Markets

Natural gas is the only fossil fuel for which global demand grows in all scenarios, showing that it "fares well under different national policy condition", the International Energy Agency (IEA) said in its 2012 Outlook, released today.

Japanese utilities are gearing up to add about 18 GW of gas-fired capacity over the coming ten years, boosting the country's capacity by 30 percent to counterbalance for lost nuclear capacity and cater for rising electricity demand, analyst forecast.

Gas prices at the US's Henry Hub price benchmark are seen to become less competitive than coal in 2013 which should offset gains in the use of gas for power generation, industrial and residential use, the Energy Information Administration (EIA) forecast.

China will subsidise shale-gas production to help boost domestic gas supplies, earmarked to underpin plans of the Beijing government plans to expand share of gas in the nation's energy mix. Subsidies of 0.4 yuan (6.4 cents) per cubic meter of shale gas will be offered for shale gas developed and consumed between 2012 and 2015, according to China's ministry of finance.

Rising LNG imports to India, and government efforts to form a national gas grid, will help gas generation to expand beyond its present 10 percent market share. LNG imports can help to boost India's gas supplies, provided that Indian buyers are prepared to pay high prices for attracting cargoes in the tight Pacific Basin, an analyst with India's Central Power Research Institute (CPRI) told Gas to Power Journal.

As Malaysia's government gears up to lifting subsidies on natural gas the market share of gas-fired power generation is bound to drop, forecasts Sarah Fairhurst of The Lantau Group. "Gas-fired power generation is likely to fall in Malaysia as it slowly lifts subsidies. Gas, which was heavily subsidized before, is now becoming more expensive and less economic," she told Gas to Power Journal.

Gas generation is expected play a bigger role in denting Brazil's need for peak load power supply, providing bottlenecks in the gas pipeline network will get resolved so that power companies can make full use of domestic gas reserves, according to a GlobalData report. Gas-fired power plants in Brazil are predominately dispatched as peaker plants, due to high fuel prices for natural gas compared with hydropower.

Singapore is on track to reach 90% gas-fired power generation capacity, Neil McGregor, chief executive at Singapore LNG Corporation forecast.

Power generation companies and industries in Singapore have committed to purchasing around 2.7 million tons per annum (mtpa) of LNG, S. Iswaran, second minister for home affairs and trade and industry said at the Asia Gas Summit. BG, appointed as the aggregator for importing the first 3 mtpa of LNG, has already achieved 90% of its franchise, he revealed.

Plans for an ASEAN power grid must proceed cautiously with one step at a time, says power analyst Sarah Fairhurst of The Lantau Group. "There are too many players trying to align too many interests," she told delegates at the Electricity Roundtable organised as part of the Singapore International Energy Week, referring to wide disparities among South-East Asian countries.

The share of gas generation in India, which at present is about 10%, is expected to rise as the government steps up efforts to form a national gas grid. Provisions in the Electricity Act such as open access to transmission and distribution network, recognition of power trading as a distinct activity, flexibility accorded to captive generating plants and provision of supply in rural areas will introduce and encourage competition in the electricity sector, an analyst with India's Central Power Research Institute (CPRI) told Gas to Power Journal.

Siemens plans to divest its lossmaking solar sector to focus its renewable energy activities on wind and hydro power. The German engineering giant confirmed it is currently in talks with potential buyers.

The market share of natural gas in Germany's power generation mix is estimated to rise to 19%, the regulator BNA's estimated in a mid-range scenario, deemed more likely than a bullish or bearish case. The mid-range scenario anticipates installed capacity from gas-fired plants to surge from 26.5 GW in 2011 to 32.9 GW in 2023.

Unconventional gas, due to its estimated abundance, has improved energy security in the United States and started a process of gas displacing coal as the dominant power generation fuel. Europe needs to adapt regulation to foster shale gas drilling, as it needs unconventional gas to make up for depleting indigenous gas production and supply new-build gas-fired plants, says Morgan Bazilian, deputy director of the Joint Institute for Strategic Energy Analysis in Colorado, USA.

South Korean energy companies, in line with the government's "Green Growth policy", have shifted towards generating more electricity from nuclear and renewable energy sources backed up by gas generation, analysts say. The government has also embarked on the liberalization of its electricity market to improve competition in the industry and encourage investment with the aim of increasing installed capacity.

Page 145 of 162

News in Brief

Siemens Energy takes shape

Dec 12 – Siemens AG has revealed that Jochen Eickholt will become a member of the future executive board of Siemens Energy, responsible for the Power Generation and Oil & Gas units. According to Bloomberg reports, Siemens is aiming to shed 75% of its energy unit in its listing.

Norway’s oil fund starts investing in renewables

Dec 11 – The Norwegian Government Pension Fund Global (GPFG), traditionally heavily exposed to the oil and gas industry, has been permitted to shift its strategy. Acknowledging heavy losses of the world’s largest pension fund, worth an estimated $1 trillion, the government in Oslo has allowed GPFG fund managers to also invest in unlisted infrastructure, notably renewable energy sources and alternative fuels, including hydrogen.

ENGIE invests in wind energy in Italy and France

Dec 10 – France’s largest energy company ENGIE has completed the acquisition of Renvico from Macquarie Infrastructure and Real Assets and KRR. The move contributes to utility’s ambition of boosting its renewable energy assets to 3 GW in Europe and 9 GW worldwide by 2021. The Renvico takeover comprises 329 MW of operating wind farms of which 142 MW in Italy and 187 MW in France. It also includes a 300 MW greenfield portfolio of various fossil power assets.

Dominion issues Scammer Alert

Dec 9 – Dominion Energy Ohio has reminded customers they will begin receiving the next U.S tax credits automatically, beginning in April 2020, in their monthly bills. Customers were warned not to provide banking details to scammers who claim such data is required to receive the federal tax credits.

BOL finances entire 220 MW plant in Nassau

Dec 6 – Bahamas Power and Light (BPL) has agreed to cover the entire costs to build a 220 MW power plant at the Clifton Pier site in Nassau, and transfer the assets to Shell North America. BPL and Shell had agreed to jointly develop a 220 MW power plant plus LNG regas terminal, but the Bahamas state utility later signed a $95 million contract with Wärtsilä to install a 132 MW engine-driven power plant at the same site.

Kepco to operate CCGT in Uruguay

Dec 5 – Kepco KPS has been awarded a contract to operate and maintain the recently commissioned combined cycle gas turbine (CCGT) power plant in Punta del Tigre, Uruguay. Under the O&M contract, Kepco said it expects to earn 17 billion Won in sales every year, for a maximum eight years.

Siemens to create thermal twin for Bajaj Energy plant

Dec 4 – Lalitpur Power Generation Company Ltd (LPGCL), part of Bajaj Group, has contracted Siemens to create a complete twin for its fossil power plant in Uttar Pradesh, India. The thermal twin, powered by thermodynamic analysis and machine learning, allows power plant operators to diagnose performance gaps for every asset in the cycle in real time.

Talks between Gazprom and Naftogaz continue

Dec 3 – Russia’s Gazprom and Naftogaz Ukrainy have continued difficult negotiations about an extension of Russian gas supplies and transit after the current contract expires on December 31, 2019. The two state-run companies are embroiled in a legal dispute that still needs resolving, however, they confirmed talks are underway and focus on the technical aspects of transiting Russian gas to Europe from 2020 onwards.

Asia seen add 400 GW by 2030

Dec 2 – Asian nations are expected to add more than 400 gigawatts (GW) of electrical capacity to the grid over the next decade — equaling about twice the installed capacity of Germany. Much of the new capacity will be renewables, backed up by some 140 GW of dependable gas-fired capacity, according to GE Energy findings. Hence, the U.S. turbine manufacturer decided to invest up to US$60 million to convert its Singapore repair center into a HA engineering and development center.

Total starts up hybrid plant with energy storage

Nov 29 – Total Quadran has started up the largest hybrid power plant combined with energy storage to harness the ample solar power potential of New Caledonia, a French overseas territory. With an installed capacity of 16 MW-peak, the plant also features a 10 MW lithium-ion energy storage system. Combining of hybrid solar PV units and possibly gas-powered generator sets with energy storage balance out supply swings and enhances the reliability of the electricity grid.

Rolls-Royce, AVK partner on standby gensets

Nov 28 – AVK, Britain’s largest supplier of critical power solutions for data centres and the financial sector, has partnered with Rolls-Royce’s MTU brand for standby gensets in UK and Ireland. The deal covers MTU Series 2000 and 4000 diesel systems in a range from 825 to 4,000 kVA. In the past 30 years, AVK has developed into the largest solutions provider in the UK’s critical power market and has to date supplied gensets equipped with MTU engines with a total capacity of more than 3.5 GW.

Golar suffers setback amid restructuring

Nov 27 – Golar LNG, owner of a fleet of 27 vessels, has seen operating revenues plunge 20% to $98.67 million, in the first nine month of this year, while net losses amounted to over $236 million. Bermuda-registered Golar in May 2019 announced plans to spin off its LNG carrier fleet with the aim of becoming a gas project developer. It recently won a contract for the Barcarena power project (605 MW) in northeastern Brazil.

Burckhardt buys remaining share of Arkos

Nov 26 – Burckhardt Compression’s subsidiary in North America has purchased the remaining 60% of Arkos Group. The US has the world’s largest installed base of reciprocating compressors, and the integration of Burckhardt and Arkos Field Services, will turn the company into the only independent one-stop provider for equipment and service in the upstream, midstream and downstream business.

Gazprom’s exports to Austria reach fresh record

Nov 25 – Supplies of Russian gas to Austria and transits to Western Europe have already exceeded record levels set last year. From January 1 through November 21, 2019, Gazprom delivered over 12.7 billion cubic meters of natural gas – 33.5% more than in the same period in 2018. Austria’s OMV imports Russian gas under a long-term contract that was recently extended until 2040.

OGUK responds to Labour Party Manifesto

Nov 21 – The UK North Sea industry association Oil & Gas UK (OGUK) has warned of an investment hiatus in reaction to Labour’s pledge to introduce a windfall tax on oil and gas companies, if it wins the General Election on December 12. Responding to this, OGUK said any increase in tax rates would drive investors away, damage the competitiveness of the UK’s offshore oil and gas industry, and could potentially increase the country’s reliance on imports. OGUK underlined it has put in place a ‘Roadmap 2035 a blueprint for net zero emission’ and is investing in technology to achieve this goal.

France, Germany and UK led on demand-side flexibility

Nov 21 – France, Germany and the UK are leading on demand-side flexibility (DSF) and grid-integration of decentralized energy sources while Sweden, Spain and Portugal are lagging behind the rest of Europe, the consultancy Delta-EE and SmartEN finds. Areas covered by their new DSF monitoring tool include availability and accessibility of demand-side response, and its monetization across the gas value chain.

AI predicts peak in power use

Nov 20 – ABB and Verdigris Technologies have developed machine-learning algorithms to predict unplanned peaks in electricity consumption and help avoid them. The Energy Forecasting app will enable users to reduce their electricity bills by reducing peak demand charges.