Markets

The introduction of a carbon floor price under Britain's Electricity Market Reform (EMR) is estimated to make natural gas catch-up with coal in terms of profitability. "Using our forward-price assumption for coal, gas-fired generation and coal-fired generation are very nearly on equal footing in the April 2015 timeframe in the UK," Deutsche Bank forecast today.

One of India's largest gas-fired power plants, the 1,967 MW Dabhol facility, is operating at less than half of its installed capacity due to the severe shortage of natural gas, a source at Ratnagiri Gas and Power Private Limited (RGPPL), the plant operator, told 'Gas to Power Journal'.

Coal-fired power plants will continue to be the mainstay for India's power generation, despite growing demand for natural gas, consultant Anand Sharma told 'Gas to Power Journal' today. 
"Gas prices are rising in tandem with shrinking domestic supplies and costs are prohibitive for importing [large volumes of] gas through pipeline or in LNG ships," Sharma said, who is the director of Mumbai-based Mantrana Maritime Advisory that also tracks power utilities.

The U.S. Energy Information Administration (EIA) has examined 29 alternate scenarios for the future U.S. energy market in its Annual Energy Outlook 2012 (AEO2012). In the EIA reference case scenario, the share of gas-fired power generation is forecast to rise from 24 percent in 2010 to 28 percent in 2035. "Uncertainty is inherent in long-term projections," EIA Administrator Adam Sieminski said when unveiling report.

Russia's Gazprom has entered talks with Italy' Enel, France's EDF and Denmark's Dong with the aim of purchasing a stake in one of their European gas-fired power plants, according to Gazprom CEO Alexei Miller.

Turkey has been an island of high energy demand in Europe, with electricity demand growing by just under 6% in Turkey in 2000-2007, compared to 2% in OECD Europe, Alexander Antonyuk, Energy Analyst at the International Energy Agency (IEA) said today.
"Turkey was one of the countries where power demand recovered fasted from the recession," he said cautioning that electricity demand growth has slowed down to 4.5% over the past two years. "This recent dip is mainly due to lower demand growth in energy-intensive industries," he told 'Gas to Power Journal' at the sidelines of a conference in Istanbul.

EnerjiSA, a Sabanci/Verbund joint venture, sees a growing need for LNG imports to Turkey as a flexible supply source of natural gas to underpin the growth of installed power generation capacity. "Gas-fired plants may well grow in number as LNG as a fuel is increasingly considered as an interim option by plant operators," Kivanc Zaimler, Commercial Director - Natural Gas, EnerjiSA said in Istanbul today.

Investment bank Société Générale today questioned the affordability of natural gas as a fuel for European power plant operators. „At today's prices, gas is too expensive a fuel for Europe," the bank said today, suggesting the "overprice" in terms of the bill is $315/1,000cm or $153bn for 2012e.

The drop in LNG supply to Japan is negatively impacting on the utilisation of gas-fired power plants. „If we were to measure a 30 mcm/d fall in LNG supply against higher gas-fired generation in Japan, then the drop in LNG supply is equivalent to power generation from 7.3 GW of gas-fired capacity," Deutsche Bank analysts said.

Venezuela has seen a surge in new-built gas turbine and distributed power plants to cover rising demand, a study shows. Increment power generation capacity is mainly supplied by gas turbines and CCGTs (2,057 MW) and distributed generation plants (983 MW), in accordance with the policy of the Venezuelan government to decrease dependency from hydropower.

Alstom has refocused its sales strategy into the German market as the country's energy mix is undergoing a dramatic change to accommodate the nuclear exit.  "Chances in renewables and in upgrading Germany's existing fossil power plants are clearly driving our business in Germany, which is a positive outcome of the nuclear phase-out," says Alf-Henryk Wulf, chief executive, Alstom Deutschland.

The German 'Energiewende' concept – a replacement of nuclear capacity mainly with renewables and some fossil power plants – is not technically impossible. Its implementation, however, requires "a great deal of coordination, time, money and public acceptance," Bernhard Fischer, chief executive, E.ON Generation said at PowerGen2012 in Cologne today.

Gas and wind is set to become "the backbone" of Germany's future power generation portfolio, Michael Süß, chief executive, Siemens Energy said today. "It is not about if and when. We have to combine renewable and fossil fuels - with gas as the backbone – to ensure security of energy supply," he said at PowerGen2012 in Cologne.

Gas is the "ideal backup" fuel for renewable energy sources (RES), key note speakers at PowerGen2012 agreed in Cologne today. "This is good news if you are building gas turbines because the capacity is needed. But this is not good news if you are investing in gas-fired plants as your return in investment is extremely unpredictable," said  Laszlo Varro, Head of Gas, Coal and Power Market Division (GCP), International Energy Agency (IEA).

China will more than double its natural gas consumption over the next five years, the International Energy Agency (IEA) forecasts in its Medium-Term Gas Market Report 2012, released at the World Gas Conference 2012.

"As gas competes against other energy sources in all market segments, notably in the power sector, pricing conditions are a key element to keep it competitive everywhere," IEA Executive Director, Maria van der Hoeven, said at the official presentation of the report on Thursday.

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News in Brief

GE repowers Azito plant in Ivory Coast

May 21 – Azito Energy has contracted GE to deploy its Predix software for two GT13E2 gas turbines and two generators at the Azito III plant site in Ivory Coast. The MXL2 upgrade for the two gas turbines is expected to boost the power plants overall output by 15 MW per turbine which, according to GE, is equivalent power for up to 120,000 homes

ERCOT at risk of brownouts this summer

May 20 – Texans is at risk of power emergency alerts this summer, and even rotating blackouts, as the current electric reserve margin of about 8.6% may prove insufficient to meet strong electric demand growth, the Electric Reliability Council of Texas (ERCOT) warned. Power grid operators typically aim for reserve margins of 10% to 15%.

ABB microgrid makes Indian villages energy self-reliant

May 17 – ABB’s MGS100 microgrid is helping some 39,000 homes and shops in remote regions in India to become energy independent, relying solely on renewable power sources and energy storage. Together with Husk Power Systems, ABB developed the MGS100 microgrid using wind and solar power to reduce household energy costs by up to 40% and improve productivity in 85% of factories and small businesses.

J-ENG develops new biofuel engine

May 16 – Japan Engine Corp. (J-ENG) has started to cooperate with Nippon Yusen Kaisha (NYK Line) to research and development a test engine running on biofuel. The new engine is designed for use in the maritime sector and is likely to be re-calibrated at a later stage for use in small-scale power generation applications.

‘Smarter E-Europe’ conference opens doors in Munich

May 15 – Today, the 2019 “Smarter E-Europe” conference and trade show is opening its doors to visitors in Munich. At the exhibition, Siemens is presenting decentralized energy solutions based on renewables and intelligent energy management systems for buildings, infrastructure and industry. Expert presentations on transforming the energy system, renewable integration and storage technologies can be seen at Siemens’ exhibit at Booth 110 in Hall B2.

Marubeni buys stake in U.S. distributed energy firm

May 14 – Japan's Marubeni Corp. has invested an undisclosed sum to buy an equity stake in GridMarket, a U.S.-based provider of development services to distributed energy resources (DER). Using proprietary analytics and machine learning, GridMarket’s distributed energy project platform helps utilities by recommending best-fit solutions like battery storage, solar PV, fuel cells and combined heat and power. By cooperating with GridMarket, Marubeni expects to identify cost-effective projects and source best-fit technologies for its own DER network in North America and Japan.

Global RES additions stall after 20-year growth

May 13 – The International Energy Agency (IEA) has reported an “unexpected flattening of growth trends” in the deployment of renewable energy sources (RES) deployment that raises concerns about meeting long-term climate goals. After two decades of strong annual growth, renewable energy developers around the world added as much net capacity in 2018 as they did in 2017.

RWE cancels €1.5bn coal power project

May 10 – The German utility RWE has decided to no longer invest in any coal-fired power projects and has cancelled a planned €1.5 billion ($1.68bn) lignite-fired power plant in Niederaussem, Germany. Instead, the utility is accelerating its transformation to renewables, energy storage and gas-fired generation through an asset swap with Europe’s largest utility, E.ON.

China’s CPECC to process gas from Iraq’s Halfaya oilfield

May 9 – Iraq and China Petroleum Engineering & Construction Corporation (CPECC) have signed a $1.07 billion deal to build and operate facilities to process natural gas extracted alongside crude oil at Iraq’s giant Halfaya oilfield. CPECC, an affiliate of China National Petroleum Corporation (CNPC), will process around 300 million standard cubic feet per day (mcf/d) of natural gas extracted from the field alongside crude oil, the oil ministry said.  Halfaya, operated by PetroChina, is Maysan Oil Company’s largest oilfield, producing 370,000 barrels per day (bpd) of the company’s total output of around 510,000 bpd.
Iraq continues to flare some of  gas extracted alongside crude oil but the Iraqi oil minister Thamer Ghadhban told Reuters Iraq is in talks with international oil companies to build a 300 mcf plant to process gas from the West Qurna 2 and Majnoon oilfields.

Chiyoda to get large cash injection

May 8 - Following losses of nearly $1 bill on an liquefied natural gas (LNG) plant project in Louisiana, Japanese construction company Chiyoda is to get a $1.4 bill cash injection. The company suffered a $953 mill loss in the six months to 30th September, 2018 after costs spiralled on the $10 bill Hackberry LNG plant in Louisiana, largely, due to escalating labour costs, it was claimed. Chiyoda was expected to record a net loss of about $1.4 bill for the fiscal year to March. Mitsubishi Corp, which owns a 33.4% stake in Chiyoda, and the Mitsubishi UFJ Financial Group, have agreed to provide capital while the company implements a rescue strategy, according to the Nikkei Asian Review.

Siemens, TÜV SÜD partner on digital energy security

May 7 – Siemens and the German technical verification association TÜV SÜD have come together to address the growing risk of cyberattacks on critical infrastructure, notably in the energy sector. The companies will digitally asses industrial control systems in both the oil and gas and power generation sectors (nuclear applications excluded). All tests will be vendor-agnostic.

UK ‘can cut emissions to net-zero’ by 2025

May 6 – Advisors to the British government have urged the Cabinet to “set and vigorously pursue” a new target to cut greenhouse gas emissions to ‘net-zero’ levels by 2050, replacing the current target of an 80% reduction against 1990 levels. The the Committee on Climate Change, which published the report, believes the new target could be achieved within the same cost-framework as the current more lenient goals.

Iraq’s gas imports from Iran bound to rise in June

May 2 – Iraq has no alternative to importing more Iranian gas to meet peak summer demand, the country’s electricity ministry said. He specified that halting imports would cost Iraq’s power grid 4,000 MW per day. Some 14 GW of Iraq’s installed capacity is run on domestic gas, and supplies from Iran keep an additional 4GW operational. “Until now, we have no alternatives to Iranian gas,” a spokesman of the energy ministry said, adding imports from Iran are expected to increase in June from currently 28 million cubic metres per day to 35 MMcm/d.

Waukesha gas engines delivered to CHP in East Germany

May 1 – INNIO’s authorized partner, S&L Energie-Projekte, has provided four packages of INNIO’s Waukesha VHP 9394GSI gas engines for a CHP, operated by the municipal utility of Lutherstadt Wittenberg in eastern Germany. The modernized district heating plant is claimed to achieve an overall efficiency above 95%.

Burns & McDonnell oversee commissioning of fast-ramp plants in Michigan

April 30 – Two quick-ramp gas power plant projects in Michigan, overseen by Burns & McDonnell, are now commissioned and in full commercial operation. Both the F.D. Kuester and A.J. Mihm generating stations are powered by 18-MW, gas-fueled Wärtsilä 18V50SG reciprocating engines. The two plants have a combined 180 MW in generating capacity.

Gazprom advances start of ‘Power of Siberia’ link

April 29 – Russia’s Gazprom is preparing to start injecting natural gas into the ‘Power of Siberia’ pipeline to China in Q3-2019. Preparations are “going according to schedule”, Gazprom chairman Alexey Miller told CNPC chairman Wang Yilin at a working meeting in Beijing.

Siemens to focus on energy transition at OTC 2019

April 26 – “Navigating the new normal” in the oil and gas industry - against the backdrop of the global energy transition - is in focus of Siemens’ exhibit at the 50th annual Offshore Technology Conference (OTC). The event will be held in Houston, Texas, on May 6-9.