Markets

Accusing the Kremlin to “weaponize fossil fuels”, Germany’s economy minister Robert Habeck said the country could cope with a halt in Russian gas deliveries by winter 2022/23. In retaliation for Berlin seizing Gazprom Germania, Russia lowered gas deliveries by 3% but Habeck is convinced new floating LNG terminals will bring in sufficient alternative supply.

South Korea’s state power firm Korea Electric Power Corp. (KEPCO) has reported an all-time operating loss for the January-March period of 7.78 trillion won ($6.06 billion). Soaring fuel costs for imported natural gas and coal contrasted with a freeze of domestic electricity rates as the government in Seoul sought to reduce the burden on consumers and contain inflation.

Ansaldo Energia has opened a new diagnostic centre in Abu Dhabi, United Arab Emirates. The integrated plant support team in the UAE works closely with an equal centre in Genoa, Italy, using digital systems and cybersecurity to monitor and manage 106 gas turbines, 42 steam turbines and 132 generators, with a total of over 33 GW worldwide.

Mitsubishi Heavy Industries (MHI) has achieved a 21.9% jump in order intake for the fiscal year ending March 31, supported by its gas turbine combined-cycle business where revenues increased 15% year-on-year. Strong customer demand for the JAC turbine model, as well as for nuclear power and thermal & drive systems also contributed to MHI’s solid results.

JERA, Japan’s largest LNG importer and power producer, has announced it will strive for flexible fuel procurement in the face of soaring gas prices following Russia’s invasion of Ukraine. To ensure supply security, JERA replaced some LNG-fuelled power plants with coal power units while others are being converted to co-fire hydrogen.

Siemens Energy has warned sales and margins in 2022 will come in at the low end of its forecast range due to mounting problems at its Spanish wind turbine division. “Disappointing again is the performance of Siemens Gamesa which is weighing heavily on the group,” Siemens Energy CEO Christian Bruch said, promising swift steps to tackle the issue.

US government analysts forecast LNG exports will stay on record high levels throughout the quieter summer season from May to August despite high Henry Hub prices. Lower demand from power generators in Europe and parts of Asia will be overcompensated by rising gas use from the industrial sector as the world economy is fast recovering.

Industrial gas demand in China’s Jiangsu province, north of Shanghai, plunged 43% in April from a year earlier as regional lockdowns to contain the spread of the coronavirus disrupt manufacturing. China’s Zero Covid approach weighs heavy on energy consumption, Morgan Stanley said, pointing at last month’s 6% in countrywide drop in gas demand as power generators turn to coal.

Industrial coal-to-gas switching and construction of new gas-fired power stations will increase the overall gas use of China’s Guangdong province by about 65% over the next five years. The provincial regulator expects Guangdong’s gas consumption to rise from 29 Bcm in 2020 to 48 Bcm by 2025, with additional volumes sourced via a new LNG regas terminal.

Fuel switching helps US power producers stabilise supply and save costs, with nearly 200 GW or 18% of the country’s 1,116 GW of utility-scale generators capable to do so. The most common mode of fuel switching is from natural gas to petroleum liquids, at almost 132 GW capacity, followed by coal to gas switching, at around 21 GW.

South Korean carmaker Hyundai Motor has decided to build an LNG-fuelled cogeneration plant at its automotive manufacturing site in Ulsan. Hyundai said it aims to source over 70% of its annual electricity demand from the new 184 MW heat and power plant, replacing three-fourth of the electricity it used to purchase from Korea Electric Power Corp.

The Japanese Prime Minister Fumio Kishida has pledged to further reduce Russian oil, gas and coal imports by increasing the dispatch of nuclear power plants and adding renewables. Japan suspended all nuclear power units after the 2011 Fukushima crisis, but the PM said an accelerated restart will not only lower fossil fuel imports but also curb emissions.

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News in Brief

FlatFish drone inspects Shell fields off Brazil

May 25 – Shell and Petrobras have contracted Saipem to use its FlatFish subsea drone in pilot projects to inspect two ultra-deepwater oil and gas fields offshore Brazil in over 2,000-meter depth. Initial tests will be carried out at Saipem’s base in Trieste, Italy, with a view to deploying the drone to Brazilian waters in the third quarter of 2022.

Gazprom cuts off supplies to Finland

May 24 – Gazprom has completely suspended gas supplies to Gasum after the Finish company refused to pay in roubles, the two companies said in separate statements. Gasum is confident it will be able to supply all its customers with gas imported through the Balticconnector (2.6 Bcm/y) from Estonia.

Heisco wins tender in Kuwait

May 23 – Heavy Engineering Industries and Shipbuilding Company (Heisco) has won a KD1.8 million ($6.4 million) tender – floated by the energy ministry of Kuwait – to install, examine and test four high voltage transformers at the Doha East Power Generation and Water Distillation Station. Heisco, founded in 1974 and listed on the Kuwait Stock Exchange, has developed into one of the largest energy engineering groups in the emirate.

JERA issues bond to finance power plant upgrades

May 20 – Japan’s leading LNG importer and power producer JERA has issued its first energy transition bond to help finance the accelerated deployment of decarbonisation technologies like hydrogen and ammonia co-firing, as well as the decommissioning of older thermal power stations. The bond is offered in two tranches: a 12 billion yen ($83 million) for a 5-year bond with a 0.420% per annum coupon, and a 8 billion yen $62 million) for a 10-year bond with a 0.664% rate coupon.

Rolls-Royce conducts laser field tests in the US

May 18 – Rolls-Royce has successfully conducted laser field tests to demonstrate ‘deep magazine’ power capability for directed applications in connection with Lockheed Martin’s layered laser defense project. Deep magazine power can be provided by a battery-only system, but the Rolls-Royce ColdFire system includes both battery-powered and near-continuous firing modes provided by M250 gas turbine engines.

Gas vs oil ratio increases in the Bakken

May 17 – The ratio of natural gas to crude oil production has risen in North Dakota’s Bakken region since 2008, and continues to accelerate. According to the US Energy Information Administration's (EIA) Drilling Productivity Report, annual gas gross withdrawals in the Bakken increased by 9% to an annual high of 2.97 Bcf/d in 2021, even though the region’s crude oil production fell by 6%.

Middle East shifts to gas power

May 16 – The Middle East, a region vulnerable to climate change, is undergoing a major shift from petroleum-based power plants towards gas-fired generation and renewable power sources. Capacity additions of over 185.46 GW are the pipeline, according to ResearchandMarkets, as the regions electricity demand for industry and residential cooling is set to grow. In fact, cooling already accounts for 70% of residential power demand.

Carbon utilisation in strong demand

May 13 – The market for carbon utilisation is forecast to grow rapidly from the 2030s onwards to surpass $285 billion by 2042, driven by rising climate commitments and a favourable regulatory framework. In its latest report IDTechEx also highlights the role of technology advances such as thermodynamics which help sequester CO2 permanently.

MTU gensets approved for biofuels

May 12 – Rolls-Royce has gained approval to use synthetic fuels in its MTU Series 4000 and Series 1600 diesel engines for power generation application. Field testing confirmed both engines can use a range of sustainable fuels including biomass-to-liquid, hydrotreated vegetable oil and power-to-liquid fuels such as e-diesel.

E.ON tells Germans how to save gas

May 11 – A large-scale switch to heat pumps, solar power and better demand-side management could help save Germany nearly 100 TWh of natural gas per year, E.ON has said, calling on households to contribute to Europe’s efforts to reduce reliance on Russian gas imports. “If 10% of the homes in Germany are equipped with solar PV installations, 20% of gas boilers are replaced by heat pumps, and the average temperature in all households is reduced by one degree Celsius on average, this would lead to natural gas savings of 103 TWh per year," E.ON Energy CEO Filip Thon said, noting this volume would equate to about 30% of Germany’s current gas imports from Russia.

Exelon Q1 earnings lower following Constellation cave-out

May 10 – Exelon has reported lower first quarter earnings and a higher operating revenue, having completed the separation of Constellation Energy – Excelon’s former power gen business. Focussing now solely on transmission and distribution, Exelon’s net income from continuing operations for the first quarter of 2022 decreased to $0.49 per share from $0.53 a share in pre-year period. In contrast, adjusted operating earnings notched up to $0.64 per share, primarily due to due to higher electric distribution earnings at ComEd from higher rate base and higher allowed electric distribution. Rate increases at Excelon’s group companies PECO, BGE, and PHI were partially offset by higher depreciation expenses at BGE and PHI.

South Africa to add 2.6 GW of new capacity

May 9 – South Africa’s Department of Mineral Resources and Energy, has just announced the REIPPPP BW6 Request for Proposals (RFP).  The bid round will add 2,600 MWs of new capacity to the energy mix. The ministry seeks to procure 11,813 MW of electricity from various power sources including renewable energy, storage, gas and coal.

GE Gas Power authorized as CVE Numbering Authority

May 6 – GE Gas Power’s increased focus on cybersecurity has been recognized by the Common Vulnerability and Exposures Programm as a ‘CVE Numbering Authority (CNA).  As such, GE Gas Power can now assign CVE identification numbers to newly discovered vulnerabilities potentially related to its products and allow GE Gas Power to directly publish new CVE Records and streamline the reporting process.

Heliogen gets nearly $90m in funding

May 5 – Heliogen has moved from design into testing and implementation of its supercritical CO2 power gen system that will be deployed for Woodside in California. The system consists of a 5 MWe sCO2 power block integrated with high temperature solid media thermal energy storage. The demonstration project is being funded with up to $50 million from Woodside, along with $39 million from the U.S. Department of Energy (DoE).

Capstone to install microturbine in the Caribbean

May 4 – E-Finity Distributed Generation, Capstone's distributor for the Mid-Atlantic, Southeastern United States and the Caribbean, has secured an order for two C1000S microturbines for a government water authority in the Caribbean. The 2 MW system will provide emergency standby power to several pumping stations throughout the remote island community and is scheduled to be commissioned towards the end of 2022.

Forecasting solar and energy storage in CAISO

May 3 – Marubeni has chosen Veritone’s AI-based distributed energy resource management solution (iDERMS) to provide price, demand and generation forecasts at their pilot project in the California Independent System Operator (CAISO) SP-15 region. In addition to day-ahead and real-time generation figures, Veritone will also forecast production and demand for the overall CAISO region.

Forecasting solar and energy storage in CAISO

May 2 – Marubeni has chosen Veritone’s AI-based distributed energy resource management solution (iDERMS) to provide price, demand and generation forecasts at their pilot project in the California Independent System Operator (CAISO) SP-15 region. In addition to day-ahead and real-time generation figures, Veritone will also forecast production and demand for the overall CAISO region.