Germany’s engineering giant Siemens Group has carved out its healthcare and energy businesses into stand-alone entities. Following the listing of Siemens Energy, the mother company now intends to gradually divest its interest in the spin-off over the next 12 to 18 months.

US gas markets are “increasingly supply-constrained,” Energy Aspects noted, after a cold snap has forced withdrawals from storage, driving up prices. The cash–prompt gap, which stood at $1.25/MMBtu at the end of last week, has shrunk to $0.49/MMBtu on early-season heating demand.

Efficient gas-fired power plants make up over 43% of operating generating capacity in the United States, covering 39% of the country’s electricity needs. Most recently added capacity uses combined-cycle gas turbine technology, surpassing new coal-fired capacity.

EDF Trading (EDFT) has started transacting Japanese power on the EEX platform, drawn by the market’s rising liquidity and its partnership with JERA in LNG trading. “We will be trading Japanese Power out of London for the time being,” said EDF Trading’s chief commercial officer, Philipp Büssenschütt.

India’s speed of electrification outpaces all other regions while China sees the largest absolute rise in electricity demand, accounting for over 40% of global growth to 2030. Electricity is in higher demand than any other fuel  and will soon meet 21% of final energy consumption.

Demand destruction due to the Covid-19 crisis has caused a “huge shock to the system,” the International Energy Agency (IEA) said, prompting investors to slash infrastructure spending by 18% in reaction to a 5% drop in global energy demand. Oil and coal use fell sharply, natural gas more modestly.

Hard-nosed buyers are bargaining for cheap term LNG supplies as about one-third of active contracts are due to expire between 2020 and 2025. Contracting activity collapsed this year with only 35 bcm signed to date, giving buyers plenty of bargaining power to negotiate flexible pricing and delivery terms.

Operators of US energy infrastructure are on high alert as Hurricane Delta, a Category 4 storm in the Gulf of Mexico, will make landfall in Louisiana later today. Sempra is shutting down Cameron LNG and Cheniere may suspend Sabine Pass, leaving surplus feedgas that weighs on Henry Hub prices.

The pandemic has cut daily peakload in PJM, the largest US regional power network, by 13.5 GW and demand is unlikely to recover before 2023. Researchers at the Applied Economics Clinic warn of a “capacity surplus," suggesting the network is “over-reliant” on gas peaking power plants.

Japanese utility buyers have been busy to snap up US LNG, importing a total of 18 cargoes in both August and September, ahead of South Korea with 15 cargoes. Generating electricity from LNG remains vital for Japan, though Kyushu Electric aims to restart units 1&2 at its Sendai nuclear plant.

Slowing oil and gas consumption as a result of the global green energy transition may lower the credit profile of national oil companies (NOCs). Oil majors can reduce this risk, according to Moody’s, by increasing their exposure to LNG assets and less carbon-intensive energy sources.

Royal Dutch Shell’s margins on LNG sales are squeezed by low oil prices. Over 80% of the company’s term LNG sales are linked to oil with a 6-month price lag, dragging down margins in the third quarter. In consequence, Shell places greater emphasis on integrated power, biofuels and hydrogen.

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News in Brief

MAN to maintain power plant in Benin

Oct 23 – PrimeServ, the after-sales brand of MAN Energy Solutions, has signed a service agreement with BWSC for the Maria Gleta power plant near the city of Cotonou, Benin. The 127 MW plant is powered by seven MAN 18V51/60DF engines. The ten-year contract covers the supply of spare parts and the provision of technical services for scheduled maintenance.

Gas saves Virginia over $14bn

Oct 22 – Virginia’s businesses and families saved more than $14.2 billion between 2008 and 2018 thanks to low-cost natural gas and expanded energy infrastructure, according to a new Consumer Energy Alliance (CEA) report. Almost 60% of power generation relies on natural gas and a third of its households use gas for home heating.

Energy storage for LNG-powered vessels

Oct 21 – Louisiana-based Harvey Gulf has asked Wärtsilä to retrofit its energy storage system (ESS) on four LNG-fuelled platform support vessels. Once upgraded in early 2022, all vessels will be of full tri-fuel operation.

Mott McDonald starts construction on ALCP6

Oct 20 – US construction firm Mott McDonald has started building the ALCP6 waste to energy project in Krabi province, southern Thailand. The plant will incinerate 144,000 tonnes per year of municipal solid waste, and the heat obtained will be converted into 6 MW of electricity to be exported to the Thai national grid.

Brace for EU sustainable finance rules

Oct 19 – Sustainable finance practices, drawn up by the European Commission, could create a "bureaucratic monster" that smaller companies and energy investors would find overbearing, the Munich-based Institute for Economic Research (ifo) warned. The regulation should hence prioritise closer scrutiny of large and listed companies.

UK could become net power exporter

Oct 16 – Increased interconnection could provide a route for excess offshore wind power in Britain to be consumed elsewhere in Europe. National Grid Interconnector Register shows up to 16 GW of interconnection could be operational by 2025 and up to 25.4 GW by 2030.

Wärtsilä to deploy GridSolv in US city

Oct 15 – AEP OnSite Partners has contracted Wärtsilä to deploy its GridSolv Quantum energy storage in the city of Martinsville, Virginia. The system includes an UL9540A limiting 2-hour battery firewall and will help lower the city’s energy costs.

Rolls-Royce spends $13.9m in Mankato

Oct 14 – Britain’s engine maker Rolls-Royce has decided to invest nearly $14 million in its Power System business to build a new R&D centre at its MTU manufacturing plant in Mankato, Minnesota, US. The expansion will see 28,000 square foot added to the facility’s existing hall, making room for the production of high-power MTU gas gensets, enhanced product testing and the creation of 20 new manufacturing positions.

Clarke commissions Vitalait power unit in Tunisia

Oct 13 – Clarke Energy and INNIO Jenbacher have completed the commissioning of an onsite power plant of a milk producer in Tunisia. The installation of another Jenbacher gas engine has increased the plant’s output to 4 MW of electricity as well as 1,100 kW of hot water and 800 kW of steam.

Secondary battery market to top $55bn

Oct 12 – Technavio expects the secondary battery market to grow by $55.62 billion through 2024, rising at an 11% rate over the forecast period. Falling costs for lithium-ion batteries as well as growing demand in Asia Pacific allowed the market to grow 2.01% this year, despite adverse effects of the pandemic. Top battery suppliers are Tesla, Clarious, Exide, LG Chem, GS Yuasa and Samsung.

Shift to sustainable tech

Oct 9 – Three quarters of utilities, surveyed by EIT InnoEnergy, are considering adopting sustainable technology over the next 12-18 months. However, over one third of the respondents found it hard to recruit the skills they need.

Generator rentals slow

Oct 8 – The rental market for power generators has slowed down due to the pandemic, with genset rentals from the oil and gas industry forecast to grow by just $153.87 million this year. However, Technavio expects the market will return to a 3% annual growth rate by 2024.

GE upgrades Italian CHP

Oct 7 – GE has completed an axial fuel staging upgrade on its 9E gas turbine at an onsite combined heat and power (CHP) plant at the Milazzo refinery in Sicily. The entire electricity needs of the refinery, over 780 GWh in 2019, will soon be supplied by the upgraded and more flexible gas turbine.

Operating assets ‘from anywhere’

Oct 6 – GE Digital’s latest software gives electric utilities remote and mobile control over their power stations for remote start-up, external monitoring and operational fine-tuning. The goal is to safe cost through autonomous operation from any location.

Chart wins order from New Fortress Energy

Oct 5 – Chart Industries has secured a second leasing order, worth $7.7 million, for ISO containers for LNG applications from New Fortress Energy for a project in the Caribbean. The US equipment maker sees double digit near-term growth in its repair, service and leasing business, notably from growing demand for LNG equipment for infrastructure.

Siemens energises Togo

Oct 2 – Siemens Energy has delivered a SGT-800 gas turbine and other components for the Kékéli Efficient Power plant project. Located in the Togolese capital Lomé, the 65 MW plant will cover almost 40% of country’s expected electricity demand.

Batteries get cheaper

Oct 1 – Cost for battery production is falling rapidly as manufacturers bring large Gigafactories on-line. By 2030, Bloomberg New Energy Finance anticipates battery pack prices to drop to $73 per kilowatt-hour, down from a current volume-weighted average of below $270/kWh.

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