Markets

Producing electricity from gas, coal or wind sees substantial amounts of input energy lost during the generating process. In 2019, U.S. utility-scale power plants consumed 38 quadrillion British thermal units (quads) of energy to provide 14 quads of electricity, with over 60% input energy lost.

Siemens Financial Services (SFS) is set to become a major shareholder in Berkeley Energy Commercial Industrial Solutions (BECIS). Targeting Asia Pacific, the two partners said they want to give customers access to distributed energy via a flexible ‘Energy as a Service’ (EaaS) model.

MAN Energy Solutions is restructuring. Plans are to cost cuts of 450 million Euros, partly through layoffs, with the aim of improving the OEM’s cash position and liquidity, and achieve a 9% operating margin by 2023. Steam turbine production in Hamburg will come to an end, and MAN also considers closing its production in Berlin.

Three main players – PowerSecure, Enchanted Rock and The American Red Cross – have installed over two-thirds of all microgrids added in the United States over the past 10 months. A total of 546 microgrids were installed in 2019 alone, more than in any previous year.

Natural gas demand in the United States has plunged over Covid-related lockdowns but analysts say “late July and August will be a litmus test for just how much industrial demand has recovered.” August is a month without a U.S. federal holiday, so baseload demand might return to “more normal levels.”

The U.S. Administration has decided to end of grandfather clauses, a legal exception that spares companies involved in TurkStream from sanctions. U.S. Secretary of State Mike Pompeo called the move “a clear warning” though Gazprom and Botas keep pushing ahead with works.

Commercial in-service dates of U.S. power projects are beset by delays. In March and April 2020, commissioning of 21% and 29% of these projects, respectively, were pushed back due to delays in equipment deliveries and Covid-19 related stay-at-home orders that disrupted construction works.

Low prices for pipeline gas imports have rendered the economics of building a German LNG import plant less attractive. The Government’s maritime coordinator, Norbert Brackmann, said companies are moving forward with their investments, though "not in the greatest hurry."

Westwood Global Group says engineering, procurement and construction (EPC) contract awards for floating structures will reach just over $5 billion in 2020, a 59% decline from $13 billion seen last year. However, markets are expected to recover to pre-crisis levels starting from 2021.

Marketed gas production in the United States keeps falling to an average 96 Bcf/d in 2020, down from 99 Bcf/d in the previous year, according to EIA projections. In April, at the height of the coronavirus crisis, gas production declined less than crude oil production, down “only” 2.3 percent.

Should Germany’s energy demand stay subdued, wholesale power prices could fall by €10.20 per MWh in 2021, compared to pre-COVID estimates. Energy Brainpool says a deepening recession could pull down prices by another 5%, extending losses by further €3.60 per MWh.

Australia’s Woodside Petroleum has announced write-downs of nearly A$6.3 billion (US$3.92bn), mostly related to its exploration assets. Australia’s largest oil and LNG exporter today posted a US$768 million drop in Q2 sales, largely due to a 28.2 percent fall in its realised LNG price.

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News in Brief

Mitsubishi produces methanol in Trinidad

Jan 20 – Mitsubishi Gas Chemical Company has launched commercial operations of a methanol and dimethyl ether plant in Trinidad and Tobago. The plant has an annual production capacity of one million tons of methanol and 20,000 tons of dimethyl ether, which can be used as an alternative fuel for cars and power generation.

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.

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