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The CEO of energy technology firm Baker Hughes has outlined what he feels are key points related to the energy transition amid deepening concern about rising gas prices and the knock-on effects this could have in the months ahead.

In an interview with CNBC’s Dan Murphy at the Gastech conference in Dubai, United Arab Emirates earlier this week, Lorenzo Simonelli was asked whether soaring gas prices were likely to be transitory or if he expected wider implications for consumers, markets and the broader economy.

“I think a lot of people are seeing what’s happening in Europe and it’s bringing to light the important discussion around the energy transition, and the importance that we have around gas as well,” he said.

It was still early to see if prices would remain high or if this rise was transitory, he said.

Benchmark European gas prices have jumped over 250% since the start of the year, Reuters reported this week.

The reasons for the spike are varied. The influential, yet typically conservative, International Energy Agency said on Tuesday that surging European gas prices had “been driven by a combination of a strong recovery in demand and tighter-than-expected supply, as well as several weather-related factors.” 

“These include a particularly cold and long heating season in Europe last winter, and lower-than-usual availability of wind energy in recent weeks,” it said.

IEA Executive Director Fatih Birol said given that the reasons behind the price rise were multifaceted, it would be “inaccurate and misleading to lay the responsibility at the door of the clean energy transition.”

Birol’s statement would appear to contrast views expressed by figures such as OPEC Secretary General Mohammed Barkindo. Barkindo told CNBC on Tuesday that soaring gas prices were the cost of the attempted shift to renewable energy sources.

“I have talked about a new premium that is emerging in the energy markets that I term the transition premium,” Barkindo said.

The effect of the gas price rise is already being felt on the ground. In the U.K., for example, it has caused a number of small energy suppliers to go bust. 

“We need energy security,” Baker Hughes’ Simonelli said. “And look, there’s plenty of gas around the world, there’s plenty of energy available,” he added. “It’s a question of bringing it to the market.”

On the energy transition — a term referring to a move from fossil-fuel based sources to ones such as solar and wind — Simonelli sought to highlight a number of issues he felt were important.

“We think there’s three hard truths,” he said. “Firstly, we’ve got to work together, accelerate the move towards decarbonization and also eliminating emissions.”

“Secondly, hydrocarbons are here to stay … and natural gas, in fact, is a key element. And thirdly, we’ve got to do it together, collaborate and actually adopt the new technologies that are available.”

Burning fossil fuels, such as oil and gas, is the chief driver of the climate emergency. And despite policymakers and business leaders repeatedly touting their commitment to net zero strategies, the world’s fossil fuel dependency is expected to get even worse in the coming decades.

None of the world’s major economies are currently on track to contain global heating to the Paris Agreement target of 1.5 degrees Celsius, according to a study published by Carbon Action Tracker earlier this month, while separate research shows the vast majority of the world’s known fossil fuel reserves must be kept in the ground to have some hope of preventing the worst effects of climate change.

The role of natural gas

The current crisis surrounding the price of gas has reinforced its continuing significance, even as major economies such as the U.K., European Union and U.S. outline plans to move away from fossil fuels in the years ahead.

Indeed, in its statement issued Tuesday, the IEA said gas remained “an important tool for balancing electricity markets in many regions today.”

“As clean energy transitions advance on a path towards net zero emissions, global gas demand will start to decline, but it will remain an important component of electricity security,” the Paris-based organization added.

In his interview with CNBC, Simonelli was asked about the role gas would play in the race to net zero. “You just have to look at Europe and look at the United States with regards to the way they’ve been successful in the last decades to actually reduce their CO2 emissions,” he said.

“You’ve seen a shift from coal to natural gas and that’s going to continue as you look at it from an emissions profile,” he said. “So, you can reduce the footprint of natural gas from an emissions standpoint. It is already one of the most efficient fuels and we think it’s here to stay.”

— CNBC’s Natasha Turak contributed to this report

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Watch the world’s first artificial energy island being built [video]

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Watch the world's first artificial energy island being built [video]

The first of 23 caissons for Princess Elisabeth Island, the world’s first artificial energy island, is nearly complete.

Princess Elisabeth Island will be an electricity grid at sea that will connect offshore wind farms to the Belgian mainland and also serve as a hub for future interconnectors with the UK and Denmark. Belgian electricity transmission system operator Elia is the project’s developer.

The 20,000-ton caissons, which will form the energy island’s outer walls, are being built at Jan De Nul Group and DEME’s construction site in Vlissingen, the Netherlands. It takes around three months to build one caisson. The production process is split into five 20-day stages. The caissons are moved between the different work sites using “runners,” which takes about six hours. 

When the caissons are ready, a semi-submersible vessel will transport them further down the harbor, where they’ll be temporarily stored in the water. They’ll then be moved to their final location in the North Sea this summer, weather allowing, said maritime infrastructure company Jan de Nul.

You can watch a time-lapse video of Princess Elisabeth Island’s first caisson being built here:

Princess Elisabeth Island is part of the larger Princess Elisabeth Zone, a future 3.5 gigawatt (GW) offshore wind farm in the North Sea, around 45 km (28 miles) off the Belgian coast. The world’s first artificial energy island will receive power from the wind turbines via undersea cables, and it will then be converted to high-voltage electricity and distributed to the Belgian mainland and other European countries. The energy island will combine both direct current (HVDC) and alternating current (HVAC).

The energy island will be finished in late 2026 when the electrical equipment will start to be installed. Princess Elisabeth Island is expected to be fully connected to all wind farms and the mainland by 2030. 

Read more: 2023 was a record year for wind power growth – in numbers


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Honda joins EV race with historic $11B investment to build 240K EVs a year

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Honda joins EV race with historic B investment to build 240K EVs a year

Honda is finally joining the EV race after announcing a massive $11 billion (CAD$15 billion) investment to build four new EV plants in Canada. The historic investment will be used to build Canada’s first EV supply chain, enabling 240,000 Honda EVs to be made for the US and Canada annually.

Honda reveals game changing investment to build EVs

Honda announced its largest investment in Canada ever as it prepares for the electric era. The plans for a new Honda EV plant and stand-alone EV battery factory in Alliston, Ontario.

Once fully operational, the EV facility will be able to produce 240,000 EVs a year, while its battery plant will have capacity of 36 GWh per year. Production is expected to begin in 2028.

According to a press release from the prime minister’s office, Honda will build Canada’s first comprehensive EV supply chain. The project will include four new manufacturing plants in Ontario.

In addition to the EV plant and battery factory, Honda will build a cathode active material and precursor plant through a joint venture with POSCO Future M. A second is planned with Asahi Kasei Corp.

Honda-investment-EVs
2024 Honda Prologue (Source: Honda)

Justin Trudeau, prime minister of Canada, said Honda’s investment is a “game changer for manufacturing in Canada.” With a full supply chain, Honda expects to cut costs by over 20%.

Honda aims for EVs and FCEVS to account for 100% of vehicle sales by 2040. Honda also invested $700 million to retool three Ohio plants to serve as its hub for future EV and EV battery production.

Meanwhile, Honda’s first electric SUV, the Honda Prologue, went on sale earlier this year. Starting at $47,400 (excluding destination), the Prologue offers up to 296 miles range.


2024 Honda Prologue trim
Starting Price
(w/o $1,395
destination fee)
Starting price after
tax credit

(w/o $1,395
destination fee)
Starting price after
tax credit

(with $1,395
destination fee)
EPA Range
(miles)
EX (FWD) $47,400 $39,900 $41,295 296
EX (AWD) $50,400 $42,900 $44,295 281
Touring (FWD) $51.700 $44,200 $45,595 296
Touring (AWD) $54,700 $47,200 $48,595 281
Elite (AWD) $57,900 $50,400 $51,795 273
2024 Honda Prologue prices and range

With the $7,500 federal tax credit, the Prologue’s starting price can fall to as low as $39,900 (excluding destination).

Lace Woelfer, VP of Honda America National Auto Sales, said the Honda Prologue hits the “sweet spot” as a sporty, stylish electric SUV.

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In a first, the US will restrict existing coal-fired plants’ emissions

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In a first, the US will restrict existing coal-fired plants' emissions

The Environmental Protection Agency (EPA) will require existing coal-fired and new natural gas-fired power plants to control 90% of their carbon emissions or shut down.

It’s the first time the federal government has restricted CO2 emissions from existing coal-fired power plants and one of four measures the EPA announced today to transition the US to a clean energy economy.

The EPA states that “the best system of emission reduction for the longest-running existing coal units and most heavily utilized new gas turbines is based on carbon capture and sequestration/storage (CCS),” which qualifies for Inflation Reduction Act tax incentives.

Coal plants that intend to stay online beyond 2039 will have to cut or capture 90% of their CO2 emissions by 2032. If a coal plant retires by 2039, it has to capture emissions but to a less stringent standard. If a coal plant retires by 2032, it’s exempt from the new final rule. Coal powered around 16% of US electricity in 2023.

The rule is projected to reduce 1.38 billion metric tons of carbon pollution through 2047 – equivalent to preventing the annual emissions of 328 million gasoline cars or nearly an entire year of US electric power sector emissions.

Harold Wimmer, president and CEO of the American Lung Association, said, “Burning fossil fuels in power plants harms people’s lungs, makes kids sick, and accelerates the climate crisis. The stronger clean air and climate protections will save lives.”

The other three final rules for coal-fired plants are:

  • A tightening of the emissions standard for toxic metals by 67% and finalizing a 70% reduction in the emissions standard for mercury from existing lignite-fired sources
  • A reduction of pollutants discharged through wastewater from coal-fired power plants by more than 660 million pounds per year
  • The safe management of coal ash placed in areas that were unregulated at the federal level until now

EPA administrator Michael S. Regan said, “By developing these standards in a clear, transparent, inclusive manner, EPA is cutting pollution while ensuring that power companies can make smart investments and continue to deliver reliable electricity for all Americans.”

The new EPA rules are part of the Biden administration’s pledge to achieve net zero in the electricity sector by 2035.

Read more: New England to become the second coal-free region in the US


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Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisers to help you every step of the way. Get started here. –ad*

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