Markets

April 2020 was the first month ever that renewables generated more electricity than thermal coal in the United States every single day. According to government data, coal’s market share in April declined to 15.3% amid a steep drop in power demand due to the pandemic.

Nationwide lockdowns in India have highlighted the financial risk of coal power plants – a technology increasingly uncompetitive compared with gas or renewables. In the first 33 days of the 2020/21 fiscal year, coal-fired generation was down just shy of 30 Terawatt-hours (TWh).

Asia’s Japan/Korea LNG (JKM) price marker is “potentially undervalued”, Energy Aspects says, pointing at a strong demand upswing in South Korea. Should KOGAS switch decisively from coal to gas generation, this would pull JKM prices above levels at the Dutch TTF starting from the fourth quarter.

Rising volumes of US LNG exports have boosted liquidity at traded gas markets, leading to greater price correlation of regional hubs and more integrated markets. Still, prices at the U.S. Henry Hub, Asia’s Japan/Korea LNG (JKM), and the UK National Balancing Point (NBP) show much less correlation than crude oil benchmarks.

U.S. electric carmaker Tesla has applied to the British energy regulator Ofgem to sell electricity in the UK. The purpose of the licence may be to introduce Tesla’s Autobidder energy trading platform in the UK, which is already running at Tesla’s Hornsdale Power Reserve in South Australia.

The rental market for mobile power gen equipment is seen grow at a 6% annual rate, expanding by $1.5 billion in the years through 2024. Growth is largely driven by infrastructure programs, as well as rising demand from mining and the oil and gas industry.

Electricity use in Europe increased for the first time in eight weeks as lockdowns are lifted, Entso-E data shows, but prices remain in the doldrums. Wholesale power prices collapsed 30-40% in the wake of the pandemic and may not fully recover until 2025, Aurora Energy Research finds.

The International Energy Agency (IEA) forecast global energy demand will fall 6% this year – seven times the decline after the 2008 global financial crisis. The impact of the coronavirus pandemic marks the biggest shock since the Second World War, with electricity demand down 2.5% in Q1-2020 though lockdown measures were in place for less than a month.

As lockdowns are gradually eased in Europe, gas demand stages a cautious recovery. If current restrictions persist for three months, Wood Mackenzie expects 17.6 Bcm of demand will be lost across seven of Europe's largest gas markets: Germany, UK, Italy, France, Spain, Netherlands and Belgium.

Aspiring to become climate-neutral by 2050, the German government is supporting clean hydrogen technologies both at home and as a future export success for the country’s engineering companies. “Green hydrogen is tomorrow’s oil,” the German research ministry noted, stressing the flexible energy carrier “opens up new markets.”

West Texas Intermediate (WTI), the U.S. benchmark oil price, has shed 16.12% in early trading today, extending Monday’s losses of nearly 25% as the pandemic erased about a third of global oil demand and storage fills up fast. Henry Hub spot gas price fell to $1.65/MMBtu, near parity to the British NBP.

Banks accelerate their exit from coal financing as the credit appeal of mining and coal power plants deteriorates amid faltering electricity demand during the pandemic. Japan’s Sumitomo Mitsui Banking Corp (SMBC) and Mizuho Financial Group head for the exit, followed by South Africa’s ABSA bank and Citi Group.

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News in Brief

Orbital signs MSA with Midwestern utility

Dec 3 – Orbital Energy has signed a master service agreement (MSA) with a US Midwestern investor-owned utility. The accord is expected to generate monthly revenues from the fourth quarter and increase revenues by 30% on an annualised basis.

Wärtsilä to use Shell engine oils

Dec 2 – The Finish engine maker Wärsilä has selected Shell as its test oil partner for engines during stress tests and fine-tuning at engine manufacturing sites. Shell’s Mysella, Argina and Gadinia range of engine oils have been developed to provide top class engine cleanliness, enhanced wear protection, long oil life, and high system efficiency.

Hamburg CHP runs fully on hydrogen

Dec 1 – Field testing has started for HanseWerk’s combined heat and power (CHP) plant in Hamburg to run fully on hydrogen. The converted 1 MW pilot plant, powered by Jenbacher engines, provides district heating equal to 13,000 MWh/year to 30 residential buildings, a sports facility, a daycare center, and the Othmarschen Park leisure centre.

Oil majors in the red

Nov 30 – For most oil majors worldwide, higher prices are needed to get their business out of the red. Breakeven prices for Saudi Arabia are $85 per barrel, around $64/bbl for Iraq, $49/bbl for Kuwait and as little as $40/bbl for Russia. As business confidence plummets, major oil companies have already slashed planned CAPEX spending by almost $89 billion in first quarter of 2020, with further cuts being made throughout the summer and autumn.

EU invests into battery cells

Nov 27 – Germany's EU Council Presidency has pledged Europe should develop an integrated value creation chain for battery cells, starting with the processing of raw materials over battery cell production to recycling. Germany is investing 3 billion Euros into the two projects that foster novel methods of battery production.

Rolls-Royce wins order from Hinkley Point C

Nov 26 – Rolls-Royce has been awarded an order from Hinkley Point C to deliver 140 Bibloc pressure transmitters for the two EPR nuclear reactors currently under construction in Somerset, UK. The transmitters will measure the flow, level and pressure of the Nuclear Steam Supply System (NSSS).

CHP industry to grow 14.4% through 2025

Nov 25 – The combined heat and power (CHP) market, evaluated at $12.152 billion, is expected to expand nearly 14.4% per year to reach $27.196 million by 2025. Growth is primarily driven by government funding and subsidy schemes. According to the U.S Environmental Protection Agency, the country aims to install 40 GW of new, cost-effective CHP to save $10 billion per year, compared to current energy use.

Rolls-Royce opens US customer center

Nov 24 – Rolls-Royce has opened its latest US customer support center in Savannah, Gerogia. The 62,000 square feet facility houses a power plant completion center, a wing services repair unit and a warehouse, all under one roof.

Lithium Werks grows manufacturing

Nov 23 – US-Dutch manufacturer Lithium Werks is growing the output and sales fuel cells and battery modules for use as power, pulse, and stand-by applications. The company’s 26650 Nanophosphate cells are used as single cells, as well as to build cell-packs and modules like Lithium Werks P40-24 battery modules. The Austin and Enschede-based company said it can “produce millions of 18650 and 26650 cells a month in China.”

AGL plans 1,000 MWh battery

Nov 20 – Australian power producer and retailer ALG wants to realise a large grid-connected battery storage unit of up to 250 MW rated output and four hours’ duration of storage, equalling 1,000 MWh. The battery will be built in stages on the site of Torrens Island Power Station in South Australia. AGL vowed to reach net zero emissions by 2050, but is currently still operating some 40 GW of coal-fired generation.

Fusion demo plant to be designed in Canada

Nov 19 – Vancouver-based General Fusion has entered a partnership with the architecture firm AL_A to design a demonstration plant, based on magnetized target fusion (MTF). Once operational, the demo plant will showcase MTF technology under power plant-relevant conditions.

Toshiba opens H2One fuelling station

Nov 18 – Toshiba has opened the first ‘H2OneMulti Station’ which fills fuel cell vehicles with green hydrogen and supplies for green electricity at Tsuruga City in Fukui prefecture. The station consists of H2One ST Unit and H2One, using hydrogen produced from wind and solar power sources.

Shale gas market grows at 7% rate

Nov 17 – Unconventional gas markets are poised to grow by $41.76 billion through 2024, rising at a rate of almost 7%. According to Technavio, about 87% of the supply growth this year is coming from the Americas.

Agua Blanca pipeline expanded

Nov 16 – Austin-based WhiteWater Midstream and MPLX have completed a 1.8 billion cubic-feet-per-day (Bcf/d) expansion of their joint venture Agua Blanca pipeline system. Christer Rundlof, CEO of WhiteWater CEO, said the expansion will be brought into service ahead of schedule. Testing and commissioning will begin this month, for the new pipeline stretch to be brought into full service in early 2021.

Wärtsilä integrates clean energy

Nov 13 – Finish technology group Wärtsilä strives to integrate variable clean power sources to achieve a 100% renewable energy future. The necessary operational flexibility will come from gas generation assets running on synthetic renewable fuels and by the extended use of energy storage.

First German-Belgium power link to start operation

Nov 12 – The two TSOs Amprion and Elia are preparing to launch the first electric interconnector between Germany and Belgium. The 1,000 MW interconnector stretches between Aachen and Lüttich, from where it links to the Rhineland region and Wallonia. It will go into operation as of 18 November, with intraday capacities to begin trading on 8 December.

Sachsen Energie takes on E.ON and RWE

Nov 11 – A small regional energy provider in Saxony seeks to counter the dominance of E.ON and RWE. Sachsen Energie, set up in a merger between two local utilities, claims it will become "the largest municipal utility in eastern Germany," catering to about one million customers, when it begins operation in 2021.

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