Markets

Singapore’s big three banks – DBS Group Holdings (DBS), United Overseas Bank (UOB) and the Oversea-Chinese Banking Corporation (OCBC) have each announced they are ceasing financing for new coal-fired power plants. With this move, the banks accelerate the region’s fuel switch to natural gas. Echoing an initially largely European phenomenon, the latest Asian financial exodus highlights growing regional concerns with stranded coal power asset and air pollution.

YPF, Argentine’s state-run oil and gas producer, is seeking to sell a partial cargo from its Tango floating liquefaction unit at Bahia Blanca in a first step to turn the country into a major shale gas exporter. Growing production from the Vaca Muerta shale gas play is meant to cover domestic demand and leave a surplus for export.

Stockpiles of thermal coal in the United States have fallen to the lowest level in a decade as more and more coal-fired power plants retire and the lost capacity is being replaced with gas-fired plants and renewables. Coal stockpiles decreased to 98.7 million tons in February 2019, their lowest value in more than a decade, and the EIA expects them to remain relatively low for the rest of this year.

Texas is at risk of power emergency alerts this summer, and may even face rotating blackouts, the Electric Reliability Council of Texas (ERCOT) warned, as the current 8.6% electric reserve margin may prove insufficient to meet strong electric demand growth. Power grid operators typically aim for reserve margins of 10% to 15% and ERCOT itself had set a target of 13.75%.

Two Czech billionaires and energy infrastructure investors are understood to have teamed up with state-run CEZ to bid or Alpiq’s gas- and coal-fired power plants in the Czech Republic. Having posted high losses in 2018, the Swiss firm Alpiq has been considering the sale of some power plants.

The Government of Morocco has made “positive efforts” to improve energy access for all citizens and end fossil fuel subsidies to establish a more competitive energy pricing regime, said Dr Fatih Birol, Executive Director of the International Energy Agency (IEA). With the exception of bottled butane, fuel prices are now linked to the international market.

The power sector is attracting more investment than the oil and gas industry, with developers having spent over $1.8 trillion globally in 2018 on energy-related projects. Though the overall spent has stabilized after three years of decline, investors increasingly focus on projects with shorter lead times, the IEA’s World Energy Investment 2019 report finds.

General Electric has outperformed its rivals Siemens and Mitsubishi Hitachi Power Systems (MHPS) by winning the most orders for HA-class gas turbines in Q1-2019, according to the latest McCoy Power Report. GE booked six orders, up from zero a year ago – MHPS won five orders, while Siemens booked four.

Shell Petroleum Development Company of Nigeria (SPDC) has said it expects to produce enough natural gas from its new Assa North/Ohaji South development to provide fuel for generating about 2,400 MW of electricity. The move is part of Shell’s strategy to shift to a more gas-orientated business, said SPDC’s general manager, Igo Weli.

The coal-to-gas switch is gathering pace in the United States. Natural gas will provide the largest share of U.S. generation this summer at 40%, up from 39% last summer, EIA projections show. Coal, meanwhile, is seen losing market share to 25%, down from 28% a year earlier.

The intensifying trade war between the US and China is starting to impact shipments of US LNG to China and slows Beijing’s efforts to switch from coal to gas use in the power sector. Only four US LNG cargoes have been delivered to China since September, when a 10% tariffs came into effect. Now, Beijing hiked this levy to 25% - in retaliation to Washington’s move to expand import tariffs on Chinese goods.

Energy giant E.ON has delivered a strong operating performance in the first quarter of this year in all markets except the UK. The Essen-based company blamed Britain’s new regulatory cap on energy price for the €90 million decline in its earnings there.

Germany-based MAN Energy Solution has opened its new U.S. headquarters in Brookshire, some 30 miles west of Houston, Texas. The new workshop and office complex combines engine and turbomachinery repair operations, which were formerly located at two different Gulf Coast sites.

Falling gas prices in Europe and Asia pose no risk of reducing US LNG exports, the Cheniere CEO Jack Fusco told analysts. “There haven’t been any spot cargos that haven’t cleared the US and made a margin,” he said in his company’s Q1-2019 earnings call.

US demand for coal to generate electricity will keep falling in the coming months, federal officials said Thursday. This is despite President Trump’s efforts to shore up the struggling industry. Renewable energy sources including wind, solar and hydropower are expected to fill much of the gap left by coal's decline, according to the Energy Information Administration (EIA). However, natural gas is expected to remain the fuel of choice for power generation with an expected 40% share of US markets this summer.

Page 11 of 158

News in Brief

Slow start of STT pipeline

Oct 18 – U.S. gas exports to Mexico have not picked up substantially despite the start of the Sur de Texas-Tuxpan (STT) pipeline. Exports are still below 6.0 billion cubic feet per day (bcf/d), although there no current postings regarding maintenance on the Sistrangas pipeline that feeds from NET Mexico.

EIB defers ban on fossil projects

Oct 17 – Luxembourg-based European Investment Bank (EIB) has bowed to pressure from Germany and the European Commission and deferred its decision to ban loans to fossil-fuel projects until mid-November. Germany wants the bank to keep financing gas-fired power projects as it views the cleaner-burning fossil fuel as a vital backup for renewable energy sources.

Brexit will not impact UK gas supply

Oct 16 – Security of power and gas supply in the UK will not be jeopardized this winter by the country’s imminent departure from the European Union, even in the event of a hard Brexit, National Grid said. In its assessment, the TSO factored in a halt to flows via the Belgium and Dutch gas interconnectors “from EU exit day one”, but said ongoing deliveries from Norway, the UK Continental Shelf and storage will continue as usual.

Ferrybridge C gets demolished

Oct 15 – Four cooling towers at the Ferrybridge Power Station have been taken down as the coal-fired power station will make way to a new, high-efficiency gas power station. Operator SSE shut down the 500 MW Ferrybridge C unit in March 2016 and now started to tear it down.

Global energy storage tops 10 GW by 2025

Oct 14 – The global market for grid-connected energy storage will grow by 6,900 MW, or 16.6% to reach over 10,500 MW by the end of 2025, according to Reportlinker.com. Germany will add over 267 MW energy storage installations over the next five to six years, while 330 MW will come from other European markets. These numbers are dwarfed by China, where up to 1,200 MW energy storage units could be connected to the grid by 2025.

Wärtsilä services EDL plant

Oct 11 – Energy Developments Ltd (EDL) of Australia has awarded Wärtsilä a service contract for gas engine-based baseload power plant at the McArthur River zinc mine in Northern Territory. The maintenance approach for the 53 MW onsite power plant is no longer pre-planned and scheduled but has been changed to condition-based and predictive maintenance, with an advisory contract.

EPH buys CCGT in Galway

Oct 10 – The Czech energy company EPH has received regulatory approval to purchase an 80% stake in the 400 MW Tynagh Energy combined-cycle gas power plant in Galway, Ireland. Mountainside Partners will continue to own the remaining stake in the CCGT, which operates based on a security-of-supply contract from the Irish TSO based on guaranteed power prices.

ITM gets £38m boost from Linde

Oct 9 – Sheffield-based ITM Power, maker of electrolysers for hydrogen production, has been boosted by a £38 million cash injection, as Linde acquired a 20% stake in ITM at 40 pence per share. Looking ahead, ITM said it is seeking to raise £14 million from new and existing institutional investors.

Drax to convert two power units

Oct 8 – Drax Group has received government approval to convert up to two coal-fired generating units at its power station in North Yorkshire to run on natural gas. With this ruling, the UK regulator overturned objections by ClientEarth, stressing some fossil power is vital for the UK to backup intermittent renewable power source.

Storage use tops 80% in key U.S. regions

Oct 7 – Gas storage utilization in the United States is rising in the autumn, with net injections topping 112 billion cubic feet (Bcf) in the first week of October. According to EIA figures, underground storages are at least 80% full in the East, Midwest, and South Central non-salt regions, allowing for seasonal withdrawals to help meet peak-day gas demand throughout the upcoming winter.

Maine, NY aspire to 100% clean energy

Oct 4 – Three U.S. states—Maine, New York, and Ohio—have updated their renewable portfolio standards (RPS), since May 2019. As a result, Maine and New York joined California, Hawaii, Nevada, New Mexico, and the District of Columbia in requiring 100% clean electricity by 2050.

TransAlta to built CHP in Alberta

Oct 3 – Canada-based Transalta and SemCAMS Midstream have agreed to develop, construct and operate a new cogeneration facility at the Kaybob South No. 3 sour gas processing plant in Alberta. To be built at a cost of some 105 million, the CHP will have an installed capacity of 40 MW. Start of commercial operation is targeted for late 2021.

GE’s 100th HA turbine sold in Greece

Oct 2 – Greek industrial firm Mytilineos has ordered a GE 9HA.02 gas turbine to be the heart of the 826 MW Agios Nikolaos combined-cycle gas power plant. This deal also marks the 100th unit of GE’s HA gas turbine sold. Construction of the CCGT is due to start before the end of the year.

ABB launches M4M analyzer

Oct 1 – Swiss technology firm ABB has launches its first Bluetooth-equipped network analyzers, called M4M. The system gathers data from distribution grids and connects them to a cloud-based control system, allowing users to react on energy consumption and on-site power generation trends.

Microsoft invests in wind power

Sept 30 – Microsoft and ENGIE have entered a long-term solar and wind energy power purchase agreement (PPA) in the United States. The deal will see Microsoft purchase a total of 230 MW from two ENGIE projects in Texas, bringing Microsoft’s renewable energy portfolio to more than 1,900 MW.

Gazprom tackles issue of ownerless gas grid

Sept 27 – Gazprom, the main supplier of pipeline gas to Europe, is trying to settle the issue of ownerless gas pipelines – a relic of the former Soviet Union. Abandoned gas transmission pipeline spanned 6,651 kilometers as of March 1, with the issue seen as “especially acute” in the North Caucasus region where half of this infrastructure is located. If no owner registers these facilities within three months, Gazprom will take over to ensure reliability and safety.

Investors flock to Myanmar

Sept 26 – Fitch Ratings has singled out Myanmar’s power sector as one of the largest beneficiaries of foreign direct investments (FDI) worldwide. Nearly $21.2 billion was poured into power generation and energy infrastructure projects thus far in 2019, which is 27% of total FDI under the Myanmar Investment Law.