Markets

Germany’s largest insurer Allianz has made plans to restructure €800 billion in investments to lower emissions related to equities and corporate bonds by a quarter by 2025, compared to 2019. The measures are part of the insurer’s interim target as it aspires to reach climate neutrality by 2050.

Shares of Siemens Energy have shed around 6% in value in German trading after GE filed a lawsuit against its German rival, alleging the theft of trade secrets for gas turbines. GE told the US district court in Virginia that Siemens received the secret insight from a Dominion Energy employee.

Price-sensitive Chinese buyers are shunning spot LNG for February delivery after Beijing put a lid on domestic prices. Utility buyers in China are reluctant to pay anything above $15 per MMBtu given that they can also revert to pipeline gas, imported from Russia and Turkmenistan, or domestic supplies.

Asia’s LNG price rally will slow as a cold spell across China, Japan and South Korea is forecast to give way to milder weather. Spot LNG prices surged by nearly 200% last month but IHS Markit says “the rally should ease once temperatures rise and more supply returns to the market.”

Lower fuel costs, a pandemic-related slump in demand and record renewable energy supply have pushed down German power prices substantially in 2020. At €30.47 per MWh, the average wholesale price was more than €7 below in 2019, according to the Energy Economics Institute (EWI) at the University of Cologne.

Unforeseen grid disturbances, notably a sudden drop in frequency of 0.25 Hertz in south-eastern Europe has split the synchronised European high-voltage power grid into two parts. The resulting “critical near-blackout situation,” highlights the need for additional fast-start power units.

Taiwanese energy company CPC Corp has just received its first shipment of US LNG from the Corpus Christi export plant in Texas under a 25-year supply deal with Cheniere Energy. Taipower, the island’s main utility, also strives to import LNG for power generation, separately from CPC.

Developers and electric utilities in the US plan to add 39.7 GW of new capacity this year. Solar will account for the largest share of new-build capacity at 39%, or 15.4 GW, followed by wind at 31%, or 4.1 GW, while planned gas-fired capacity amounts to 6.6 GW.

Japanese developer Hitachi has decided to shut its Horizon subsidy by March 31, 2021, as it abandons plans to build a £20 billion ($27bn) nuclear power station at Wylfa on Anglesey. The move is set to increase the UK’s reliance on gas for power generation, next to renewables.

Very cold weather across Northeast Asia has spurred a flurry of spot LNG purchases from electric utilities for February. JKM month-ahead prices are more than double the current TTF value – far higher than necessary to divert all available spot supply from the Atlantic basin.

Ken Kawai, CEO of Mitsubishi Power has defined the manufacturer’s 2021 goals as accelerating hydrogen and ammonia cofiring while enhancing economics. “High expectations are held,” he said, for Mitsubishi Power to “improve its productivity” – not least because the unit accounts for 30% of MHI Group’s business.

An economy recovery in 2021 is expected to trigger a rebound in coal demand, though a short-lived one. The International Energy Agency (IEA) forecasts a 2.6% rise in global coal demand in 2021 – spurred by China, India and Southeast Asia – while Europe strives to stage a ‘green recovery.’

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News in Brief

First 8-cylinder B36:45 engine delivered

Jan 19 – Rolls-Royce has delivered the first 8-cylinder variant of its Bergen B36:45 gas engine to a tomato producer in Belgium. The medium speed genset is planned for delivery this spring and will drive an onsite power plant that generates 4700 kW electricity and 5520 kW heat. The new engine offers a 20% increase in power per cylinder and will replace an existing Bergen 12-cylinder B35:40 genset.

Moody’s upgrades Enel to Baa1

Jan 18 – Moody’s Investors Service has upgraded Enel’s long-term rating to Baa1, with a stable outlook. The upgrade reflects Enel’s progress in reducing its risk profile, analysts said, pointing at the Italian utilities ongoing investment in networks and renewables, growing geographical diversification and focus on centralised financing.

GE sues Siemens Energy

Jan 15 – General Electric has sued its German rival Siemens Energy over the alleged use of stolen trade secrets to win gas turbine contracts worth several billion dollars. GE told the US district court in Virginia that Siemens received the secret information from a Dominion Energy employee.

Orbital Energy launches Eclipse

Jan 14 – Nasdaq-listed Orbital Energy Group has launched a new subsidiary, Eclipse Foundation, a drilled shaft construction company. The new company specialises in providing services for power transmission and substations, communication tower and a disaster restoration through emergency power.

S’Korean coal and LNG imports slide

Jan 13 – South Korea’s imports of thermal coal and LNG have fallen 12% and 11%, respectively, as the government cracks down on fossil fuel usage to curb air pollution. Customs data shows that coal imports amounted to 10.2 million tons in December, down 1.4 million tons from the same month last year but up from November’s imports of 9.5 million tons.

SMC builds 1.7 GW CCGT in Batangas

Jan 13 – Excellent Energy Resources, part of SMC Global Power Holdings, is building a 1,700 MW combined cycle gas power plant in Barangay Dela Paz and Ilijan in Batangas City with investments of about 67.863 billion Philippine Pesos ($1.41bn). The project is estimated to be completed in 36 to 40 months.

UK’s National Grid issues supply warning

Jan 12 – Natural gas prices in the UK surged as National Grid issued warnings on supply deficit as LNG cargoes are being diverted to North Asia. Prices at the British NBP gas trading hub soared to the equivalent of $8.95 per MMBtu, while the JKM price for North Asian spot LNG cargoes for February 2021 was last at $19.700 per MMBt.

Fortistar invests in hydrogen

Jan 11 – Fortistar, a privately-held fund, has joined an equity investment of up to $157 million in hydrogen producer BayoTech. Cottonwood Technology Funds and the New Mexico State Investment Council also participated in the latest financing round. BayoTech’s systems produce local hydrogen close to the application, serving end users in the industrial gas and petrochemical segment as well as those who use of hydrogen to power fuel cells.

Ashtead appoints new CFO

Jan 5 - Ashtead Technology has appointed a chief financial officer (CFO) and five managers for newly created roles across its international team. The appointments are meant to cement the company’s position in the offshore energy market, including offshore wind and decommissioning of thermal power plants

NFE secures LNG for Puerto Rico, Mexico and Nicaragua

Dec 23 – New Fortress Energy (NFE) has agreed to purchase Henry-Hub-indexed LNG for its integrated gas and power businesses in Puerto Rico, Mexico and Nicaragua. The New York-based project developer said it now has covered 80% of its expected needs throughout Latin America, thus reducing its need for spot purchases and its exposure to changes in the market price for LNG.

China and Korea mandate coal-to-gas switch

Dec 22 – The Chinese government has launched a coal-to-gas boiler switching programme, targeting 7.1 million homes, which makes gas demand more weather-sensitive this winter. Similarly, South Korea mandated the closure of 15 coal-fired plants since the start of December in an effort to reduce air pollution. Analysts expect this will accelerate the drawdown of LNG terminal inventories going into Q1-2021.

GE repowers oil field in Brazil

Dec 21 – GE Power Conversion has been awarded a contract by Sulzer Pumps UK to supply motors for four water injection pumps of a Floating Production Storage and Offloading (FPSO) vessel. The 8,000 kW, two pole motors will run at 3,600 rpm with a limitation of the starting current at 300%, enabling the oil and gas field operator to optimise the generator which supplies electricity on the FPSO.

VELO distributes Sapphire Metal 3D-Printers in the US

Dec 18 – California-based VELO3D has formed a distribution partnership with GoEngineer for Flow pre-print software, Sapphire metal AM printer, and Assure quality assurance and controls. GoEngineer will be VELO’s only distributor in the United States.

Indian electric boats to achieve zero emissions

Dec 17 – Cochin Shipyard, India’s largest shipbuilder, has asked Siemens Energy to equip India’s first fleet of 23 boats with electric propulsion drive train, integrated with batteries and vessel automation. Combining the electric propulsion drive trains, energy storage, and automation systems is expected to significantly reduce fuel consumption.

Terna BESS auction six times oversubscribed

Dec 16 – A pilot auction, held by the Italian TSO Terna, for battery energy storage systems (BESS) to provide reserve grid services has been six times oversubscribed. The auction was held with an expectation that around 230 MW would be on offer, but Terna received 1,327 MW worth of bids and eventually awarded contracts for 249.9 MW.

New £150m link to UK’s Easington terminal

Dec 15 – National Grid has completed a gas pipeline under the River Humber, build in 18 months and at a cost £150 million, as new link to the import terminal at Easington. Following commissioning, the pipeline is now operational and can now transport between 70 to 100 million cubic metres - around a quarter of Britain's gas needs.

US emissions fall 11%

Dec 14 – Energy sector-related emissions in the US are expected to fall 11% this year, largely due economic and behavioural effects the coronavirus pandemic. According to the EIA's December Short-Term Energy Outlook (STEO), emissions in 2020 are forecast fall by 19% for coal, by 13% for petroleum, and by 2% for natural gas.

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