Daily News

Stockpiles of thermal coal in the United States have fallen to the lowest level in a decade as more and more coal-fired power plants retire and the lost capacity is being replaced with gas-fired plants and renewables. Coal stockpiles decreased to 98.7 million tons in February 2019, their lowest value in more than a decade, and the EIA expects them to remain relatively low for the rest of this year.

Carbon capture and hydrogen are interdependent; hence the resurgence of strategic interest in hydrogen is strongly connected with carbon capture in multiple ways. “The most basic is the source of hydrogen: today it is fossil fuels with over 10 tons of CO2 emitted for a ton of H2,” said IEA chief economist Laszlo Varro.

Texas is at risk of power emergency alerts this summer, and may even face rotating blackouts, the Electric Reliability Council of Texas (ERCOT) warned, as the current 8.6% electric reserve margin may prove insufficient to meet strong electric demand growth. Power grid operators typically aim for reserve margins of 10% to 15% and ERCOT itself had set a target of 13.75%.

Two Czech billionaires and energy infrastructure investors are understood to have teamed up with state-run CEZ to bid or Alpiq’s gas- and coal-fired power plants in the Czech Republic. Having posted high losses in 2018, the Swiss firm Alpiq has been considering the sale of some power plants.

Boston-based energy infrastructure developer Advanced Power has broken ground on its South Field Energy project in Columbiana County, Ohio. The 1.182 GW combined-cycle gas power plant is being developed at a cost of $1.3 billion and is scheduled to come online in mid-2021.

The Government of Morocco has made “positive efforts” to improve energy access for all citizens and end fossil fuel subsidies to establish a more competitive energy pricing regime, said Dr Fatih Birol, Executive Director of the International Energy Agency (IEA). With the exception of bottled butane, fuel prices are now linked to the international market.

The battery boom is coming as solar-plus-energy storage prices keep falling, making this hybrid technology preferable over gas peaking power plants on a levelised cost of electricity (LCOE) basis. According to Wood Mackenzie analysis, unsubsidized utility-scale LCOE for a 4-hour lithium-ion solar-plus-storage will be competitive against gas peakers in all the National Electricity Market (NEM) states of Australia in 2023.

General Electric has outperformed its rivals Siemens and Mitsubishi Hitachi Power Systems (MHPS) by winning the most orders for HA-class gas turbines in Q1-2019, according to the latest McCoy Power Report. GE booked six orders, up from zero a year ago – MHPS won five orders, while Siemens booked four.

The power sector is attracting more investment than the oil and gas industry, with developers having spent over $1.8 trillion globally in 2018 on energy-related projects. Though the overall spent has stabilized after three years of decline, investors increasingly focus on projects with shorter lead times, the IEA’s World Energy Investment 2019 report finds.

Dynamics of the global energy transition are driven by the speed of electrification and the competition between flexible gas power plants and renewables plus energy storage. Margins in the downstream power market are becoming more attractive, as price discrimination allows for better value capture downstream than in the generation business.

Shell Petroleum Development Company of Nigeria (SPDC) has said it expects to produce enough natural gas from its new Assa North/Ohaji South development to provide fuel for generating about 2,400 MW of electricity. The move is part of Shell’s strategy to shift to a more gas-orientated business, said SPDC’s general manager, Igo Weli.

Mitsubishi Hitachi Power Systems (MHPS) has won an order to deliver two H-25 gas turbines for a combined heat and power (CHP) project, being built on behalf of the Chinese Paper Firm Lee & Man Paper Manufacturing Ltd. Situated near Dongguan, in China’s Pearl River Delta, the CHP is due to start commercial operations in 2020.

The German Chancellor Angela Merkel has vowed her new Climate Cabinet is seeking ways for the country to reach climate neutrality. Should the ministers find a “sound” way to achieve net-zero greenhouse gas emissions by 2050, Germany would be able to join France and Sweden, in drafting a long-term EU climate strategy, said Merkel at the 10th Petersberg Climate Dialogue in Berlin.

The coal-to-gas switch is gathering pace in the United States. Natural gas will provide the largest share of U.S. generation this summer at 40%, up from 39% last summer, EIA projections show. Coal, meanwhile, is seen losing market share to 25%, down from 28% a year earlier.

The intensifying trade war between the US and China is starting to impact shipments of US LNG to China and slows Beijing’s efforts to switch from coal to gas use in the power sector. Only four US LNG cargoes have been delivered to China since September, when a 10% tariffs came into effect. Now, Beijing hiked this levy to 25% - in retaliation to Washington’s move to expand import tariffs on Chinese goods.

News in Brief

Fuel switch could abate 1.2bn tons of CO2

July 19 – Some 1.2 billion tonnes of CO2 could be abated by switching to gas using existing infrastructure, if prices and regulation are supportive. According to the International Energy Agency (IEA), this would be enough to bring global CO2 emissions back down to where they were in 2013.

IEA launches methane tracker

July 18 – A new ‘methane tracker’, launched by the International Energy Agency (IEA), provides up-to-date estimates of current oil and gas methane emissions by drawing on the best available data. Analysts stressed methane emissions could be reduced by nearly half at no net cost.

Canada’s CO2 tax also affects gas power

July 17 – Change in Canada’s carbon tax regulation for new power plants has changed to also affect cleaner-burning, gas combined-cycle power stations starting from 2021. The move could cause SaskPower to reconsider its planned upcoming Moose Jaw gas power station.

MAN, Daewoo, HSD partner on engine digitalization

July 16 – MAN Energy Solutions, Daewoo Shipbuilding & Marine Engineering (DSME) and HSD Engine (HSD) have signed a strategic agreement to cooperate in the field of marine engine systems digitization. The three companies also work together on auxiliary systems and data analysis, aiming to apply part of their know-how to power generation and related sectors.

Canada launches first utility-scale smart microgid

July 15 – The Ontario-based municipal utility North Bay Hydro Services is cooperating with the smart grid solutions firm S&C Electric to launch Canada’s first utility-scale microgrid system. Among some solar power, the 789KW microgrid system will be powered by two 265kW natural gas generators.

Macquarie funds Mexican power plant

July 12 – Macquarie Capital has chosen Credit Agricole, Natixis and SMBC to co-finance a $380 million combined-cycle gas power plant. The 560 MW plant is designated to be built in San Louis Potosi, a city in central Mexico.

B&V launches distributed energy group

July 11 – Black & Veatch has launched a dedicated distributed energy group to place its conventional power business in the context of the global energy transition. The distribute energy group will look into new fuel sources such as hydrogen and aspires to “re-power the more-than-century-old power industry.”

Funding secured for Kazah CHP project

July 10 – Kazinform Erg has committed to spend $500 million on a gas cogeneration station that will provide heat and electricity to the south of Kazakhstan. Over 87% of Kazakhstan’s electricity is generated from fossil fuels, and in 2018 the country produced 107,060 billion kWh of electricity, a 3.8% increase over the previous year and enough to cover total power use of 103,228 kWh.

Bitcoin mining uses much energy

July 9 – Estimates of bitcoin’s electricity consumption are wide-ranging, on the order of 20‑80 TWh annually. According to George Kamiya, digital energy analyst at the International Energy Agency (IEA), bitcoin mining consumed around 45 TWh in 2018 although this has risen significantly this year. Through the first six months of 2019, bitcoin mining has already consumed an estimated 29 TWh.

Coal exit doesn’t impact Germany's supply security

July 8 – Electricity supply security in Germany is set to stay “very high” even as the country begins to phase out coal-fired power generation, the Federal Ministry for Economic Affairs and Energy (BMWi) said in a monitoring report. “Energy supply is adequately ensured”, the ministry said, in all scenarios examined up to 2030. Thereafter, things are less clear but the German Coal Commission is adamant that its proposal to exit coal power by 2038 is feasible and won’t seriously impact reserve margins.

Hydrogen demo plant starts in Adelaide

July 5 – The Australian Gas Networks (AGN), part of the Australian Gas Infrastructure Group (AGIG), has received A$4.9 million in government funding for an A$11.4m hydrogen electrolyser demonstration project at the Tonsley Innovation District in Adelaide. At the test site, AGN plans to blend 5% renewable hydrogen with natural gas for supply to customers using its existing gas distribution networks. The project is based on a Siemens proton exchange membrane (PEM) electrolyser, running based on wind and solar power.

Wärtsilä forms biogas solution

July 4 – Wärtsilä Puregas Solutions, specialists in biogas upgrading technology, has merged with Wärtsilä’s biogas liquefaction team to create a one-stop-shop service for biofuel production. Having installed the world’s largest bioLNG facility in Skogn, Norway, Wärtsilä will deliver two more bio-LNG plants to customers in Scandinavia. The company’s Puregas CA process recovers more than 99.9% of the biomethane present in raw biogas.

PNM to close San Juan Generating Station

July 3 — New Mexico's largest energy holding, PNM Resources, has filed an application to the Public Regulation Commission to close the coal-fired San Juan Generating Station. For replacement power, PNM said the preferred option was a mix of gas power plants, solar and wind farms and new battery storage facilities. The utility strives to be ‘emissions-free’ by 2040.

ADB opens office in Singapore

July 2 — The Asian Development Bank (ADB) has decided to open an office in Singapore. The lean office with twelve staff will focus on the expansion of its private sector operations, e.g. through Public-Private Partnerships. “We estimate that developing Asia will need $1.7 trillion per year in infrastructure investments until 2030 to maintain the region’s growth momentum,” commented Singapore’s finance minister Heng Swee Keat.

Testing starts at Haliade-X

July 1 – Technology testing has started at GE’s Haliade-X, the world’s biggest offshore wind turbine. The 12 MW nacelle and 107-metre long blade was shipped to the UK as part of an advanced technology testing program, focused on enhancing the platform before it enters into serial production in 2021.

Tata to build UK’s first CCUS plant

June 28 – Tata Chemicals has announced plans to build the UK’s first industrial-scale Carbon Capture, Usage and Demonstration plant at its Northwich industrial site. The CCUD unit will be built at an estimated cost of£16.7 million and is planned to start operation in 2021. It will make use of CO2 emissions from fossil fuel power plants and turn it into sodium bicarbonate, which can then be sold to pharmaceutical industries.

Gazprom seeks to partner with Fortum

June 27 – The heads of Gazprom and Forum, Alexey Miller and Pekka Lundmark, have met in St. Petersburg to discuss a potential cooperation in the field of power generation. The Finish energy company Fortum owns 29.5% of the Russian power plant TGC-1 as well as a 49.99% share in the German utility Uniper. Through the talks, Gazprom could gain Fortum’s support to expand its firm long-term deliveries of Russian gas to Finland and Germany.