Spot price differentials between regional U.S. gas trading hub and the benchmark Henry Hub have narrowed in the first half of 2020 amid lower production and a Covid-19-related plunge in demand. Basis prices are set to stay narrow at most hubs, with Winter 2020/21 forward basis swaps for SoCal Citygate and Waha Hub averaging $1.11/MMBtu and -$0.47/MMBtu.
Pacific Gas & Electric (PG&E), California’s largest utility, has been cutting power starting from Tuesday due to high winds and heat that could exacerbate the spread of wildfires. An all-time record heat across Southern California keeps fuelling fires, with up to 3 million residents at the brink of power outages.
U.S. liquefaction plant developer Venture Global sees LNG-fuelled power generation as “a counter” to China’s building spree of new coal power units. By turning to LNG, utilities can “regain control of the energy transition in the post-Covid-19 era," Venture Global co-founder Michael Sabel told the Gastech Virtual Summit.
Carbon emissions will remain “stubbornly high” for another 15 years, the Norwegian classification society DNV GL says, though global emissions from energy use are forecast to fall 15% in the years through 2035. The oil & gas industry will still account for over 80% of energy-related emissions in 2050.
Global regasification capacity under construction is forecast to reach a 10-year high at 144 million tonnes per annum (mtpa) in 2020, with China accounting for over a third of the new-built capacity. Wood Mackenzie warned, however, the expansion of the Caofeidian and Rudong LNG terminals could be delayed to 2021.
Siemens Energy has laid out its post-spin-off strategy and set a target for an adjusted EBITA margin of 6.5 to 8.5% for fiscal year 2023. In its first phase, the company will focus on increasing profitability and cash flow by implementing a leaner cost structure, optimized logistics and centralized purchasing.
News in Brief
Energy storage for LNG-powered vessels
Oct 21 – Louisiana-based Harvey Gulf has asked Wärtsilä to retrofit its energy storage system (ESS) on four LNG-fuelled platform support vessels. Once upgraded in early 2022, all vessels will be of full tri-fuel operation.
Mott McDonald starts construction on ALCP6
Oct 20 – US construction firm Mott McDonald has started building the ALCP6 waste to energy project in Krabi province, southern Thailand. The plant will incinerate 144,000 tonnes per year of municipal solid waste, and the heat obtained will be converted into 6 MW of electricity to be exported to the Thai national grid.
Brace for EU sustainable finance rules
Oct 19 – Sustainable finance practices, drawn up by the European Commission, could create a "bureaucratic monster" that smaller companies and energy investors would find overbearing, the Munich-based Institute for Economic Research (ifo) warned. The regulation should hence prioritise closer scrutiny of large and listed companies.
UK could become net power exporter
Oct 16 – Increased interconnection could provide a route for excess offshore wind power in Britain to be consumed elsewhere in Europe. National Grid Interconnector Register shows up to 16 GW of interconnection could be operational by 2025 and up to 25.4 GW by 2030.
Wärtsilä to deploy GridSolv in US city
Oct 15 – AEP OnSite Partners has contracted Wärtsilä to deploy its GridSolv Quantum energy storage in the city of Martinsville, Virginia. The system includes an UL9540A limiting 2-hour battery firewall and will help lower the city’s energy costs.
Rolls-Royce spends $13.9m in Mankato
Oct 14 – Britain’s engine maker Rolls-Royce has decided to invest nearly $14 million in its Power System business to build a new R&D centre at its MTU manufacturing plant in Mankato, Minnesota, US. The expansion will see 28,000 square foot added to the facility’s existing hall, making room for the production of high-power MTU gas gensets, enhanced product testing and the creation of 20 new manufacturing positions.
Clarke commissions Vitalait power unit in Tunisia
Oct 13 – Clarke Energy and INNIO Jenbacher have completed the commissioning of an onsite power plant of a milk producer in Tunisia. The installation of another Jenbacher gas engine has increased the plant’s output to 4 MW of electricity as well as 1,100 kW of hot water and 800 kW of steam.
Secondary battery market to top $55bn
Oct 12 – Technavio expects the secondary battery market to grow by $55.62 billion through 2024, rising at an 11% rate over the forecast period. Falling costs for lithium-ion batteries as well as growing demand in Asia Pacific allowed the market to grow 2.01% this year, despite adverse effects of the pandemic. Top battery suppliers are Tesla, Clarious, Exide, LG Chem, GS Yuasa and Samsung.
Shift to sustainable tech
Oct 9 – Three quarters of utilities, surveyed by EIT InnoEnergy, are considering adopting sustainable technology over the next 12-18 months. However, over one third of the respondents found it hard to recruit the skills they need.
Generator rentals slow
Oct 8 – The rental market for power generators has slowed down due to the pandemic, with genset rentals from the oil and gas industry forecast to grow by just $153.87 million this year. However, Technavio expects the market will return to a 3% annual growth rate by 2024.
GE upgrades Italian CHP
Oct 7 – GE has completed an axial fuel staging upgrade on its 9E gas turbine at an onsite combined heat and power (CHP) plant at the Milazzo refinery in Sicily. The entire electricity needs of the refinery, over 780 GWh in 2019, will soon be supplied by the upgraded and more flexible gas turbine.
Operating assets ‘from anywhere’
Oct 6 – GE Digital’s latest software gives electric utilities remote and mobile control over their power stations for remote start-up, external monitoring and operational fine-tuning. The goal is to safe cost through autonomous operation from any location.
Chart wins order from New Fortress Energy
Oct 5 – Chart Industries has secured a second leasing order, worth $7.7 million, for ISO containers for LNG applications from New Fortress Energy for a project in the Caribbean. The US equipment maker sees double digit near-term growth in its repair, service and leasing business, notably from growing demand for LNG equipment for infrastructure.
Siemens energises Togo
Oct 2 – Siemens Energy has delivered a SGT-800 gas turbine and other components for the Kékéli Efficient Power plant project. Located in the Togolese capital Lomé, the 65 MW plant will cover almost 40% of country’s expected electricity demand.
Batteries get cheaper
Oct 1 – Cost for battery production is falling rapidly as manufacturers bring large Gigafactories on-line. By 2030, Bloomberg New Energy Finance anticipates battery pack prices to drop to $73 per kilowatt-hour, down from a current volume-weighted average of below $270/kWh.
Barclays may help fund Rolls-Royce
Sept 30 – UK’s prime engine maker Rolls-Royce is understood to be close to getting fresh financing from Barclays Bank. The Derby-based company, however, insists no final decision has been taken on the precise amount that may be raised or any allotment of shares to any investor.
Petronas to truck LNG to off-grid users
Sept 29 – Petronas Dagangan Group is gearing up to build a LNG truck delivery service for off-grid customers in Peninsular Malaysia. Trucks fitted with cryogenic tanks will bring the super-chilled fuel to remote industries and small-scale power generators with no access to the natural gas grid. Malaysia’s Peninsular Gas Utilisation (PGU) pipeline is only 2,500 kilometers in length and was initially built to export gas to Singapore.
