Markets

As the EU targets 20 percent wind power generation by 2020, smart power generation based on flexible fast-starting gas combustion engines are essential to guarantee security of power supply while maintaining grid reliability. Flexibility is the key feature of Wartsila's so-called Smart Power Generation. "The 'dinosaurs', those vast old-fashioned power plants are, if not already obsolete, certainly not the answer to the variability challenges of the future....

The United States is likely to stay the country with the lowest cost of power production worldwide as an abundance of shale gas production will put in a ceiling at about $4/MMBtu, Andy Weissman, energy adviser at Haynes and Boone forecast.

As Singapore's power generation capacity expands, an increasing number of gas turbines are getting registered with the National Electricity Market of Singapore (NEMS). "With the latest addition the total amount of CCGT capacity registered with NEMS now stands at 7,500 MW," said a representative at Singapore's Energy Market Company (EMC), the facilitator for traded wholesale electricity markets in the city-state.

Diesel and gas generators are experiencing a sales boom across Africa and Asia as they step in to backfill unforeseen power shortages in developing countries, according to findings in GlobalData's report 'Diesel and Gas Generator, 2012'.

The volatility of gas prices in Europe is forecast to rise as utilities in the U.K., Germany and Spain need more flexible gas supply for dispatching power plants at short notice to counterbalance the growing share of intermittent power supply from renewables.

"We envisage gas demand from the power sector to increase across most European countries, with Great Britain set to become a wind and gas dominated system by 2030, following the closure of most coal plants," James Cox, Principal Consultant at Pöyry told Gas to Power Journal.

The outcome of the US presidential election in November is expected to have merely a limited effect on global energy markets, two Washington-based consultancies found independently.

South Korea's ministry of Ministry of Knowledge Economy (MKE) will establish a master plan for shale gas development before the end of the year as it aims for shale gas-derived LNG imports to account for 20% of the country's LNG import capacity, a ministry official told 'Gas to Power Journal'.

Despite short term restraints in the market for gas-fired power generation, Frost & Sullivan's Energy Industry Director, Harald Thaler sees "sound medium- and long-term prospects" for the industry and forecasts global gas-fired power plant orders will total 537 GW through 2020.

Electricity is the largest sector for growth for the gas industry and the trend is likely to continue as coal-fired plants are retired, ExxonMobil's Americas gas marketing manager, Paul Greenwood, told a gas forum in Chicago this week.

Japan's ministry for economy, trade and industry (METI) will host an LNG conference in Tokyo on September 19 to evaluate the increasingly central role of gas supplies for power generation as the country considers a nuclear phase-out by 2030. METI is aiming to overhaul the current strict regionalization of Japan's main electric power utilities, which consume about 5 million tonnes per month of LNG for to fuel gas-fired power plants.

The rapid implementation of India's 'National Gas Grid for LNG', designed to accommodate rising gas supply from LNG import terminals on the western coast, will provide a fillip to gas-fired power generation. "The formation of the gas grid (12,000 km) in India is a great leap which is going to encourage the use of gas-based power generation over a wider geographical area," an analyst at India's Central Power Research Institute told Gas to Power Journal.

While European power prices are will stay flat over the coming days they  are likely to increase in by the end of September on colder weather conditions, the Italian bank UniCredit forecast. Gas generation remained on low levels throughout Europe, while higher profit margins and subsequently higher utilisation of power generation have supported carbon prices in recent weeks, bank research shows.

At current prices, "gas is too expensive a fuel for Europe", Société Générale said in a report today. The bank remains more bearish than the forward curve and recommends selling the front year NBP Summer 13 contract.

A surge in Japan's LNG imports for thermal power generation is on the cards as the party of Prime Minister Yoshihiko Noda is gearing up to adopting a zero-reliance policy on nuclear power to win voters' support in the forthcoming election.

Hot-weather-driven electricity demand for air conditioning coupled with low natural gas prices has led to a 24% surge in U.S. gas demand for power generation in the period through August 15, according to the U.S. Energy Administration (EIA).

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News in Brief

SPIG wins contract for Al Dur Phase II

Sept 23 – Italy-based SPIG, part of Babcock & Wilcox Enterprises, has won a contract to provide seawater cooling tower system to SEPCOIII for the Al Dur Phase II project in Bahrain. The Al Dur Phase II is a combined-cycle gas-turbine plant to generate 1,500 MW of electricity and approximately 50 million gallons fresh water per day.

MHI-MME to take over turbocharger production

Sept 20 – Mitsubishi Hitachi Power Systems will no longer produce MET turbochargers, the standard worldwide exhaust gas turbochargers used in stationary engines. Starting from January 1, 2020, these devises will be produced by Mitsubishi Heavy Industries Marine Machinery & Equipment (MHI-MME) instead.

Japan starts electricity futures trading

Sept 19 – Tokyo Commodity Exchange (TOCOM) has launched trading in electricity futures to advance price competition in Japan’s liberalized energy market. The East Area peakload electricity contract for October delivery first traded at 10.9 Yen per kWh, lower than the standard price of 11 Yen set by TOCOM in advance.

Duke to reduce rates in 2020

Sept 18 – Duke Energy Florida (DEF) customers will see lower bills in 2020. The utility filed a proposal with the Florida Public Service Commission to reduce rates for electricity and gas by more than 3% while adding more solar power and making grid improvements.

Myanmar approves three power projects

Sept 17 – Myanmar’s Ministry of Electricity and Energy has given the green light to plans for a 1,230 MW gas-fired power plant in Kanpauk, Taninthayi region, a 377 MW gas-fired unit in Ahlon, Yangon region and a 1,390 MW thermal plant in Milaunggyine in Ayeyawady region. The conflict-ridden country is currently producing electricity from 5,600 MW installed capacity, derived both from state- private-owned power stations.

Bonny Train-7 to cost $6.5bn

Sept 16 – Nigeria LNG is preparing to add a seventh processing train to Bonny LNG, bringing total capacity from 22 million tons per annum (mtpa) to 30 mtpa. Estimated to cost $6.5 billion, Bonny Train-6 will include a new liquefaction unit, a storage and a condensate tank as well as three gas turbine generators.

Schneider to complete L&T takeover by early 2020

Sept 13 – Venturing into India, Schneider Electric hopes to finalise the Rs 14,000 crore acquisition of Larsen & Toubro's electrical and automation business by early 2020. After the transaction is completed, Schneider will have a 65% stake in L&T, while the remainder will be held by Temasek.

MHI to advice China on energy conservation

Sept 12 – Mitsubishi Heavy Industries Thermal Systems, part of MHI, has set up a joint venture withan affiliate of State Grid Corporation of China (SGCC) to perform technical consulting for energy conservation projects in China. The focus of SGCC lies on building new decentralized power stations, biomass-derived power gensets and energy saving solutions.

Tender extended

Sept 11 – Turkmengas has extended a tender for the overhaul of the gas turbine engines of the NK-12ST and NK-14ST brands. Bidders need to pay to receive the tender documents, and then submit a written application to Turkmenistan’s state gas company.

Gas power units to buffer Germany’s coal exit

Sept 10 – Electricity output of Germany’s fleet of gas-fired power plants has risen to a over 13,5 billion kilowatt-hours in the three months from June to August, Fraunhofer ISE figures show. These productivity gains put CCGTs in pole position to balance supply swings in connection with the German coal exit.

Power of Siberia gas flows to start on Dec 1

Sept 9 – Russian gas supplies to China via the eastern route are going to start on December 1, 2019, Gazprom chairman Alexey Miller told his counterpart at CNPC in Beijing. The huge Chayandinskoye field, containing some 1.2 trillion cbm of gas, had already been connected to the 38 Bcm per year ‘Power of Siberia’ gas pipeline in August.

Hurricane Dorian causes havoc in the Bahamas

Sept 6 – In the aftermath of Hurricane Doran, a Category 5 storm, Bahamas Power and Light has said there is a total blackout in New Providence, the most populous island of the archipelago. Dorian made landfall twice on Sunday, ripping off roofs and electricity lines. In most parts, electricity has not been restored.

LNG cargoes via Bab-el Mandeb decrease

Aug 30 – Northbound LNG shipments via Bab el-Mandeb, a sea route chokepoint between the Horn of Africa and the Middle East, have fallen over the past three years as Egypt imports less natural gas from the Persian Gulf. In 2015 and 2016, both Jordan and Egypt imported up to 1.4 Bcf/d of LNG into Red Sea ports but these shipments fell sharply following the development of large gas finds in the Mediterranean.

Hokuriku Electric buys LNG cargo

Aug 29 – Japanese utility Hokuriku Electric has purchased an LNG cargo for delivery in November as soaring temperatures drew down gas in storage for the autumn. The cargo is understood to be scheduled for delivery in the second half of November from Malaysia’s Petronas and may well be destined for Hokuriku Electric’s first LNG-fired power generation unit,  the Toyama Shinko plant.

Technip spins off LNG activities

Aug 28 – TechnipFMC, has decided to spin off its European-based engineering and construction operations into a separate business, leaving the American half of the firm as an equipment supplier to the oil and gas sector. The split is due to be completed in the first half of 2020.

FLNG power market to top $930m by 2023

Aug 27 – The global market for floating LNG power vessel is projected to reach $ 931.6 million by 2023, up from $ 860.1 million seen last year, according to ReportsnReports. Major vendors of FLNG power vessels are Siemens, MAN, Wärtsilä, Caterpilar and GE which are targeting to use the technology to supply decentralized power to island nations in Southeast Asia and along the coast of sub-Saharan Africa and the Americas.

EIA monitors grid hourly

Aug 26 – The U.S. Energy Information Administration (EIA) has launched a beta release of its hourly electric grid monitor. The enhanced version analyses hourly generation by energy source and hourly sub-regional demand for certain balancing authorities in the Lower 48 states.