Markets

The power sector in Pakistan has seen nationwide load-shedding in the last week of May, leaving electricity production in an estimated 4,000MW shortfall, after the closure of the partially state-owned Qadirpur gas field for annual maintenance contributed to a gas shortage of reportedly 1.2 billion cubic feet a day (Bcf/d).

Discoveries of offshore gas field in Tanzania are expected to prompt the government to help expand the market share of gas-fired power generation with a view to decreasing dependence on hydropower to reduce risk exposure to drought, the US Energy Information Administration (EIA) forecasts.

The US Energy Information Administration (EIA) expects the extension of the renewable electricity production tax credit (PTC), which Congress extended on 1 January as part of the American Taxpayer Relief Act of 2012 (ATRA), will result in the addition of significant wind capacity in the US over the next three years. A higher share of intermittent wind energy will require flexible fossil backup capacity.

E.on has chosen the right time to enter the European market for small gas-fired combined heat and power (CHP) systems under 1MWe, according to Michael Brown, Director at consultancy Delta Energy & Environment (Delta-ee) and former Executive Director at COGEN Europe. Delta-ee's projections see annual deployment of around 1.5 – 2.0 GWe for CHP projects in the 0.4 – 5.0 MWe size, and up to 1.5 GWe for projects in the 10 – 400kWe size by 2020.

Rather than sourcing flexibility from part-loaded conventional generation, Wärtsilä Power Plants believes that electricity markets should embrace high efficiency peaking and load-following power that can rapidly ramp up from standstill to provide the super-fast flexibility needed to balance large fluctuations of wind and solar power, says Melle Kruisdijk, Wärtsilä's Market Development Director for Europe.

SSE has called gas-fired generation in the UK "barely profitable, if at all" in its annual report for the 2012/13 fiscal year, due to spark spreads throughout the year being "stubbornly low, if not negative." The company said that a combination of minimal economic growth, a sustained fall in underlying energy demand and high wholesale prices were largely to blame for the difficult environment facing gas-fired power generation.

Toshiba Infrastructure South America Ltd (TIC-SA) has expanded production of electricity transformers in Brazil, "Renewable energy sources need transformers to connect with existing grid [and] this need will show a solid rise in emerging nations [such as Brazil] with its high growth rates," Atsushi Ido, Toshiba representative told Gas to Power Journal.

The impact of the US shale gas revolution – though positive for coal-to-gas switching in US power generation, will keep a lid on oil prices. The price of crude was "more likely to go down than up" over the next two to five years, said Paolo Scaroni, chief executive of Italy's incumbent energy company Eni.

A leading driver behind Mexico's rising natural gas consumption in recent years has been the substantial rise in the use of gas in the power sector, country analysis undertaken by the US Energy Information Administration (EIA) finds.

Industry in southern Germany could curb their electricity consumption at times of peak demand by up to 480MW in the course of an hour if Demand-Side Management (DSM) mechanisms were to be widely implanted, according to study presented by energy think thank Agora in Berlin this week.

The contribution of gas to the UK's power generation mix has plunged by 32 percent in 2012 from 2011 level, comprising 28 percent of total generation, mainly due to the relative low cost of coal compared to gas and cheap coal imports mainly from Russia, Columbia and the United States, the latest country analysis done by the US Energy Information Administration (EIA) shows. The contribution of coal was 39 percent of UK's energy mix, rising by 32 percent.

The crux of renewable expansion lies in the choice of location: If installations were built at the sites in Europe that offer the highest power yields, some €45 billion of investment in renewables could be saved by 2030, a study carried out by Siemens together with the Technical University of Munich finds.

Billions of euros are being wasted every year as a result of "building and expanding renewable power sources in the wrong location" and as a result of "inefficiencies in worldwide energy systems and markets," Siemens board member and CEO, Dr. Michael Suess said when presenting the study in Brussels today.

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News in Brief

Denmark paves the way for Nord Stream 2

July 7– Denmark on late Monday gave the Nord Stream 2 consortium permission to utilize pipe-laying vessels with anchors in Danish waters, paving the way for the Gazprom-led consortium to complete the interconnector. Construction of the 1,230-kilometre pipeline is nearly complete, except for a final stretch of about 120-kilometers in Danish waters. The project was halted in December when the Swiss-Dutch pipe-laying company Allseas suspended works over threats of U.S. sanctions.

EPRI tests early warning system

July 6– The Electric Power Research Institute (EPRI) is conducting trial tests with multiple utilities across the United States of an early warning system. It can detect an off-gassing event as a precursor to thermal runaway up to 30 minutes prior to a cascading failure. This gives plant operators time to mitigate the problem or shut down the system.

KKR buys stake in First Gen

July 3 – Valorous Asia Holdings, owned by KKR investment funds, has bought a 11.9% stake in First Gen through a voluntary tender offer. First Gen, one of the Philippines’ largest independent power producers with 3,492 MW installed capacity, is owned by First Philippine Holdings which is controlled by the Lopez family. KKR’s acquisition of the First Gen stake is worth nearly $192.3 million.

Gazprom’s ‘BBB’ rating affirmed

July 2 – S&P Global Ratings, Moody's Investors Service and Fitch Ratings have affirmed Gazprom's long-term credit ratings as part of their annual reviews. The ‘BBB’ ratings for Gazprom from S&P and Fitch are in line with the sovereign credit rating of the Russian Federation, while Moody's ‘Baa2’ rating is a notch higher.

MHIEC to refurbish WtE plant in Kushiro

July 1 – Mitsubishi Heavy Industries Environmental & Chemical Engineering Co (MHIEC) has received an order from the Kushiro Wide-Area Federation to repair and improve the core equipment at the local Waste-to-Energy plant in Takayama. The WtE plant has a capacity of 240 tonnes per day (tpd). Renovation will increase the energy efficiency of the fluidized bed type gasification and ash melting furnace facility, reducing emissions by around 15% annually. Works are due completed in September 2023.

Nigeria: Only two of six power projects on target

June 30 – Nigeria’s Bureau of Public Enterprises has disclosed that only two out of six privatized power plants were delivered on target. Only Transcorp Power Ltd and Geregu Power Ltd out of the six privatised electricity generation companies (GENCOs) were said to have met their performance targets since taking over.

German investors prefer solar over wind

June 29 – Energy infrastructure investors are keen to build solar power projects in Germany, but shun wind parks. In the latest solar power auction, investors offered to build almost 450 MW of capacity – more than four times the 96 MW of volume on offer– with the average successful bid at 5.27 cents per kilowatt-hour (ct/kWh). The wind auction, in contrast, was undersubscribed: The German network agency  (BNetzA) tendered around 826 MW, but successful bids only totalled 464 MW, at an average price of 6.14 ct/KWh.

MAN ventures into synthetic fuels

June 26 – MAN Energy Solutions has entered the hydrogen economy with the recent pro rata acquisition of H-TEC SYSTEMS, an electrolysis tech firm. The German OEM also committed itself to upgrading its gas turbines to run on 100% hydrogen by 2030.

Varegro starts using Cummins gas genset

June 25 – Belgian-based horticultural company Varegro, has started to use a Cummins HSK78G gas generator to power its greenhouses in Oostrozebeke, West Flanders. Varegro said it selected the Cummins HSK78G genset to produce combined heat and power (CHP) on its premises at a competitive cost for use in energy-intensive greenhouse facilities.

GE names Deloitte as independent auditor

June 24 – GE’s audit committee has selected Deloitte as the company’s independent auditor for the 2021 fiscal year, replacing KPMG. The selection of Deloitte concludes GE’s latest audit tender process.

Northern German states push for hydrogen pilot cluster

June 23 – Northern German states are pushing for greater hydrogen use with a pilot project cluster. Some 12 large demonstration plants for the production and use of green hydrogen are meant to be realised in Hamburg, Schleswig-Holstein and Mecklenburg-Western Pomerania. The aim is to demonstrate how 75% of CO2 emissions can be saved in the region by 2035.

Wärtsilä to design and equip battery-powered ferries

June 22– The Finish engine maker Wärtsilä has been awarded a contract to design and equip two new zero-emissions ferries on behalf of the Norwegian operator Boreal Sjö. For each ferry Wärtsilä will supply the thruster motors, batteries, onboard and shore-based battery charging equipment, the back-up generators, and various electrical systems. The equipment is scheduled for delivery to the yard in early 2021 for the ships to start commercial operations in autumn 2021.

Subsidy cut slashes Chinese wind turbine margins

June 19 – China’s wind turbine original equipment manufacturers (OEMs) could have their gross profit margins halved due to subsidy cuts, Wood Mackenzie forecasts. Commissioned onshore wind power capacity is expected to drop by more than 16% to 19 gigawatts (GW) from 2020 to 2021 as government subsidies were terminated. This could also lead to a 27% drop in turbine prices over the next five years, slashing OEMs’ gross profit margins by half.

PowerPHASE converts gas peakers into storage engine

June 18 – U.S. emergency power provider PowerPHASE has developed an upgrade to convert 7F gas turbine-based peaking plants (350 MW each) to a so-called Storage Engine (400 MW). The unit would be able to store 3500 MWh daily and discharge 4800 MWh daily. CEO Bob Kraft claims utility customers could dispatch the Storage Engine, despite its lower heat rate (4000), ahead of higher heat rate options (9000 for gas peakers) in a competitive market like ERCOT in Texas.

Cummins names Davis head of New Power unit

June 17 – Cummins has appointed Amy Davis as Vice President and President of the company’s New Power Segment, effective July 1. The new unit includes Cummins’ electrified powertrains, battery design and assembly, battery management, fuel cell and hydrogen generation.

GE powers USS Zumwalt

June 16 – The US Navy has taken delivery of the USS Zumwalt, its first full-electric power and propulsion ship, equipped by GE’s Power Conversion. The ship features a high-voltage system, propulsion drive trains with multi-phase VDM25000 power converters and advanced induction motors. Kevin Byrne, head of GE’s North America marine segment said “the full-electric power and propulsion ship has the flexibility to direct energy where it is needed on the platform.”

New England power prices down 40%

June 15 – Spot electricity prices in New England (NE) has fallen since winter 2019/20 when it stood at an average $28/MWh, down 40% from an average $47/MWh in the previous winter. Low natural gas prices, warmer-than-normal temperatures, lower loads, and reduced needs to run expensive peakload generators were the cause for the substantial drop in NE’s winter electricity prices, the U.S. Energy Information Administration (EIA) finds.