Germany has emerged as a leader in the European Cogeneration market due to the country's strong commitment to energy efficiency, comprehensive policy promotion through the combined heat and power (CHP) support scheme and the government's decision to phase-out nuclear power is revealed in the recently released COGEN Europe report European Cogeneration Review – Germany.
Natural gas is set to remain important in transitioning the UK to a low-carbon electricity producer in the short term future, but can only play a more significant role beyond the 2020s if carbon capture and storage technology (CCS) is deployed on a commercial scale, according to a report from the London School of Economic’s (LSE) Grantham Institute on Climate Change.
Gas consumption in India has grown at an annual rate of 10 percent from 2001 to 2011 despite insufficient pipeline infrastructure. Natural gas mainly serves as a substitute for coal in electricity generation and with 45 percent of total use, the power sector is currently the largest user of natural gas in India, according to a country specific energy analysis from the US Energy Information Administration (EIA).
Natural gas fired power plants will continue to face severe difficulties to stay in the merit order in competitive OECD Europe power markets in such as Spain, Germany and the UK, as dispatch of coal plants stays more economic at current fuel and carbon emission prices, Dennis Volk, gas and power market analyst at the International Energy Agency (IEA) told Gas to Power Journal in an interview.
"Under current market conditions, gas-fired plants have no longer a big role to play in much of OECD Europe ..."
The use of natural gas to generate electricity in Japan was up by 15 percent in 2012 when compared to 2011, according to the US Energy Information Administration (EIA). Japan's use of all fossil-fuelled power generation was also up 21 percent in 2012 when compared to 2011, and now represents 90 percent of the country's energy mix.
As dispatch patterns shift, gas-fired power plants can now increasingly be described as intermittent energy sources, much in the same way as renewables, Richard Sarsfield-Hall, principal consultant at Pöyry Energy Consulting, said at this year's FLAME Conference in Amsterdam. Weather conditions impact the output of wind and solar installations and subsequently determine what levels of backup power is required from combined-cycle gas and coal plants on an intermittent basis.
Most European power markets face an oversupply of fossil power plant capacity, Guido Custers, Managing Director at Delta Energy said at this year's FLAME conference in Amsterdam. In both the Netherlands and Germany, adverse market conditions and negative profit margins is prompting operators to consider either mothballing or even decommissioning existing gas-fired plants.
Vattenfall, Europe's fifth largest utility, is pessimistic about the prospects of gas as a fuel source in the future energy mix; so in the next few years it is unlikely that new investments (apart from already planned investments) in gas power plants will be forthcoming, said Gabrielle Seeling-Hochmuth, head of gas strategy at Vattenfall's gas competence centre at this year's FLAME gas conference in Amsterdam.
Natural gas consumption in Mexico is on the rise with the country's consumption increasing by 4 percent per year on average during the period between 2007 and 2011 due to growing demand in the industrial sector. Mexico also plans to add 28GW of gas-fired power generation capacity between 2012 and 2027 according to the Comisión Federal de Electricidad (CFE), Mexico's state-run electricity provider. CFE estimates that this could raise natural gas needs for power generation by 5.1 billion cubic feet per day (Bcf/d).
The hunger of Turkey's industry for natural gas is unabated, while new government incentives and tax breaks aim to put the use of domestic lignite resources at an advantage over natural gas as a fuel source for power generation.
"We are over reliant on gas imports and this dependency is set to rise in line with GDP growth," said Levent Özcan Caner, Strategy Department, Ministry of Energy and Natural Resources, suggesting that government regulation in favour of coal would help reduce Turkey's gas import dependency.
Turkey's gas-fired power generation capacity will continue to expand until new nuclear capacity starts operation. "We believe 60 bcm is a viable figure for Turkey's total gas demand volume by 2020, as gas-fired capacity will defend its 45 percent levels of market share until new nuclear capacity starts operation, said Ali Güleç, Senior Consultant at Deloitte.
Falling energy demand, rising gas prices and the subsidised growth in the renewable electricity supply threaten the future of natural gas as a replacement for coal in Australia's national energy mix, Bret Harper, Associate Director of Research at RepuTex – an Australian specialist energy and carbon research firm – told Gas to Power Journal.
News in Brief
JERA on recruiting spree
Feb 26 – Japan’s largest electric utility and LNG buyer JERA is looking to hire 20 administrative and 60 technical staff. Recruitment activities will begin on 1 March 2021.
B&W wins $13m new contracts in North America
Feb 25 – The thermal segment of Babcock & Wilcox has been awarded several energy-related projects in North America, worth approximately $13 million, as the market strengthens and projects continue to restart following delays in 2020 due to the impact of the coronavirus crisis.” We’re seeing customers now moving forward with necessary work that had been previously put on hold. The recent inclement weather also has forced higher loads within the utility sector and we anticipate stronger demand for parts and services going forward,” said B&W Chief Operating Officer Jimmy Morgan.
PIC Group to service 1.1 GW Hummel Power Station
Feb 24 – Atlanta-based PIC Group has been awarded an Operation and Maintenance (O&M) contract for the Hummel Power Station, a 1,124 MW combined-cycle plant operated by LS Power Group. Situated in Shamokin Dam, Pennsylvania, the CCGT is equipped with three SGT6-5000F gas turbines, one SST6-5000 steam turbine, three SGen6-1000A air-cooled generators and one hydrogen-cooled SGen6-2000H generator.
Duke Energy claims natural gas is cheaper than energy storage
Feb 23 – Duke Energy Progress and Duke Energy Carolinas have both indicated in their latest integrated resource plans (IRPs) they view battery storage as potentially more costly than proven gas-fired generating technology. Market observers noted, however, that Duke’s estimates peg the capital costs of a 50 MW/200 MWh energy storage plant at $347 per kWh —far higher than the cost of units that entered commercial service in 2020, as per Lazard data.
EU emission rules could herald end of combustion engine
Feb 22 – Future EU emission rules for cars could mean the abrupt end of combustion engines and put many jobs at risk, the German engineering federation VDMA has warned in a position paper. The use of efficient combustion engines is “still important” – both for vehicles and small generators –VDMA President Karl Haeusgen stressed, especially since these engines can be operated in a climate-neutral manner with synthetic fuels or hydrogen.
Saudi cement producer renews Wärtsilä O&M deal
Feb 19 – The Saudi Arabian cement producer Umm AlQura Cement has signed a five year Operation and Maintenance (O&M) agreement with Wärtsilä for the customer’s captive power plant in Taif City. The 47 MW plant operates with five Wärtsilä 32TS engines. The initial three year maintenance agreement was signed in 2015, and thereafter renewed once.
Gazprom expands Sakhalin–Vladivostok gas pipeline
Feb 18 – The Russian major Gazprom is expanding the Sakhalin – Khabarovsk – Vladivostok gas trunkline at the section between Komsomolsk-on-Amur and Khabarovsk. More than 315 kilometers, or three quarters of its overall length, has been welded to date. Gazprom’s 2021-2025 investment programme will total RUB 5.49 billion ($70 million) – more than three times he money spent in 2016–2020. Planned projects include 14 inter-settlement gas pipelines, 9.3 kilometers of gas pipeline branches, and six gas distribution stations.
Enstor closes sale of Waha gas storage
Feb 17 – Houston-based Enestor Gas has completed the sale of its Waha Gas Storage assets in northwest Texas to WhiteWater Midstream. Waha Gas Storage assets have the capacity, when fully developed, to store approximately 10 Bcf of natural gas and include six underground caverns and permits for five additional caverns.
Technip Energies listed in Paris
Feb 16 – Today, Technip Energy has been listed at Euronext’s regulated market in Paris. CEO Arnaud Pieton said the company’s mission is to “serve the energy transition” through its leading position in LNG, hydrogen and ethylene. As growth areas, he singled out sustainable chemistry and CO2 management.
US renewable energy share to double by 2050
Feb 15 – The U.S. Energy Information Administration (EIA) projects that the share of renewables in the U.S. electricity generation mix will increase from 21% in 2020 to 42% in 2050. Wind and solar generation are responsible for most of that growth, while nuclear and coal-fired generation decrease. The share of gas-fired generation will remain stable even though gas prices remain low at an estimated $3.50 per MMBtu, according to EIA projections.
Nikkiso to build electric-mechanical actuators
Feb 12 – The clean energy arm of Nikkiso Cryogenic Industries has bought the intellectual property to manufacture electric-mechanical actuators (EMA) and control panels. Coupled to a cryogenic pump, the system works without gearbox which reduces the size of these vertical pumps frequently used in the oil and gas industry.
Europe’s hydrogen projects outnumber current plants
Feb 11 – The number of hydrogen projects across Europe is almost double that of operational electrolysers as demand for the clean fuel is rising fast. According to research by DLA Piper and inspirata, there are 192 planned or announced hydrogen projects in Europe compared to 107 currently operational ones.
NTE to develop 5 GW clean energy projects
Feb 10 – Florida-based NTE Energy is working with investment partners to develop 1.2 GW of solar and 3.9 GW of battery energy storage systems (BESS) next to thermal power plants. “By co-locating renewable projects with thermal generation, we can offer customers access to affordable solar power options backed up by reliable natural gas,” said Steve Remen, NTE managing director. The company aims to bring 4 GW of its proposed clean energy projects into commercial operation by 2026.
Oil price bounces back
Feb 9 – The price of crude oil has recovered to pre-pandemic levels, after plunging to an all-time low last year. Brent crude oil prices for the front-month April were last seen trading at nearly $61 per barrel, while West Texas Intermediate (WTI), the benchmark for US oil, has risen above the $58 a barrel mark for the first time in over a year.
Equinor VP named co-chair of OGUK board
Feb 8 – Arne Gürtner, Senior Vice President UK & Ireland Offshore at Equinor has been appointed to co-chair the Oil & Gas UK board, as the sector strive to recover while meeting its net-zero targets for 2021. He will be working with Phil Simons, VP North Sea & Canada, Subsea 7.
Enagás to tap wind power for hydrogen
Feb 5 – The Spanish utilities Enagás and Naturgy are evaluating the potential of producing hydrogen from a 250 MW floating off-shore wind farm and a 100 MW on-shore wind farm in Asturias. The project is hoped to generate more than 1500 jobs during construction and operation, with developers applying for funding under the IPCEI scheme.
Turboden wins contract in the Philippines
Feb 4 – Italy-based Turboden, part of Mitsubishi Heavy Industries, has been awarded a contract by the Philippine utility EDC to supply a 20 MW geothermal power plant at Bacon-Manito, on the island of Luzon. The zero-emissions power unit is scheduled to start operations before the end of 2022, and will help lower the local grid’s dependence on fossil energy source.
