Markets

Northwest European near-curve gas prices have fallen in recent days. With the TTF Oct-19 trading as low as 3.86 $/mmbtu, this low price drives up demand for LNG shipping to higher-priced markets in Asia. Energy Aspects says the TTF Oct-19 contract has already priced in much of the incremental demand from the power sector switching to gas from coal.

Nearly 16 gigawatt of utility-scale gas power generation has been added in Florida between 2008 and 2018 – the most in any U.S. state. The share of natural gas in Florida’s energy mix surged from 47% to 72%, and EIA analysts anticipate gas-fired generation will continue to displace less cost-competitive plants fuelled by coal and petroleum liquids.

Spot LNG deliveries to Japan have decreased despite record-low prices as power generators like Jera, Tepco, Kepco and Chubu Electric prefer thermal coal over natural gas. Peak electricity demand is now largely met by thermal coal which remains the cheapest fuel source.

Wind and solar power are forecast to outperform combined-cycle gas power plants in most parts of the United States on a levelized cost of energy (LCOE) basis through 2040. However, Wood Mackenzie finds that combined-cycle gas power stations beat renewables on cost in Florida, the Midcontinent and in some spots in PJM West where gas prices are exceptionally low.

Russia's Novatek and Japan’s Saibu Gas have signed a Heads of Agreement (HoA) to set up a joint venture to market LNG and natural gas to end customers. This agreement will include the development of gas-powered generation in Japan, bunkering business in Asia, and the construction and operation a new storage tank at the Hibiki LNG terminal.

Speculative orders for Floating Storage and Regas Units (FSRU) are on the rise as developers want to have the vessels ready for quick deployment once local regulators issue a permit for an LNG-to-Power project. There is a trend towards owing FSRUs rather than chartering the units, says Tor-Ivar Guttulsrød, director FSRU & FLNG at ABS Global Gas Solutions.

Headline numbers of India’s 350 MW gross installed capacity versus 180 GW in maximum load are misleading. The Brookings Institute finds that power plant outages due to fuel shortages or technical faults as well as grid-level power losses reduce the actual “recoverable surplus” to just 30 GW, sometimes less.

Though China’s natural gas production are likely to double to 325 billion cubic metres by 2040, the country’s gas import dependency keeps growing largely due to rising demand and lower than expected domestic production of shale gas and coal bead methane (CBM).

Genscape, a global provider of real-time energy markets data, will be acquired by the data analytics provider Verisk which also owns the consultancy Wood Mackenzie. Versik agreed to buy Genscape for $364 million in cash to enhance WoodMac’s intelligence in energy data and analytics.

Statisticians at the U.S. Energy Information Administration (EIA) have developed two novel ways to compare electricity use from noncombustible renewables with other energy sources: the fossil fuel equivalence approach and the captured energy approach.

The U.S. fracking sector “disappoints yet again” is the bleak verdict of IEEFA’s second quarter earnings review of oil and gas companies. Only 11 of the 29 scrutinized companies achieved positive free cash flows, and together they generated $26 million free cash flows – “ too little” to dent their $100 billion in long-term debt.

Norway’s Equinor and Russia’s Gazprom have lost market share in Europe for the first time in four years as LNG shipments to the region tripled over the past 10 months. Sluggish spot demand from Asia made shippers divert excess cargoes to Europe instead.

Widespread blackouts across Britain eleven days ago were caused by a lightning strike. This led to almost simultaneous outages of two generators, taking 1,500 MW off the grid – much more than the 1,000 MW of back-up power available, National Grid told UK energy regulator Ofgem.

Natural gas deliveries to U.S. LNG export plants set a monthly record in July, although gas use for power generation spiked to 44.5 billion cubic feet (Bcf) on July 19. Healthy shale gas output drove down spot gas prices at the Chicago Citigate – the regional price benchmark for Midwestern states to levels lower than those at Henry Hub.

GE's share price keeps recovering fast after investigator Harry Markopolis made the stock plunge over 11% in one day, alleging $38.1 billion in potential losses that were hidden through a “bigger fraud than Enron.” Reacting swiftly, GE CEO Larry Culp bought shares worth $2 billion and dismissed the claims as "meritless, misguided and self-serving speculation."

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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.