Markets

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.

Proposed reforms to the Mexican energy sector are set to increase domestic gas supplies and spur gas-fired power generation. Despite having the sixth largest gas reserves in the world, Mexico suffered gas shortages has to imports 2.1 billion cubic feet of gas per day (Bcf/d).

Keen to source more LNG for power producers, GAIL India has secured regasification capacity of up to 2.5 million tons annuallly in the planned expansion of Petronet's Dahej terminal as it is getting closer to forging new import deals with oversees vendors.

Unless coal prices doubled or carbon prices increased tenfold, there is no way that European power producers would switch from preferring to burn coal over natural gas, analysts said. Coal CIF ARA hovered around 84.90 $/t this week, while EUA were last seen trading at 5.36 €/t.

Nigeria's natural gas demand is expected to hit 16 million tons per year (mtpa) by 2015; forecast gas production for 2013 is 6.9mtpa, up from just 4.6mtpa in 2010, according to the Nigerian National Petroleum Corporation (NNPC) and the corporation expects steady supply growth will boost the gas to power sector as new projects come online.

Higher natural gas prices relative to coal prices in the US have caused a 14% plunge in the use of gas for power generation over the first seven month of this year, according to EIA figures. Henry Hub spot prices currently hover around $3.50/MMBtu – a substantial rise from the $2.39/MMBtu average spot price for the first half of 2012.

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News in Brief

Tokyo Gas snaps up US shale assets

July 31 – The Japanese utility Tokyo Gas has agreed to raise its stake in the U.S. firm Castleton Resources to 70 percent from 46 percent to increase its foothold in shale gas production in Texas and Louisiana.  Castleton Resources holds acreage in the Haynesville and Cotton Valley formations. The transaction is scheduled to be completed on August 14.

Electrical PE market to grow 1.7% through 2027

July 30 – The market for electrical protective equipment (PE) in North America, valued at $2,787 million in 2019, is forecast to rise at an annual rate of 1.7 percent to reach $3,163 million by 2027. Main growth drivers, according to ResearchandMarkets, are ongoing power transmission projects in the context with U.S. LNG export infrastructure expansions.

GE wins turbine order from Italian paper mill

July 29 – DS Smith Paper Italia has ordered a GE LM6000PF aero-derivative gas turbine for its paper mill in Lucca, Italy. The paper mill is currently powered by two aero-derivative turbines, and the additional unit will increase plant efficiency by 2%, while assuring steam supply for the industrial process.

Aceleron secures £2m green energy investment

July 28 – UK battery developer Aceleron today announced receipt of a £2 million equity investment from BGF and Mercia Asset Management. Aceleron is BGF’s second investment into a pure clean technology, signalling a shift in behaviour as more and more fund managers support a green recovery and the UK’s policy of net-zero carbon by 2050.

NRG buys Centrica’s North American arm for over $3.6bn

July 27 – U.S. utility NRG Energy has agreed with Centrica to acquire the latter’s North American subsidiary Direct Energy for $3.625 billion in an all-cash transaction. The transaction will diversify NRG’s earnings by adding more than three million retail customers and generate an estimated $740 million in adjusted EBITDA upon closing.

Siemens rolls out Comfy app

July 24 – Siemens is deploying its workplace experience solution Comfy across its global offices, including major utility customers. The aim is to equip approximately 600 company locations by October 2020.

BlackRock puts $18bn into sustainable investment

July 23 – Sustainability aspects are poised to bring about "fundamental change" to the way financial market actors operate, said Philipp Hildebrand, vice head of U.S. investment company BlackRock. About 18 billion dollars have been put into BlackRock's sustainable investment products since the beginning of 2020, he told the German business daily FAZ, arguing this would be "only the beginning" of a much larger shift in investment practices.

Vaca Muerta output slows

July 22 – Argentina has resorted to importing LNG for the Southern Hemisphere winter as domestic production at the vast Vaca Muerta shale formation fell in the first half of 2020. State-owned IEASA purchased 28 LNG cargoes at average prices of $2.87 million British thermal units (mmBtu).

GE to implement air quality control systems in India

July 21 – GE Power India Ltd (GEPIL) has won three contracts with a combined value of $112.57 million to supply air quality control systems. One semi-dry flue-gas desulfurization (FDG) unit will be installed for Hindalco Industries’ 1x150MW power plant at the Aditya aluminium smelter in Sambalpur. A wet FDGs system will be installed on behalf of NTPC for their Feroze Gandhi Unchahar thermal power plant (2x210MW plus 2x210 MW plus 1x210MW units) in Rae Bareli, Uttar Pradesh.

Wärtsilä CEO sees “tough” H2 ahead

July 20 – Wärtsilä CEO Jaakko Eskola has told analysts he sees a “tough second half of the year ahead,” as the Finish manufacturer seeks to mitigate Covid-related business disruptions. In the segment of up to 500 MW, Wärtsilä’s market share fell from 9% to 8%, while orders for gas- and liquid- power plants increased by 1% to 17.8 GW during the twelve-month period ending in March 2020.

GE launches update to digital plant software

July 17 – GE Digital has unveiled updates to its digital power plant software: Proficy Plant Applications, Proficy Operations Hub, Proficy Historian, and Proficy CSense. The software accelerates digitization for industries and integrates related onsite power generation units.

Germany EEG fund slips into the red

July 16 – Germany's green energy fund, funded through the renewable energy surcharge (EEG levy), has slipped into the red for the first time since 2013, according to TSO data. The account, funded by end-customers through a surcharge on their power bill, fell from about €2 billion in available funds to €-1.16 billion in the first six months of 2020.

China seen overtake Japan as worlds’ largest LNG buyer by 2025

July 15 – The International Energy Agency (IEA) expects China to overtake Japan as the world’s biggest LNG buyer with imports of 128 Bcm a year by 2025, equivalent to around 174 million tonnes. However, IEA analysts cautioned this scenario is “highly dependent on China’s future policy direction” and whether that includes an ongoing push for coal-to-gas switching for industry, residential heating and power generation.

IEA stages Clean Energy Transitions Summit

July 14 – Ministers from dozens of countries, accounting for over 80% of the world economy, have participated in the first Clean Energy Transitions Summit organised by the International Energy Agency (IEA). Dr Fatih Birol, the IEA’s Executive Director, said there “clearly is momentum” behind a sustainable recovery from the economic impacts of the Covid-19 pandemic. Participants agreed to reconvene in mid-2021.

Siemens Energy to exit coal

Jul 13 – Newly formed technology company Siemens Energy wants to phase-out any operations and technology to related to coal-fired power generation, CEO Joe Kaeser said, without giving a specific timeline. Siemens had been harshly criticised earlier this year for participating in the Adani coal mine project in Australia.

Statkraft, GE enhance GB grid stability

July 10 – Statkraft and GE Power Conversion are working together to stabilise Britain’s power grid. To that end, GE will manufacture and install two Rotating Stabiliser synchronous machines at Statkraft’s site in Keith, Moray. Statkraft was awarded four stability contracts (two at Keith and two at Lister Drive) by National Grid ESO (NGESO) earlier this year.

Siemens Energy spin-off approved

July 9 – A large majority of Siemens shareholders have voted to approve the spin-off of the company’s energy business. The spin-off was approved by 99.36 percent of capital stock represented at today’s extraordinary shareholders’ meeting.

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