Markets

The United States is currently facing its worst drought in decades which is likely to reduce power supply since electricity generation can be very water-intensive, the U.S. Energy Information Administration (EIA) warns.

Despite short term restraints in the market for gas-fired power generation, new analysis from Frost & Sullivan's Energy & Power Research expects "sound" medium- and long-term prospects and forecasts global gas-fired power plant orders to total 537 GW through 2020.

The majority of the coal-to-gas switching activity in the U.S. is "permanent" as most utilities are not expected to revert investment decisions of converting coal plants to run on natural gas,  Moody's Investors Service said.

South Korea has risen high on the agenda of Siemens, Germany's engineering giant, who is targeting the country as a key growth market for gas turbine sales.

Sales prospects and revenue generated in Asia and the Middle East currently more than offsets reduced earnings in ailing European markets, says Lothar Balling, Head of Gas Turbine Power Plant Solutions in the Fossil Power Generation Division at Siemens Energy.

Germany's largest utility E.on said it has no intention of building additional gas or coal-fired capacity in western Europe until 2020 as it expects markets to be oversupplied with power generation capacity until the final shutdown of all German nuclear reactors.

Hong Kong has secured sufficient natural gas supplies from China but pricing issues constrain operators to switch from coal-to-gas generation, Larry Chuen-Ho Chow, Director, Hong Kong Energy Studies Centre at Hong Kong Baptist University told Gas to Power Journal.

Investment in combined-cycle gas turbine (CCGTs) power plants in Germany are "highly problematic" as decreasing, even negative clean spark spreads resulting from reduced runtime hours have cut profit margins to zero". Unless capacity remuneration mechanisms are introduced, PricewaterhouseCoopers sees no market signals that could convince operators to build new plants.

During the first half of 2012, new gas-fired and renewable capacity has dominated power plant additions in the United States. As total of 165 new electric power plants were added in the 33 federal states, with combined new capacity of 8,098 megawatts (MW), according to the US Energy Information Administration (EIA).

Whether US operators choose to dispatch electric generators largely depends on system demand for electricity and the relative cost of operating the plant, a report by the US Energy Information Administration (EIA) shows.

Doosan Heavy Industries (Doosan HI) is considering local investment in India with the aim of better tapping into the country's rapidly growing power generation market.

Russian gas exports to Europe have dropped 14.5% to 32.8 Bcm in the second quarter of 2012 on reduced offtake volumes from Gazprom's continental European buyers who prefer coal over gas generation.

Germany's second-largest utility RWE on Tuesday announced it will cut more than 2,400 jobs as first-half year profit came in 'unchanged', while electricity sales fell 8 percent and gas sales dropped 11 percent. "The present framework conditions are anything but favourable", Peter Terium, RWE chief executive said when presenting the H1 results in Essen today.

As profitability at several of E.on's conventional gas- and coal-fired power plants across Europe is squeezed due to reduced operating hours and low power prices, E.on chief executive Johannes Teyssen said plant closures may have to be considered.

Average on-peak wholesale electricity prices in the US have plunged between 24% and 39% across major price hubs from January to June this year as natural gas prices fell to a 10-year low, according to EIA statistics.

German utility E.on today posted a Eur2.4 billion increase in its H1 earning to Eur6.7 billion, largely due to successful gas negotiations with suppliers.

Page 154 of 166

News in Brief

Micro CHP market to top $3bn by 2026

Feb 18 – The global micro CHP market revenue is forecast to exceed $3 billion by 2026 amid rising demand for captive combined heat and power units by industry. According to Global Market Insights, micro CHPs are also increasingly combined with solar PV and energy storage into hybrid power units.

Rio Tinto uses battery to power Pilbara mine

Feb 18 – Australian mining company Rio Tinto has freed up $98 million for a new solar PV unit and a lithium-ion battery energy storage system to help power its entire Pilbara mining network. The 12 MWh battery storage at Tom Price will provide spinning reserve to help stabilize the local grid.

Japan and Korea eager to build ‘hydrogen economy’

Feb 17 – Liquid hydrogen is meant to become the basis of Japan’s and South Korea’s new energy economy. Several public-private partnerships accelerate efforts to produce hydrogen fuel cell vehicles and use hydrogen as a clean energy source, gradually replacing oil and natural gas.

MHPS teams up with KBR to expand sales

Feb 14 – Mitsubishi Hitachi Power Systems (MHPS) has agreed to cooperate with U.S. firm KBR to expand sales of SDA pitch-fired power plants. The fuel for these plants is insoluble matter (SDA pitch), which remains when light oil fractions are recovered from heavy oil fractions using the solvent de-asphalting (SDA) process. The petroleum industry can now utilize this residual material for power generation.

Turboden provides CHP to First Nations

Feb 13 – Brescia-based Turboden, part of Mitsubishi Heavy Industries (MHI), has agreed to an 8,000 kW combined heat and power (CHP) plant, running on woody biomass to indigenous First Nations in Saskatchewan, Canada. The Organic Rankine Cycle (ORC) power gen system will uses sawmill residual woody biomass as fuel and help electrify some 5,000 homes.

Himoinsa gensets win award

Feb 12 – Himoinsa has received an Innovation Trail Live award for its rental gas generator sets. Three gensets – HRGO 30, HRGO 40 and HRGO 70 – were distinguished due to their long running time, low operational costs, as well as reduced emissions and sound level.

Ofgem lowers default price cap

Feb 11 – UK energy regulator Ofgem has announced it will lower the default price cap by £17 to £1,162 for the six months effective from 1 April 2020. Analysts say Ofgem’s decision comes amid a “warm winter” and “healthy LNG supply,” which pushed down wholesales gas prices to a 13-month low. Looking ahead, there might well be “another slight reduction to the cap later this year.”

Opel plans Gigafactory for battery cells

Feb 10 – German carmaker Opel, part of French PSA, plans to manufacture enough battery cells for half a million e-cars annually in a new factory in the western German town of Kaiserslautern from 2024. Two billion Euros would be invested in the factory, designed to house three units with 8 GWhs each, which would be the largest in Europe so far.

GE adds 235 MW in Ivory Coast

Feb 7 – GE is carrying out a gas turbine extension at the Azito power plant in the Ivory Coast. Under the contract, GE will supply its GT13E2 gas turbine in combined-cycle configuration, one HRSG, one steam turbine and associated equipment. The upgrade will boost the plant’s capacity by 30 percent, or 253 MW to reach a total of 710 MW.

FID on Azito extension

Feb 6 – Independent power producer Globeleq and IPS have reached financial close on expanding the Azito gas-fired power plant in Ivory Coast. The plant currently has 460 MW installed capacity and provides 25 percent of the country’s power supply. Once the lasted upgrade will be completed, Azito’s capacity will be boosted to 713 MW.

Batteries vs. hydro power

Feb 5 – More than 28 GW of lithium batteries deployed for stationary storage applications by the year 2028, according Navigant Research. Pumped hydro power plants, however, dominate the market as they account for 96% of installed energy storage worldwide.

Ofgem expects green energy to cost more

Feb 4 – Britain’s energy regulator Ofgem has been seeking to incentivize investment in green energy. However, the watchdog’s new head, Johnathan Brearly, cautioned “more investment does mean higher cost.” Though investors’ returns could come down, technology improvements will reduce down capital costs further in the long run.

FES takes over 1.3 GW Pleasants Power Station

Feb 3 – FirstEnergy Solutions (FES), soon to be renamed Energy Harbor, has completed the ownership transfer of the Pleasants Power Station, a 1,300-MW thermal plant located in Pleasants County, West Virginia. FES took over the power unit from Allegheny Energy Supply Company.

Körte heads Siemens Strategy

Jan 31 – Peter Körte, aged 44, has been appointed the new head of Siemens’ Strategy Department, effective February 1, 2020. In his new role, he will develop Siemens’ strategies for digitalization and the Internet of Things (IoT) which are deemed “crucial growth drivers.”

SP40 engine oil launched

Jan 30 – Petro-Canada Lubricants has launched SENTRON SP 40, new oil for gas engines with steel pistons. The lubricant is built to withstand severe operating environments and enables optimum output from stationary engines.

Asian NOCs enact energy transition

Jan 29 – From Tokyo to Jakarta, the energy transition is the hot topic, as most of Asia’s national oil companies (NOCs) that doing nothing is no longer an option. PTTEP and CNPC have both made carbon reduction commitments, but others are yet to follow.

Saudi Aramco spends $5m to join VAKT

Jan 28 – Saudi Aramco Energy Ventures has invested $5m into VAKT, a blockchain platform for commodity post-trade processing. The platform, launched in London in December 2017, is backed by the likes of BP, Equinor and Shell, Gunvor, Koch Supply & Trading, Mercuria, ABN Amro, ING and Société Générale.