Daily News

Saudi Aramco has commissioned International Power and GDF SUEZ (IPR-GDF Suez) to expand the Tihama power plant sites, located in Saudi Arabia, by 532 MW. Long-term offtake contracts through to 2026 have been signed for this expansion, the two companies said today.

February 2012 was an "outlier" in electricity consumption and should be considered as such, Societe Generale  analysts, led by Paolo Coghe and Thierry Bros, wrote in the Energy Pulse report issued today. The prolonged and record-breaking cold spell endured by Europe during the first half of February resulted in strong electricity  consumption – but just for the month itself.

Gas prices across Europe need to drop by 20% to make the fuel competitive with coal for power generation during hours of peak demand, Vitol's gas head David Gallagher said. At that level it would make economic sense for electricity producers to switch from burning coal to gas.

Reliance Industries, India's biggest company by market capitalisation,  has filed for arbitration this week, claiming the Indian government is restricting it from recovering cost on developing an offshore gas block. The dispute prompted Reliance to curtail gas supplies to Indian power plant operatiors, leaving India with a severe electricity shortage.

International Power (IP), a London-based energy group, has posted a 5% rise in  revenues to €4,257 million in the first quarter driven by strong growth in Asia and Lation America. In an interim management statement, IP said revenue in Asia surged 22% to Eur491 million while revenue in Latin America increase by and 16% to Eur1.021 billion.

Investments in new combined cycle power plants  (CCGTs) in Germany are "highly problematic" without the introduction of capacity remuneration mechanisms as the internal rate of return (IRR) for such projects is close to zero, Reinhard Rümler, senior manager, energy advisory at PwC told Gas-to-Power Journal.

Operators of gas-fired power plants in Spain are confronted with slower repayments of loans taken out to build their assets as the run-time hours of plants are curtailed by preferential grid feed-in of renewable energy.

Gains for gas demand in the power and industrial sector will offset a decline in gas demand for residential use, Howard Gruenspecht, acting administrator, U.S. Energy Information Administration (EIA) said today. The share of natural gas in the U.S. energy mix is forecast to rise 27% by 2035, from 24% in 2010, according to EIA forecasts.

Ofgem, the U.K. energy regulator, warns Britain might face a gap in power generation capacity as ageing plants are being retired while construction of new nuclear, gas-fired or offshore wind power projects are delayed. "Britain is facing pretty frightening times with regards to spare capacity," Alistair Buchanan, Ofgem CEO said today.

Except for Europe, the global gas-to-power sector is expanding rapidly driven by rising electricity demand in emerging markets. "Even if gas is regulated to death in Europe, the growth of gas-to-power generation will continue outside Europe," Stefan Judisch, chief executive of RWE Supply & Trading said today.

The share of gas-fired power generation is likely to rebound in the mid-term future in line with growing renewable power production. "The key driver for gas demand growth in Europe will come from the power generation sector," Klaus Schäfer, CEO, E.ON Trading & E.ON Ruhrgas forecast today.

Gas does not get to play its rightful role in the European energy mix, Rune Bjornson, senior vice president natural gas, Statoil said today. Adverse economics currently hamper the rise of gas in the energy sector, he said, suggesting "the price of carbon is far too low to incentivise a switch from coal to gas".

China is set to become "the engine of global gas demand" in the coming years, as opportunities for a greater share of gas in power generation arise due to Government concerns about air pollution, Fatih Birol, chief economist at the International Energy Agency (IEA) said today.

China's State Electricity Regulatory Commission (SERC) has imposed measures compelling power plant operators to improve coordination of plant dispatchment to meet summer peak demand. To this end, SERC set out measures to enhance stability of the power grid by closer supervision of plant dispatchment and load scheduling.

ABB, a power and automation technology group, will invest about $50 million to build new facilities in India to manufacture high-voltage products and transformers. "This decision supports our business philosophy to locate production facilities closer to markets," Bernhard Jucker, head of ABB's Power Products division said today.

News in Brief

PG&E files for bankruptcy by Jan 29

Jan 16 – Northern California’s utility Pacific Gas & Electric has informed federal regulators that it expects to seek Chapter 11 bankruptcy protection by end of this month. The San Francisco-based utility is under investigation for its shortcomings in the deadly 2018 wildfires.

Gas engine market to top $4.4bn by 2020

Jan 15 – Global demand for natural gas engines is forecast to expand with the market set to exceed $4.4 billion in value by 2022, according to Zion Market Research. Key manufacturers include, GE, Rolls-Royce, Cummins, Caterpillar, Wärtsilä, Kawasaki, MAN, Deutz, Doosan and Yanmar.

Encana selects Siemens rotating equipment

Jan 14 – Siemens has been selected to provide one feed and sales gas train and one refrigeration compression train for Encana’s Pipestone Processing Facility in Grand Prairie, Alberta, Canada. The new unit, due to operational in 2021, will provide Encana with 19,000 barrels per day of net raw condensate processing capacity plus 170 million cubic feet per day of net inlet gas processing capacity.

Cheap U.S. LNG underpins power project in Panama

Jan 11 – AES Colón expects the entry of low-cost US LNG will transform the Central American energy sector, much as it has in the Panama. The utility in September started up an $1.15 billion LNG import terminal and adjacent combined-cycle power plant.

Rolls-Royce joins forces with OT industries

Jan 10 – Britain’s bellwether manufacturer Rolls-Royce has signed an accord with OT Industries to explore areas of joint work for the provision of Emergency Diesel Generators (EDGs) and Instrumentation and Control (I&C) systems for new units at the Paks nuclear power plant in Hungary. OT industries is majority owned by the MOL Group.

State-run utilities dominate energy spending

Jan 9 – Future investments in global energy supply largely rest in the hands of governments. In the power sector, a striking 95% of monies are spent by regulated utilities under schemes to minimize risk associated with variable prices on competitive markets. However, once China will have completed its power sector reform the share of countries that rely on competitive markets will rise from 54% to almost 80%.

Floating power market to top $1.4bn by 2022

Jan 8 – The market for floating power plants (<250MW capacity) is expected to grow at an annual rate of 10.11%, expanding from currently $889.6 million to reach $1,440 million by 2022. Main growth drivers, according to MarketsandMarkets, are cost advantages of floating over land-based power plants, particularly in regions with a lack of power infrastructure.

Energean to supply gas to Israel

Jan 7 – Energean Oil and Gas has agreed to supply 5.5 Bcm of natural gas Karish and Tanin fields over 19 years to the Israeli power producer I.P.M. Beer Tuvia. The deal is expected to $900 million in revenue for Energean over the contract duration.

Eranove builds 390 MW plant in Ivory Coast

Jan 4 – Ciprel, a subsidiary of Eranove Group of France, is preparing to construct a 390 MW power plant in Jacqueville near Abidjan, the capital of the Ivory Coast. Driven by one of GE’s F-class turbine the combined-cycle power plant will be similar to one that Ciprel already has in operation.

Works advance on Jawa-1 CCGT

Jan 3 – Construction works are forging ahead for Jawa-1, a 1,760 MW combined-cycle gas-fired power plant. Built at cost of $1.8 billion the facility will be built by PT Jawa Satu Power (JSP) and PT Jawa Satu Regas (JSR) in Karawang, West Java.

Grozny TPP due onstream in 2019

Jan 2 – Construction of Unit 2 of the Grozny Thermal Power Plant (TPP) is advancing fast with a view having the entire plant operational in mid-2019. The first 180 MW unit has been running uninterruptedly for a fortnight and once the second unit will start up, Grozny TPP will reach its design value of approximately 360 MW.

E&P profitable at $50/bbl

Dec 21 – Globally, Wood Mackenzie expects exploration budgets to remain steady in 2019. But with stronger prices, lower costs and a greater focus on commerciality, the exploration sector is now seen to be more resilient than ever, and “well positioned to generate positive full-cycle returns at oil prices of US$50/barrel or even lower.”

GE upgrades substation in Germany

Dec 20 – TransnetBW has asked GE Power to upgrade one of the substations in so-called ‘Badische Rheinschiene’, a highly loaded link in the transmission grid of southwest Germany. The project will deliver 22 bays of 400 kV GIS to reduce the substation’s footprint while increasing its capacity.

Burckhardt opens service centre for Central Europe

Dec 19 – Swiss-based Burckhard Compressions has opened a new service centre for Central Europe in Slovakia. Reciprocating compressors of any brand are serviced there for operators in Slovakia, the Czech Republic, Hungary and Poland.

Global CCS growth nears 10% per year

Jan 19 – A report from analysts Research and Markets says the global Carbon Capture and Storage (CCS) market will grow 9.18% per year between 2017 and 2021, with Babcock & Wilcox, ENGIE, GE Power, Linde and Mitsubishi Heavy Industries dominating developments.

BAE switches to gas power

Dec 18 – BAE Systems has received a U.S. Army contract worth $158 million to replace the coal-fired power supply at Holston Army Ammunition Plant in Kingsport, Tennessee, with a natural gas steam facility. The modernization project will replace an existing coal-fired plant and significantly reduce the facility’s overall carbon footprint.

Silver Lake buys 90% in ServiceMax

Dec 17 – GE Digital has agreed to sell a majority stake in Service Max, a provider of cloud-based software tools, to Silver Lake, a global technology investor. Under the agreement, GE will retain a 10% equity ownership in ServiceMax. The divestment comes as GE Group seeks to reduce its debt.