Up to 60 percent of Saudi Arabia's ageing oil-fired capacity is foreseen to be replaced by gas generation by 2030. "If electric power continues to be generated on a large scale by inefficient oil-fired power plants, as it is today, then the Middle East would have to import crude," warns a Siemens study, carried out by the Technical University of Munich.
Power market liberalisation in Japan and South Korea is slowly forthcoming; and the lack of clarity over nuclear energy has prompted major utilities to delay firm LNG procurement decisions which could cause a supply crunch in the Pacific Basin, warns Gavin Thompson, head of Asia Pacific gas & power analysis at Wood MacKenzie.
Action seems forthcoming from policy makers in continental Europe to follow Britain's lead and introduce a carbon-floor price as a means to improve the profitability of gas-fired power generation (spark spreads). Germany's Green party calls for a minimum national carbon price of €15/ton, while the CEO of Austria's biggest utility Verbund, Wolfgang Anzengruber suggested only a carbon price at €35/ton would promote a switch from coal to gas.
Japanese utilities are rushing to step up LNG imports, spurred by Kansai Electric Power's announcement it will suspend operations of its two Ohi reactors until they comply with more stringent safety regulations. Gas-fired generation is vital to make up for the lost nuclear capacity and to avert the risk of power shortages.
Despite Europe's sub-par gas demand growth, with indigenous supply collapsing and global LNG supply diverting to Asia, suppliers like Gazprom "regain the whip hand" in Europe, Deutsche Bank analysts warn.
"A market that should be in the doldrums looks poised to see prices breaking to the upside," they forecast, singling out US LNG exports as a panacea to avert the risk of high-priced oil-indexed Russian gas that threaten to further undermine the profitability of gas power generation.
Myanmar's state-owned power producer has awarded Wood Group GTS a $13million contract to overhaul and upgrade three GE Frame 6B gas turbines in operation at a plant near the city of Yangon. "The order is our first major contract win in Myanmar," a Wood Group representative said, adding the retrofit is expected to increase the utility's revenue by $1million per year.
The 'Energiewende' (energy turnaround) is profoundly reshaping the energy landscape in Germany: Regulatory changes, financial incentives and technological developments are the driving factors for transforming a previously centralized, hierarchical energy system to an ever-more distributed conundrum with a rapidly-increasing share of renewables at its heart, says Frank Reichenbach, manager at The Advisory House (TAH).
Chinese investors are gearing up to spend close to $4 trillion on building and commissioning 88GW of new power generation capacity every year between now and 2030 – mainly hydro, renewables and gas-fired plants. A report compiled by Bloomberg New Energy Finance (BNEF) forecasts that China may annually start-up the equivalent of the UK's total generating capacity, boosting supply by more than 1,500GW in the coming 18 years.
Scotland-headquartered turbine services company, Wood Group GTS has upgraded its two facilities in Aberdeen, UK and Houston, US to add more gas turbine maintenance services for turbines used to power industrial oil and gas production. Previously, these engine lines were supported nearly exclusively by the original equipment manufacturers (OEMs).
The Nigerian government's National Council on Privatization has received 110 submissions from joint venture companies interested in operating 10 power plants under construction, including gas-fired ones. The Nigerian government is in the midst of a privatisation program that will draw to a close at end of this year, a deadline set out by Vice President Namadi Sambo, chairman of Niger Delta Power Holding Company (NDPHC).
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.
