Carbon emission prices in the US Regional Greenhouse Gas Initiative (RGGI) have soared to unprecedented highs due to more stringent emission rules and fears that US President Biden will enact a fracking ban. In the latest RGGI quarterly auction, held on March 3, the clearing price hit $7.60 per ton of CO2.
A cross-section of 30 US shale oil and gas producers shows the industry has enjoyed the first full year of positive free cash flows since the fracking boom began. Energy Economics and Financial Analysis (IEEFA) found the 30 producers generated $1.8 billion in free cash flows in 2020 after slashing capital spending by $20 billion.
Japanese and Australian partners – J-POWER, Iwantani Corp, Kawasaki HI, Marubeni, AGL and Sumitomo – have launched the HESC Pilot plant that uses coal from Australia’s Latrobe Valley to produce hydrogen, destined for the Japanese market. The aim is to scale up the output of the HESC produce to 225,000 tonnes of hydrogen annually with CCS.
The Electric Highway Coalition – made up of American Electric Power, Dominion, Duke Energy, Entergy, Southern Co., and the Tennessee Valley Authority – plan to establish a network of electric vehicle (EV) charging stations to enable seamless travel between Gulf Coast, Midwest and Atlantic State destinations. Over 18 million EVs are estimated to be on US roads by 2030.
Italy’s gas network operator Snam will become Europe’s first TSO to test the injection of a hydrogen blend into its gas grid through a cooperation with UAE-based Mubadala Investment. Snam imports LNG via the FSRU Toscana and the onshore Panigaglia regas facility near Genoa, where carriers with the hydrogen-LNG blend from Abu Dhabi are likely to berth.
Withdrawals from US gas storage kept falling this week, with analysts attributing the storage-build to mild weather in South Central regions and a subsequent rise of gas injection into salt cavern storage. South Central was badly hit by the mid-February ‘Big Freeze’ in Texas but temperates already sprung back to a 10% warmer-than-normal March to-date.
Gazprom is reviewing its options to produce and utilize hydrogen in Russia, and export the fuel through its existing gas pipeline infrastructure. Grey hydrogen is cheaper to make for large natural gas producers such as Gazprom, and the Russian gas major is already in talks with Germany to add hydrogen to its gas deliveries through the North Stream-2 pipeline.
Joe M. Kang, President of the International Gas Union (IGU), has highlighted the role of natural gas as an enabler of the energy transition. Speaking at the 50th GECF Gas Lecture Series, he criticised the “lack of a global approach” on how to ensure clean, secure and affordable energy given that “renewables cannot yet replace hydrocarbons.”
Raising the Social Cost of Carbon (SCC) is seen as a tool for US Democrats to obstruct upstream gas projects, notably fracking leases. Energy Aspects believes the bar for federal approval of new fossil fuel infrastructure will rise once the Democrats gain majority of the Federal Energy Regulatory Commission (FERC) in July.
News in Brief
Enel’s Q1 investment up 8.8%
May 7 – Italy’s state-dominated utility Enel has stepped up investment in renewables and power transmission grids in the first quarter by 8.8% to €2,035 million in a further shift to green energy. Revenues fell by -14.4% to €17,107 million over the same period, largely due to losses in thermal generation and trading activities in Italy and Spain as well as lower volumes of electricity sold into the Spanish end-user market.
Germany advances Net Zero target to 2045
May 6 – The German government has pulled forward the date for Net Zero emissions to 2045 in a move designed to accelerate and intensify efforts to reduce emissions from the transport and power sector. The new target is to curb emissions by 65% by 2030 (up from the previous 55% goal) and reach a 88% reduction by 2040, followed by Net Zero five years later.
Cummins Q1 revenues up 22%
May 5 – Cummins today posed a 22% rise in first quarter revenues to $6.1 billion. Sales in North America increased 7% while international revenues surged 45% largely due to strong new product sales in China and India. Based on latest developments, Cummins raised its full year 2021 revenue guidance to 20-24%, a considerable rise from previous 8 - 12% forecasts.
Actis vows to help Egypt divest Siemens-built CCGT
May 4 – Egypt’s sovereign wealth fund is cooperating with the private equity firm Actis to sell a 25-year concession to operate three 4.8 GW combined-cycle power plants built by Siemens under a €6 billion contract. The three CCGTs are owned by the Egyptian Electricity Holding, and Actis CEO Ayman Soliman promised to help selling one of the three plants.
RIX launches mobile hydrogen system
April 30 – California-based RIX Industries has launched an industry-first mobile hydrogen generation unit, part of its M2H2-Series of scalable Methanol-to-Hydrogen systems. Able to generate hydrogen onboard and on demand, the system is applicable for ships and remote small-scale production of the green fuel with the aim of replacing diesel for power generation. The M2H2 systems, combined with fuel cells, can produce electricity without any NOx, SOx, or particulate matter and Net Zero CO2 emission with renewable methanol.
US gas future hit 7-year high
April 28 – US natural gas futures have increased over 2% to a seven-week high as LNG exports go from strength to strength, while domestic production eased off slightly. Moreover, a return of colder-than-average weather has pushed up gas demand for heating significantly so that utilities had to withdraw gas from storage, which is rather unusual in April.
Zhongyu Gas bucks the trend
April 27 – Zhongyu Gas, a pioneer in the Chinese gas industry, has achieved remarkable growth during the pandemic. The Hong-Kong headquartered TSO recorded a turnover of approximately HK $8,544 million in 2020, up 4.9% year-on year, while profit attributable to owners of the group was HK $1,057 million, a staggering 145.7%. At the end of 2020, the turnover of Zhongyu’s value-added gas services segment recorded HK $636 million, a year-on-year increase of 54.2%. To date, Zhongyu Gas has 18,777 industrial customers and 3.96 million residential users.
Germany agrees higher renewable goals for 2022
April 26 – The German parliament has voted in favour of higher tender volumes for next year’s wind and solar PV installations. However, parliamentarians did not yet agree on a new renewable target for 2030, even though this has become necessary after the EU raises its overall emission reduction target to 55%.
Rolls-Royce to deliver 16V 8000 engines to Taiwan
April 23 – British engineering giant Rolls-Royce has delivered the first 16-cylinder engines of the MTU Series 8000 to a customer in Taiwan. The shipyard CSBC will install the two engines, capable to deliver 7,280 kilowatts of power each, in new patrol vessels for the Taiwanese Coast Guard. The 16V engines‘ „big brother“ - 20V 8000 has been the best-selling engine in its power class since its introduction around 20 years ago, Rolls-Royce noted.
Rolls-Royce to deliver 16V 8000 engines to Taiwan
April 23 – British engineering giant Rolls-Royce has delivered the first 16-cylinder engines of the MTU Series 8000 to a customer in Taiwan. The shipyard CSBC will install the two engines, capable to deliver 7,280 kilowatts of power each, in new patrol vessels for the Taiwanese Coast Guard. The 16V engines‘ „big brother“ - 20V 8000 has been the best-selling engine in its power class since its introduction around 20 years ago, Rolls-Royce noted.
GE to equip Verbund’s pump storage power plant
April 22 – GE Power Conversion has been selected to equip Verbund’s new fully-fed pump storage power plant Reißeck II+ in Kärnten, Austria. For the new 45 MW unit, GE will supply three MV7616 converters which are water cooled fully fed converters with an electrical voltage of 6.6kV each. In the wider Kärnten area, Verbund operates a total of 1,460 MW of hydropower plants that are often used for pump-water energy storage.
Fluxys takes stake in Brazilian TSO
April 21 – Belgian gas company Fluxyis, the operator of the Zeebrugge LNG import terminal and stakeholder in Dunkirk LNG and the TAP pipeline, has bought a minority stake in a Brazilian gas transmission system operator. The deal is for a stake in Transportadora Brasileira Gasoduto Bolívia-Brasil (TBG), the owner and operator of a 2,600-kilometres pipeline system that links the southern part of Brazil with neighbouring Bolivia. Fluxyis said the equity transfer was made via the US investment fund, EIG Global Energy Partners.
MHI launches 90MPa hydrogen booster pump
April 20 – Mitsubishi Heavy Industries (MHI) has developed an ultra-high pressure liquid hydrogen booster pump for hydrogen fuelling stations. With 90 megapascal (MPa), the new unit achieves considerably higher pressure than the earlier 40 MPa unit. It is located at MHI’s research & innovation center in Nagasaki District, Japan.
New EU target may force Germany to achieve 68% emissions cut
April 19 – European Union leaders’ decision to raise the bloc’s 2030 target for cutting emissions by “at least 55%” means that Germany needs to step up its efforts and may have to cut emissions by 62% to 68% over 1990 levels, researchers say. Policymakers in Berlin initially aimed for a 55% reduction by 2030 but this is now no longer enough to comply with stricter rules.
Trafigura co-sponsors MAN’s ammonia engine
April 16 – Trafigura, a global commodity trading house, has agreed to co-sponsor the development of MAN Energy Solutions ammonia-fuelled engine for maritime vessels. The ammonia engine is expected to be commercially available for large-scale ocean-going ships by 2024, followed by a retrofit package for existing maritime vessels by 2025. In the future, ammonia-fuelled engine are also meant to be used for power generation.
Tula dDSF helps curb NOx emissions by 74%
April 15 – Tula Technologies, a leader in propulsion technology, and Cummins have showcased the results of a study on the effectiveness of Tula’s diesel Dynamic Skip Fire (dDSF) in reducing nitrogen oxides (NOx) by 74% and carbon dioxide emissions by 5% on a Cummins X15 HD Efficiency Series diesel engine. In comparison with current engine technologies and modifications to the thermal management techniques, use of the dDSF system saved 20% in fuel and related costs.
Marubeni starts EPC works for Rabigh IPP
April 14 – Japan’s Marubeni Corp has been granted limited-recourse financing for the 300 MW Rabigh solar IPP project in Saudi Arabia’s Makkah Province. The loan was granted by Mizuho Bank, Al Rajhi Banking and Investment and Japan’s Bank for International Cooperation. EPC work on the project is scheduled to start in early May. All electricity from the Rabigh IPP will be sold to the Saudi Power Procurement Company (SPPC) for 25 years starting with the plant’s commissioning.
