In Today’s Talking Points: China Installs 9.65 Gigawatts of Solar Power in Q1 2018; Jordan in Advanced Talks with China to Build $1 Billion Reactor; Sinopec Energy Posts Best Quarterly Earnings in the Past 3 Years; China’s Top Refiners Plan Maintenance of Plants in Q2 2018, Throwing Doubts on Global Oil Optimism
China Installs 9.65 Gigawatts of Solar Power in Q1 2018
China’s National Energy Administration announced this week that the rate of solar power installation had increased 22% from the same period a year ago, up to 9.65 gigawatts. Much of this power is not going into large, centralised grids, it is being used alternatively in local micro-grids, offering more power to those across the country lacking infrastructure. The distributed solar power segment increased a massive 217%. In 2017, China installed 52.83 gigawatts of solar capacity, whereas in 2016 only 34.2 gigawatts had been installed, signalling that current government targets are likely to be surpassed this year. Solar power now accounts for around 7.3% of the country’s power generation, in line with the recent government push for renewable energy.
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Jordan in Advanced Talks with China to Build $1 Billion Reactor
The Atomic Energy Commission of Jordan has said that it is in ‘advanced’ talks with the China National Nuclear Corp to build Jordan’s first nuclear reactor. The reactor is expected to be a 220-megawatt reactor and to cost the Kingdom $1 billion when operations start in 2025. Jordan has recently been focused on alternative energy sources, building nuclear, solar and wind plants to generate energy to counter reliance on it’s neighbours and to combat its lack of oil and natural gas reserves. Further to this, a recent influx of refugees has strained the current infrastructure, and the lack of water makes pumping it around the country expensive. The new nuclear plant aims to ease these problems and develop a new partnership.
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Sinopec Energy Posts Best Quarterly Earnings in the Past 3 Years
China’s Petroleum & Chemical Corp (Sinopec) reported their best quarterly profits since the middle of June 2015, stemming from a strong performance by their refining department and changes in crude oil prices. As Asia’s largest refiner, they posted net profit growth of 12.3% in the first three months of this year, in comparison to the same period last year, with profits growing to 19.31 Billiom RMB (up from 12.57 Billion in Q4 2017). The increase in profit is also attributed to higher processing margins, which are benefiting both state owned and private refineries. Although posting high profits, they expect less revenue in the following quarter as their largest plant in Zhenhai undergoes a major overhaul starting in may.
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China’s Top Refiners Plan Maintenance of Plants in Q2 2018, Throwing Doubts on Global Oil Optimism
Some of the largest refineries in China will shutdown for scheduled maintenance and an overhaul of plants in May and June 2018, cutting nationwide refinement by 10% and dampening oil demand in the world’s largest crude importer. Q1 saw oil refiners post some of the best profits they have seen in the past few years, however the maintenance will likely reduce their earnings through Q2. A slowdown in refining activity will likely reduce Chinese imports of crude oil, which may dampen the recent crude oil price rally. The major oil import hub of Huangdao will also be shutdown, further exacerbating these effects. More optimistically, a flurry of independent refineries are hoping to take over while the large plants are under maintenance to make up for the loss of refinement.
Read more on Reuters