Markets

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.

International Energy Agency's Executive Director, Maria Van der Hoeven sees "golden prospects for natural gas. However she urged the gas industry in Riyadh today to step-up security standards in unconventional gas production.

Coal is forecast to increase in its competitiveness against gas, Société Générale said in a research note on Tuesday. "Demand for imports [of coal] will in our view keep on increasing, even if more slowly," analyst Emmanuel Fages said with reference to the expected recession in the Eurozone throughout 2012.

The gas value chain is integrating as upstream companies such as Gazprom and Taqa have an incentive to venture beyond their midstream activities into gas-to-power. "Upstream players - producers of oil and gas – have an incentive to go downstream," Sybren Hettinga, head of European gas structuring at Cargill, told 'Gas-to-Power Journal' in an interview.

The Russian gas giant Gazprom and Essen-based RWE are in negotiations to form a joint venture (JV) on power generation, an RWE spokesperson confirmed to 'Gas-to-Power Journal' today. "We do not comment on the status of negations," he said, adding joint projects in gas-to-power would be "one of the options".

The European Network of Transmission System Operators for Electricity (ENTSO-E) has alerted grid operators of the risk of reduced margins of available power generation overload in Europe this winter. ENTSO-E published its Winter Outlook 2011-2012 and Summer Review 2011 on Thursday this week, indicating that under severe conditions, December and January could be the most stressed months of the winter for security of electricity supply.

The power generation sector is forecast to be the main driver for global gas demand, according to projections of the International Energy Agency (IAE). "Global gas demand will be driven by power generation", IEA analyst, Warner de Kate, said at the EMART energy conference in Lyon.

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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.