Pondering why the Czech-based companies EPH and PPF Investments have recently acquired all of Vattenfall’s former lignite power plant assets in eastern Germany, IEEFA data analyst Gerard Wynn suggests that the buyers don’t believe Germany will meet its 2030 emissions target. They think that another sector, not lignite, will bear this burden or they expect to be compensated for any forced early retirements of power plants.
Anticipating that South Africa’s proposed gas power projects will cost up to $3.7 billion, the Department of Energy (DoE) announced it will reveal a list of preferred bidders for the projects by the end of March 2017. DoE had issued an Independent Power Producer (IPP) program as the basis for the procurement of two projects totalling 3,000 MW.
Keen to clean up hazardous air pollution, the Chinese government is embracing nuclear power and seeks to shift from coal to gas generation – although fuel costs still make operators favour coal. As for new nuclear, China has an additional 20 reactors under construction, which, if completed, will add more than 22 GW to its existing capacity of 27 GW.
By the end of 2018, Qatar Electricity & Water Company (QEWC) plans to boost the emirate’s power generation capacity to 13.1 GW, up from currently 8.8 GW. Installed capacity is enough to meet demand of around 8.2 GW but rising energy use, particularly for air-conditioning and water desalination, makes new-build gas power plants a necessity.
Detroit-based DTE Energy has unveiled plans to spend up to $1.5 billion to construct new gas-fired generating capacity across the US as it needs to replace part of its coal power plants that are due to be phased out by 2023. The utility said it will file a full application for the new-builds with Michigan regulators in mid-2017.
Signing of a £18 billion contract for electricity offtake from the Hinkely Point C nuclear project is burdening rate-payers with higher costs than new gas power stations would have done, the UK government had to admit. Analysts at Barclays Bank estimated EDF will generate a 7.2% rate of return – even if the project would come in 25% over budget and was completed four years late (by 2029).
Though imported cost of coal and LNG has declined, power prices in Japan keep rising. According to data from Japan's 10 major utilities, the average retail electricity price rose for four consecutive fiscal years (2011–14). LNG prices fell by 37% and coal prices fell by 19% in fiscal 2015 but Japan's retail electricity price eased of by merely 2%.
Doreen Power, a privately-run utility in Bangladesh, has contracted MAN Diesel & Turbo to supply three 18V 48/60TS engines for a 56.7 MW baseload power plant near Dhaka. “48/60’s can be retrofitted to 51/60s without any major effort,” a MAN spokesman said, but cautioned about Bangladesh’s current gas supply constraints.
Shale oil and gas production from the Appalachian Basin's Utica play has hit 3.5 Bcf/d this June, jumping from very low levels of 0.1 Bcf/d in December 2012. The surge in output from the vast Utica play keeps a lid on US natural gas prices and incentivise more power station operators to shift from coal to gas. The capacity factor for CCGTs has risen to 56% and is expected to increase further.
Even though thermal coal prices increased by nearly 50% this year, the effect on fuel switching is not enough to make the use of LNG economically viable for power generators. For coal-to-gas switching in Asia, analysts say that LNG would have to fall by another third from its recent lows around $6/mmBtu.
In the face of gas supply shortages following a major and prolonged leak at SoCalGas’ Aliso Canyon storage facility, the US Energy Information Administration (EIA) now provides timely updates in its ‘Southern California Daily Energy Report’. Withdrawal rates at Aliso Canyon have fallen sharply below the usual 1.9 Bcf/d – causing regulators to place a cap on gas-burn and spurring electricity imports from neighbouring states.
Sluggish growth in the oil and gas segment saw 2015 global energy spending fall to $1.83 trillion, an 8% drop year-on-year, according to IEA’s latest report. Participants in a survey agreed that China has become “more attractive”, with foreign investors being particularly drawn to “ample opportunities in the electricity sector.”
German grid operator 50Hertz is installing phase shifters to raise electrical resistance that stops excess renewable power supply from spilling over into Poland’s PSE grid zone – causing diplomatic spats. Electrical current normally takes the path of least resistance, but if Germany’s north-south routes are congested e.g. by ample wind power supply – this excess supply sometime takes a detour through neighbouring countries.