Power market liberalisation in Japan and South Korea is slowly forthcoming; and the lack of clarity over nuclear energy has prompted major utilities to delay firm LNG procurement decisions which could cause a supply crunch in the Pacific Basin, warns Gavin Thompson, head of Asia Pacific gas & power analysis at Wood MacKenzie.
Value and use of fossil baseload capacity is declining in the Southwest Power Pool (SPP) in the US as wind capacity doubled from 3.4GW to 6.8GW in the three years until June 2013.
Turkey's government is plagued with a new headache over costs of gas imports after Abu Dhabi-based energy group Taqa decided to pull out of a $12 billion coal-fired power project. Domestic coal is seen as a leeway to reduce Turkey's annual $55bn energy import bill, and policy makers in Ankara have introduced tax breaks in favour of coal generation.
Action seems forthcoming from policy makers in continental Europe to follow Britain's lead and introduce a carbon-floor price as a means to improve the profitability of gas-fired power generation (spark spreads). Germany's Green party calls for a minimum national carbon price of €15/ton, while the CEO of Austria's biggest utility Verbund, Wolfgang Anzengruber suggested only a carbon price at €35/ton would promote a switch from coal to gas.
Tension is rising between policy makers and utilities amid rising urgency to invest in new power generating capacity in the UK. Policy makers keep urging utilities to fund much-needed new capacity, but cash-constraint utilities need to first reorganise their balance sheet before they can fund new-build projects, says Ben Caldecot, head of government advisory at Bloomberg New Energy Finance (BNEF).
A nearly continual scale up of power demand in parts of Asia over the next 20 years might mean power-starved manufacturers in these economies seek out distributed energy, such as rented natural gas reciprocating engines, said a report by Frost & Sullivan.
Japanese utilities are rushing to step up LNG imports, spurred by Kansai Electric Power's announcement it will suspend operations of its two Ohi reactors until they comply with more stringent safety regulations. Gas-fired generation is vital to make up for the lost nuclear capacity and to avert the risk of power shortages.
Up to 2020, sales projections for distributed gas engine and turbine sales in Combined Heat and Power (CHP) applications will not be affected by shale gas prices. "Until then, country-specific policy measures, alongside slowly improving spark spreads based on non-shale energy price drivers, will be more important," says Michael Brown who leads Delta-ee's research on CHP markets.
A GDF Suez-led consortium has awarded Ansaldo Energia and FATA a turnkey construction contract, valued at $581 million (€440 million), to realise two open-cycle gas turbine power plants (OCGT) in Avon, South Africa.
Italian marine classification society RINA has approved a design for a compressed natural gas (CNG) storage system aboard vessles, which is being used as gas feed at a fuel oil peaking power plant retrofitted to run on gas in Grati, Indonesia. The 300MW unit is "the world's largest CNG storage system," according to RINA.
As the regulatory clock continues to tick and deadlines loom large on implementing new EU rules like EMIR and REMIT, some utilities "face an uphill battle" to understand and meet the obligations, warns James Brown is senior energy consultant, EMEA for Allegro Development.
"When the current ambiguities are cleared up and firm deadlines reset, everyone will be expected to switch on quickly," he said, warning "Failure to comply will be met with stiff penalties."
Despite Europe's sub-par gas demand growth, with indigenous supply collapsing and global LNG supply diverting to Asia, suppliers like Gazprom "regain the whip hand" in Europe, Deutsche Bank analysts warn.
"A market that should be in the doldrums looks poised to see prices breaking to the upside," they forecast, singling out US LNG exports as a panacea to avert the risk of high-priced oil-indexed Russian gas that threaten to further undermine the profitability of gas power generation.
A new independent, cross-party report urges the UK Government to clarify its energy policy beyond 2020. "The Government should work with industry to narrow the debate by identifying 'low regrets' investments for the power sector beyond 2020," finds the report which will be presented in Parliament today.
Myanmar's state-owned power producer has awarded Wood Group GTS a $13million contract to overhaul and upgrade three GE Frame 6B gas turbines in operation at a plant near the city of Yangon. "The order is our first major contract win in Myanmar," a Wood Group representative said, adding the retrofit is expected to increase the utility's revenue by $1million per year.
Mitsubishi Heavy Industries (MHI), jointly with Taiwan's largest EPC company CTCI Corporation, has won a full-turnkey order from Taiwan Power Company to build a gas-fired combined cycle plant, consisting of three power islands with a combined capacity of 2,600MW. The mega plant, located in Tunghsiao Township about 150 kilometers southwest from Taipei, will be powered by M501J gas turbines.
MHI said the latest order from Tawain brings the number of sold 60 hertz M501 gas turbines up to 22, including four successive orders for 10 units in total from South Korea.