Natural gas-fuelled power generation in the United States reached its highest daily level at 41 Bcf/day on July 20 – just a tick lower than the 2016 peak of 42 Bcf/d seen on August 11 last year. Higher gas prices relative to last summer explain part of the decrease; but PointLogic Energy analysts stressed that “although power burn in 2017 is lower than in 2016, it is still relatively high compared with the previous five-year average for that period.”
Australia’s Origin Energy has announced a 15-18% rise in 2017 power prices for customers in New South Wales (NSW) and South Australia (SA) from July 1. Passing fuel costs through to consumers, Origin's decision makes average small-sized companies pay $750-920 per year more for their electricity use. With this latest price hike, Origin follows in the footsteps of EnergyAustralia, AGL Energy and ActewAGL all of which are already implementing power prices rises of up to 20%.
Shares in E.on and RWE have risen up to 5% after news broke on Wednesday that Germany’s top court declared the country’s nuclear fuel tax as “unconstitutional”. This ruling opens up doors for litigation, and the country’s main operators of nuclear power stations – E.on, RWE and EnBW - are expected to claim back over €6 billion that they were made to pay between 2011 and 2016.
The Australian state of Queensland is helping Stanwell Corp to bring a mothballed power plant back into the market in an effort to lower energy prices. The state’s pre-Budget, disclosed yesterday, acts on the Government’s commitment to help re-dispatch a total AS$386 million worth of flexible gas generating capacity near Townsville – and proposes a AS$770 million subsidy to help drive down wholesale electricity prices.
The Institute of Directors (IoD), the UK’s longest-running organisation for professional leaders, has called on whoever forms the next Government to come up with a “transparent alternative” to energy price caps.
“Price cap or freezes don’t help,” the IoD said, suggesting Whitehall should rather create a default tariff structure instead.
May 30 – Production of natural gas in the U.S. has picked up slightly, while demand for power generation remains moderate – but Energy Aspects does not expect a return to healthy storage injection levels. “Given this, cash prices should trade sideways, with the market unlikely to want to push a lot more gas into the power sector,” analysts said in a note. As of late last week, Henry Hub cash was hovering around 3.22 $/mmbtu, so gas prices are just below the 3.27 $/mmbtu fuel switching trigger (7,100 gas vs 10,300 coal).
The first annual capacity auction, completed by PJM Interconnection this week, produced a price of $76.53/megawatt-day for resources in most of the grid area. Transmission limits and power plant retirements, however, led to substantially higher prices in areas with constraints. The grid operator procured 165,109 MW of capacity resources for the period from June 1, 2020, to May 31, 2021, resulting in a 23.3% reserve margin.
May 22 – Members of the Organization of the Petroleum Exporting Countries (OPEC) net oil revenues have plunged to $433 billion in 2016, the lowest since 2004. In real dollar terms, the 2016 revenue represents a 15% decline from the $509 billion earned in 2015. The EIA projects that OPEC’s 2017 net oil export revenues will rise to about $539 billion dollars (nominal), based on a slight recovery in average crude oil prices, as well as higher OPEC output during the current year.
The cleanest and safest power plant is the one you don’t have to build thanks to higher energy efficiency, says Noé van Hulst, OECD ambassador of the Netherlands and IEA board chairman. Dubbed the “hidden fuel”, energy efficiency is demand-side driven, meaning it lacks the headline-grabbing milestones of big power plant projects, or other energy supply infrastructure. And through the energy efficiency trend accelerates, “progress on a global scale is still happening too slowly.”
May 02 – With Henry Hub having stayed just below the fuel switching trigger of 3.08 $/mmbtu (7,100 gas vs 10,300 coal) during the past week, Energy Aspects forecast that gas prices in the Northeast and Midwest, “should see support this week on maintenance-related output cuts and colder Midwest temperatures.” Analysts also said in a note that “Henry Hub should also see limited support from the dip in output this week, as well as a slightly more constructive weather forecast for May.”