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Gas-fired combined-cycle power plants (CCPPs) will dominate the US power generation market, as economics of low-cost gas generation and more stringent emissions regulation continue to erode the competitiveness of coal-fired plants, forecasts John Wilson, vice president for product sales Americas at Siemens.

Tuesday, 11 December 2012 / Markets

GE bets on 25-year gas super-cycle

GE is betting on a 25-year super-cycle of natural gas generation, underpinned by cheap shale gas supply, hence the company heavily invests to increase this side of the business, says Paul Browning, President and CEO of Thermal Products, GE Power & Water.

Coal generation will regain ground from gas in the US power sector in the coming year leaving less coal available for export to Europe and Asia, investment bank Barclays Capital forecast.

Coal-to-gas substitution in the US power generation sector is set to decline amid a rise in natural gas prices beyond 2012 levels. Prices for gas delivered to power plant operators during 2013 will average about 22 percent higher than during 2012, while the average cost of delivered coal will go up only 1 percent, the US Energy Information Administration (EIA) forecasts.

Japan's industrial conglomerates Mitsubishi Heavy Industries (MHI) and Hitachi are gearing up to merge their thermal power plant activities with the aim of increasing their market share at the expense of rivals Siemens, Alstom and GE.

The BRIT countries – Brazil, Russia, [India] and Turkey – are what E.ON Generation has singled out as growth markets.

"Europe is still our core market but we are not seeing the greatest growth in this area at the moment. You might want to call the UK 'an exception', but it is the BRIT countries that we at E.ON target as growth markets," Jim Lightfoot, director fleet management Gas CCGT at E.ON Generation told Gas to Power Journal in an interview.

Energy trade between the United States and Canada has exceeded $100 billion dollars in 2011, with the two countries forming the world's largest integrated energy market, according to the US Energy Information Administration (EIA).

A 'dash for gas' strategy to bolster investment in new power plant capacity will be unveiled over the coming ten days as the UK government will reveal details over capacity payment mechanisms. A gas generation strategy will be published alongside the Chancellor’s Autumn Statement on December 5.

Persistently negative profit margins for generating electricity will lead to the closure of 14 GW of thermal power plants in Germany by 2015, pushing up power prices, Deutsche Bank analyst Mark Lewis forecasts.

South Korean utilities are stepping up gas imports in an effort to avert the risk of power cuts following the shut-down of nuclear reactors. South Korean Prime Minister Kim Hwang-Sik reiterated a warning, highlighting the risk of possible power shortages and rolling blackouts triggered by forecast of a harsh winter.

Utilities in Germany can trigger some power price upside if they embark on a "conspicuous plant retirement programme", French investment bank Societe Generale said in a report, suggesting E.on has been "the first utility to blink".

Caught in an era of stagnation - that is how Juliana Passadore, Frost & Sullivan's Business Unit Leader for Energy & Power Systems describes the Brazilian gas-to-power market, as a supply shortage and high gas prices hamper investment in new projects. 

Sellers of diesel and gas generators are enjoying a flurry of interest across Africa and Asia as energy hungry countries such as China, India and Nigeria step up investment in small to medium-size gensets to backfill power shortages, GlobalData's report 'Diesel and Gas Generator, 2012' shows.

Despite of India's surging electricity demand, the economics of gas generation hinge on peak production, says Rajeev Mathur, executive director marketing at Gas Authority of India Ltd (GAIL). "If anyone wants reliable power [during hours of peak demand] he can pay more. That's where the economics of imported gas for power generation will work," he told Gas to Power Journal.

Siemens, the German engineering giant, is hopeful to break ground in Singapore for its H-class gas turbines as it builds on the market penetration of its F-class technology, says Thomas Hagedorn, Vice-President, Sales, GT Power Plant Solutions Asia Pacific.

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News in Brief

Brookfield invest $2bn in Cove Point LNG

Oct 22 – Brookfield Asset Management, an investor in energy infrastructure and power storage, has agreed to take a 25% stake in Cove Point LNG for just over $2 billion in cash. The alternative investor also owns assets in hydro (7.9 GW), wind (4.9 GW), solar (1.7 GW), distributed generation (400 MW) and energy storage (2.7 GW).

Ansaldo appoints new CEO

Oct 21 – Ansaldo Energia’s board of directors has appointed Giuseppe Marino as new CEO. Together with the chairman, Giuseppe Zampini, he will decide on the company’s strategy particularly relating to the new Chinese joint ventures.

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.