Saudi Arabian utility developer ACWA Power has signed a $1.2 billion contract to realize a 1,500 MW power project in Uzbekistan’s Syrdarya region under a Build, Own, Operate, Transfer (BOOT) model. All electricity from the combined-cycle gas plant will be sold to JSC National Electric Grids under a 25-year Power Purchase Agreement (PPA).
In Asia, indoor farming is becoming a critical enabler of food security. However, this highly energy intensive process of plant growing requires an electricity price of 3-5¢/kWh to breakeven, U.S. indoor farmers disclosed. In Japan it’s even higher, Wood Mackenzie noted.
Germany's policy push to reach 2030 climate targets is “insufficient,” two government-commissioned studies find. Despite the agreement on a coal phase-out, the introduction of a CO2 price and several other measures, emissions will likely exceed the target by around 70 million tonnes in a decade, mainly due to shortcomings in transport and the heating sector.
In the face of Britain's renewable energy build-out to become carbon-neutral by 2050, more batteries will be deployed to balance the grid. But scaling up batteries to do all the load-shifting is still uneconomical with current technologies, so flexible gas generators remain vital to back-up the grid, says London-based flexible power provider Statera.
The Finish technology group Wärtsilä has signed a 15-year operation and maintenance (O&M) agreement with Energía del Pacífico for a 378 MW power plant in El Salvador. The deal takes effect once the gas-fired plant starts operations at the end of 2021.
Manila-listed First Gen Corp. is fast-tracking a floating storage and regas unit (FSRU) to ensure continuous fuel supply for 3.2 Gigawatt (GW) gas-fired power gen capacity near Batangas City. Construction of the FSRU is slated to start in May with the aim of receiving the first LNG cargo in the autumn of 2022.
Despite the coronavirus outbreak, China’s natural gas demand and LNG offake has rebounded in February as the government is keen to reinvigorate industrial output as much and as quickly as possible. Chinese LNG offtakes in February were more than 21 percent higher year-on-year, compensating for the y/y reduction seen in January.
The French power grid operator RTE has chosen Nidec to deploy an electricity storage system to optimize the management of electricity flows on the transmission grid in Vingeanne, near Dijon. The pilot project, dubbed Ringo, aims to prevent grid congestion at times of peak demand.
Iren Energia has awarded a €180 million contract to Ansaldo Energia to install a 430 MW combined-cycle power unit at the Turbigo Power Station. Once fully operational, the new CCGT unit will increase the installed capacity at the Turbigo site near Milan to 1,280 MW by summer 2022.
Cash-strapped McDermott International, a global EPC contractor, is moving forward with the previously agreed sale of Lummus Technology after having received no higher bids. Lummus will be sold for $2.725 billion to the Chatterjee Group and Rhône Capital, with proceeds used to repay McDermott's debtor-in-possession (DIP) financing.
Iranian power plants have suffered fuel shortages this winter as “severe cold weather” pushed up natural gas demand for power generation and heating, the energy ministry said. To meet demand, Iranian developers strive to finalize the construction of 3 GW additional capacity by March 19.
Russia’s Gazprom is playing hardball to reduce cost of its three main sub-holdings: Mezhregiongaz, Energoholding, and Gazprom Export by 2 percent. From 2020, Gazprom will review and approve budgets separately to tighten its grip on the units’ operations and investments.
News in Brief
Zhonghua’s profits halve
April 1 – Hong Kong-listed Zhonghua Gas Holdings has recorded a staggering 46.7% fall in profit, citing a lower margin for LNG supplies and reduced subsidies, although full-year revenue rose by 7.3%. In December, Zhonghua partnered with Shanghai Shenergy to supply LNG in the Yangtze River Delta region, and also has strong business relationships with Tractebel Engineering and Tianjin Jinre Heat-Supply Group.
Endesa donates $28m to fight coronavirus
March 31 – Endesa has created a 25 million euros ($27.8 million) fund to help fight the coronavirus pandemic in Spain. The Spanish utility, subsidiary of Enel, said the fund will be designated for purchases of protective equipment for health-care workers.
MAN develops liquid methane terminal in Swedish port
March 30 – OxGas has commissioned MAN Energy Solutions to act as ‘owners engineer’ to develop and build a liquefied methane-based fuels terminal in the Swedish Port of Oxelösund. The terminal will feed both LNG and green methane derived from bio gas to SSAB ’s local steel production, and to re-distribute it via train and trailers to other parts of Sweden for use in the steel industry and decentralized power generation.
American ISOs to delay grid investments
March 27 – North America’s independent system operators (ISO) are considering delaying investments in grid upgrades and enhancement as electricity demand weakens due to industry shutdowns to contain the coronavirus pandemic. PJM Interconnection, the largest U.S. bulk power market which spans 13 Mid-Atlantic and Midwestern states, revised its daily forecast of about 100,000 MW of load but actual demand came in at 95,500 MW.
Wärtsilä starts combustion trials using ammonia
March 26 – The Finish technology group Wärtsilä has initiated combustion trials using ammonia in an effort to reduce emissions. Based on initial results, the tests will be continued on both dual-fuel and spark-ignited gas engines, followed by field tests in collaboration with ship owners from 2022, and potentially also with energy customers.
Xodus sees growth in cable services
March 25 – Xodus Group has stepped up services related to subsea power cables over the last twelve months. The number of new consulting assignments grew by more than 50%, resulting in more than 70 active work streams that are handled by more 30 permanent staff.
Electricity “more indispensible than ever”
March 24 – Disruptions caused by the coronavirus crisis lay bare how much modern societies rely on electricity, according to the International Energy Agency (IAE). Millions of people are mandated to stay home, causing a surge in teleworking, e-commerce and video streaming which pushes up domestic electricity use.
U.S. frackers cut Capex
March 23 – Sharp cuts in capital spending among Appalachian gas producers are now being replicated in other U.S. basis, with Energy Aspects anticipating the deepest impact on production and earnings to take place starting from the second half of 2020. So far, E&P companies just hedged 52% of this year’s expected production even though some Appalachian producers are seen “lock in some pure gas volumes at prices above the curve.”
EV makers face bankrupcy
March 20 – Electric vehicles (EVs) remain particularly exposed to the corona effect of supply-side constraints and demand erosion. Gigafactory facilities are likely to be delayed and fledging EV manufacturers could face bankruptcy, Wood Mackenzie warns. On the flip side, declines in EV sector demand may be gains for the stationary energy storage segment.
Manufacturing rebounds in Asia
March 19 – Asian-dominant supply chains for solar and energy storage are gradually rebounding after contractions in February. Moving forward, Wood Mackenzie expects near-term development activity and local logistics in leading European and North American markets will outweigh lingering supply issues.
Italy’s gas demand plunges
March 18 – Corona-struck Italy has seen demand for natural gas plunge 8% from the previous week, with similar declines likely in other EU countries as national governments impose lockdowns to contain the virus. Industrial demand is “particularly volatile,” while gas generators will bear the brunt of demand loss, Wood Mackenzie says, as a carbon price decline is bolstering thermal coal.
Nexif raises funds for Rayong CHP
March 17 – Nexif Energy, a joint venture between Singapore-based Nexif and Denham Capital, has raised project financing for the Rayong gas-fired cogeneration project in Thailand. The 92 MW plant is being developed project with Ratch Group, based on 25-year power purchase agreement with Electricity Generating Authority of Thailand (EGAT).
ADB provides $10m loan for Afghan IPP
March 16 – The Asian Development Bank (ADB) has agreed to provide $10 million in debt financing for a gas-fired power unit in Mazari Sharif with a capacity of nearly 60 MW. Phase-1 of the Independent Power Project (IPP) will get another $10 million loan from the Leading Asia's Private Sector Infrastructure Fund (LEAP).
IEA models 50% Carbon-Free Generation
March 13 – Analysts at the U.S. Energy Information Administration (EIA) have drawn up the 50% Carbon-Free Generation case - assuming a stark shift in state-level policies. In this event, the U.S. would have 19% more nuclear power generation, 10% more wind power and 17% more solar PV contribution than in its Annual Energy Outlook 2020 (AEO2020) reference case.
E-charging market to top $15bn by 2030
March 12 – By 2030, the U.S. market for energy-optimisation in support of charging electric-vehicles could be worth $15 billion per year, McKinsey finds. The consultancy expects high demand for home-charging appliances as residential power tariffs are comparatively cheap and most charging can happen overnight when off-peak electricity prices are lower.
Oversupply builds up
March 10 – Energy Aspects’ end-March forecast has added on another 100+ billion cubic feet of natural gas supply while demand remains subdued. In the U.S., the seasonal decline in heating degree days nearly halved the natural gas withdrawal rate. Gas-burn in the power sector and residential/commercial demand are forecast to fall by 1.7 billion cubic feet per day (bcf/d) and 4.0 bcf/d, respectively.
Small-scale LNG cuts cost for power plants
March 10 – Decentralized gas power plants in remote locations can source cheaper fuel from small-scale LNG regas terminals than from trucking the super-chilled gas across long distances. “Trucking LNG further inland would entail additional costs as well as logistical challenges,” IEA analysts noted. For example, a 100 MW baseload power plant would require, on average, around 20 daily deliveries from tanker trucks.
