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Hello Power Up readers,

Oil and gas news has dominated the newsletter in recent weeks, particularly as attacks on energy infrastructure have taken center stage in the Russia-Ukraine war. Indeed, Russia's recent heavy strikes against Ukraine's natural gas facilities have been a reminder that the conflict can still have an impact on energy markets, especially in Europe. We'll explore this further down.

However, if we want to talk about growth in the energy markets, then we need to look at where it's all happening and where the outlook remains mostly sunny: renewables.

Renewable power capacity is expected to more than double by 2030, increasing by 4,600 gigawatts – roughly the equivalent power generation capacity of China, the European Union and Japan combined, the International Energy Agency wrote in a report this week. Solar panels, cheap and easy to install, are expected to account for 80% of that growth, cementing the technology's supremacy in the energy transition.

This is certainly impressive. But consider that this growth forecast is actually lower than what the IEA estimated a year ago, primarily due to U.S. President Donald Trump's anti-renewables policies. The early phase-out of U.S. federal tax incentives and other regulatory changes lowered the IEA growth expectations for renewables in the U.S. market by almost 50% compared with last year’s forecast. Changes to China's auction system led to a further downgrade. Growth in offshore wind is also expected to slow down due to higher costs.

The significant adjustments in the outlook - driven mostly by political changes - suggest the road to lower emissions power will be bumpier than many expected.

But relative to the cloudy growth outlook for fossil fuels, the future of renewables still looks pretty bright.

I love to get your thoughts and comments, so don’t hesitate to contact me at ron.bousso@thomsonreuters.com or follow me on LinkedIn.

Moving back to oil and gas, Russia's heavy bombardment of Ukraine's natural gas infrastructure ahead of winter is set to have a knock-on impact on Europe's energy market as Ukraine draws more fuel from its western neighbours.

Any increase in European gas prices as a result of Ukraine’s purchases is nevertheless likely to be mitigated by the abundance of global liquefied natural gas supplies.Russia stepped up attacks on Ukraine's energy grid and gas production facilities in recent days as the war enters its fourth winter. Last Friday, Moscow launched its largest attack on Ukrainian gas infrastructure since the start of the war, which the CEO of state oil and gas company Naftogaz said caused critical damage to facilities. There were further strikes on civilian gas supply infrastructure over the weekend. Ukraine has also ramped up drone attacks on Russian oil refineries and facilities in recent weeks.

It is so far unclear to what extent the strikes have hurt Ukraine's domestic gas production. A massive wave of Russian attacks on Ukrainian energy facilities in March reduced production by over a third, meaning that the latest attacks could have similar or larger impact.

The disruption comes at a crucial time for Ukraine as it scrambles to refill storage facilities before the onset of winter, when gas demand for heating soars.Low storageUkraine operates Europe's largest underground gas storage, which has a capacity of 31 billion cubic metres, though it currently holds around 13 bcm, or 42% of capacity, according to Erisa Pasko, gas analyst at Energy Aspects. The figure, however, includes around 4.7 bcm of gas in strategic reserves that are harder to tap, she added.

Ukraine has traditionally exported gas to Europe, delivering Russian fuel under a major transit contract that accounted for around 5% of total European Union imports in 2024, generating substantial revenue for Kyiv. The flow meant that Ukraine's gas storage and pipeline network was initially spared from Russian attacks, but that all changed when the transit agreement expired on January 1, 2025.

Beyond its domestic gas production, which reached around 19 bcm last year, Ukraine today imports gas via interconnectors from Hungary, Poland and Slovakia. It has also started using pipelines via the Balkans to import small volumes of LNG delivered to Greece and Croatia.

If the current damage to Ukraine’s production is at a similar scale to last winter’s, Ukraine will likely need to increase imports from western neighbours between October and March to 2.1 to 4.1 bcm, from a previous estimate of 1.5 bcm, according to Energy Aspects' Pasko.Stronger demand from Ukraine will therefore increase pressure on the neighbouring European gas market, which has itself undergone dramatic transformation in the wake of Moscow's 2022 invasion of Ukraine.

Texas's main power generation system is on track for a rare contraction in fossil fuel-fired generation in 2025, as long as output from the state's massive wind farms rises sharply as expected during the final quarter of the year, writes ROI Energy Transition Columnist Gavin Maguire..

Exxon Mobil signed an agreement with Iraq on Wednesday to help it develop its giant Majnoon oilfield and expand oil exports, marking the U.S. major's return to the country two years after exiting.

Britain's electricity and gas grid operators expect the country to have sufficient energy supplies this winter, despite tighter gas margins due to declining domestic production, they said in their respective winter outlooks on Thursday.

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