Daily News

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.

News in Brief

Siemens opens Pittsburg Service Center

Nov 16 – Pittsburgh Service Center (PSC), a $32 million state-of the art facility spanning over 300,000 square feet, has been opened by Siemens in Mount Pleasant. The centre is home to Siemens Turbine Generator Specialty Services (TGSS) which belongs to the company’s large-scale turbine segment

Drax faces legal action over Repower project

Nov 15 – Britain’s power producer Drax is facing a law suit over plans to start converting two coal-fired units at the plant into four combined cycle gas turbines (CCGTs). Drax argues the move will help it exit coal by 2023, but environmentalist object the Repower project, arguing it would “risk locking in high-carbon energy onto the grid until 2050.”

U.S. turbine market to top 14GW by 2024

Nov 14 – The U.S. industrial gas turbine market is expected to exceed 14 GW by 2024. Federal government initiatives to expand the penetration of natural gas-fired station will augment the industry outlook, according to a Market Study Report.

Xcel snaps up Mankato Energy Center

Nov 13 – U.S. electric utility Xcel Energy has agreed to purchase Mankato Energy Center in Minnesota from Southern Power in a $650 million deal. A second gas-fired power unit is scheduled to come online in 2019, set to increase the plant’s total generating capacity to 760 MW.

Shell re-focuses on new energies

Nov 12 – Electricity and new green fuels have risen on the agenda of Royal Dutch Shell, with the company announcing plans to invest up to $2 billion a year through to 2020. “That might seem modest by oil and gas standards, but we can do a lot with it in this space,” commented Brian Davis, Shell’s VP energy solutions.

Kollsnes shut down

Nov 9 – A collision between the frigate Helge Ingstad and the tanker TS Sola off the Sture terminal near Bergen in western Norway has led to the closure of the Vestprosess pipeline and Kollsnes gas processing plant, the Norwegian TSO Gassco said in a market note.

MHPS to service Uzbekenergo’s power plants

Nov 8 – Mitsubishi Hitachi Power Systems, Ltd. (MHPS) has signed an accord with state-owned Uzbekenergo and Mitsubishi Corp to collaborate in a service and maintenance program (CSMP) for power plants in Uzbekistan. The agreement is meant to help grow the reach of Japanese companies in Central Asia.

Austria to import more Russian gas

Nov 7 – Russia’s gas giant Gazprom and OMV of Austria have signed Gazprom and OMV an amendment to their supply contract, stipulating deliveries to Austria will be increased by 1 Bcm/y beyond the contractual. In the first ten month of 2018, alone supplies of Russian pipeline gas have grown by a third compared to the previous year, reaching 8.8 Bcm.

UK launches 1st geothermal plant

Nov 6 – The UK’s first geothermal electricity plant has gotten underway today, backed by £18 million in funding. Drilling started using a rig from Helsinki. Once operational, demonstration plant will deliver up to 3 MW of electricity to the National Grid.

Germans register more EVs

Nov 5 – Electric vehicles (EVs) are gaining popularity in Germany: The share of pure EVs in s new car registrations climbed to 1.3% in October, as the total number of new EVs increased 55% year-on-year, according to the Federal Motor Transport Authority (KBA). Hybrid cars account for a 4.4% market share, diesel fell to 31.8% and the lion’s share of 62.3% is still taken by petrol models.

GE retrofits Wet FDG in India

Nov 2 – India’s largest energy conglomerate NTPC Ltd. has asked GE Power to supply and install Wet Flue Gas Desulphurization (Wet FDG) technology at four power plants in a deal worth US$247 million. The four facilities are the 2x660 MW Solapur power plant, the 2x660 MW Tanda Stage-II, the 1x500 MW Feroze Gandhi Unchahar project and the 2x660 MW Meja power project.

Floating power barge

Nov 1 – Siemens has developed barge-based, turnkey floating power solutions that take a critical part of an FLNG facility’s infrastructure — power generation — off a project’s critical path. According to the manufacturer, this helps reduce overall project execution time by as much as 25% or more, maximizing return on investment.

KBR posts 28% rise in profit

Oct 31 – U.S. engineering company KBR has reported a rise in net profits and voiced optimism to secure more mid-scale LNG and downstream projects with its joint venture partner ConocoPhillips. Third-quarter revenues rose by more than 23% to $1.27 billion, compared with $1.03bn in Q3-2017. Net profit was $58 million, up 28% from $45m in the year-ago period.

Togo: IPP gets go-ahead

Oct 30 – Eranove, a private equity-backed independent power producer (IPP), has received the green light for a $110 million power project in Togo. A concession agreement was signed for the combined-cycle power plant to be built in the area of Lomé port. The Spanish firm Grupo TSK was selected as EPC contractor for the 65-MW project.

Goldman, Cargill fined for avoiding tax on Teeside

Oct 29 – Goldman Sachs and Cargill have been hit with a £79 million fine for dogging tax on their ownership of a Teesside power plant. The two U.S. banking giants took over Teesside Power Ltd after the collapse of Enron in 2001, and HM Revenue and Customs just won a court case against the two trading houses over a tax avoidance scheme.

Gazprom to start production at Kovyktinskoye in 2019

Oct 26 –The Russian gas giant Gazprom has announced it will to start production drilling at the vast Kovyktinskoye field in 2019, with a view to start feeding gas from Kovyktinskoye into the Power of Siberia gas pipeline in late 2022. Situated in eastern Siberia near Lake Baikal, the field holds an estimated 2.7 Tcm of gas reserves, and 90.6 million tons of gas condensate, and 25 Bcm/y of planned design capacity.

MAN launches ETB blower in China

Oct 25 – A new Electrical Turbo Blower, the designated ETB40, has been launched by MAN Energy Solutions at a ceremony in Shanghai hosted by its two-stroke licensee, CSSC-MES Diesel Co. (CMD). The blower raises the exhaust-gas pressure in order to overcome the pressure difference between exhaust gas and scavenging air receiver.