Markets

Spot-price elements in long-term gas purchase contracts (LTCs) are required for new gas power projects to ensure enough gas is supplied at a sufficiently low price. "Since the end of 2008, the price level of supply contracts for [gas fired power plants] has often been above the level required for a commercially attractive use in power generation," Uli Brunner, energy expert, PA Consulting Group told Gas to Power Journal.

German utility E.ON said today it expects its first-half underlying net income to be around EUR 3.3bn, more than trippling in value from EUR 0.9bn in the previous year.

The Indian state of Andhra Pradesh is facing further cuts in gas supply from the Reliance-operated Krishna-Godavari basin which will reduce gas-to-power generation by another 400-700 MW, exacerbating the energy shortage in the region. 

The profit margin of gas-fired power plants in Germany has dropped to a 4-year low, as the clean spark spread for baseload 2013 delivery has plunged to minus Eur8/MWh at the end of last week. Utilities can only operate their gas plants profitably for generating power for higher priced peak load hours between 8am and 8pm local time.

The price advantage of US LNG exported to Europe over gas prices at the UK National Balancing Point (NBP) is seen to drop to "virtually nil" over the 2016-2020 period. The lack of a price discount means that "US LNG exports cannot directly displace gas into Europe, but could free up flexible LNG supplies which otherwise would have been imported into Asia," analyst Michael Lewis said in a report today.

French-Belgian utility GDF Suez is planning to mothball a total of 1.6 GW of fossil – mainly gas-fired – generation capacity in the period in this and the coming year, Jean Francois Cirelli, the company's vice chairman and president said.

India's power ministry has appointed an expert committee to investigate the reasons for the massive grid failure that affected 600 million people, nearly half of the country's total population on Tuesday, July 31, across all northern states. The new power minister, Veerappa Moily, who took charge late yesterday, declared that the grid is now functioning normally.

An unabated speed of the current switch from coal to gas generation in the U.S. would place at least 49 GW of coal-fired capacity at risk for retirement by 2020, according to the reference case in EIA's Annual Energy Outlook 2012 (AEO2012).

Texas-based Global Power Equipment Group has closed a $31.5 million deal to buy Koontz-Wagner Custom Controls Holdings ahead of schedule in a bit to strengthen its position as a leading manufacturer of natural gas turbine auxiliary equipment. The acquisition "marks the first of what we believe could be many more", said Global Power CEO Luis Manuel Ramírez.

Swedish state-owned energy group Vattenfall today said it expects demand and power prices to remain on low levels as it posted a 10 percent drop in second-quarter core earnings, dragged down by the lower prices.

US power plant owners and operators plan to retire almost 27 GW of coal-fired capacity between 2012 and 2016, shifting the energy balance further towards gas generation. Key drivers behind the rise in coal plant closures are the modest growth in US energy demand combined with a continuous drop in relative fuel prices of gas compared with coal, the EIA said in its Annual Electric Generator Report.

Natural gas is the energy source that most countries are shifting towards as it becomes "permanently cheap," the CEO of GE forecasts. "It's really a gas and wind world today," Jeff Immelt was reported as saying on Monday.

Germany's third largest utility EnBW today reported a 26.3% drop in revenue 1.97 billion euros for its power generation and trading segment in the first half of 2010. EnBW was hit by the forced shut-down of two nuclear reactors last year as part of the German nuclear phase out.

Electricity consumption in Germany has dropped 1.4% to 261.5 TWh in the first half of 2012, mainly due to reduced demand from power-intensive industries such as steel production, preliminary data published by energy industry association BDEW shows.

Electricity generated from UK gas-fired plants has plunged to its lowest level in 15 years in April as a result of high gas prices, the Department of Energy and Climate Change (Decc) said on Thursday. Gas demand for power generation decreased by 16.7 percent, reducing the share of gas in the UK's energy mix to 40 percent, down from 46 percent last year.

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News in Brief

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.

Gazprom tackles issue of ownerless gas grid

Sept 27 – Gazprom, the main supplier of pipeline gas to Europe, is trying to settle the issue of ownerless gas pipelines – a relic of the former Soviet Union. Abandoned gas transmission pipeline spanned 6,651 kilometers as of March 1, with the issue seen as “especially acute” in the North Caucasus region where half of this infrastructure is located. If no owner registers these facilities within three months, Gazprom will take over to ensure reliability and safety.

Investors flock to Myanmar

Sept 26 – Fitch Ratings has singled out Myanmar’s power sector as one of the largest beneficiaries of foreign direct investments (FDI) worldwide. Nearly $21.2 billion was poured into power generation and energy infrastructure projects thus far in 2019, which is 27% of total FDI under the Myanmar Investment Law.