroBangla Chairman Zanendra Nath Sarker told Nikkei Asia.

“We have amended our last production sharing contract, and the new contract model has attractive terms for the international companies … I think it’s a win-win situation for both the parties,” he said.

3. News in brief: More energy stories from around the world

Methane emissions from the energy sector rose to a near record high in 2023, according to the International Energy Agency (IEA). In its annual methane tracker, the IEA said the production and use of fossil fuels resulted in close to 120 million tonnes of methane emissions last year.

Methane emissions from the energy sector were close to the all-time high of 2019 in 2023Image: IEA

The CEO of the Nigerian National Petroleum Company, Mele Kyari, has called for a tailored approach to the energy transition for African countries. Speaking at the CERAWeek conference, he said: “It is clear that before the energy transition, countries must first attain security of energy supply in their countries. You cannot talk about energy security when it is not even available. In most sub-Saharan Africa, 70% of the population doesn’t have access to clean cooking fuels. Therefore, you must fill the supply gap first.” He added: “For us today, the transition must be differentiated.”

Oil prices have risen to a four-month high after the IEA reversed its previous projection of a supply surplus. Following the agency’s forecast that the oil market would be in a “slight deficit” this year, Brent crude, the international benchmark, rose 1.3% to $85.15, while US benchmark oil West Texas Intermediate rose 1.7% to $81.04 per barrel.

The US Department of Energy plans to grant $750 million to projects building capacity for clean hydrogen across 24 states. The funding will be for projects working across six areas of hydrogen development, including research and development of electrolyzers, securing supply chains for machines and recycling the critical materials used in hydrogen production.

Italy’s Chamber of Deputies will launch an inquiry into how nuclear energy can help the country meet its decarbonization goals 30 years after closing its last nuclear power plant. The deployment of advanced nuclear technologies, such as Small Modular Reactors, is expected to play a crucial role in driving the energy transition and the chamber’s Environment Committee said it would explore the role nuclear energy can play in helping the country achieve decarbonization by 2030 and climate neutrality by 2050.

Europe is on course to end the winter with its gas stocks at a record high. Euractiv reported that storage facilities across the EU and the UK were 62% full on 5 March, compared to an average of 41% on the same date between 2011 and 2020. Inventories are on track to end the winter with around 664 terawatt-hours (TWh), beating previous highs of 629 TWh at the end of winter 2022/23 and 609 TWh at the end of winter 2019/20.

TerraPower has said it plans to start building the first of a new generation of nuclear power plants in the US in June. The company’s chief executive, Chris Levesque, told the Financial Times the company would apply for a construction permit this month for its reactor, which is cooled with liquid sodium rather than water.

4. More on energy from Agenda

To embrace the green energy transition, governments must enable the private sector to spearhead development of green solutions. This article explores why regulatory hurdles must be reduced to enable clean energy expansion that has never been more pressing.

Stone wool, a lava-based material, can help to cut emissions thanks to its superior insulation qualities. Read more here.

I sat down with Radio Davos, accompanied by John Defterios, to discuss what lies ahead for the energy sector this year. Listen below.