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Production and use of refined coal – processed to reduce emission when burned – has reached record highs the United States, particularly in the power sector. According to EIA estimates, refined coal’s share of total coal tonnage consumed for U.S. electricity generation will have increased from 15% in 2016 to more than 18% through October 2018.

Sulfur dioxide (SO2), nitrogen oxides (NOx), and carbon dioxide (CO2) emission of the U.S. power sector will remain relatively flat, according to EIA projections, despite an anticipated 23% rise in electricity generation from 2018 to 2050, as most added generation will come from renewables of natural gas.

With electric cars gaining popularity, the global electric vehicle battery market is anticipated to grow at a record 18% rate to reach a size of $120 billion by 2027. Government initiatives and more wide-spread environmental concern in western countries are driving the electrification of the transport sector.

Mexico’s state-run electric utility Comisión Federal de Electricidad (CFE) is aiming to renegotiate take-or-pay clauses it had agreed with North American gas pipeline developers, including TransCanada and Sempra’s IEnova. CFE is the anchor customer for most new pipelines under construction, but the company's new CEO Manuel Bartlett wants to focus on hydropower, diesel and coal instead of gas-fired generation.

Beginning with the February billing cycle, customers of SCE&G, a wholly owned subsidiary of Dominion Energy, will start seeing the benefits of the Dominion Energy-SCANA merger reflected in their monthly energy bills. Typical customers will see their bills drop 15%, with further reductions in May for fuel and Demand-Side Management participants.

Seasonal imports of LNG help meet peakload gas demand in New England’s industrial and power sector. During the freeze in the first week of February, more than 800,000 million cubic metres per day of gas was imported via Excelerate’s Northeast Gateway floating regas facility offshore Boston.

Price will largely determine the share of gas-fired generation in the future power mix of the United States. Scenario analysis in the EIA’s latest Annual Energy Outlook (AEO2019) shows that natural gas could provide between 21% and 54% of all U.S. electricity generation, dependent on fuel prices and relative technology costs.

Implementing the German coal exit will see 12.5 GW of coal-fired capacity being closed by 2022, pushing up the country’s gas demand. To fully replace these shuttered coal plants with gas-fired generation would create a need for additional 81 TWh in gas supply, equating to an 8% rise of German gas demand, says the lobby group Zukunft Erdgas.

The UK government’s Department for Business, Energy and Industrial Strategy (BEIS) is inviting applications for funding under a new £320 million Heat Networks Investment Project (HNIP). Designated as ‘gap funding,’ the monies will be is offered through a combination of grants and loans over a period of up to three years.

If the asset swap of RWE and E.ON goes ahead, the resulting companies would have “unprecedented market power”, say Ines Zenke from energy law firm Becker Büttner Held. In 2018, E.ON agreed to buy RWE's subsidiary innogy and the two utilities agreed to exchange large parts of their assets. The swap will leave E.ON focused on regulated distribution grid with stable returns, while RWE takes on E.ON's and innogy's renewable business, on top of fossil power plants.

Natural gas is bound to gain importance in the German power mix starting from the mid-2020s when coal-fired capacity is gradually being phased-out. Energy Aspects says Germany’s coal exit will help more of the global LNG oversupply find a home in Northwest Europe. The 2022 start-up of the Wilhelmshaven FSRU will support this trend.

Analysts say carbon prices in the European Emissions Trading System (EU-ETS) could exceed €38 per ton by 2020 as emission certificates taken out by Germany will get cancelled as it exits coal-fired power generation. A subsequent surge in carbon prices will accelerate coal-to-gas switching in Europe.

Texas could not solely rely on green energy sources without putting supply security at risk. Replacing all installed coal power capacity cost-effectively would only work with a combination of renewables, natural gas-fired generation and battery storage. Gas generally outcompetes coal generation in ERCOT if the price of gas falls below $3/MMBtu.

Freezing weather in the Midwest and a fire at a gas compressor station in southeast Michigan has forced local utilities to restrain gas supply. General Motors halted operations at 11 Michigan manufacturing plants and Fiat Chrysler also had to cancel shifts to conserve natural gas.

Rapidly evolving exports of LNG and liquid fuels will turn the United States into a net energy exporter next year. As gas demand grows in Asia and Henry Hub prices remain competitive, US LNG export capacity is expected to rise further before levelling off after 2030, when rival supplies are set to enter global markets.

Page 13 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.