Regulation & Policy

Theresa May, the new UK Prime Minister, has shut down the Department of Energy and Climate Change (DECC) and moved responsibilities to the newly created Department for Business, Energy and Industrial Strategy, led by Greg Clarke. Critics in Whitehall voiced concerns that the new government places less importance on closing Britain's power gen capacity gap as main attention lies on Brexit.

US consumer watchdog has warned the California Independent System Operator (CASIO) against introducing a ‘Western Power Grid’ that would strengthen links between eight states and facilitate more electricity exports to Mexico. Critics warn this would be “burdening consumers with higher costs [of generation] to benefit investors,” while proponents say an interregional grid would help save nearly $1 billion over the next decade.

Over two-thirds of households in Myanmar still lack access to electricity, so new centralised gas power plants – like the Sembcorp’s 225 MW Myingyan combined-cycle gas power project – are deemed “vital” to supply much-needed electricity to the grid.

A flurry of power plant closures this spring has spurred the UK government to buy more electricity generation capacity and buy it earlier. Up to 53.8 GW of capacity for delivery in 2017/18 will be procured in an ‘early auction’ next January, while the volume of the T-4 auction in December for 2020/21 delivery was raised by around 6 GW to now 52 GW.

An $18 million program to install a state-wide micro grid, powered by distributed gas-fired turbines, is underway in the US costal state of Connecticut. Deployment is fast-tracked in response to hurricane Sandy, with $18 million in funding made available through the ‘DEEP Microgrid Pilot Program’.

Daily electricity generation in Nigeria has reached another low point, plummeting to just over 2,520 MW on Friday – a far cry from estimated peak demand of 17,720 MW. Yet in the face of a domestic gas supply crisis, flaring of associated gas continues and foreign private investment in domestic power & gas projects is hard to come by.

Following the abrupt withdrawal of £1 billion CCS funding by the UK treasury, Whitehall now has to set out its ‘Carbon Plan’ to explain how it will meet targets set in the Paris Agreement without capturing carbon from fossil power plants. Today, CSSA detailed ‘36 lessons-learned’ from UK CCS programmes – a retrospective.  Scotland’s SCCS warned any alternative climate action might cost even more dearly.

Uncertainty abounds after Britain voted for Brexit amid concerns over implications on foreign direct investment, not least in the UK energy sector. The very future of the Hinkley Point nuclear power project is up in the air, as observers warn that the departure of UK prime minister David Cameron might give EDF a pretext to pull the plug on financing.

Cross-border electricity flows need better TSO coordination, as do capacity measures set by national policymakers, if Europe wants to achieve its energy security policy objectives. As Fabien Roque, senior vice president for Compass Lexecon Energy put it: “We will only be able to address issues of coordination in capacity markets if we can deal with simultaneous scarcity situations.”

Unsubsidized renewable spot prices in many markets are now equal to or below gas power prices, prompting substantial changes in generation requirements. “We are in the midst of transition to a new energy paradigm and this implies consequences for traditional generation. The first need is a much higher efficiency for all plants along with greater flexibility,” Enrico Viale, Enel Group’s head of global thermal generation said at the opening of Power-Gen Europe in Milan today.

Implementation of the EPA’s Clean Power Plan will accelerate the growth of renewable generation and the phase out of coal power plants throughout the United States. Wind and solar power is set to will overtake coal-fired generation by 2029, while gas power capacity will exceed coal-fired plants by 2022, according to EIA projections.

Pennsylvania’s environmental watchdog will host a public hearing on June 21 to discuss the proposed CPV Fairview Energy Center (1,050 MW) in Jackson Township, Cambria County. Approval for the plant’s air quality plan is still pending, though the operator aims to start construction in early 2017.

‘Continuity in energy policy’ is the top concern of UK energy professionals, surveyed in the EI’s Energy Barometer 2016, with a ‘lack of investment’ a close second. An overwhelming majority of respondents foresee negative effects on the UK energy system – notably on supply security, renewable deployment and energy efficiency - should Britain leave the EU.

German energy minister Sigmar Gabriel has rejected the idea of establishing a commission to analyse ways of a coal power phase-out. He called the nuclear exit a “brave decision,” but cautioned one should “not attempt to repeat such experiments too often.” E.ON and RWE are radically restructuring their operations to stay afloat as Berlin keeps embracing renewables.

Stepping up the use of local energy sources and lowering electricity prices is the main objective of Turkey’s new electricity law, approved by parliament this week. Complicated regulation on energy investment will also be scrapped in a bid to incentivise new-build capacity.