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June 2026 • Volume 19 • No 4 • Published monthly • ISSN 1757-7365

THE ENERGY INDUSTRY TIMES is published by Man in Black Media • www.mibmedia.com • Editor-in-Chief: Junior Isles • For all enquiries email: enquiries@teitimes.com

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Following WindEurope in Madrid, TEI Times

spoke to Hitachi Energy’s Alfredo Parres

to hear the challenges facing offshore wind,

and the real progress that is being made.

Page 13

News In Brief

Fossil fuelled power

generation in structural

decline

Every OECD country in 2025 was

below its fossil-fuelled power gen-

eration peak for the rst time, indi-

cating a turning point in the transi-

tion away from fossil fuels.

Page 2

Trump anti-renewables

crusade takes effect

The Trump administration escalated

its crusade against renewable ener-

gy by stalling approvals for about

165 onshore wind projects waiting

for sign-off from the Department of

Defense.

Page 4

Chinese solar exports

double amid energy crisis

Data analysed by global energy

think-tank Ember shows that Chi-

na’s solar exports reached a record

6  in arch, double the previ-

ous month, amid high energy prices

due to the U-Israel war with Iran.

Page 5

UK smooths the way to new

green energy target for 2040

The UK government has accepted

the recommendation of its indepen-

dent Climate Change Committee to

set a legally binding goal of cutting

carbon emissions  per cent by

200.

Page 7

Battery storage grows ‘at

blistering pace’

Installations of batteries that store

energy for later use surged by 48

per cent in 202 from the previous

year, according to new data from

BloombergNE.

Page 8

Energy Transition

Investment Series

TEI Times analyses ietnam’s cli-

mate pledges, electricity mi and

investment environment.

Page 14

Technology Review

Long duration energy storage is fast

emerging as the key solution to re-

duce wind curtailment, stabilise

grids, and ensure that clean energy

delivers its full value. Page 15

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The EU and the UK are cracking down on the use of Chinese components in its energy

sector, as the region looks to grow its use of renewables without jeopardising national security

by increasing dependence on foreign players. Junior Isles

Europe’s offshore wind expansion running into structural supply constraint

THE ENERGY INDUSTRY

TIMES

Final Word

When trust is broken things are

torn apart, says Junior Isles.

Page 16

The import of China-made energy in-

frastructure euipment to Europe is

coming under scrutiny, with the EU and

UK recently taking steps to block the

use of solar and wind power euipment

in projects due to security concerns.

Early last month, the European

Commission said imported inverters

used to control solar panel installa-

tions and other energy technology rep-

resented one of “the most pressing

threats” to the EU’s critical infrastruc-

ture and that any funding would be

stopped from November .

European Commission spokesper-

son Siobhan McGarry told reporters

the EU Executive has decided to take

“concrete action right now” against

the “risk of disruption of the EU’s crit-

ical infrastructure by foreign actors,”

including by “developing guidance on

restricting the use of EU funds for

projects involving inverters from

high-risk suppliers.”

uppliers from China, ussia, North

Korea and Iran are affected by the ban,

an unnamed EU ofcial told Politico,

but noted that Chinese suppliers hold

0 per cent of the global market share

of solar inverters. uawei is a market

leader in the technology.

igh-risk vendors already involved

in EU-funded projects can ask for an

eception, the EU ofcial said, and

the Commission will decide by No-

vember , whether to allow the proj-

ects to continue without restrictions

on which suppliers they can use.

ccording to carry, risks posed

by foreign interference in clean ener-

gy networks include manipulation of

“electricity production parameters”,

disruption of electricity generation

and unauthorised access to operation-

al data. This could mean a “remote

shutdown… leading to countrywide

blackouts”, she said.

Europe has taken an increasingly

restrictive approach to Chinese tech-

nology imports that it judges to be a

security risk or likely to undermine

key industrial sectors such as the car

industry.

The Commission has recently out-

lined its Industrial ccelerator ct,

which will eclude China from public

funding for other clean technologies

such as electric vehicles. eanwhile,

its cyber security act will exclude Chi-

nese companies such as uawei from

telecommunications networks and so-

lar energy systems.

In a statement, uawei said the

Continued on Page 2

Europe’s offshore wind expansion is

running into a structural supply con-

straint where the turbine market is

becoming increasingly concentrated,

says ystad Energy.

ccording to the Denmark-based

global independent research and ener-

gy intelligence company, E erno-

va, iemens amesa and estas have

historically anchored western off-

shore turbine supply, but with E

Ve rn o va h a vi n g p a us e d n ew o ff s ho r e

wind orders following a series of tech-

nical and operational setbacks, ie-

mens amesa and estas now ac-

count for virtually all turbines

available to European developers.

ystad Energy’s analysis of the off-

shore wind market outlines a sharp

increase in per-megawatt () costs,

with turbine selling prices rising by

between 40 per cent and 45 per cent

since 2020, outpacing manufacturing

cost increases of 20-25 per cent over

the same period.

“Europe’s offshore ambitions are

real, and the pipeline reects genuine

political commitment. But the mar-

ket has moved into structurally tight

territory: high demand, limited sup-

plier diversity and rising turbine

compleity. That combination gives

original euipment manufacturers

(OE) real pricing power and the

ability to be selective about which

projects get built,” said ander Baks-

joberget, Offshore ind esearch at

ystad Energy. “If Europe doesn’t

meaningfully epand estern manu-

facturing capacity or rethink how sup-

ply constraints are addressed in its

auction frameworks, it won’t deliver

its post-2030 targets at the pace or

cost the energy transition reuires, es-

pecially in the current climate that has

so much uncertainty as a result of the

iddle East conict.”

ricing pressure is most acute in the

turbine’s most comple components,

says ystad Energy. The nacelle,

which houses the generator, gearbo

and power electronics that convert

wind into electricity, sits at the centre

of current supply constraints, while

similar pressures are emerging in

blade manufacturing, driven by in-

creasing turbine sizes, longer produc-

tion cycles and the logistical demands

of transporting and installing

net-generation components.

The supply constraint is not evenly

distributed across the turbine value

chain. It is most pronounced in na-

celles and blades, where supplier con-

centration is high and substitution is

limited, while towers remain compar-

atively more eible, with a broader

supplier base and lower barriers to

entry.

ccording to ystad, the mi of tur-

bines being delivered between 2020

and 202 shows how uickly the mar-

ket has changed. Earlier years were

dominated by smaller -0  tur-

bines, while more recent deliveries

are shifting toward the larger 14-15

 class. iemens amesa was rst

to move into bigger turbines, signing

contracts for its   model ahead

of estas before moving into the 

 class, while estas’ 236-

 grew in popularity from 202

onward. iemens amesa still holds

the larger overall share of deliveries,

cementing its position as the market

leader. This shift in turbine size is im-

portant context for understanding

price increases: the turbines being

built and installed today are signi-

cantly larger and more comple than

those from ve years ago, and that

compleity is reected in what OEs

can charge.

The 40-45 per cent rise in turbine

selling prices since 2020 cannot be

eplained by rising costs alone. In

2020-202, turbines were sold under

contracts that assumed relatively sta-

ble input costs, and when ination hit

hard through 202-2023, manufactur-

ers were locked into those agreements

and absorbed the losses themselves.

hen those contracts epired from

2023 onward, prices reset sharply and

the burden shifted to developers, who

now face higher turbine prices and

tighter contract terms. anufacturers

are recovering their margins on newer

deals, though protability across off-

shore divisions remains sueezed by

the costs of ramping up and scaling a

new generation of larger, more com-

ple turbines.

The key shift in the offshore turbine

market is not just the level of cost in-

ation, but how those costs are dis-

tributed across the value chain. ys-

tad Energy’s analysis models a

scenario where a 30 per cent increase

in selected input categories would

raise total manufacturing costs by

roughly  per cent, reecting how

different components are eposed to

different cost drivers.

EU takes hardline against

Chinese technology imports,

citing security concerns

McGarry: the Commission is taking “concrete action right now”

audiovisual.ec.europa.eu

THE ENERGY INDUSTRY TIMES - JUNE 2026

OECD nations have reached a deni-

tive turning point, transitioning from a

historical peak in fossil fuel generation

to a sustained and structural decline,

according to recent report from UK-

based energy think-tank Ember.

Ember’s ‘Global Electricity Re-

view’ showed that record solar growth

meant clean power sources grew fast

enough to meet all new electricity

demand in 2025, thereby preventing

an increase in fossil generation, which

saw a small fall of 0.2 per cent. This

was the rst year since 2020 without

an increase in electricity generation

from fossil fuels and only the fth year

without a rise this century.

The analysis further shows OECD

fossil generation in 2025 was 19 per

cent below its peak. Since peaking in

2007, fossil fuel generation in OECD

has dropped 19 per cent (-1313 TWh),

lowering its share in the mix from 63

per cent to 48 per cent by 2025. This

shift resulted in a 28 per cent reduction

(-1477 MtCO2e) in OECD power

sector emissions. The rise in solar and

wind generation in this period (+2138

TWh) met both the fall in fossil gen-

eration (+1313 TWh) and also the rise

in electricity demand (+630 TWh) in

their entirety.

Every OECD country in 2025 was

below its fossil generation peak for

the rst time. Nearly all, 36 out of the

38, OECD countries saw fossil gen-

eration peak in 2019 or before. Tür-

kiye peaked in 2021, and Colombia

peaked in 2024. Two member states

– Iceland and Costa Rica – now oper-

ate zero-emission power systems, a

further seven maintain fossil share

below 10 per cent, while a group of

six nations remains heavily reliant on

fossil fuels for over 60 per cent of their

electricity generation.

Non-OECD fossil generation fell in

2025 as China peaks and India avoids

coal reliance.

Beyond the OECD, 2025 also

marked the rst year this century, out-

side the COVID affected 2020, in

which non-OECD fossil generation

fell, as China (-0.9 per cent) and India

(-3.3 per cent) both fell. China’s fossil

output declined as solar expanded

rapidly. India, meanwhile, is moving

towards clean energy without repli-

cating the coal heavy trajectory of

earlier industrialising economies.

The report said ambitious coal

phase-out targets, combined with rap-

id wind and solar deployment, have

allowed OECD nations to increasing-

ly decouple their electricity sectors

from fossil fuels in favour of a clean-

er power mix.

“For governments, this shift rep-

resents a strategic pivot toward ener-

gy sovereignty; by prioritising do-

mestically generated renewables,

countries are insulating themselves

from the price volatility and geopolit-

ical risks that accompany dependence

on global fossil fuel markets,” the

report stated.

The ndings came as the Interna-

tional Renewable Energy Agency

(IRENA) published a report showing

that the economics of solar and wind

energy paired with battery storage in

prime solar and wind regions deliver

round-the-clock power at lower costs

than fossil fuels.

Firm levelised costs of electricity

(‘rm costs’) for solar plus storage

range from $54-82/MWh in high-

quality resource regions, compared

with $70-85/MWh for new coal in

China and more than $100/MWh for

new gas globally.

Commenting on the report, IRENA

Director-General Francesco La Cam-

era said: “24/7 renewable power is

now cost-competitive with fossil fu-

els. The long-standing argument that

renewables lack reliability no longer

holds. Today, renewables can deliver

reliable, round-the-clock power. As

oil and gas markets remain exposed

to geopolitical shocks, including on-

going disruptions in the Strait of Hor-

muz, we must insulate our economies

with resilient renewable systems.”

Commission failed to provide “any

specic facts or technical evidence”

to back its decision.

“This restriction lacks an objective

and transparent basis, constitutes

origin-based discrimination, and

violates the principle of fair and

non-discriminatory treatment in

international trade... All suppliers

should be held to the same standards

of technical transparency and cyber

security,” Huawei said.

A report issued in late April by

Loom, a non-prot organisation

focused on economic, environmen-

tal and national security issues, said

dependence on Chinese green tech-

nology was making European coun-

tries vulnerable to cyber attacks,

trade restrictions and espionage.

The report co-authored by Mi-

chael Collins, a former deputy head

of national security strategy in the

UK Cabinet Ofce, said European

governments were failing to fully

account for such risks as they roll

out Chinese green tech in a bid to

secure energy supplies and address

climate change.

Collins told the Financial Times

that countries risked “sleepwalking

into a scenario where you’re sud-

denly confronted with a big nation-

al security problem”.

The report, co-authored by Mi-

chal Meidan, Director of the China

Energy Programme at the Oxford

Institute for Energy Studies and

based on interviews with energy

and national security experts, iden-

tied eight separate risks linked to

an over-reliance on Chinese green

technology.

Among the greatest was supply

chain disruption, according to the

authors, who argued that China was

likely to restrict supply of low-car-

bon technology and components.

Asked about the report, the foreign

ministry in Beijing said the essence

of China-EU trade relations was

“mutual benet and win-win out-

comes” and should not be “politi-

cised or subjected to an overly broad

security framing”.

Chinese ofcials dismissed con-

cerns about dependence on their

country’s green technology, say-

ing that Beijing has no intention

of using it for political advantage

and that cheap turbines, solar pan-

els and other renewable energy

products reduce the much greater

risk stemming from high carbon

emissions.

Loom’s Executive Director, Joss

Garman, said the recent fossil fuel

price shocks “should accelerate Eu-

rope’s energy transition but new

dangers arise because the cheapest

route runs so overwhelmingly

through China”.

Meanwhile, in late April, Chinese

wind turbine maker Ming Yang

Smart Energy accused the UK of

“politicisation” after the UK gov-

ernment ruled in March that Ming

Yan g cou ld no t dep lo y i ts p roduct s

in offshore projects in the country,

and rejected plans to invest £1.5

billion in manufacturing turbine

blades and other parts in the Scottish

Highlands.

Ming Yang’s Chair, Zhang Chuan-

wei, said in an interview with the

FT that the UK’s “politicisation” of

the investment would not only harm

Ming Yang but also “greatly under-

mine the sense of security Chinese

companies feel when entering the

British market”.

He said that he and other Ming

Yan g executi ves had spo ke n to th e

UK’s energy ministry, but the gov-

ernment declined to explain what

made its products a national securi-

ty threat.

Continued from Page 1

New research led by the University of

Oxford and University College Lon-

don (UCL), UK, has revealed that pol-

lution from coal red power plants is

signicantly reducing the energy out-

put of solar photovoltaic (solar PV)

installations, particularly where these

are expanding side-by-side.

The ndings, published in Nature

Sustainability, map and assess more

than 140 000 solar PV installations

worldwide using satellite data. By

combining this with atmospheric data

on air pollution, the researchers cal-

culated how much sunlight is lost and

how this reduces electricity genera-

tion. They found that aerosols – tiny

particles suspended in the air – re-

duced global solar electricity output

by 5.8 per cent in 2023. This is equiv-

alent to 111 TWh of lost energy – the

amount generated by 18 medium-

sized coal red power plants.

Crucially, these losses represent a

signicant and often overlooked

constraint on the clean energy transi-

tion. Between 2017 and 2023, new PV

installations added an average of

246.6 TWh of electricity each year,

while aerosol-related losses from ex-

isting systems reached 74.0 TWh an-

nually – equivalent to nearly one-third

of the gains from new capacity. This

highlights a previously unrecognised

interaction between fossil fuel use and

renewable energy, where emissions

from one system directly reduce the

performance of the other.

Lead author Dr Rui Song (Depart-

ment of Physics, University of Ox-

ford, and Mullard Space Science Lab-

oratory, UCL) said: “We are seeing

rapid global expansion of renewable

energy, but the effectiveness of that

transition is lower than often assumed.

As coal and solar expand in parallel,

emissions alter the radiation environ-

ment, directly undermining the per-

formance of solar generation.”

To identify the sources of these

aerosol-related losses, researchers

traced their origins and found coal

red power generation to be a major

contributor. This effect is particularly

evident in China, where solar and coal

capacity have expanded in parallel and

are often co-located. Regions with

high coal capacity aligned closely

with areas experiencing the greatest

solar PV losses.

China is the world’s largest solar

producer, and generated 793.5 TWh

of solar PV electricity in 2023 (41.5

per cent of the global total). But it also

experienced the largest losses from

aerosols, with total output reduced by

7.7 per cent. The researchers estimate

that around 29 per cent of aerosol-re-

lated solar PV losses in China come

specically from coal red power

plants. Coal plants emit ne pollution

particles that scatter and absorb sun-

light, reducing the amount that reach-

es nearby solar panels. As a result, the

panels generate less electricity than

they otherwise could.

Interestingly, China was also found

to be the only major region showing

a sustained improvement. Aerosol-re-

lated solar PV losses declined by an

average of 0.96 TWh per year (-1.4

per cent annually) between 2013 and

2023. This is likely due to stricter

emission standards and widespread

adoption of ultra-low-emission tech-

nologies within coal red power

plants, rather than a reduction in coal

capacity itself.

Co-author Dr Chenchen Huang

(University of Bath) said: “Our nd-

ings send a clear warning to the Sus-

tainable Development Goals: over-

looking pollution-induced solar

energy losses can lead to a systematic

overestimation of renewable energy

output by governments, businesses

and the broader community. To stay

on track, policies must account for this

hidden drag and shift fossil-fuel sub-

sidies away from coal.”

The Global Renewables Alliance

(GRA) has announced its 2026 corpo-

rate partners, bringing together leading

companies from across the renewable

energy value chain at a critical moment

for the global energy transition. As

countries and businesses face contin-

ued energy insecurity, price volatility

and growing pressure on competitive-

ness, the partnership underlines the

urgent need to accelerate the deploy-

ment of renewable power, grids and

storage.

This year’s partners include Fortes-

cue, Iberdrola, Arup, EDP, Hitachi,

Octopus Energy Generation, Ørsted,

SSE, SUNOTEC, and Vestas.

Together, these companies represent

a broad cross-section of the global

energy ecosystem, including develop-

ers, utilities, technology providers,

manufacturers, investors, advisors,

and major energy buyers. By partner-

ing with GRA, they contribute indus-

try expertise and strengthen the pri-

vate sector voice in support of tripling

global renewable energy capacity by

2030.

“Energy has become a dening issue

for economic stability and competi-

tiveness,” said Bruce Douglas, CEO

of the Global Renewables Alliance.

“The companies partnering with GRA

this year are demonstrating that re-

newables, combined with grids, stor-

age and electrication, are not only

the fastest and cheapest route to de-

carbonisation, but the foundation of a

secure and resilient energy system.

Turning ambition into implementa-

tion is now the priority.”

Across industries, partners high-

lighted the growing role of renew-

ables in addressing today’s energy

challenges.

Andrew Forrest, Executive Chair-

man and Founder at Fortescue, said:

“Volatile fossil fuel prices are a hand-

brake on global growth. Nations and

industries cannot build prosperity on

fuels that swing wildly in cost and

security. The only real pathway for-

ward is clear – replace fossil fuels with

abundant, predictable renewable en-

ergy. Fortescue is proving that heavy

industry can be decarbonised now, not

decades from now.”

Gonzalo Sáenz de Miera, Director

of Climate Change and Alliances at

Iberdrola, said: “Electrication is at

the heart of the response to today’s

security and competitiveness chal-

lenges, stemming from the continued

dependence of our energy model on

fossil fuels… Through our partner-

ship with the Global Renewables Al-

liance, we are joining forces with key

partners to accelerate electrication

worldwide and deliver meaningful

benets across society.”

Through their partnership with

GRA, the companies will share prac-

tical business experience and demon-

strate how renewable energy is al-

ready delivering tangible benets for

businesses and economies.

Headline News

Corporations join Global Renewables Alliance to strengthen energy security

Fossil fuelled power generation

in structural decline

Every OECD country in 2025 was below its fossil fuelled power generation peak for the rst

time, indicating a turning point in the transition away from fossil fuels. Junior Isles

Coal pollution reduces solar power output, study nds

Photo by www.pexels.com

THE ENERGY INDUSTRY TIMES - JUNE 2026

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THE ENERGY INDUSTRY TIMES - JUNE 2026

Europe News

Janet Wood

A Swiss parliamentary commission

has narrowly backed allowing the con-

struction of new nuclear power plants

in the country, endorsing an amend-

ment to the nuclear energy law by 13

votes to 12. It rejected proposals to

mandate state funding.

The Council of States has already

voted to lift the current ban. The Na-

tional Council will decide next,

though the nal word is likely to rest

with voters.

Opponents had sought additional

conditions, including a detailed

waste-disposal strategy, stronger pri-

oritisation of renewables and a revised

electricity supply plan. A proposal to

limit approval to fourth-generation

reactors also failed. A majority of the

commission argued that energy policy

should remain technologically neutral

and keep all options open. Some ar-

gued that lifting the ban would under-

mine planning certainty for renew-

ables and expose the public sector to

substantial nancial risks.

A separate proposal, the Stop Black-

out initiative, also seeks to lift the

current ban on nuclear new-build.

Since it published its 2017 Energy

Strategy, Switzerland has prohibited

new nuclear plants, while allowing

existing ones to operate as long as they

are safe. Swiss-based utility Axpo es-

timates that existing Swiss nuclear

plants, Gösgen and Leibstadt, can con-

tinue operating for another 80 years,

but under current plans Gösgen will be

disconnected from the grid by 2029

unless a new decision is made.

The discussion comes as Thomas

Sieber, Chair of Axpo, called for three

to four gas red power plants to be

added to Switzerland’s mix of hydro-

power and other renewables alongside

nuclear. e said gas red power plants

have major advantages because they

can be built relatively quickly and

bring eibility to the system.

“This gives us time to expand other

capacities and, from an economic per-

spective, is also the most cost-effec-

tive option for winter electricity in the

next few years or even decades,” said

Sieber.

Sieber also spoke out in favour of

focusing funding more on winter pow-

er and promoting the expansion of wind

power. Switzerland must act now to be

able to guarantee sufcient winter elec-

tricity and security of supply by 2050.

Electricity prices are likely to decline

in the medium term. More and more

renewable energies are coming into the

system worldwide, which have a

price-dampening effect, said Sieber,

who will relinquish his role as Axpo

Chair at the end of May.

eanwhile, po has ofcially

opened its largest solar PV array in

northwestern Spain. The Vilecha facil-

ity comprises four photovoltaic plants

with a combined capacity of 200 MW.

Germany has announced plans to join

a new Important Project of Common

European Interest (IPCEI) on innova-

tive nuclear technologies, making

fusion energy a strategic priority

alongside EU partners, while the gov-

ernment has pledged over €2 billion

for research and pilot projects to 2029.

The new IPCEI aims to bring togeth-

er research institutions, start-ups and

industry across Europe, with project

launches targeted for 2027.

Fusion is being supported despite still

being in the experimental stage. Euro-

pean fusion companies and industry

groups recently called for greater pub-

lic support of private sector projects

and a dedicated regulatory framework

distinct from that governing nuclear

ssion, in an open letter to the EU warn-

ing that Europe must “seize the

opportunity” or risk falling behind

countries such as the US, China, Japan

and Canada.

The US attracted more than 70 per

cent of global private fusion funding

last year, with deals worth $2.6 billion,

while Europe accounted for about $600

million in venture capital investment

during the same period. Europe lacks

large government-backed pro-

grammes, with the exceptions of the

UK and Germany.

Mark Cupta, a fusion investor at ven-

ture capital rm relude entures, said

that as start-ups moved from laborato-

ry experiments towards commer-

cial-scale devices, companies would

require “at least an order of magnitude

more capital”.

HSCALE, the hyperscale data centre

rm backed by Bain Capital, has an-

nounced the nancial closure of its

second large-scale data centre campus

in Settimo, Milan, Italy. The transac-

tion brings HSCALE’s total commit-

ted power capacity in the Milan met-

ropolitan area to 250 MW, with

ready-for-service dates in 2028.

The combined Milan investment rep-

resents more than €2 billion of capital

deployment in the region, where

pre-construction and procurement ac-

tivities are already underway. The

company said all major hyperscalers

are already present and growing in this

area, making it a primary deployment

zone for cloud infrastructure in South-

ern Europe.

Oliver Schiebel, HSCALE Chief

Executive, said: “Milan is one of the

strongest hyperscale markets in Eu-

rope and we are committing around

€2 billion to this region because we

understand what the market needs,

and are serious about its growth po-

tential. Our team closed the second

site, secured the power and is already

progressing through pre-construc-

tion, ensuring we deliver real capaci-

ty, as fast as possible.”

HSCALE’s energy strategy in Milan

is designed around a diversied supply

mix, with nearly 50 per cent of power

sourced from renewable generation

including solar, wind and hydroelec-

tric. It has a ‘structural partnership’

with Aquila Clean Energy, which it

says provides integrated access to

clean energy supplies rather than rely-

ing solely on standard power purchase

agreements.

Ocean Winds (OW) has started elec-

tricity production at its 30 MW Éoli-

ennes Flottantes du Golfe du Lion

(EL) oating offshore wind farm.

The pilot wind farm, 16 km off the

coast, aims to demonstrate the viabil-

ity of oating offshore wind develop-

ment and construction

Marc Hirt, Country Manager for

France at Ocean Winds, said: ”The

start of electricity production for

EFGL is an important milestone for

France’s energy sovereignty and for

oating wind more broadly.”

Meanwhile Nexans, RTE and Su-

perGrid Institute have announced the

launch of RHODÉ (Raccordement

HVDC Offshore Distant Électrique),

a collaborative project to develop

oating DC electrical connections

for large-scale offshore wind farms

installed in deep waters, far from the

coast.

The group said large-scale deploy-

ment of offshore wind is potentially

leading to the development of sites

located at depths greater than 100 m

and several tens of kilometres from

the coastline. Under these conditions,

traditional solutions with ed bot-

tom substations may reach their tech-

nical and economic limits. It said

RHODÉ forms the missing link be-

tween research projects already un-

derway and the industrial realisation

phase of the rst 320 k or 2 k

oating DC connections, envis-

aged from 2040 onwards.

Janet Wood

The UK government has accepted the

recommendation of its independent

Climate Change Committee to set a

legally binding goal of cutting carbon

emissions 87 per cent by 2040.

The decision comes as the govern-

ment announced reforms that will give

Parliament the authority to approve

critical energy schemes and protect

infrastructure projects from judicial

review.

The proposal would allow Parlia-

ment to designate and approve the

most important clean energy projects

as being of ‘Critical National Impor-

tance’ (CNI), reducing the exposure

from judicial review on all but human

rights grounds.

or all other nationally signicant

infrastructure – including transport and

water projects – the government will

introduce a ed legal challenge win-

dow, at the end of which the planning

consent could be updated to address

any legitimate issues. Courts would

refuse permission for a judicial review

on any issues not brought up during the

consenting period or in the challenge

window. The government is also ex-

pected to allow promoters of smaller

energy projects to apply directly to the

Planning Inspectorate, to support fast-

er decision-making on generation and

transmission.

A Treasury spokesperson said: “For

too long, vital infrastructure delivery

has been delayed by judicial reviews

of projects the country needs. The

Chancellor won’t stand for it any lon-

ger and is bringing forward bold

changes to support delivery.”

The government has also recently

made changes that would help offshore

wind developers. Until now, develop-

ers faced strict limits on the types of

environmental compensation they

could offer. The new rules open up a

wider range of options.

Marine Minister Emma Hardy said:

“Offshore wind power is a key driver

of our mission to make Britain energy

secure and tackle the climate crisis.

As we build the clean energy infra-

structure our country needs, these

reforms mean that we can also deliver

real, lasting benets for nature, from

restoring native oyster beds to pro-

tecting seabird colonies for future

generations.”

Meanwhile Schroders Greencoat and

Carlton Power have reached Final In-

vestment Decision (FID) on the 30

MW Barrow Green Hydrogen Project

in Cumbria.

The project, which is being delivered

by Green Hydrogen Energy Company

(GHECO) saw the signing of a Low

Carbon Hydrogen Agreement with the

UK government in June 2025, follow-

ing the government’s rst ydrogen

Allocation Round. GHECO is target-

ing a 200 MW portfolio of green hy-

drogen projects in the UK by 2030.

Kristian Høeg Madsen, Co-Head of

Hydrogen Investments at Schroders

reencoat, said: “e have signicant

ambitions to grow the GHECO plat-

form – reaching Final Investment De-

cision on Barrow is therefore a key

milestone for Schroders Greencoat, as

well as the UK’s emerging hydrogen

economy.”

UK smooths the way

to new green energy

target for 2040

Two more data centres totalling

250 MW planned for Milan area

Germany backs fusion as industry calls for EC support

Floating wind plant starts generation

n Permitting and nature protection rules reformed

n Final investment decision on green hydrogen plant

Switzerland moves closer to new

nuclear build

n Commission joins voices in favour n Axpo chief calls for gas plants in addition

Photo by Pexels.com

Ve st a s h a s w o n a 1 86 M W t u rb i ne

order from EDF Power Solutions

North America for the Forêt Domani-

ale Wind Project. The order includes

28 EnVentus V162-6.2 MW wind tur-

bines and 2 EnVentus V162-6.0 MW

along with a 10-year service agree-

ment. Turbine delivery is expected in

Q2 2027, with commissioning expect-

ed in Q4 2027. This is the third project

that EDF has secured through Hy-

dro-Québec’s call for tenders.

In addition, Equinor, through its

subsidiary Rio Energy, acquired the

Esquina do Vento wind project from

Ve st a s. T h e 2 30 M W pr o je c t i s l oc a t-

ed in the state of Rio Grande do

Norte in northeast Brazil. Addition-

ally, Equinor entered into a wind tur-

bine supply agreement with Vestas

for the same project. As per the sup-

ply agreement, Vestas will supply 51

V163-4.5 MW turbines, with instal-

lation scheduled to commence in

March 2027.

Wärtsilä will supply an off-grid pow-

er solution for a new data centre facil-

ity under construction in Texas, USA.

The 790 MW power plant will operate

with 42 Wärtsilä 50SG engines run-

ning on natural gas.

The Wärtsilä equipment is sched-

uled for delivery in 2028, and the

plant is expected to become fully op-

erational in late 2029. This is Wärt-

sil’s fth data centre related order in

the U and its rst in Teas. lto-

gether, Wärtsilä has thus far sold

over 2.4 GW of power capacity for

US data centres.

AtkinsRéalis has announced that it has

signed a Strategic Alliance Agreement

with First American Nuclear (FNCO)

to be the engineering, procurement,

and construction management

(EPCM) provider for EAGL-1 SMR

projects in North America. The agree-

ment contemplates services worth up

to 20 million over the rst ve years.

Under the rst task orders, tkins

Réalis will prepare procedures and

policies required to do design work,

such as a quality programme and

engineering procedures. It will also

undertake the conceptual design for

the balance of plant and review the

design of the nuclear steam supply

system.

EAGL-1 is the only US nuclear re-

actor design cooled by lead-bismuth,

a liquid metal alloy that has been

used in successful nuclear systems

abroad for decades. The unique

properties of lead-bismuth enable a

simpler, more compact reactor de-

sign with fewer components and re-

duced complexity.

Electroguayas, Ecuador’s state power

generator, has awarded a $20 million

contract to upgrade the 90 MW Santa

Elena II thermal plant to HH Interna-

tional of South Korea. HH Internation-

al will increase the capacity of the

plant to 108 MW.

The plant came online in 2011 and

comprises 53 9H21/32 model en-

gines which use diesel for startup

and then operate on fuel oil.

Electroguayas said that Santa Ele-

na’s expansion will reduce depen-

dence on eastern basin reservoirs and

electricity imports during droughts

and El Niño events as well as

strengthen grid stability and voltage

quality, while fast-start internal com-

bustion engines will help meet peak

demand and offset sudden supply

disruptions.

Wärtsilä has signed two equipment

supply contracts with Origem Energia

to develop new balancing power proj-

ects in Brazil. The contracts are for the

supply of two batches of 18 Wärtsilä

34SG balancing engines.

The projects are the Pilar and Pilar

Nova power projects, scheduled to

start operations in October 2028, and

the Manguaba I-V projects, sched-

uled to start operations in August 2.

South Korea’s Hanwha Power has

signed an MOU with Canadian infra-

structure company Pembina Pipeline

to collaborate on green power gener-

ation projects.

Under the terms of the agreement,

Hanwha Power will explore apply-

ing waste heat recovery power gen-

eration systems to Pembina’s pipe-

line compressor stations and gas

infrastructure facilities. Hanwha

Power’s waste heat recovery power

generation system is a next-genera-

tion technology that uses carbon di-

oxide in a supercritical state.

Indonesian state utility PLN has

awarded a 45 MW hydropower project

contract valued at $116 million to

Kencana Energi Lestari (KEEN). The

hydropower plant will be developed

in Pakkat district, Humbang Hasun-

dutan Regency, North Sumatra.

Giat Widjaja, Finance Director of

KEEN, said: “The Pakkat 2 hydro-

power plant is estimated to require

an investment of around $116 mil-

lion, with a construction target of ap-

proximately four years. We are cur-

rently awaiting the signing process

for the Power Purchase Agreement

with PLN before entering the con-

struction phase.”

Indonesia has been accelerating re-

newable-energy development as part

of its broader strategy to reduce de-

pendence on fossil fuels and meet

long-term climate commitments.

DeepOcean has secured a contract for

the installation and support of in-

ter-array cables at the TPC offshore

wind farm phase 2 (TPC-II) offshore

Taiwan. The scope of the contract

covers installation of inter-array ca-

bles, as well as engineering and proj-

ect management services.

The 295 MW project, located 6.5-

20 km off Lukang in Changhua

County, will feature 31 Vestas 9.5

MW turbines installed on jacket

foundations. The turbines will be

connected via three 66 kV inter-ar-

ray cable loops to an offshore sub-

station, with power exported to shore

through three export cables.

The offshore work will be carried

out with Dong Fang Offshore using

the chartered subsea vessel Orient

Adventurer. The work will com-

mence immediately and be complet-

ed during 2026.

South Korea’s Ministry of Climate,

Energy, and Environment has an-

nounced plans to build ten GW-scale

solar power complexes in and near the

greater Seoul area as part of a push to

expand renewable energy capacity and

lower electricity generation costs. This

is part of the ministry’s plan to achieve

100 GW of renewable energy capacity

by 2030.

The government said it will identi-

fy ten agship solar power projects

by 2030, including sites in the Si-

hwa and Hwaong districts. Other

potential locations include Pyeong-

taek Port and Lake Pyeongtaek, for-

mer coal red power plant sites in

the Chungcheong region, and border

areas spanning northern Gyeonggi

Province and Gangwon Province.

Each project will have capacities

ranging from 1 GW to 1.4 GW.

The Asian Development Bank (ADB)

has signed a 6 million nancing

package with ACWA to develop a 300

MW wind power plant in Uzbekistan’s

Bukhara region.

The new facility, Bash 2, extends

the Bash ind ower roject co--

nanced in 2023. Bash 2 will feature

39 turbines, each up to 8 MW, a

35/500 kV substation, and transmis-

sion lines connecting to the national

grid.

The nancing includes 0 million

from ADB’s ordinary capital resourc-

es, $41 million from commercial

lenders with ADB as the lead arrang-

er, as $25 million from the Leading

Asia’s Private Infrastructure Fund 2

(LEAP 2).

RenewRome, a special purpose vehi-

cle owned by Kanadevia Inova, Acea,

Suez, Vianini Lavori and RMB, has

been selected to build and operate a

new waste-to-energy (WtE) plant for

the Municipality of Rome. Kanadevia

Inova will act as the EPC contractor

and will be responsible for plant main-

tenance for 30 years.

The new WtE facility is located in

Santa Palomba, 25 km southwest of

Rome. The new plant will treat

around 600 000 tonnes of non-recy-

clable waste annually and generate

around 6 . The ue gas treat-

ment (FGT) system consists of a

semi-dry unit, a wet scrubber, and a

selective catalytic reduction system

for nitrogen oxide reduction.

Construction work began last

month, and the rst waste delivery is

scheduled for autumn 2029.

Nordex has won orders from West-

fälisch-Niedersächsische Energie

(WNE) for the supply and installation

of 12 N175/6.X wind turbines. The

turbines will be installed across three

projects in the district of Höxter in

North Rhine-Westphalia. The total ca-

pacity of the orders amounts to 82 MW.

The contracts also include a service

agreement for the turbines for 20 years.

Seven turbines will be deployed at

the Dringenberg project, three tur-

bines at the Gehrden Ost project, and

two turbines at the Gehrden Fölsen

extension project. Construction work

is scheduled to start in mid-2027.

Mott MacDonald is providing lend-

er’s technical and environmental sup-

port to the West Wales Hydrogen

project, a production facility that will

deliver 2000 t of low-carbon hydro-

gen annually.

Developed by MorGen Energy, a

large-scale green hydrogen ecosys-

tems developer, West Wales Hydro-

gen is claimed to be the rst proj-

ect-nanced green hydrogen project

in the UK and Europe.

Located at the former oil renery

site in Milford Haven within the

Celtic Freeport of Wales, the project

will feature a 20 MW electrolyser

system supplied by hefeld-based

ITM Power that will be used to pro-

duce the green hydrogen.

Mott MacDonald provided techni-

cal due diligence on the project’s de-

sign, contracting structure, construc-

tion and operational plans, cost and

schedule assumptions, as well as key

risks.

The company is now advising the

lenders on bankability and ongoing

monitoring requirements.

The Ukraine government has an-

nounced that it will hold a competition

to award 322  of new eible

generation in the most energy-decient

regions. Prime Minister Yulia Svy-

rydenko said that these include the

Kyiv and Cherkasy regions (250 MW),

the Sumy, Kharkiv, and Poltava regions

(872 MW), Dnipropetrovsk (100

MW), and Odesa regions (100 MW).

An incentive mechanism will be

provided for participants. The maxi-

mum term for commissioning new

capacities is 20 months.

GE Vernova has won an order from

Middle Delta Electricity Production

Company (DEC), an afliate of

Egyptian Electricity Holding Compa-

ny (EEHC), for projects at MDEPC’s

Bahna and Nubaria power plants in

Egypt. The scope includes two Ad-

vanced Gas Path (AGP) upgrades for

the two GE Vernova 9F gas turbines at

the Bahna power plant, along with

multi-year services agreements for

Bahna and Nubaria with terms of 15

and eight years, respectively.

The upgrades are expected to in-

crease plant output while improving

efciency by about 2 per cent.

Genesis Energy and Saft, a subsidiary

of TotalEnergies, have signed a con-

tract for a 200 MWh extension for the

Huntly battery energy storage system

(BESS). The expansion builds on the

original 100 MW / 200 MWh BESS at

Huntly Power Station on New Zea-

land’s North Island.

With this expansion, Huntly is set

to become one of the largest BESS

sites in the country, reaching a poten-

tial output of 400 MWh, co-located

with a .2  gas and coal red

power station.

Eurus Energy Holding’s Aeolus SAS

(Aeolus) has completed two 50 MW

solar power plants in Tunisia, repre

senting Eurus’s rst renewable energy

projects in Tunisia.

The 50 MW solar power plants are

located in Sidi Bouzid Governorate

and Tozeur Governorate and will

supply electricity to approximately

120 000 households in Tunisia.

Operations will be carried out by

operating companies jointly owned

by Aeolus (49 per cent stake) and

Scatec ASA, a Norwegian renewable

energy solutions provider (51 per

cent stake).

Americas

Asia-Pacic

Vestas wins 186 MW

Québec turbine order

AtkinsRéalis wins SMR

EPCM contract

PLN awards $116 million

hydropower contract

DeepOcean wins Taiwan

offshore wind contract

South Korea to build ten

large-scale solar complexes

ADB and ACWA support

Uzbekistan wind power

Waste-to-energy plant to

be built in Rome

Nordex wins 82 MW

German turbine orders

Support for West Wales

Hydrogen project

Ukraine seeks 1.3 GW of

eile eneration

GE Vernova wins upgrade

contracts in Egypt

Next phase of New

Zealand’s Huntly BESS

Aeolus supplies solar

plants to Tunisia

Wärtsilä wins Brazil grid

balancing contracts

Off-grid energy for data

centre in Texas

International

Europe

THE ENERGY INDUSTRY TIMES - JUNE 2026

Tenders, Bids & Contracts

Hanwha Power MOU for

Canada green energy

HH International to

upgrade Santa Elena II

Sponsored Editorial

THE ENERGY INDUSTRY TIMES - JUNE 2026

ata centre construction has always been a

balancing act between speed, scale and resil-

ience. That balance is being tested as never

before. AI workloads are pushing power densities

into territory the industry was not initially prepared

to handle, and operators are being asked to deliver

capacity at a pace that traditional build models strug-

gle to support. The constraint is no longer just land

or chips. It is power, and more specically, the abil-

ity to get power into the building, congured cor-

rectly, and operational on schedule.

This is where the modular electrical switchroom

has quietly become one of the most important

components in the data centre stack. As of recently,

AV K h a v e p o s i t i o n e d t h e m s e l v e s a s a n e x p e r t p r o -

vider of this technology, completing their full

power chain offering.

A gap in the power chain

For all the talk of end-to-end energy partners, the

reality has been that data centre operators have

rarely been able to source their full power infra-

structure from a single provider. Generators have

come from one supplier, switchgear from another,

UPS from a third, and the integration risk has sat

squarely on the operator or main contractor. Mod-

ular electrical switchrooms, the containerised units

that house the critical electrical infrastructure re-

sponsible for safely distributing power throughout

the facility, have typically been a separate procure-

ment exercise altogether.

AV K h a s s p e n t m o r e t h a n 3 6 y e a r s b u i l d i n g e x p e r -

tise in uninterruptible power supplies, standby

power, prime power and control systems. The

component that now completes the picture, the

modular switchroom, was the missing piece. With

the launch of AVK PowerPods, that gap has closed.

PowerPods are fully integrated, pre-engineered,

transportable units that consolidate transformers,

switchgear, UPS, batteries, circuit breakers, cooling

integration, control panels, re suppression, and

distribution boards into a single containerised

solution. Each unit arrives ready to connect and

deploy. With this addition, AVK now provides the

entire power chain for a data centre, covering every

part of the energy lifecycle from generation through

distribution to ongoing maintenance.

AI as the forcing function

The timing of this launch is no accident. Hyperscale

operators and AI infrastructure providers are placing

demands on power delivery that did not exist even

three years ago. Training clusters require contiguous

blocks of power measured in tens or hundreds of

megawatts. Inference workloads need facilities op-

erational quickly enough to keep pace with model

deployment cycles. And the projected growth in AI

compute means that capacity planning is now a con-

tinuous activity rather than a periodic one.

Traditional build models are struggling to keep up.

Stick-built electrical rooms, constructed on site

alongside the rest of the facility, are exposed to

weather, labour availability, supply chain disruption

and the sequential dependencies of site programmes.

Lead times for individual components such as

transformers and switchgear have stretched in re-

cent years, and operators have absorbed both the

cost and the schedule risk.

The modular approach reorders this equation. By

moving construction off-site into a controlled facto-

ry environment, integration testing can be complet-

ed in advance, quality is more consistent, and the

unit arrives at the data centre as a tested system

rather than a collection of parts waiting to be assem-

bled. Construction time on site is reduced, and the

operator gains condence that the euipment has

been validated as an integrated whole.

Built for scale at Haydock

AV K h a s i n v e s t e d i n a 1 4 0 0 0 0 f t

facility in Haydock,

northwest England, designed specically to support

the volume that hyperscale and AI infrastructure

projects require. The facility has the capacity to house

22 to 25 PowerPods at any one time, depending on

size, with most units up to 18 m in length and 4.2 m

wide. Multiple access routes allow for fast delivery

to project sites across the UK and into Europe.

The scale of the facility matters because it reects

the scale of the underlying demand. PowerPods are

not a bespoke engineering project repeated occa-

sionally. They are a productionised offering de-

signed for mass deployment, and the factory has

been built around that operational reality. At the

same time, the facility supports full customisation

within each unit, so operators retain the ability to

specify the technology conguration that suits their

requirements.

Technology agnostic by design

One of the structural problems with traditional pow-

er infrastructure procurement is that operators often

end up locked into a single manufacturer’s ecosys-

tem. The choice of UPS dictates the switchgear, the

switchgear dictates the controls, and the architecture

becomes rigid before the facility is even built.

AV K ’ s a p p r o a c h i s d e l i b e r a t e l y d i f f e r e n t . P o w e r -

Pods are designed to be technology-agnostic,

meaning the operator chooses the best component

for each function rather than accepting a bundled

solution. AVK acts as an energy partner, consulting

on the optimal conguration for the project at hand

and sourcing equipment accordingly. The result is

genuine eibility, better lead times due to a broad-

er supply base, and an outcome tailored to the facil-

ity’s specic operational prole.

This matters more in the AI context than in con-

ventional cloud workloads. AI infrastructure has

different thermal proles, different load patterns,

and different redundancy requirements, and the

right technology stack for one operator will not be

the right stack for another. The supplier agnostic

model accommodates that variation in a way that

single-vendor solutions cannot.

A complete proposition

The strategic shift represented by PowerPods is that

AV K i s n o w i n t h e b u s i n e s s o f d e l i v e r i n g h o l i s t i c

and complete power solutions. Generators, UPS,

switchrooms, controls and service all come from the

same partner, which means a single point of account-

ability across the power chain and a single design

philosophy guiding the integration.

Ben Pritchard, CEO at AVK, sees this as the cul-

mination of a long-term direction of travel. “The

launch of AVK PowerPods reinforces our position

as one of the few businesses capable of designing,

delivering and supporting the entire data centre

power ecosystem, at scale, with true eibility and

with the engineering depth that critical infrastruc-

ture demands. PowerPods complete our proposition

to the market. With our ready-to-deploy model, we

are perfectly positioned to support the next wave of

hyperscale data centres and AI infrastructure.”

What this means for the industry

For data centre operators planning their next wave

of capacity, a credible single-source provider for the

full power chain changes the procurement conver-

sation. Integration risk moves to the supplier, sched-

ule certainty improves, and the operator can focus

on the workload-facing decisions that actually dif-

ferentiate their service. The cost of complexity in

multi-vendor power procurement has always been

hidden in programme overruns and commissioning

delays, and removing it has tangible value.

The wider industry implication is that modular,

factory-built power infrastructure is becoming a

necessity rather than a nice-to-have for projects

above a certain scale.

AI has accelerated this transition because the al-

ternative, slower stick-built construction, is no lon-

ger viable at the pace operators need. PowerPods

are AVK’s answer to that shift, grounded in 36 years

of critical power expertise and now positioned at the

centre of how hyperscale facilities will be powered

for the foreseeable future.

AVK has spent more than 36 years building expertise in uninterruptible power supplies,

standby power, prime power and control systems. With the addition of PowerPods, it now

provides the entire power chain for a data centre, covering every part of the energy lifecycle

from generation through distribution to ongoing maintenance.

AVK’s CEO, Ben Pritchard:

PowerPods complete our

proposition to the market

Solving the power bottleneck

holding back AI data centres

t was not long after the start of

Russia’s war against Ukraine

that gas and subsequently elec-

tricity prices, began to spiral across

much of the EU. The crisis brought

the realisation that in order to meet

its decarbonisation goals, while en-

suring energy security, Europe must

double-down on efforts to deploy

home-grown renewables such as

offshore wind. The war in Iran pro-

vided another stark reminder as to

why this is paramount.

At the North Sea Summit in Ham-

burg in January this year, European

leaders committed to an accelerated

and more consistent expansion of

offshore wind. And in April at the

WindEurope Annual event in Ma-

drid, just three months after the

Hamburg summit, the industry took

stock of the current situation and

what needs to be done.

In a statement, WindEurope said:

“Europe needs to move from crisis

to condence The war in Iran re-

minded Europe, again, that it needs

to replace imported fossil fuels with

homegrown, secure electricity. Off-

shore wind delivers the energy Eu-

rope needs. It is homegrown, scal-

able and cost-effective. Offshore

wind helps lower electricity costs

for households and businesses. And

it shields Europe from geopolitics

and fuel price swings.”

The North Sea Summit 2026 saw

the governments of Belgium, Den-

mark, France, Germany, Ireland,

Luxembourg, the Netherlands, Nor-

way and the United Kingdom, to-

gether with wind industry players,

and Transmission System Operators

(TSOs) of the electricity and hydro-

gen networks agree the ‘Joint Off-

shore Wind Investment Pact’ for the

North Seas.

All signatories of the Hamburg

Declaration committed to “working

together towards a shared ambition:

to scale offshore wind energy to the

levels required for Europe’s decar-

bonisation, to enable hydrogen as a

complementary energy carrier to

offshore renewable electricity

(where cost-efcient), to ensure af-

fordable and secure energy for citi-

zens and businesses, and to

strengthen Europe’s industrial base

and technological leadership”.

The Hamburg Declaration provid-

ed the political signal Europe’s off-

shore wind supply chain needed.

Governments agreed to contribute to

the build-out of 15 GW of offshore

wind annually from 2031-2040.

CfDs offer visibility on future rev-

enues and help de-risk new wind

energy investments. The volume

commitments offer visibility for

manufacturers and supply chain to

invest in factories, ports and

services.

WindEurope also highlighted the

huge role that industry has to play.

“As its contribution to the Hamburg

Declaration, the European wind in-

dustry committed to cut the costs of

offshore wind by 30 per cent by

2040, compared 2025 levels. This

will come through lower nancing

costs, de-risked projects and faster

industrialisation,” said Tinne van

der Straeten, WindEurope CEO.

“The industry is already delivering.

We are investing in projects, manu-

facturing capacity and skills. And

stepping up on security.”

Yet delivering on the goals re-

mains a tall order. One major obsta-

cle is grid buildout. Commenting on

the threat, Alfredo Parres, Hitachi

Energy’s Global Head of Renew-

ables, and Wind Europe Executive

Committee member, said: “It’s real;

we already see it. If you look

around the world, hundreds of giga-

watts are waiting in connection

queues. But the good thing about

the situation is that the problem is

too big to be ignored. It’s very

much a central topic and we don’t

need to convince people that the

challenge needs to be addressed.

[But] maybe we need to push a bit

further to say grids are not just im-

portant – they are a strategic asset,

especially when you think about the

security agenda.”

Pointing out the impacts of the

grid situation, Parres noted that ca-

pacity cannot be connected on ei-

ther the generation or demand side.

“Industries cannot connect to get

more power, and operating units are

curtailed because the grids are satu-

rated or the energy they put on the

market cause negative prices,” he

said.

Spain, for example, which was a

success story in terms of renew-

ables deployment, has been at a

standstill for a while, resulting in

negative prices. In the UK, where

large amounts of future offshore

wind capacity has been locked in

through its auction process, many

projects have no connection dates

before 2032/33.

Still, despite the challenges, Par-

res offered evidence of progress.

Since the Hamburg declaration, off-

shore wind generation targets have

been conrmed, with an emphasis

on hybrid projects that combine

wind power projects and intercon-

nection projects.

“The Hamburg declaration takes

the Copenhagen call to action from

WindEurope’s annual event last

year further in terms of the level of

detail of what needs to be done. It

highlights the need to have an inte-

grated system to deliver electrica-

tion, and nancing,” said arres.

“The UK’s AR7 [Auction round 7],

with an increased budget and secur-

ing 7 GW of new capacity, is a good

example of what can be done. And

indicates that AR8 could be just as

good as AR7.”

In countries like the Netherlands,

Denmark and Germany, where there

were failed auctions, governments

revised auction models to further

de-risk projects by moving to CfDs.

“For me, this is absolutely moving

in the right direction. It is the best

tool right now to help lock-in more

generation and more projects,” said

Parres.

Looking at the rest of the agenda,

he says there is a need to continue

working on the infrastructure – how

to put the offshore network in place.

“Cost allocation for projects that go

across countries is very tricky; very

sensitive and we need to  it,” he

noted. “We need to talk about the

relationship between the UK and

EU so that we can be closer again

on the energy agenda.”

Continuing to build up the supply

chain and ensuring the huge genera-

tion plans turn into contracts must

be a priority. To this end, suppliers

like Hitachi Energy have been en-

tering framework or programme

agreements so that several projects

can be considered together in order

to create supply chain efciencies

and thereby reduce costs. This will

ultimately contribute to affordabili-

ty for consumers.

In its current investment pro-

gramme, Hitachi Energy has allo-

cated €9 billion to 2027 to ramp up

the manufacturing and resources

needed to meet the demand.

Parres noted: “This investment

comes with 15 000 people who will

be hired and trained to develop a

career in a satisfying, vibrant work

environment where they can grow.”

Notably, money and resources will

be invested in segments such as

transformers, circuit breakers and

high voltage direct current (HVDC).

This long term, frame agreement

approach was taken to not only

meet forecasted demand, but also to

address how project developers are

changing their market approach.

“When we saw how TenneT, for

example, came to the market with a

2 GW programme for HVDC –

bringing 11 connections to the mar-

ket in one go, and splitting those

volumes between three main suppli-

ers – that gave us visibility. It gave

us certainty on future needs and

provided the motivation for us to

invest big-time,” said Parres. “Simi-

larly, a programme agreement with

E.On on distribution transformers

over several years gave us clarity on

what was coming.”

While this will help deliver proj-

ects faster and cut costs, achieving

the 30 per reduction in LCOE,

which equipment manufacturers

agreed under the Hamburg declara-

tion, is multi-faceted.

Unit capacity factor, said Parres,

is the rst item the industry must

address. In the same way that a 15

 turbine is more cost-efcient

than a 10 MW machine, a 2 GW

DC link is more efcient than a

1 GW link.

“Everything that brings more

power, reduces the cost of a kilo-

watt-hour; so size matters,” ex-

plained Parres. “Technology helps

us to increase power density.”

The second area is efciency, said

Parres. “If you can optimise how

the whole system is designed from

an electrical standpoint, you can re-

duce losses, which contributes to a

lower LCOE. Here, HVDC reduces

losses big-time.”

Standardisation, through things

like frame agreements, is the third

part of lowering LCOE said Parres,

citing the agreement signed in Ma-

drid with Danish renewables devel-

oper, Ørsted. Collaborating more

closely with project developers,

through such agreements allows

more optimised designs to be

brought to market.

But LCOE is not just about cost; it

is also about revenue. “With LCOE

we can also address revenue – get-

ting more through the lines, having

less curtailment; having more ener-

gy in the system,” said Parres. “The

point is, there is no single magic

bullet. It’s not about squeezing the

supply chain even more – we’re not

in favour of a race to the bottom –

reducing margins and putting the

industry in losses. We saw what

happened with wind turbine manu-

facturers. It’s better to collaborate;

increase efciencies so everyone

can make reasonable margins.”

He concluded: “Going forward

from Madrid, we need to think and

talk holistically. Move away from

point-to-point solutions to system

solutions, where all the stakeholders

develop, in a harmonious way, the

generation, grid and the offtake.

And combine it with longer term

planning This is where we need

to go and it’s where we are going.

That’s the mission I have left Ma-

drid with that’s the ag I’m ying.”

The energy crises, triggered by wars in Ukraine and Iran, have spurred Europe to accelerate its offshore wind

abition but the challenges are signicant ollowing the indEurope event in adrid Junior Isles caught up with

itachi Energys lfredo arres to discuss those challenges and what real progress is being ade

Offshore wind: from

Hamburg to Madrid

THE ENERGY INDUSTRY TIMES - JUNE 2026

Energy Outlook

Parres: “We need to think and talk

holistically… That’s the mission I

have left Madrid with”

Photo by pexels.com

of $15.5 billion. In addition, Vietnam

issued a Revised Power Development

Plan 8 (PDP8) and amended its Elec-

tricity Law.

Energy mix

Vietnam’s primary energy supply is

heavily dominated by fossil fuels. Coal

accounted for more than half of the

total mix and oil contributed a further

31 per cent in 2024. Natural gas plays

a relatively modest role at just over 7

per cent, while hydro represents only

7 per cent of supply. Non-hydro re-

newables barely register at 3 per cent,

and other sources are negligible. The

electricity generation prole is simi-

larly shaped by coal, which provided

just over half of all power produced,

also in 2024. Hydropower was the

second largest contributor at around

2 per cent, reecting the country’s

longstanding reliance on its river sys-

tems. Renewables made up a more

visible share of generation at 13.1 per

cent, though still far below the levels

required for a rapid transition. Natural

gas contributed 7.2 per cent, and there

was no contribution from oil and nu-

clear (see pie chart).

The amended PDP8, released in

April 2025, outlines a steep expansion

of electricity demand and system ca-

pacity through 2030 and 2050 (see

chart). Commercial electricity con-

sumption is projected to more than

double by mid-century, while total

capacity rises to over 205 GW by

2050 from roughly 90-100 GW in

2030. The plan accelerates a structur-

al shift towards renewables, with

non-hydro sources reaching up to

three-quarters of the mix by 2050,

alongside major growth in offshore

wind, solar, and storage. Coal is fully

phased out, while gas transitions

progressively towards hydrogen and

CCS-enabled technologies.

Transmission and distribution con-

straints and curtailment are, unsur-

prisingly, a key challenge to the path

to net zero for a nation experiencing

ietnam’s energy transition is

reaching a critical turning

point. Investors face a complex

mix of rapid growth and systemic chal-

lenges, as the country accelerates to-

ward 2050 net zero goals. Beyond the

potential for renewable expansion,

successful ventures require navigating

infrastructure bottlenecks, regulatory

shifts, and structural market hurdles.

Decarbonisation commitments

ietnam has taken signicant steps in

recent years on its path to decarboni-

sation, despite facing a great many

hurdles. The country updated its cli-

mate commitments under the Paris

Agreement through the publication of

its Nationally Determined Contribu-

tion (NDC) in October 2022. It raised

its targets to cut greenhouse gas emis-

sions. On its own, without outside

help, it pledged to reduce emissions

by 15.8 per cent below projected levels

by 2030, up from 9 per cent previous-

ly. ith international nancial sup-

port, that gure rises to 3. per cent,

compared to 27 per cent before.

The updated NDC is more ambi-

tious on paper, but independent as-

sessments suggest it falls short of

genuine progress, according to the

Climate Action Tracker, an indepen-

dent scientic assessment of national

climate action, as of late 2025. The

targets remain consistent with around

4°C of global warming and require no

major effort beyond policies already

in place. Vietnam did make stronger

promises at COP26 in 2021. The

commitments included a net zero goal

by 2050, a commitment to phase-out

coal, and cuts to methane emissions,

though these sit somewhat uneasily

alongside the modest NDC targets.

Importantly, the updated plan does set

out its funding requirements clearly.

The net zero emissions by 2050

target is anchored in the nation’s Na-

tional Climate Change Strategy, re-

leased in 2022. The strategy caps

2050 emissions at 185 MtCO

e, calls

for no new coal red power projects

after 2030, with gradual reduction of

coal capacity from 2035, and posi-

tions wind and solar as dominant

long-term sources. Also, the strategy

underlines reliance on international

nance. It signed a ust Energy Tran-

sition artnership (ET) with an In-

ternational Partners Group compris-

ing the EU, G7, Norway, Denmark,

Asian Development Bank, and IFC.

The ET carries a pledged pipeline

fast-paced growth in electricity de-

mand. The grid is strained by rapid

renewable growth, regional imbal-

ances, and outdated infrastructure.

Major upgrades, storage deployment,

and direct power purchase mecha-

nism market reform are now central

to easing congestion, attracting pri-

vate investment, and securing reliable

clean-energy expansion.

Investment environment

Vietnam has delivered strong GDP

growth in recent years, and most ex-

perts expect this to continue. Stripping

out ination, the economy grew at

around 6 per cent a year on average

over the past ve years. Construction

and industry are key drivers, backed

by a government commitment to $200

billion of infrastructure investment by

2030. The country’s credit rating is at

its highest-ever level, though it sits one

notch below what global investors

consider investment grade. Reaching

that threshold by 2030 is a stated gov-

ernment priority. The main risks are

rising ination, gradual currency de-

preciation, and Vietnam’s vulnerabil-

ity, as a heavily trade-dependent econ-

omy, to shifts in global demand and

geopolitical instability.

Regulations change fast: a key de-

cree on power purchase agreements

was scrapped and replaced within

eight months. Off-take agreements

lack government guarantees, some

state-owned buyers have withheld

payments to existing projects, and

grid bottlenecks in high-solar-re-

source regions create meaningful

curtailment risk. Foreign developers

have also felt the pressure of domestic

preference, with two high-prole e-

its in 2023 and 2024, and a 2026 off-

shore wind award going to a Vietnam-

ese conglomerate over a foreign

developer that had invested in the

project since 2019.

On the opportunity side, the pipeline

is substantial. Vietnam is targeting 73

GW of solar by 2030 against roughly

21 GW today. A new corporate power

purchase framework is opening direct

off-take routes for industrial buyers.

And a tripartite agreement signed in

2025 positions Vietnam as a potential

clean-energy exporter to Singapore

and Malaysia.

Policies and incentives

Vietnam has moved quickly to build a

comprehensive legal framework for its

energy transition. The Electricity Law

2024 sets the foundation, establishing

the rules for competitive wholesale

electricity markets, direct power pur-

chase agreements, and offshore wind

licensing. The PDP8, backed by a

committed investment envelope of

$136 billion in the power sector by

2030, translates that framework into

hard capacity targets and designated

renewable zones.

Two decrees issued in March 2025

add important detail. Decree 57 en-

ables direct power purchase agree-

ments between renewable generators

and large industrial consumers, with

a hedging mechanism built into the

wholesale market. Decree 58 sets out

the preferential terms for offshore

wind, including price ceilings by

TE ENE INDUT TIE - UNE 2026

Energy Transition Investment Series

Vietnam’s shift: navigating the 2050

decarbonisation map

ENERGY SUPPLY (left) AND ELECTRICITY GENERATION (right) IN VIETNAM IN 2024

region, though it requires a minimum

5 per cent state-owned enterprise

stake in each project.

Vietnam also launched an emissions

trading pilot in August 2025, cover-

ing around 150 facilities across ther-

mal power, cement, and steel. A car-

bon trading exchange at the Hanoi

Stock Exchange followed in early

2026. Full market operation is target-

ed for 2029.

Renewable energy projects can ac-

cess meaningful tax incentives, in-

cluding a 10 per cent corporate in-

come tax rate, a four-year tax holiday,

and import duty exemptions on

equipment.

Investor backdrop

ecent deal activity reects genuine

investor appetite, spanning both oper-

ational acquisitions and early-stage

development.

Sembcorp of Singapore acquired

majority stakes in three Vietnamese

wind and solar businesses for around

$131 million in 2024, bringing its

total in-country capacity to 455 MW

on completion. In the same year,

UK-listed Gresham House acquired

commercial and industrial rooftop

solar developer Asia Clean Capital

Vietnam through its SUSI Asia Ener-

gy Transition und. acico Energy

closed $28.5 million in local bank

debt for a 30 MW wind farm in 2025,

backed by a signed power purchase

agreement with EVN.

On the development side, Copenha-

gen Infrastructure Partners is advanc-

ing the 3500 MW La Gan offshore

wind project in partnership with a

local state-owned enterprise. A joint

development agreement between

PTSC, Sembcorp, and a Petronas and

TNB consortium is exploring a sub-

sea cable export route to Singapore

and Malaysia. Vietnamese conglom-

erate VinEnergo was awarded the 750

MW Hon Trau offshore wind project

in early 2026, ahead of a German

developer that had been involved

since 2019.

Development nance institutions

are also active. The IFC committed a

record 30 million in climate nance

to Vietnam in FY2024, the largest

such deployment across the East

sia-acic region that year.

Prepared for The Energy Industry

Times by Joseph Jacobelli of actE, a

cimate ine an nance inight

platform (asiacleantechenergy.com).

Key data from Vietnam’s revised Power Development Plan VIII

Energy supply (left) and electricity generation (right) in Vietnam in 2024

Vietnam’s energy transition strategy includes a net zero goal by 2050, a commitment to phase-out coal, and cuts

to methane emissions. Importantly, the plan also clearly sets out its funding requirements. TEI Times analyses the

country’s climate pledges, power mix and investment environment.

he global energy transition has

reached a point where success

can no longer be measured by

how much renewable energy we can

build, but instead by how effectively

we can use it. The strong momentum

behind offshore wind this year has

been telling, with recent auction

rounds delivering record capacity,

competitive pricing, and renewed

condence in the role of renewables

in powering future economies.

On paper, this looks like a major

step forward, but there is a critical

gap that still needs to be addressed.

Generating clean electricity is only

half the equation; what matters just

as much is whether that energy can

be stored and used when people ac-

tually need it.

Without effective storage, a large

portion of the wind power that will

be generated by new projects risks

being wasted, just as existing gener-

ation is too often wasted. As power

systems become more reliant on re-

newables, long duration energy stor-

age (LDES) is fast emerging as the

key solution to reduce wind curtail-

ment, stabilise grids, and ensure that

clean energy delivers its full value.

In many markets today, wind farms

can produce large volumes of clean

electricity. But if this happens when

demand is low and the grid cannot

absorb the excess power, turbines are

slowed down or switched off, often

due to transmission constraints or

oversupply. This curtailment process

means that clean, low-cost energy is

simply not used. In some cases, op-

erators are even compensated for the

electricity they could have generated

but did not.

A 2025 report by Beyond Fossil

Fuels and Ember found that €7.2 bil-

lion in renewable generation was lost

across just seven European countries

in 2024 due to grid constraints. Cur-

tailment in Spain rose from 0.8 per

cent in 2024 to 11 per cent by mid-

2025 while more than 1100 GWh of

clean energy was discarded in July

2025 alone.

Germany saw a 97 per cent surge

in solar curtailment in 2024, with

compensation costs for curtailed re-

newables reaching €554 million for

the year. In March 2025, Greece re-

corded 200 GWh of curtailment in a

single month, equivalent to a quarter

of its total 2024 volume.

In the UK, where over 40 per cent

of power comes from renewables,

about 7 TWh of electricity, just over

2.5 per cent of national consump-

tion, are currently curtailed each

year. As renewable capacity ex-

pands ve to eight times by 2030,

this gure could increase sharply

without intervention.

The economic consequences are

not limited to wasted energy. Curtail-

ment creates a situation where con-

sumers pay twice: once to build and

operate renewable assets, and again

to compensate them for not produc-

ing. It also perpetuates reliance on

fossil fuel generation, which must

remain on standby to provide power

when renewables cannot deliver.

LDES offers a way to resolve cur-

tailment by storing excess wind gen-

eration during periods of oversupply

and allowing that energy to be used

later, rather than wasted. These tech-

nologies can store electricity for ex-

tended periods, typically beyond six

to eight hours, and in some cases for

days or even weeks. LDES will

work alongside short duration ener-

gy storage – batteries – as part of a

tailored, multi-technology solution

to enhance system eibility. The

difference is that LDES is built to

store large volumes of power across

time. It captures excess electricity

when supply exceeds demand and

releases it later, when the grid needs

it most.

This directly reduces curtailment

and improves the utilisation of exist-

ing renewable assets. Instead of re-

newables being intermittent contrib-

utors, they become part of a more

stable and dispatchable energy mix.

That is why policy frameworks

are now beginning to prioritise stor-

age technologies that provide both

storage and eibility. The UK gov-

ernment has introduced a cap and

oor mechanism specically to sup-

port investment in LDES. The mod-

el provides a guaranteed minimum

revenue level to developers, reduc-

ing nancial risk, while also cap-

ping excessive returns to protect

consumers.

According to the National Energy

System Operator (NESO), achieving

a balanced and resilient power sys-

tem will require a diverse mix of

storage technologies, ranging from

batteries to pumped hydro and hy-

drogen, supported by wider infra-

structure improvements. As part of

this approach, up to 8 GW of LDES,

capable of operating beyond eight

hours, is targeted for deployment by

2030.

Analysis suggests that for every

gigawatt of LDES deployed, cur-

tailment costs can be reduced by

approximately €140 million per

year in markets such as Germany.

Tens of billions in system savings

are possible through reduced fuel

consumption, lower infrastructure

requirements, and improved asset

utilisation.

In Scotland, government analysis

demonstrates that 20 GW of LDES

capacity by 2050 could save £24 bil-

lion between 2030 and 200 by re-

ducing gas reliance. To achieve this,

LDES capacity must increase from

just 1.8 GW today to 4-6 GW by

2030.

owever, to deliver grid eibility,

we need technology solutions that

are fully locatable and adaptable,

able to operate in areas of high con-

gestion and close to where demand

is strongest. They must also be mod-

ular, so they can be designed to meet

the specic needs of each location

rather than relying on a one-size-ts-

all approach. As power systems

evolve, this level of eibility is no

longer optional; it is essential.

These solutions must also support

low-carbon systems. It is not enough

to generate renewable energy – we

must also store and manage it in a

way that supports a cleaner system

overall. LDES is becoming an im-

portant part of this shift, helping to

balance supply and demand over

longer periods.

Liquid air energy storage (LAES)

is one example of how these require-

ments can be met. As a form of

LDES, it can store electricity for

hours, days or longer, allowing ex-

cess energy to be captured when

supply is high and used later when

demand increases. This is particular-

ly important in systems with a grow-

ing share of wind and solar power,

where generation does not always

match consumption.

The technology works using pro-

cesses that are already well estab-

lished in industry. It draws in ambi-

ent air, compresses it, and then cools

it to a very low temperature, typical-

ly between -160°C and -196°C, until

it becomes a liquid. This liquid air is

stored in an insulated tank.

When electricity is required, the

liquid air is heated. As it warms, it

expands rapidly, by up to 700 times

its original volume, and this expan-

sion is used to drive a turbine and

generate power. The system captures

and reuses both heat and cold within

the process, improving efciency

and reducing energy losses.

A key advantage of this approach

is its eibility. LE systems do

not depend on specic geographical

features and can be deployed in a

wide range of locations, including

near cities, industrial areas or renew-

able energy sites. Their modular de-

sign allows them to be scaled ac-

cording to system requirements,

making them suitable for both large

and smaller applications.

In addition to storing energy, these

systems can also support grid stabili-

ty. Power networks require services

such as frequency control, voltage

support and inertia to operate reli-

ably. Traditionally, these have been

provided through large synchronous

generators in fossil fuel power

plants, but as they phase out, renew-

able generation does not contribute

the physical inertia needed. This is

where LAES comes in.

A leading example is Highview’s

LAES facility at Carrington near

Manchester, currently being built. As

well as delivering 300 h of stor-

age and an output of 50 MW for six

hours, the plant will also feature an

integrated “stability island”.

This asset can operate inde-

pendently of the storage elements

and provides critical services such

as inertia, short circuit level and dy-

namic voltage control without need-

ing to use any of its energy re-

serves. This allows it to compete

across multiple National Energy

System Operator (NESO) products

without reducing performance

across other functions – and can

even deliver active power. The

same principle will be applied at its

Hunterston project in Scotland, but

on a larger scale.

The market for LDES, including

LAES, represents a $4 trillion in-

vestment opportunity globally, ac-

cording to the Long Duration Ener-

gy Storage Council, which says it

requires a 50-fold scale-up by 2040.

LDES, working alongside short-

duration batteries that provide

fast-response eibility, is no lon-

ger a future option but a critical re-

quirement for modern power sys-

tems. Without it, the full value of

renewables like offshore wind will

remain constrained by curtailment,

grid instability and continued de-

pendence on fossil fuels to deliver

backup power to the grid.

The countries that move fastest to

deploy scalable LDES technologies

will not only deliver energy security

and lower system costs but also gain

a decisive competitive advantage in

the global clean energy race.

With the right policy support and

sustained investment, technologies

such as LAES can transform renew-

able power from an intermittent re-

source into a dependable foundation

for industrial growth, economic re-

silience and net-zero energy systems.

Gary Preece is Chief Market Devel-

opment Ofcer at Highview.

Without effective storage, a large portion of the wind power that will be generated risks being wasted. Long duration

energy storage is fast emerging as the key solution to reduce wind curtailment, stabilise grids, and ensure that clean

energy delivers its full value. Highview’s Gary Preece explains.

Offshore wind’s big breakthrough

depends on long-duration storage

THE ENERGY INDUSTRY TIMES - JUNE 2026

Technology Review

Preece: generating clean energy

is only half the equation

photo:pexels.com

THE ENERGY INDUSTRY TIMES - JUNE 2026

Final Word

merican educator and author

Stephen Covey once said

“trust is the glue of life…”. It

is a quote not wasted on Fatih Birol,

Executive Director of the Internation-

al Energy Agency (IEA). At the end of

May the IEA launched its 11th ‘World

Energy Investment’ report, one which

Birol called “perhaps the most import-

ant up to now” due to the Middle East

crisis.

According to Birol, the crisis, which

has resulted in the effective closure of

the Strait of Hormuz, is “the largest

energy security threat in history –

bigger than the oil crises of 1973 and

1979, and the 2022 natural gas crisis

in Europe and beyond, put together”.

While ‘what if the Strait of Hormuz

is closed?’ has long been a theoretical

question, the issue is now real. The

closure of this critical transit route –

where as much as 20 per cent of the

world’s oil and gas shipments pass

through – has had, and will continue

to have, wide-ranging impacts for the

energy sector.

Energy security is now priority

number one, two and three for many

countries and industry players, driving

governments to reshape their invest-

ment decisions. The WEI report pro-

vides numbers on expected spend for

the sector this year at this critical time,

as well as knowledge and information

on how budgets compare with the last

ten years.

According to the IEA, global energy

investment will reach $3.4 trillion in

2026, a slight increase year-on-year.

While this top line number is import-

ant, the breakdown is of more signi-

cance. Around $2.2 trillion is expected

to go to grids, storage, low-emissions

fuels, nuclear, renewables, efciency

and electrication in 2026, while

around $1.2 trillion is set to be invest-

ed in oil, natural gas and coal.

“The breakdown provides vital in-

formation for governments and indus-

try players who have to re-shape their

energy investment decisions and

strategies based on the right data and

information,” said Birol.

The IEA chief shared four key areas

that will frame the debate triggered by

the US-Israeli war against Iran.

The rst is energy diversication.

Birol called it his “number one golden

rule”. Avoiding over-reliance on a

single country, trade route or technol-

ogy makes perfect sense and many

countries – both consumers and ex-

porters – have logically taken steps in

this direction.

“The UAE for example, is fast-track-

ing a pipeline to bring energy, not

through Hormuz, but through Fujairah

on the other side of the country,” said

Birol. “For the consuming countries,

a recent example is an agreement

signed by India to store UAE stocks.”

He said the second trend will see

countries shifting to domestic energy

sources where possible. This is partic-

ularly important in Asia, which imports

80-90 per cent of its Middle East oil

and gas through the Strait of Hormuz.

This, says Birol, will strengthen mo-

mentum for renewables, not only in

Asia but globally. Notably, the report

also shows that solar deployments

continues at pace, with global solar

investments hitting $1 billion/day.

The Strait’s closure will also increase

the call for nuclear and in some

countries, coal. Birol noted that it is

too early to say what the net effect will

be on emissions because of the Middle

East crisis.

The IE report nds reduced spend-

ing on coal across all scenarios but

warns this conclusion may also require

careful review in light of today’s crisis.

As coal is the most carbon-intensive

of all the fuels, there are pressing en-

vironmental reasons to reduce its use.

But as it is also relatively abundant in

many Asian countries that are being

hit hard by the current disruption, it

might also be considered an energy

security asset. According to the IEA,

coal investments this year may be the

highest for the last 15 years, driven by

Asia.

While energy resources vary from

country, Birol noted that the “one re-

source that all countries have, is ener-

gy efciency” and urged countries to

make the most of this potential. “We

believe energy efciency measures

will be deployed in many countries in

order to make energy more secure and

affordable,” he said.

urther electrication is the third

strategy the IEA predicts governments

will adopt going forward. “Electricity

will make even stronger inroads into

the energy mix in response to this

crisis. The IEA has already highlight-

ed that the ‘Age of Electricity’ is

coming,” said Birol.

This was evidenced by the an-

nouncement of a major electrication

strategy for France. French President

Emmanuel Macron said last month

that thousands of companies would be

involved in the country’s effort to

double the share of domestically

produced electricity in its energy mix

to 60 per cent by 2030.

ust 0 years ago, in the rst EI

report, the share of electricity in

global energy investment was less than

40 per cent. According to the IEA, that

share is now more than 60 per cent.

This has been driven by electric mo-

bility and more recently by data centre

growth, especially in countries like the

U, where gas and coal red plant

investment is set to overtake China for

the rst time in decades as the country

reacts to data centre demand.

IEA Chief Energy Economist, Tim

Gould, who led the report, added:

“Electricity has always been a big part

of the energy investment picture… but

since 2015, spending on electricity has

been growing faster than other parts

of the global economy… fast forward

to our expectations for 2026, the share

of electricity investment [in the energy

mix] rises to around 70 per cent. In

China, it’s 75 per cent.

In terms of spend on coal and gas

red plant, he said: “hile China has

traditionally been out in front, largely

because of investments in coal, there

has been a sharp increase in the US,

primarily for gas red plants.”

He also noted that global spending

on grids is expected to reach $500

billion in 2026 – up nearly 20 per cent

year-on-year. Spending on battery

storage projects for the power sector

is forecast to be “well above” $100

billion/year.

The fourth trend the IEA predicts is

that in terms of investment, there will

be greater focus on energy security. In

some cases, it says, this will mean

substantial additional investment and

additional cost. With high energy

prices driving ination and conse-

uently interest rates, nancing proj-

ects will become more challenging it

says.

But perhaps in some ways the most

important area of all, is trust. As the

price of commodities continue to rise,

we are seeing scarcity of some com-

modities in certain parts of the world.

But as Birol stresses, there is one

commodity that is the most scarce in

today’s energy world. That is trust.

“In the coming months and years we

will hear [about] trusted partners in

energy trade – imports or even exports.

When countries make long term ener-

gy contracts and trade agreements –

these could be LNG agreements or

building a nuclear power plant – they

will not only look at how much this

energy will cost, what is the technol-

ogy or the quality of the fuel. They will

also ask: ‘Can I trust this partner in the

long term? Can this energy I buy or

technology I develop, be a risk to my

energy security or national security?’”

Trust will certainly be an important

element in the energy world in the

near-term and likely years to come.

Governments will be all too aware

that if the Strait is closed once, it can

be closed again. As Birol puts it, the

closure of Hormuz means the “vase is

broken”. Things will never be as they

were before, at least not for the fore-

seeable future – sometimes memories

can be surprisingly short.

The US-Israel war on Iran has

demonstrated that the world of energy

not only depends on trust, but is much

like trust itself. Infrastructure built up

over years has been damaged in a

heartbeat and will not return any time

soon. As American entrepreneur and

lm producer once said: “Trust takes

years to build, seconds to break, and

forever to repair.”

Events in the Middle East will cer-

tainly leave a lasting impact on the

energy sector.

When trust is broken

Junior Isles

Cartoon by Jem Soar