US State Department officials have asked European utilities where they would source natural gas from if the escalating conflict between Russia and Ukraine impairs supplies. Gazprom already reduced deliveries since the autumn, creating artificial tightness, but the US promises to ship LNG if contracted Russian gas flows get halted due to conflict or sanctions.
China may triple electricity generation to cover 60%, instead of currently 23% of total energy demand to reach Net Zero by 2060, Royal Dutch Shell reckons. The oil major also predicts green hydrogen to play a key part in China’s future energy mix as the country’s carbon price will quadruple to 1,300 yuan ($204.82) per tonne in 2060.
The International Energy Agency (IEA) has dismissed rumours that Europe’s high gas and electricity prices are caused by the clean energy transition. “This is not a renewables crisis; it’s a gas market crisis,” IEA head Fatih Birol said, pointing out Gazprom lowered export to Europa by 25% since November 2021 and currently delivers one-third less than it could.
Switching to synthetic e-fuels – like carbon-neutral methanol or bio-ethanol – will not be a solution to decarbonise transport in Germany, simply because not enough e-fuel is available. “We will predominantly need e-fuels for aviation,” the transport minister Volker Wissing said, suggesting the public can drive in a carbon-neutral way using e-mobility.
The EU taxonomy’s classifies new gas power as ‘transitional investment’ if the rate of unabated gas declines over time. At least 30% of low-carbon gas needs to be co-fired by 2026, and the rate is envisaged to reach 100% by 2035 – though utilities will struggle to source enough hydrogen in time.
Tapping the power of the sun, Siemens Energy will set up a hybrid plant to supply stable baseload electricity to 10,000 households in French Guiana. An intelligent combination of 55 MW photovoltaics, an electrolyser to produce green hydrogen, fuel cells and energy storage is scheduled to be commissioned in the autumn of 2023.
Remote telemetry units (RTUs) monitor the grid-connection of conventional 1 GW power stations, but these RTUs need to get smaller to control the vast range of renewable options like solar, biomass and wind that are measured in kilowatts. On-site, the RTU fine-tunes the plant’s operation in coordination with the local TSO and relays information to the asset owner.
Concerns about exposure to Russia push gas buyers towards LNG contracting. “Both oil- and Henry Hub-indexed longterm LNG contracts will trade at a considerable discount to local spot prices through to 2025/6,” Wood Mackenzie reckons, though utility companies need to commit to longer duration contracts to take advantage of the current spot price premium.
Concerned about an excessive onshore wind buildout, Germany’s biggest TSO TenneT underlined the vital role of new hydrogen-ready gas power plants. “If we want to exit coal already by 2030 already, the economy ministry needs to honour his commitment to H2-ready power. TSOs need stable capacity to balance the grid,” says TenneT COO, Tim Meyerjürgens.
Classifying unabated gas-fired power plants as “transitional investments” – as in the EU taxonomy proposal – attracts financial and utility investors. As it stands, both will be able to increase their corporate “green scoring” by investing in gas, including outside Europe. The CO2 cap for new power plants build by 2030, meanwhile, paves the road for hydrogen co-firing.
With over 124 GW of coal, gas and nuclear capacity to be displaced in Europe by 2030, investment in new solar combined with energy storage is set to surge. The rising diversification of asset ownership in distributed energy storage could unlock a 40-GWh market, with some analysts anticipating 12x market growth in this decade.
Capturing carbon emissions directly from the air requires a lot of electricity, hence the German government prioritises the renewable build-out. “Carbon Capture and Utilisation (CCU) with direct air capture should only be used once renewables have reached a share of more than 80% of power supply,” analysts at the Federal Environment Agency (UBA) stressed.
Coal has staged a surprise return in the global power gen market in the face of sky-high LNG prices, but this phenomenon will be short-lived, the International Energy Agency (IEA) says. Most of the recent switching from gas back to coal will reverse as gas prices retreat from early 2022 highs.
Brussel has given EU member states time until January 21 to react to the contested Taxonomy, which labels fresh investment into gas and nuclear power as “climate friendly.” The scheme can only be stopped if at least 20 EU countries oppose it, which is unlikely as France and Poland want new small-scale nuclear reactors and Germany more flexible gas generation.
News in Brief
Oman inaugurates 500 MW solar plant
Jan 26 – ACWA Power has inaugurated Ibri 2, an $417 million solar power plant with a capacity of 500 MW. The large IPP will sell solar power to Oman’s national grid over a 15-year period, backed up by flexible gas power plants.
GenCell raises funds
Jan 24 – Israel-based fuel cell maker GenCell Energy has raised $35.9 million in its latest funding round. CEO Rami Reshef said the fresh capital will accelerate developments in the field of green ammonia, pursued with TDK, as well as charging stations for electric vehicles.
German utilities invest record amounts
Jan 21 – Energy companies in Germany invested a record €20.5 billion in 2021, and the industry association BDEW expects capital expenditure will stay high throughout 2022. Out of the total sum, €4.3 billion were invested in electricity generation plants, €9.9 billion in transmission and distribution plants and €1.2 billion in other assets, such as metering points and information technology.
H2-powered plant for French Guiana
Jan 20 – Siemens Energy will set up a hybrid plant to supply stable baseload electricity to 10,000 households in French Guiana. An intelligent combination of 55 MW photovoltaics, an electrolyser to produce green hydrogen, fuel cells and energy storage is scheduled to be commissioned in the autumn of 2023.
Decarbonising UK homes
Jan 19 – Just 9 million hot water cylinders are currently installed in British homes, leaving a gap of 18 million homes whose heating would need to be decarbonised for the UK to meet Net Zero. According to the trade body HWA, the political focus of decarbonising heating has been solely on the heat source; such as boilers and heat pumps – while little to no focus has been on hot water cylinder. This gap in in government policy, which could result in unnecessary costs to consumers.
Cresta to fund Lapis Energy’s CCS projects
Jan 18 – Texas-based Cresta Fund Management has agreed to finance Lapis Energy’s CCS and clean hydrogen projects. The two partners are now looking to identify, design and develop projects for the permanent sequestration of CO2, targeting customers within the heavy industry and petrochemical companies.
GE to repower Long Lake plant
Jan 17 – GE will modernize four generors at the Long Lake hydropower plant in northwest US, operated by Avista Utilities. Once refurbished, the plant will have an installed capacity of more than 100 MW. The first modernized Long Lake unit is scheduled to go into operation at the end of 2024 and the last one in 2029
mtu to power Romania’s largest data center
Jan 14 – mtu Series 4000 gas generators will provide electricity heat and cooling for Romania’s largest data center. ClusterPower is building a 273,000-squaremetre technology campus near Craiova by 2025, where it will host five data centers with a Power Usage Effectiveness (PUE) of 1.1
Green hydrogen from Quebec
Jan 13 – Charbone has agreed to provide the US propane distributer Superior with green hydrogen from its Sorel-Tracy facility in Quebec, Canada, starting from the third quarter of 2022. The hydrogen will be delivered directly from Charbone’s H2 plant to Superior’s customers which include mining, power generation, transportation and industrial energy users.
Cresta to fund Lapis Energy’s CCS projects
Jan 12 – Texas-based Cresta Fund Management has agreed to finance Lapis Energy’s CCS and clean hydrogen projects. The two partners are now looking to identify, design and develop project for the permanent sequestration of CO2, targeting customers within the heavy industry and petrochemical companies.
US rivals Australia as world’s largest LNG exporter
Jan 11 – Analysts at the US Energy Information Administration (EIA) are confident that the growth in US LNG exports could see America’s liquefaction and send-out capacity exceed that of Australia and Qatar – the world’s two largest LNG exporters. Looking ahead, the EIA expects US exports of the super-chilled gas will rise 17% from 2021 levels to average 11.1 Bcf/d from December through March.
Africa’s first FLNG plant arrives in Mozambique
Jan 10 – Coral Sul FLNG, Africa’s first-ever floating LNG facility has arrived in Mozambican waters. The plant is critical to develop the US$7 billion Coral South project, led by the Italian oil and gas company Eni. Some of the produced gas will be used for power generation in Mozambique, though most will be liquefied and sold to global markets.
GE snaps up Opus One Solutions
Dec 23 – GE Digital has agreed to acquire Opus One Solutions Energy Corp, a Californian software company that helps utilities integrate renewables and Distributed Energy Resources (DERs) at scale across the electric grid. The transaction is expected to close within 30 days, GE stated without disclosing what price was paid for the takeover.
Qatar invests in Rolls-Royce’s nuclear power business
Dec 22 – Qatar Investment Authority, the state’s sovereign wealth fund, has agreed to invest £85 million in Rolls-Royce SMR, the company’s new technology for small-scale, low carbon nuclear power. UK business and energy secretary Kwasi Kwarteng called the investment a “clear vote of confidence” in the UK’s nuclear innovation. It follows £210 million Qatari investment in the development in Small Modular Reactors. Now fully funded, Rolls-Royce SMR business also received £490 million through commercial equity and UK Research and Innovation (UKRI) grant funding.
JERA helps Japanese film producer curb emissions
Dec 20 – Toho, a Japanese film producer and entertainment company, will get support from the country’s largest power producer JERA to reduce CO2 emission from film production. To that end, JERA will supply zero-emissions energy to Toho and draw up a roadmap to decarbonise the media company as a whole.
Tractebel develop concept to store H2 offshore
Dec 17 – Tractebel Overdick and partners have developed an offshore infrastructure and processing facilities concept that relies on the storage of hydrogen (H2) in offshore caverns. The design study outlines a scalable offshore platform for the compression and storage of up to 1.2 million cubic meters of hydrogen.
Ethatec uses CO2-free power to produce ethanol
Dec 15 – ESG Clean Energy has signed a letter of intent (LOI) with Ethatec to use ESG’s patented CO2-free gensets to its ethanol production. Ethatec uses waste from bakeries and pizza factories which is being crushed and then mixed with water and enzymes and heated in a multi-stage mashing process to saccharify the starch. It is then cooled and fed into fermentation tanks, where yeast is added. for alcoholic fermentation of the sugar. After 72 hours, the mixture is fed to a distillation system where ethanol is obtained.
