Markets

Power cut hit Turkey's north-western region including the city of Istanbul over the weekend, following a system failure in a gas-fired power plant in the city of Bursa.

The link to Trayport's 'Global Vision (GV) Screen' as a trading interface has helped to boost the liquidity at the European Energy Exchange (EEX). "At the EEX, future trades are effectuated via Eurex and spot trades via Comserv, but trades can also be made directly via the GV Screen interface. This helped to boost liquidity together with other steps undertaken in 2011 such as extended Cross-Margining in the clearing process," EEX marketing representative, Eileen Hieke, told Gas-to-Power Journal today.

Power trading in 2011 was the "mainstay of revenue" for the European Energy Exchange (EEX Group), the bourse said today when publishing a review of its business. The bourse said it observed "a shift in trading activities towards shorter terms" in the fields of power and natural gas.

Tokyo Electric Power (Tepco) today announced forecast of a fresh record volume of natural gas consumed for power generation as it aims to close the gap in nuclear power supply following the shutdown of its Fukushima Daiichi plant following an earthquake last March. For the financial year ending March 31, Tepco forecasts gas use will rise to a record of 22.67 million tonnes of liquefied natural gas (LNG), increasing an earlier estimate issued in November of 22.6 million tonnes.

Deutsche Bank today slashed its price projections of the German baseload power price for 2012 and 2013 on the back of an expected drop in demand of electricity, natural gas and carbon emission allowances in Europe in the prolonged recession.

Investments in carbon capture storage (CCS) for new-built and operational power plants has a softening effect on carbon prices - albeit not a big one, Energy Brainpool's chief analyst Tobias Federico estimates.

"The scale of the price effect largely depends on how widespread the implementation of CCS technology will be implemented in the power generation sector," he told Gas-to-Power Journal in an interview.

BDEW, Germany's energy and water association, today released data on the country's power generation mix. Gas-fired generation was virtually unchanged at 14% in 2011. The share of renewable energies in the country's overall power generation mix surged by 20% in 2011, according to BDEW statistics. In 2011, renewable energies have already overtaken nuclear plants (18%) and coal-fired power generation (19%) in terms of market share.

Societe Generale is anticipating that 2011 will be far worse than 2009 for gas demand. The year 2011 has so far seen a 9.3% yoy drop in gas consumption and a 1.9% decline in electricity demand, Societe Generale said in its latest SG Energy Pulse report.

The European Network of Transmission System Operators of Gas (entsog) has forecast that Europe has sufficient stocks of natural gas in storage to meet demand in the event of a cold-spell, when demand surges 10% above normal levels.

UK Energy Secretary Chris Huhne has called on attendees at the Durban COP17 climate conference plenary to join forces to combat climate change and avert power shortages in developing countries.

Natural gas is forecast to overtake coal as the predominant fuel in power generation in the U.S. by 2025. Gas will become the world's No. 2 overall fuel source due to its abundant supply and the political backing for less carbon emission intensive gas-fired power plants, according to the latest long-term outlook published by ExxonMobil Corp today.

More regulations under Dodd Frank, MiFID and EMIR may prompt financial trading houses to shy away from commodities. Trading on less liquid market hubs for gas and electricity may take a battering once the new regulation comes into force in 2012.

"Speculators might exit, liquidity might take a plunge and trading – particularly in less liquid commodity markets – might be down to the utilities again," Louis Caron, global executive lead, energy and commodity risk at RiskAdvisory/SAS Group told 'Gas-to-Power Journal' in an interview today.

RWE has confirmed to 'Gas-to-Power Journal' today that is considering divesting stakes in German power plants and splitting-off and selling of parts of the company.

Annual gas demand of natural gas in seven core European countries - UK, Germany, Italy, France, Spain, Netherlands and Belgium – is forecast to plunge by fall by 44 Bcm year –on-year, or 10.7%, to 370 Bcm in 2011, Deutsche Bank said in a report.

European utilities are profiting from a rebound in a power prices and production margins, Societe Generale commodity analysts said, estimating that between 20% and 50% of hedge for 2012 has been achieved by higher generation margins post Fukushima. "Some utilities have delayed their hedging strategy and will thus benefit from higher margins post-Fukushima that should flow into the accounts as soon as 2012," the bank said in a recent report.

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News in Brief

San Miguel Energy claims $6.19bn subsidy for Ilijan plant

May 24 – South Premier Power Corp. (SPPC), San Miguel Energy’s development vehicle for the 1,200-MW Ilijan gas power project, has claimed that it already paid $6.19 billion in subsidies to state-run Power Sector Assets and Liabilities Management Corp (PSALM) for its financial obligations as independent administrator. The build-operate-transfer (BOT) contract for the Ilijan plant will expire in 2022; and by that time, SPPC will get ownership of the plant.

Evolve approved as energy storage for VPPs

May 23 – Eguana Technologies’ new Evolve system has been officially approved as an energy storage system for Simply Energy’s Simply Extra VPP (virtual power plant) offer in South Australia. Customers who purchase an Evolve system can sign up for the Simply Extra VPP offer and receive up to $5,100 in VPP Access Credits. These credits will be calculated on a daily basis at $3.49 per day to a maximum of A$5,100, credited over a five year period.

EIA launches State Energy Portal

May 22 – The U.S. Energy Information Administration (EIA) has released a new State Energy Portal, providing interactive energy data and customizable views of more than 150 charts, tables, and maps. The new portal gives users access to more than 1,700 state- and regional-level data series from more than 50 data sources.

GE repowers Azito plant in Ivory Coast

May 21 – Azito Energy has contracted GE to deploy its Predix software for two GT13E2 gas turbines and two generators at the Azito III plant site in Ivory Coast. The MXL2 upgrade for the two gas turbines is expected to boost the power plants overall output by 15 MW per turbine which, according to GE, is equivalent power for up to 120,000 homes

ERCOT at risk of brownouts this summer

May 20 – Texans is at risk of power emergency alerts this summer, and even rotating blackouts, as the current electric reserve margin of about 8.6% may prove insufficient to meet strong electric demand growth, the Electric Reliability Council of Texas (ERCOT) warned. Power grid operators typically aim for reserve margins of 10% to 15%.

ABB microgrid makes Indian villages energy self-reliant

May 17 – ABB’s MGS100 microgrid is helping some 39,000 homes and shops in remote regions in India to become energy independent, relying solely on renewable power sources and energy storage. Together with Husk Power Systems, ABB developed the MGS100 microgrid using wind and solar power to reduce household energy costs by up to 40% and improve productivity in 85% of factories and small businesses.

J-ENG develops new biofuel engine

May 16 – Japan Engine Corp. (J-ENG) has started to cooperate with Nippon Yusen Kaisha (NYK Line) to research and development a test engine running on biofuel. The new engine is designed for use in the maritime sector and is likely to be re-calibrated at a later stage for use in small-scale power generation applications.

‘Smarter E-Europe’ conference opens doors in Munich

May 15 – Today, the 2019 “Smarter E-Europe” conference and trade show is opening its doors to visitors in Munich. At the exhibition, Siemens is presenting decentralized energy solutions based on renewables and intelligent energy management systems for buildings, infrastructure and industry. Expert presentations on transforming the energy system, renewable integration and storage technologies can be seen at Siemens’ exhibit at Booth 110 in Hall B2.

Marubeni buys stake in U.S. distributed energy firm

May 14 – Japan's Marubeni Corp. has invested an undisclosed sum to buy an equity stake in GridMarket, a U.S.-based provider of development services to distributed energy resources (DER). Using proprietary analytics and machine learning, GridMarket’s distributed energy project platform helps utilities by recommending best-fit solutions like battery storage, solar PV, fuel cells and combined heat and power. By cooperating with GridMarket, Marubeni expects to identify cost-effective projects and source best-fit technologies for its own DER network in North America and Japan.

Global RES additions stall after 20-year growth

May 13 – The International Energy Agency (IEA) has reported an “unexpected flattening of growth trends” in the deployment of renewable energy sources (RES) deployment that raises concerns about meeting long-term climate goals. After two decades of strong annual growth, renewable energy developers around the world added as much net capacity in 2018 as they did in 2017.

RWE cancels €1.5bn coal power project

May 10 – The German utility RWE has decided to no longer invest in any coal-fired power projects and has cancelled a planned €1.5 billion ($1.68bn) lignite-fired power plant in Niederaussem, Germany. Instead, the utility is accelerating its transformation to renewables, energy storage and gas-fired generation through an asset swap with Europe’s largest utility, E.ON.

China’s CPECC to process gas from Iraq’s Halfaya oilfield

May 9 – Iraq and China Petroleum Engineering & Construction Corporation (CPECC) have signed a $1.07 billion deal to build and operate facilities to process natural gas extracted alongside crude oil at Iraq’s giant Halfaya oilfield. CPECC, an affiliate of China National Petroleum Corporation (CNPC), will process around 300 million standard cubic feet per day (mcf/d) of natural gas extracted from the field alongside crude oil, the oil ministry said.  Halfaya, operated by PetroChina, is Maysan Oil Company’s largest oilfield, producing 370,000 barrels per day (bpd) of the company’s total output of around 510,000 bpd.
Iraq continues to flare some of  gas extracted alongside crude oil but the Iraqi oil minister Thamer Ghadhban told Reuters Iraq is in talks with international oil companies to build a 300 mcf plant to process gas from the West Qurna 2 and Majnoon oilfields.

Chiyoda to get large cash injection

May 8 - Following losses of nearly $1 bill on an liquefied natural gas (LNG) plant project in Louisiana, Japanese construction company Chiyoda is to get a $1.4 bill cash injection. The company suffered a $953 mill loss in the six months to 30th September, 2018 after costs spiralled on the $10 bill Hackberry LNG plant in Louisiana, largely, due to escalating labour costs, it was claimed. Chiyoda was expected to record a net loss of about $1.4 bill for the fiscal year to March. Mitsubishi Corp, which owns a 33.4% stake in Chiyoda, and the Mitsubishi UFJ Financial Group, have agreed to provide capital while the company implements a rescue strategy, according to the Nikkei Asian Review.

Siemens, TÜV SÜD partner on digital energy security

May 7 – Siemens and the German technical verification association TÜV SÜD have come together to address the growing risk of cyberattacks on critical infrastructure, notably in the energy sector. The companies will digitally asses industrial control systems in both the oil and gas and power generation sectors (nuclear applications excluded). All tests will be vendor-agnostic.

UK ‘can cut emissions to net-zero’ by 2025

May 6 – Advisors to the British government have urged the Cabinet to “set and vigorously pursue” a new target to cut greenhouse gas emissions to ‘net-zero’ levels by 2050, replacing the current target of an 80% reduction against 1990 levels. The the Committee on Climate Change, which published the report, believes the new target could be achieved within the same cost-framework as the current more lenient goals.

Iraq’s gas imports from Iran bound to rise in June

May 2 – Iraq has no alternative to importing more Iranian gas to meet peak summer demand, the country’s electricity ministry said. He specified that halting imports would cost Iraq’s power grid 4,000 MW per day. Some 14 GW of Iraq’s installed capacity is run on domestic gas, and supplies from Iran keep an additional 4GW operational. “Until now, we have no alternatives to Iranian gas,” a spokesman of the energy ministry said, adding imports from Iran are expected to increase in June from currently 28 million cubic metres per day to 35 MMcm/d.

Waukesha gas engines delivered to CHP in East Germany

May 1 – INNIO’s authorized partner, S&L Energie-Projekte, has provided four packages of INNIO’s Waukesha VHP 9394GSI gas engines for a CHP, operated by the municipal utility of Lutherstadt Wittenberg in eastern Germany. The modernized district heating plant is claimed to achieve an overall efficiency above 95%.