Forward fuel prices for winter 2013/14 predicted by the UK's gas and power TSO National Grid strongly favour coal burn over gas. The spark spread versus clean dark spread shows that coal is a clear winner for profitability, with a continued difference of over £10/MWh in favour of coal. For gas and coal to be equitable the gas price needs to fall by about 40% or around 30p/therm, alternatively coal prices would need to see a near doubling and increase by about $80/tonne.

The Kenyan Ministry of Energy and Petroleum has invited bids for a 700-megawatt gas-fired power plant near Mombasa, that is expandable to 800MW, in an effort to dent demand and avert the risk of power shortages.

Demand for new highly efficient gas power plants will not abate in Japan and South Korea regardless of high costs for LNG as a fuel, says GE's regional general manager power generation for Asia Pacific, Ramesh Singaram. As for Japan, he sees an annual demand for 3.5 to 4 gigawatt of new-build capacity over the next ten year. "Anything coming from nuclear would be upside," he told Gas to Power Journal.

The operator of Dabhol, India's largest gas-fired power plant, are considering renting out the 1,967-megawatt plant to private electricity producers under a tolling model, after operations were halted due to domestic gas shortages. Burning LNG instead is not an option: "We cannot recover the high cost of imported gas," said the plant operator RGPPL.  

Members of the Association of Southeast Asian Nations (ASEAN) have a significant potential to increase power output, and cut fuel consumption by one-fifth, via efficiency savings on existing and planned gas-fired power plant assets, the International Energy Authority (IEA) finds.

Though project financiers see more and more decentralised gas-fired projects mushrooming in China, Asia's fastest growing economy will continue to dent the bulk of its energy needs by burning coal, projects financiers and lawyers agreed at a panel debate in Bangkok today.

Saudi Arabia is set to burn more of its domestic gas resources to generate power as it invests $109 billion to increase alternative and renewable energy sources. "Over the past two years we have seen a renewed commitment to alternative energies by the Saudi government," James Fallon, Saudi analyst at Control Risks said speaking to Gas to Power Journal.

Coal is set to overtake natural gas as it emerges as the "fuel of choice" in Southeast Asia due to its relative abundance and affordability, as the region's power demand is nearly doubling over the next two decades, forecast Yerim Park, Programme Officer - South East Asia, International Energy Agency (IEA).

The pace of depletion of Thailand's gas resources is concerning policy makers as it puts power supply security at risks and threatens to lead to high costs for gas and power imports. "If we do nothing, our energy import dependence will top 95% by 2030," Dr. Twarath Sutabutr, deputy director general at Thailand's Department of Alternative Energy Development and Efficiency warned, singling out renewable energy and interconnectors a key solutions.

Single-cycle gas combustion turbines play a vital role in ensuring US energy security, accounting for up to 27% of peakload power supply, according to new analysis by the U.S. Energy Information Administration (EIA). Single cycle turbines contributed 121 gigawatts of power and accounted for 3% of overall electricity generation in 2012.

Pavilion Gas, the LNG unit of Singapore's state-owned investment company, plans to boost its existing S$1bn investment in the sector with a view to start LNG trading in the region within three months. "I believe we have what it takes to attract growing LNG volumes into Asia, and will be in a position to set LNG prices in the region." Seah Moon Ming, chief executive of Pavillion said, suggesting this may lower prices.

Nigeria has completed the bulk of the privatisation process of Power Holding Company of Nigeria (PHCN), dividing the incumbent into six generation and 11 distribution companies – all sold separately, for close to $2.5 billion.

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News in Brief

BelGAS launches new pressure regulator

May 29 – BelGAS has introduced its new P1098 High-Capacity Pressure Reducing Regulator, a large-volume regulator for natural gas, propane and other fuels. The pilot-operated device has a large-area actuator diaphragm, allowing for fast and accurate response to modulating gas flow conditions. It is adaptable for low to extra-high pressure—up to 400 psi main valve inlet.

GE to sell lightning business

May 28 – GE has signed a definitive agreement to sell its lighting business to Savant Systems, a provider of smart homes. CEO H. Lawrence Culp called the divestment “an important step in the transformation of GE into a more focused industrial company.” The transaction is expected to close in mid-2020.

China’s fuel demand recovers

May 27 – The Chinese government has lifted restrictions on private travel since April which pushed up demand for transport fuels. Gasoline demand has recovered particularly fast and is expected to return to last year’s levels by June 2020. Wood Mackenzie estimates gasoline consumption to reach 3.4 million barrels per day (b/d) in the second quarter, down just a 0.8% year on year. Diesel or gasoil demand is expected to reach 3.4 million b/d in Q2 2020, a 3% decline year-on-year. Overall, China’s oil demand is seen rise a “modest” 13.6 million bpd, or 2.3%, in the second half of 2020.

Wärtsilä to retrofit CHP in Spain

May 26 – The Finish engine maker Wärtsilä has bagged an order to supply and install a 34SG gas-fuelled engine generating set for Rofeica Energia's combined heat and power plant in Barcelona, Spain. The installation of the gas engine will allow Rofeica to switch the CHP from heavy fuel oil to gas-fuelled operation, reducing emissions.

New York body rejects William’s plans for gas pipeline expansion

May 21 – New York’s and New Jersey’s state bodies for environmental conservation have rejected Williams’ plans for the Northeast Supply Enhancement project, designed to transport 400 million cubic feet per day of gas from Pennsylvania to New York. The state bodies had already denied wetland permits in 2019, but Williams pipeline subsidiary Transco filed another application with the U.S. Federal Energy Regulatory Commission (FERC), arguing firm services under the project were agreed with UK’s National Grid for customers in New York City districts of Brooklyn, Queens, Staten Island and Long Island.

UK inflation at 4-year low amid falling energy costs

May 20 – The rate of inflation in the UK has fallen to a four-year low as the pandemic pushed down global oil and fuel prices which translate into lower wholesale power prices. The consumer price index fell to an annual rate of 0.8% in April, down from 1.5% in March, according to the Office for National Statistics.

Deficit grows in German green energy fund

May 19 – German regional grid operator TransnetBW has warned of a growing shortfall in the country’s fund for green energy sources, financed under the so-called renewable energy (EEG) levy. TransnetBW, the TSO in southwest Germany, said “due to the EEG cost allocations defined for 2020, we anticipate there will be a negative year end bank account balance in the high three-digit million euro range for 2020.”

Spanish gas companies ‘resilient’

May 18 – Spain’s regulated gas companies “should prove to be resilient” to external shocks arising from coronavirus containment measures, Standard & Poor’s analysis finds, calculating with an average drop in EBITBA at less than 3% in 2020. A new remuneration framework for 2021-2026, recently enacted by the Spanish government, provides enhanced visibility rated grid operators amid the pandemic.

German electricity prices second highest in EU

May 15 – Taxes and the renewable energy surcharge have pushed up Germany’s household electricity prices to the second highest level in Europe, topped only by prices in Denmark. While Danish households paid 29.2 Euros per 100 kWh on average in the second half of 2019, prices in Germany averaged 28.7 Euros, according to the EU statistics office Eurostat.

Calpine’s Q1 earnings fall

May 14 – Calpine, America’s largest generator of electricity from gas and geothermal, has reported a net income of $128 million for the first quarter of 2020, down from $175 million in the prior year period. Lower commodity margins and unfavourable change in income taxes were partially offset by earnings from hedge positions for the three month ending March 31.

Siemens to supply hybrid plant in the Philippines

May 13 – Berkley Energy has contracted Siemens Energy to build a hybrid power project on the island of Mindoro in the Philippines. The project links 16 MW wind power with battery storage, stabilizing energy supply in a remote location with a weak link to the grid and reducing its dependence on diesel.

U.S. energy emissions fall

May 12 – Energy-related carbon emissions in the United States have fallen more than energy consumption, down 2.8% over the course of last year to 5,130 million metric tons (MMmt). Power sector emissions were down 145 MMmt, due to a switch from coal to gas and renewables. In April 2020, emissions experienced another unprecedented fall in due to Covid-19 lockdowns.

MAN expands Omincare concept

March 11 – MAN Energy Solutions’ service brand has extended its ‘PrimeServ Omnicare’ concept from turbomachinery to the marine and power segments. The one-stop service solution is now also applicable for maintenance of third-party machinery, including engines, turbochargers and related auxiliaries.

MIVOLT launches cooling fluid

May 7 – MIVOLT, part of the British company M&I Materials, has launched two specialist fluids to improve cooling efficiency at data centres. The electricity demand of data centres is forecast to rise to 20% of global supply to accommodate lifestyle changes like 5G internet network, autonomous vehicles and bitcoin mining.

Germany adds 1,300 km to power grid

May 6 – Germany has made progress in expanding its strained power grid. According to the Federal Network Agency (BNetzA), over 1,300 kilometres of new power transmission lines have been built and another 830km approved. A further 3,600km are planned to be built by 2030 to alleviate grid bottlenecks and allow transporting rising volumes of offshore wind southbound.




Oman nationalizes first IPP

May 5 – Manah Power, the first privately-run Independent Power Project (IPP) in Oman, has been transferred to state ownership, following the expiry of a Power Purchase Agreement (PPA) between United Power Company and state-owned OPWP. Manah IPP was developed under Build-Own-Operate-Transfer (BOOT) model, which stipulates an eventual nationalization of the assets – a feature absent in subsequent IPPs.

U.S inventories at record highs

May 4 – Inventories for crude oil and natural gas have reached a new record high in the United States, as fuel demand declines both for transport and the electric power sector. From March 13 – when a national emergency was declared due to the Covid-19 pandemic – to April 24, U.S. commercial crude oil inventories increased by 74 million barrels, or 16%, according to government figures. The acute scarcity of crude storage on April 20 led to a sell-off of future contracts at negative prices.