Markets

Investment in wind power is largely driven by China, where removal of regulatory restrictions in the country's northern provinces sparked a 2 GW, or 37%, rise in 2018 to a total installed capacity of 5.6 GW. Worldwide, nearly 52.2 GW of net wind power capacity was added last year – a 4% annual rise, according to Wood Mackenzie’s Global Wind Power Market Outlook Update: Q1-2019.

Fitch Group affiliate BMI Research expects natural gas will contribute more than half of the UK’s electricity needs in less than 10 years, up from currently about 45%. Gas gains importance in the UK power sector amid Government policies to exit coal power by 2025, and as private investors cancelled some new nuclear power projects.

Aspiring full electrification by 2030, the Government of Myanmar has vowed to fast-track several gas-fired power projects as it aims to add some 3,000 MW to effectively double the country’s installed capacity over the next two to three years. Realizing this plan comes with a price tag of $5.16 billion, according to estimates by Myanmar’s Ministry of Electricity and Energy (MOEE).

Global CO2 intensity has decoupled from electricity demand growth since the mid-2010s, and this trend intensified when China and other major Asian economies started to turn their back on coal use for power generation, while falling costs for wind and solar PV made clean energy more attractive.

The South African arm of AEP Energy is about to purchase two power plants in Nairobi from Iberafrica and considers converting these units from diesel to natural gas. In Kenya, diesel-generated electricity is about 3 times costlier than geothermal, wind and hydropower and about 2.5 times more expensive than gas power.

Length in natural gas supply the U.S. Mid-Atlantic and Ohio region is building up amid rising production from the Marcellus and Utica Shale. Simultaneously, growing demand in the South Central region for feed-gas for LNG export facilities on the Gulf Coast has caused a reversal in gas flows on key interstate pipelines.

Latest earnings calls from publicly-traded U.S. gas producers show a slowdown in 2019 gas production as the role of private producers increase. The 25 firms sampled by Energy Aspects have a combined base output of 23.1 billion cubic feet per day (bcf/d), and said they expect 1.3 bcf/d annual production gains in 2019. This projected 6% uplift is less than their earlier growth 9% forecast.

Spain’s gas network operator Enagás has agreed to pay $590 million for a 10.93% ownership interest in Tallgrass Energy (TGE), the operator of several U.S. interstate pipelines. To finance the deal, Enagás partnered with the private equity firm Blackstone and Singapore’s sovereign wealth fund GIC.

As the second wave of the US shale revolution unfolds, the United States is forecast to account for 70% of the rise in global oil production and some 75% of the expansion in LNG trade over the next five years. On global oil markets, the U.S. has “essentially compensated for recent production shortfalls in Venezuela and Iran,“ commented Dr Fatih Birol, Executive Director of the International Energy Agency (IEA).

State-owned utility Taiwan Power Company (Taipower) has signed two non-binding LNG supply deals, seeking to start shipments from 2023. The imported fuel is designated for Taipower’s combined-cycle gas power project at Taichung, where unit 1 of 2 is scheduled to start up in early 2024.

Electricity consumption in the United States will continue to grow but at a slower pace than in recent years, the EIA forecasts, as global trade tension have an adverse effect on economic growth and reduce electricity demand from the manufacturing sector. Though net U.S. electricity output rose 4% last year to a record high of 4,178 million MWh, the EIA attributes this to a one-off weather related effect.

Puerto Rico Electric Power Authority (PREPA) has agreed with NFEnergía, the local New Fortress Energy affiliate, to supply LNG and convert Units 5&6 of the San Juan power plant. The diesel-to-gas conversion of these two combined-cycle power units is expected to generate about $750 million in fuel cost savings.

Striving to achieve universal electricity access, utilities invested $500 million globally in off-grid energy access last year. Though investments in energy access grew another 22% in 2018, after surging 37% the year before, Wood Mackenzie says “total volumes still fall well short of the estimated financing needed to reach universal electricity access globally by 2030.”

Manila Electric Co. (Meralco) has filed to Energy Regulatory Commission (ERC) of the Philippines, requesting to end interim power supply agreements prior to the next Malampaya gas field maintenance – but the regulator wants utilities to keep producing electricity from condensate. The upcoming October shutdown will affect gas supply to three of Luzon’s major power plants: Santa Rita (1,000 MW), San Lorenzo (500 MW) and Ilijan (1,200 MW).

As Japanese utilities keep restarting shuttered nuclear power units, analysts say the return of cheap nuclear power will displace baseload generation from fossil sources, in particular natural gas. Japan has to import its entire gas demand as LNG, which is more costly than thermal coal, so a rise in nuclear power output is forecast to reduce LNG shipments by up to 10% this year.

Page 11 of 154

News in Brief

Tohoku Electric tenders for LNG cargo

Aug 19 – Tohoku Electric Power, the fourth-largest electric utility in Japan in terms of revenue behind Tepco, Kepco and Chubu, is understood to be seeking an LNG cargo for delivery in September. A tender process is ongoing.

Cost for decarbonizing industry tops $21tr

Aug 16 – Total costs to fully decarbonize the four most polluting industries – cement, steel, ammonia and ethylene – are estimated to amount to $21 trillion between today and 2050. McKinsey said this could be lowered to about $11 trillion if zero-carbon electricity prices come down further compared to fossil fuel prices. In this event, industry could switch to using electricity for heating processes.

Co-firing Braskem plant with hydrogen

Aug 15 – Siemens is making fossil energy greener at the Braskem onsite power plant in Brazil. In this modernization project two SGT-600 gas turbines are co-fired up to 60% with hydrogen, enhancing efficiency for the production process of the adjacent the petrochemical complex.

Canada's CO2 tax to hit CCGTs

Aug 5 – Change in Canada’s carbon emissions tax regulation for new power plants has changed to also affect cleaner-burning, gas combined-cycle power stations starting from 2021. The move could significantly lower the profitability of gas generation and could prompt SaskPower reconsider its planned Moose Jaw gas power station.

GE CFO steps down

Aug 2 – Jamie S. Miller, General Electric’s chief financial officer, has decided to quit after two years in the job and 11 years with the company. Having overseen GE’s fiscal activities during a period of intense restructuring, Miller will remain in office while the GE board is looking for a successor.

Siemens HR boss quits

Aug 1 – Janina Kugel, Siemens chief HR officer, is leaving the company amid an apparently scattered working relationship and stark personal differences with CEO Joe Kaeser. Her contract will expire by mutual agreement on January 31, 2020.

ABB standardizes eBus chargers

July 31 – Zurich-based ABB, a member of the ASSURED consortium, is working on standardizing the specifications for automatic charging of heavy vehicles. The aim is to drive down the total cost of ownership for electric fleet operators, helping increase adoption of eBuses and eTrucks. Conformance and interoperability tests will be carried out in Q4-2019.

U.S. Senate helps fund EV charging stations

July 30 – The need for expanded electric vehicle charging infrastructure is greater than expected given that there had been over 1.75 million electric vehicles (EV) in North America at the end of 2018, a nearly 60% increase from the previous year. To help fund additional charging stations, among other things, the U.S. Senate approved the $287 billion America’s Transportation Infrastructure Act (ATIA).

PNOC, Lloyds to develop merchant LNG-to-Power projects

July 29 – Philippine National Oil Co. (PNOC) has signed a Memorandum of Understanding (MoU) with Lloyds Energy to develop a 1,200 MW LNG-fuelled power plant in partnership with Mitsubishi. Dubai-based Lloyds Energy is looking at ways to develop integrated LNG import facilities and gas power plants on a merchant basis in Bataan and Batangas provinces.

Macquarie finances CCGT in Mexico

July 26 – Macquarie Capital has chosen Credit Agricole, Natixis and SMBC to co-finance a $380 million combined-cycle gas power plant. The 560 MW plant is designated to be built in San Louis Potosi, a city in central Mexico.

Naturgy cashes in on gas network

July 25 – Spanish gas utility Naturgy has posted a 7% rise in core earnings for the first half of the year due to strong gains from its gas network business that helped offset falling revenues from power generation and slimmer LNG margins.

French court rejects appeal against Total CCGT

July 24 – Judges at an appeal court in Nantes have thrown out an appeal by environmentalist against Total’s planned Landivisiau combined-cycle gas power plant in Brittany. The 440 MW project, initiated by Direct Energy which was since acquired by Total, is over two years behind schedule. The French grid operator RTE has singled out the Landivisiau CCGT as “critical” in guaranteeing supply security in winter 2020/21 due to the planned shutdown of four coal power plants.

U.S. gas production falls in wake of ‘Barry’

July 23 – Shut-ins related to Hurricane Barry have scaled back U.S. gas production by 1.6 billion cubic feet per day, compared to last week, while power sector gas demand rose by just over 2.0 bcf/d. Consequently, there is significantly less gas available for storage so the injection rate has halved, according to Energy Aspects figures.

Blackout after fire at Madison substation

July 22 – Electricity is gradually being restored at Madison, Wisconsin, after 13,000 people experience a blackout following an explosion at a substation near Madison Gas & Electric’s 100 MW gas-fired Blount Generating Station. No injuries were reported.

Fuel switch could abate 1.2bn tons of CO2

July 19 – Some 1.2 billion tonnes of CO2 could be abated by switching to gas using existing infrastructure, if prices and regulation are supportive. According to the International Energy Agency (IEA), this would be enough to bring global CO2 emissions back down to where they were in 2013.

IEA launches methane tracker

July 18 – A new ‘methane tracker’, launched by the International Energy Agency (IEA), provides up-to-date estimates of current oil and gas methane emissions by drawing on the best available data. Analysts stressed methane emissions could be reduced by nearly half at no net cost.

Canada’s CO2 tax also affects gas power

July 17 – Change in Canada’s carbon tax regulation for new power plants has changed to also affect cleaner-burning, gas combined-cycle power stations starting from 2021. The move could cause SaskPower to reconsider its planned upcoming Moose Jaw gas power station.