Displaying items by tag: Oil

Renewables reportedly generated more power than coal in the first half of 2025. Energy think tank Ember put out a report this week, which showed that solar and wind generation also grew faster than the rise in electricity demand in the first half of 2025. Global electricity demand rose by 2.6% year-on-year, adding 369TW. Solar increased by 306TW and wind by 97TW. Both coal and gas generation fell slightly, although a rise in other fossil fuel generation slowed the decline further.

Tellingly, fossil fuel generation fell in both China and India. Indeed, China added more solar and wind than the rest of the world combined, cutting its fossil fuel generation by 2% or by 58.7TWh. In India, renewables grew at the expense of fossil fuels, but demand growth was relatively low at 12TWh. In the US and the European Union (EU) fossil fuel generation actually increased. In the US, this was due to demand growth outpacing new renewable power. In the EU, weaker wind and hydroelectric output led to a greater reliance on coal and gas.

Meanwhile, a separate report by the International Energy Agency (IEA), also out this week, predicts that installed renewable power is likely to more than double by 2030 even as the sector navigates headwinds in supply chains, grid integration and financing. The IEA forecasts that global renewable power capacity will increase by 4600GW by 2030, roughly the equivalent of adding the total power generation capacity of China, the EU and combined. Solar photovoltaic (PV) will account for around 80% of the global increase in renewable power capacity over the next five years, followed by wind, hydroelectric, bioenergy and geothermal. Solar PV is expected to dominate renewables’ growth between now and 2030, remaining the lowest-cost option for new generation in most countries. Wind power, despite its near-term challenges, is still set for considerable expansion as supply bottlenecks ease and projects move forward, notably in China, Europe and India. However, the IEA’s outlook for global renewable capacity growth has been revised downward slightly compared to 2024, mainly due to policy changes in the US and in China.

This is all very well but what does it mean for the cement sector? At face value, possibly not much anytime soon. Both Ember and the IEA are talking about domestic electricity generation, not industrial. Ember reckons that half the world’s economies may have already peaked in fossil fuel power generation, but usage rates are still high. Prices of fossil fuels may even subsequently come down - to the benefit of industrial users such as cement plants. Yet, carbon taxes should, in theory, discourage increased usage - if they are working correctly.

Market distortions should not be discounted though. Some readers may recall what happened with carbon credits in the earlier stages of the EU emissions trading scheme. Free carbon allowances, calculated during the boom years of 2005 - 2007 when production was maxed out, were far too much to cover production during the resulting economic crisis. The sale of extra allowances provided many plants with a nice little earner and did little to encourage decarbonisation. Carbon capture is likely to require large amounts of electricity, but cheaper energy from renewables may help.

However, take a look at renewable energy stories in the Global Cement website news so far in 2025 and there are nearly 30 solar-related and seven wind-related ones. Cement companies are busily adding renewable capacity to reduce the cost of their electricity. This week, for example, Equator Energy commissioned a 10MW captive solar power plant at Mombasa Cement’s Vipingo plant in Kenya. Last week, Southern Province Cement in Saudi Arabia signed a 25-year solar energy power purchase agreement for its Bisha cement plant. Lest one forget, Saudi Arabia was the largest exporter of crude oil among Organization of the Petroleum Exporting Countries (OPEC) members in 2023 at 6,659,000 barrels/day. If a cement plant in Saudi Arabia is investing in renewables, then one might suspect a change in the global energy mix is occurring.

Electricity accounts for around 12% of the energy demand at a cement plant. Nearly two-thirds of that demand comes from either grinding raw materials or cement. Then, as mentioned above, carbon capture is expected to increase the demand for electricity. One estimate reckons it will increase electricity consumption by 50 - 120%. Renewables are expected to bring down the price of electricity but demand will also grow.

So… expect more renewable projects linked to cement plants.

Saudi Arabia: Arabian Cement Company has estimated that its production costs will rise by 14% after Saudi Aramco raised its fuel prices. In an addendum to a previous announcement published on the Saudi Exchange on 4 January 2024, the producer said that it will explore cost reduction strategies throughout the coming financial period.

Saudi Arabia: Utilities provider Saudi Aramco has notified Saudi Arabian cement producers of a rise in the price of its feedstock and fuel products from 1 January 2024. Zawya News has reported that Saudi Kayan Petrochemical Company forecast the effect of the price rise to be a 1.2% increase in producers’ cost of sales in 2024.

Yanbu Cement said “The impact of changing the price of fuel products will lead to an increase in the cost of production.” Umm Al-Qura Cement echoed the concern, while Saudi Cement Company said that it is working out the extent of the financial impact and will study ways to mitigate it.

El Salvador: Holcim El Salvador says that the upcoming solar power plant at its El Ronco cement plant will have a capacity of 21.4MW, across three separate installations. Energy provider AES El Salvador holds a 20-year power supply agreement for construction and operation of the plant. The La Prensa Grafica newspaper has reported that Banco Cuscatlán supplied a loan for the project. When operational, the new solar power plant will lower Holcim El Salvador's oil consumption by 43,000 barrels/yr.

Holcim El Salvador CEO Rodrigo Gallardo said "We are not only making solutions and products with a lower CO₂ content, but also cutting CO₂ in our production processes."

Nigeria: GE Gas Power expects to commission a new 50MW power plant at a Dangote Cement site in early 2023. The supplier said that the new power plant will provide energy for Dangote Cement's cement production and refinery operations.

The This Day newspaper has reported that the new plant is part of a total 500MW-worth of new power infrastructure which GE Gas Power expects to commission in Nigeria before July 2023.

India: JK Lakshmi Cement recorded consolidated sales of US$209m in the first quarter of the 2023 financial year, up by 25% year-on-year from US$167m in the first quarter of the 2022 financial year. The group’s net profit was US$14.5m, down by 15% from US$17.2m.

ZeeBiz News has reported that the producer experienced a 29% year-on-year increase in costs to US$188m, which it attributed to rising global fossil fuel prices.

India: India Cements’ fourth-quarter sales were US$183m in its 2022 financial year, which ended on 31 March 2022, down by 4% year-on-year from US$190m in the corresponding quarter of the 2021 Indian financial year. The producer’s net loss was US$1.37m, as against a first-quarter 2021 financial year net profit of US$6.47m. During the quarter, the company’s cement sales volumes fell by 1.4% to 2.63Mt from 2.67Mt, while its clinker sales volumes fell by 88% to 38,000t from 324,000t. For the full 2022 financial year, India Cements’ sales of cement rose by 2% to 9.07Mt from 8.9Mt. Coal costs ended the financial year at US$300/t, five times the 31 March 2021 price of US$60/t.

India Cements said “The spiralling prices of fuel, along with the shortage in availability of the same, affected the margins of the industry. The woes of the industry worsened further with the outbreak of Russia's war with Ukraine resulting in sanctions being imposed on Russia and its exports, fuelling further shortage of coal and oil in the market.”

Russia: SibCem’s first vice president Gennady Rasskazov says that the local production cost of cement is expected to rise by 30% year-on-year in 2022 due to the new ‘economic circumstances’ the country faces. He added that, due to economic sanctions, the price of coal rose by 76 - 86%, goods and materials by 55%, diesel by 30%, oils and lubricants by 83% and transport and logistics costs by 14 - 24% in the first quarter of 2022. The average growth in worker pay at SibCem will rise by 30% in 2022 as the company has implemented indexed salaries. Rasskazov made the comments at a meeting with cement producers, consumers and local officials at the Novosibirsk State University of Architecture and Civil Engineering.

Cameroon: The government has enacted a ban on the export of cement, along with other commodities including oil and grain, from East Region. The Journal du Cameroun newspaper has reported that the impacts of the Russian invasion of Ukraine have exacerbated a difficult supply situation of the basic commodities in the region, dating to the beginning of the Covid-19 outbreak in the country in March 2020.

The East Region borders the Central African Republic and Congo. It has no cement plants of its own.

Vietnam: Vicem Hoàng Mai Cement has announced a full-year sales target of US$79.2m for 2022, down by 1.5% year-on-year from 2021 levels. Its target net profit for the year is US$656,000, more than five times its 2020 figure. The company forecasts cement production of 1.73Mt, up by 11% from 1.56Mt, and clinker production of 1.4Mt, down by 4.1% from 1.46Mt, for the year. It plans to replace 30 – 40% of the natural gypsum currently used in cement production with synthetic gypsum. It will also increase the proportion of ash and slag in its raw materials mix.

The Chúng Khoán newspaper has reported that Vicem Hoàng Mai Cement said that it is experiencing increased costs due to high raw materials and fossil fuel prices. A coal shortage has also disrupted production.