Markets

Sulfur dioxide (SO2), nitrogen oxides (NOx), and carbon dioxide (CO2) emission of the U.S. power sector will remain relatively flat, according to EIA projections, despite an anticipated 23% rise in electricity generation from 2018 to 2050, as most added generation will come from renewables of natural gas.

With electric cars gaining popularity, the global electric vehicle battery market is anticipated to grow at a record 18% rate to reach a size of $120 billion by 2027. Government initiatives and more wide-spread environmental concern in western countries are driving the electrification of the transport sector.

Mexico’s state-run electric utility Comisión Federal de Electricidad (CFE) is aiming to renegotiate take-or-pay clauses it had agreed with North American gas pipeline developers, including TransCanada and Sempra’s IEnova. CFE is the anchor customer for most new pipelines under construction, but the company's new CEO Manuel Bartlett wants to focus on hydropower, diesel and coal instead of gas-fired generation.

Beginning with the February billing cycle, customers of SCE&G, a wholly owned subsidiary of Dominion Energy, will start seeing the benefits of the Dominion Energy-SCANA merger reflected in their monthly energy bills. Typical customers will see their bills drop 15%, with further reductions in May for fuel and Demand-Side Management participants.

Seasonal imports of LNG help meet peakload gas demand in New England’s industrial and power sector. During the freeze in the first week of February, more than 800,000 million cubic metres per day of gas was imported via Excelerate’s Northeast Gateway floating regas facility offshore Boston.

Price will largely determine the share of gas-fired generation in the future power mix of the United States. Scenario analysis in the EIA’s latest Annual Energy Outlook (AEO2019) shows that natural gas could provide between 21% and 54% of all U.S. electricity generation, dependent on fuel prices and relative technology costs.

Implementing the German coal exit will see 12.5 GW of coal-fired capacity being closed by 2022, pushing up the country’s gas demand. To fully replace these shuttered coal plants with gas-fired generation would create a need for additional 81 TWh in gas supply, equating to an 8% rise of German gas demand, says the lobby group Zukunft Erdgas.

The UK government’s Department for Business, Energy and Industrial Strategy (BEIS) is inviting applications for funding under a new £320 million Heat Networks Investment Project (HNIP). Designated as ‘gap funding,’ the monies will be is offered through a combination of grants and loans over a period of up to three years.

If the asset swap of RWE and E.ON goes ahead, the resulting companies would have “unprecedented market power”, say Ines Zenke from energy law firm Becker Büttner Held. In 2018, E.ON agreed to buy RWE's subsidiary innogy and the two utilities agreed to exchange large parts of their assets. The swap will leave E.ON focused on regulated distribution grid with stable returns, while RWE takes on E.ON's and innogy's renewable business, on top of fossil power plants.

Natural gas is bound to gain importance in the German power mix starting from the mid-2020s when coal-fired capacity is gradually being phased-out. Energy Aspects says Germany’s coal exit will help more of the global LNG oversupply find a home in Northwest Europe. The 2022 start-up of the Wilhelmshaven FSRU will support this trend.

Analysts say carbon prices in the European Emissions Trading System (EU-ETS) could exceed €38 per ton by 2020 as emission certificates taken out by Germany will get cancelled as it exits coal-fired power generation. A subsequent surge in carbon prices will accelerate coal-to-gas switching in Europe.

Texas could not solely rely on green energy sources without putting supply security at risk. Replacing all installed coal power capacity cost-effectively would only work with a combination of renewables, natural gas-fired generation and battery storage. Gas generally outcompetes coal generation in ERCOT if the price of gas falls below $3/MMBtu.

Freezing weather in the Midwest and a fire at a gas compressor station in southeast Michigan has forced local utilities to restrain gas supply. General Motors halted operations at 11 Michigan manufacturing plants and Fiat Chrysler also had to cancel shifts to conserve natural gas.

Rapidly evolving exports of LNG and liquid fuels will turn the United States into a net energy exporter next year. As gas demand grows in Asia and Henry Hub prices remain competitive, US LNG export capacity is expected to rise further before levelling off after 2030, when rival supplies are set to enter global markets.

Streamlining operations, General Electric has decided to consolidate all of its renewable and grid assets into a single, simplified Renewable Energy business. With this move, GE wants to offer more integrated solutions, simplify its structure, and improve performance.

Page 17 of 158

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.