Daily News

Scottish & Southern Energy (SSE) has decided to reduce its existing power generating capacity in the UK by around 2,000MW during the 2013-2014 financial year, and to not invest in any new gas-fired capacity in the country until at least 2015.

The gas-fired Peterhead Project in Aberdeenshire, Scotland and the coal-fired White Rose Project in Yorkshire, England have been announced as the two preferred bidders for the UK's £1 billion Carbon Capture and Storage Commercialisation Programme Competition. The UK government will now seek to come to terms by the summer with the two preferred bidders for Front End Engineering Design (FEED) studies due to last 18 months, before a final investment decision is taken in early 2015.

Globeleq, a power company owned by Actis, has begun construction on a 139MW expansion for its existing Azito gas-fired power plant near Abidjan, Côte d'Ivoire. Completion of the project is expected in early 2015, at which point the nominal capacity of the plant will be 420MW.

Improvements in energy efficiency and changes in the manufacturing output mix have resulted in a significant decrease in energy intensity in the US. Total energy consumption in the American manufacturing sector decreased by 17 percent in the period from 2002 to 2010, despite only a 3 percent decrease in gross output, according to recently released data from the US Energy Information Administration (EIA).

New Zealand's Nova Energy, a subsidiary of the Todd Corporation, has opened its new gas-fired co-generation 100MW McKee Power Plant in Taranki on the country's North Island. The power plant is designed as a peak time plant and has a start up time of 15 minutes enabling it to respond quickly to changes in electricity demand, but can also operate in baseload mode if necessary.

Germany has emerged as a leader in the European Cogeneration market due to the country's strong commitment to energy efficiency, comprehensive policy promotion through the combined heat and power (CHP) support scheme and the government's decision to phase-out nuclear power is revealed in the recently released COGEN Europe report European Cogeneration Review – Germany.

Natural gas is set to remain important in transitioning the UK to a low-carbon electricity producer in the short term future, but can only play a more significant role beyond the 2020s if carbon capture and storage technology (CCS) is deployed on a commercial scale, according to a report from the London School of Economic’s (LSE) Grantham Institute on Climate Change.

Gas consumption in India has grown at an annual rate of 10 percent from 2001 to 2011 despite insufficient pipeline infrastructure. Natural gas mainly serves as a substitute for coal in electricity generation and with 45 percent of total use, the power sector is currently the largest user of natural gas in India, according to a country specific energy analysis from the US Energy Information Administration (EIA).

Natural gas fired power plants will continue to face severe difficulties to stay in the merit order in competitive OECD Europe power markets in such as Spain, Germany and the UK, as dispatch of coal plants stays more economic at current fuel and carbon emission prices, Dennis Volk, gas and power market analyst at the International Energy Agency (IEA) told Gas to Power Journal in an interview. 

"Under current market conditions, gas-fired plants have no longer a big role to play in much of OECD Europe ..."

The Cockenzie Power Station in East Lothian, Scotland has shut down all four of its turbines after using up all of its permitted running hours under EU regulation. Owner and operator ScottishPower already has planning permission, obtained in 2011, to build a new 1000MW gas-fired combined-cycle gas turbine (CCGT) power station on the site of the now shut down Cockenzie plant.

Wärtsilä has launched a new product called the GasReformer for turning gas associated with the production of oil into energy. Traditionally such gases would be flared and wasted but the GasReformer uses steam reforming technology to convert gases rich in hydrocarbons into a methane rich product which can be used as fuel in gas fuelled engines.

The use of natural gas to generate electricity in Japan was up by 15 percent in 2012 when compared to 2011, according to the US Energy Information Administration (EIA). Japan's use of all fossil-fuelled power generation was also up 21 percent in 2012 when compared to 2011, and now represents 90 percent of the country's energy mix.

Temporary energy provider Aggreko has signed Tri-Party Power Purchase Agreements (TPPA) with Mozambique utility Electricidade de Moçambique (EDM) and Namibian utility NamPower to provide them with up to 32MW and up to 90MW of gas fuelled power, respectively from its interm power plant at Gigawatt Park in Ressano Garcia, Mozambique.

As dispatch patterns shift, gas-fired power plants can now increasingly be described as intermittent energy sources, much in the same way as renewables, Richard Sarsfield-Hall, principal consultant at Pöyry Energy Consulting, said at this year's FLAME Conference in Amsterdam. Weather conditions impact the output of wind and solar installations and subsequently determine what levels of backup power is required from combined-cycle gas and coal plants on an intermittent basis. 

Most European power markets face an oversupply of fossil power plant capacity, Guido Custers, Managing Director at Delta Energy said at this year's FLAME conference in Amsterdam. In both the Netherlands and Germany, adverse market conditions and negative profit margins is prompting operators to consider either mothballing or even decommissioning existing gas-fired plants.

News in Brief

Quarrels over contract award

June 26 – Guam Power Authority’s decision to award a contract to finance, build and operate a new 180 MW power station on the island to Korea Electric Power has sparked protest by rival bidders. Four companies had submitted proposals – Korea Electric, Osaka Gas, Powerflex and Hanwha Energy Corp. Declining to comment on the quarrels over the contract awarding process, GPA said the deal with Korea Electric is expected to be closed by September 9, pending a related impact study.

PTT steps up power sector investment

June 25 – Thailand's state-run PTT Pcl has decided to boost investments in the retail and industrial power sectors to help insulate the energy company against the impact of a global economic slowdown on its oil refining and chemical businesses. Referring to the Sino-U.S. trade war as a global challenge, PTT chief executive Chansin Treenuchagron said the company is looking “how we can survive in the short term.”

APR helps power Libya’s recovery

June 24 – Libya’s state-owned GECOL has asked APR Energy to bring in temporary generators to provide a rapid 450 MW boost. Under the latest contracts, APR provided mobile gas turbines at four key sites in Libya (250 MW) as well as 200 MW of diesel generators at two sites.

GE supplies SCADA to New Zealand

June 21 – GE’s Renewable Energy Grid Solution’s business has won an order from two New Zealand utilities to upgrade their traditional Supervisory Control and Data Acquisition (SCADA) systems with GE’s Advanced Distribution Management Solutions (ADMS). The orders were placed by Top Energy Ltd with some 31,000 customers and Northpower serving over 60,000 customers, though the contract values were not disclosed.

Top 5 OEMs to rule two thirds of global wind market

June 20 – After a decade of fragmentation, the top 5 turbine OEMs are consolidating again and Wood Mackenzie anticipates key players will surpass a combined market share of 68% by 2020, up from 47% five years ago. Vestas, SGRE and GE remain the top 3 wind turbine producers wwhile the Chinese leaders, Goldwind and Envision, are becoming increasingly popular due to their product reliability and track record.

Keane to merge with C&J Energy

June 19 – Oil- and gasfield service providers C&J Energy Services and Keane Group have agreed a merger-of-equals in a $746 deal that will give the two companies the necessary uplift in an industry burdened by budget cuts of hydrocarbon producers. The 50:50 merger will create a company will create a company with a combined enterprise value of $1.8 billion, including $255 million in debt. The deal is expected to close in the fourth quarter of this year.

Evol LNG helps power Australian gold mine

June 18 – Kirkalocka Gold Mine in Western Australia will use Evol LNG to fuel Zenith Energy’s 14.5 MW power station with regasified natural gas starting from September 2019. The mine is run by Adaman Resources and had been relying on diesel to cover its energy needs. Based on the current diesel price, Adaman Resources expects to reduce fuel costs by more than A$13 million (US$9 million) during the first six years of operation of the new onsite LNG-to-Power plant.

Shell Energy ordered to refund overcharged UK customers

June 17 – UK energy regulator Ofgem has ordered Shell Energy Retail to refund around 12000 customers who were overcharged after the Government’s cap on gas and electricity prices came into force in January. Shell Energy Retail s agreed to refund these customers by paying £29,000 in compensation (£5 per fuel), and also pay an additional £200,000 into Ofgem’s voluntary redress fund.

BASF enters battery market

June 14 – German chemical company BASF is using NGK Insulators’ sodium sulfur batteries as its entry point into the energy market. The Japanese manufacturer NGK is currently the only maker of the large-scale sodium sulfur (NAS) batteries, capable to store several hours of energy. A joint project in northern Germany uses NAS batteries that store energy for five hours, while a recently completed project in Abu Dhabi using 108MW / 648MWh of the systems with a full six hours storage duration.

CNPC boosts domestic gas production

June 13 – China National Petroleum Corp (CNPC), the largest Chinese oil and gas company, has announced plans for domestic natural gas output to reach 55% of overall domestic supply by 2025. Last year, CNPC managed to boost production by 5.9% to reach 138.02 billion cubic metres, while also increasing imports of pipeline gas and LNG.

Gazprom taps new gas deposits for Nord Stream 2

June 12 – Gazprom is fast-tracking hydrocarbon production in northwest Russia to boost reserves for export through the Nord Stream 2 pipeline (55 Bcm/y), currently being built through the Baltic Sea. At a meeting with Nord Stream shareholders, Gazprom noted that its Yuzhno-Russkoye field has yielded about 276 Bcm of natural gas, including 0.9 Bcm of hard-to-recover Turonian gas, since the start of operations. Turonian gas reserves, consisting of about 99% methane with no heavy residues, lie at a depth of 800–850 meters in reservoirs with low permeability. Commercial production at the Turonian deposit is scheduled to start in late 2019.

PG&E turns off electricity to avoid wild fires

June 11 – Pacific Gas and Electric Company (PG&E) has turned off electricity for some Californian communities at risk of a wildfire during the lastest heat wave. The authorized blackout started on Saturday in Napa, Solano and Yolo counties, with electricity being gradually restored over the course of Monday. Approximately 16,000 customers have been affected.

Gazprom to build power plants in Serbia

June 10 – Gazprom Energoholding has signed an Agreement of Intent (AoI) to build an upgrade several gas-fired power plants in Serbia. Together with Novi Sad, Gazprom Energoholding is already building a CCGT with some 200 MW capacity near a refinery in the Serbian town of Pancevo.

U.S. fund splashes out $4bn to buy El Paso Electric

June 7 – Infrastructure Investment Fund (IIF), a private investment vehicle within J.P. Morgan Inc., has agreed to acquire the U.S. utility El Paso Electric Co for $68.25 per share in a cash transaction. The enterprise value on the transaction is estimated at $4.3 billion. El Paso Electric customers will receive a total $21 million in bill credits over three years.

Caterpillar gensets back up Finnish data center

June 6 – The Swedish telecom giant Telia has ordered 12 Caterpillar gensets to provide standby emergency power to back up operations at its new data center in Helsinki. The Cat dealer Witraktor figured a system which includes eight Cat 3516B and four 3516E generator sets. The Telia Helsinki Data Center is the largest such facility in Finland, and its primary electric power supply comes from a combination of wind, hydroelectric and biomass.

Capstone wins orders in Iraq

June 5 – Micro-turbine producer Capstone has secured an order for two C600 Signature Series microturbines to provide 1.2 MW of energy to power a triethylene glycol (TEG) dehydration facility near Basra, in southern Iraq. The contract also includes Capstone’s new self-cleaning pulse filtration system, allowing the turbines to better withstand hot and sandy conditions with minimal maintenance.

Gas to supply record 43% of US power needs

June 4 – This summer, natural gas is forecast to cover between 40% and 43% of 2019 peak electricity demand in all U.S. states except Texas, according to projections by the Energy Information Administration (EIA). Gas demand soared to nearly 10,700 billion cubic feet (Bcf) last summer, a 16% rise from 2017 levels. Should there be another heat wave this year, that record may well be broken. Capacity wise, natural gas is on course to top its 45% share in the U.S. power mix.