Markets

As Japanese utilities keep restarting shuttered nuclear power units, analysts say the return of cheap nuclear power will displace baseload generation from fossil sources, in particular natural gas. Japan has to import its entire gas demand as LNG, which is more costly than thermal coal, so a rise in nuclear power output is forecast to reduce LNG shipments by up to 10% this year.

Norway’s Golar LNG has started to unload the first commissioning cargo at its Golar Nanook FSRU (floating storage and regas unit) offshore Sergipe, northeastern Brazil. The supply is designated for the Porto de Sergipe-I Power Project, a 1.5GW combined-cycle gas power plant, developed by Golar in a joint venture with Stonepeak Infrastructure Partners.

U.S. major ExxonMobil, together with Qatar Petroleum, has made a gas discovery of 5-8 trillion cubic feet (Tcf) its Glaucus-1 well off Cyprus. The find adds another giant discovery to the East Mediterranean but a lack of subsea pipelines hamper the use of this gas in the local power sector, so Exxon considers teaming up with other majors to monetize the find through a new LNG venture.

Electric load at the MISO grid in the Midwest of the United States was pushed to its limits during the recent period of extreme cold weather in late January. According to EIA figure, day-ahead gas spot prices reached $7.42/MMBtu) at Chicago, the main hub in the region, while MISO day-ahead electricity prices surged to $120/MWh.

Enagas, the Spanish gas network and LNG terminal operator, has announced construction of the Trans Adriatic Pipeline (TAP) - part of Europe’s Southern Gas Corridor - is 85% complete. Enagas saw a 1% rise in its 2018 annual profit to 442.6 million Euros amid a 4.5% increase in conventional gas demand.

Spanish-owned Scottish Power has unveiled its “biggest ever investment in the UK in a single year," announcing to splash out £2 billion on green energy in 2019. Programmes include building giant batteries to store excess energy at wind farms, investing in smart grids for customers to buy and sell electricity, and charging points for electric cars.

U.S. engineering company McDermott International has posted a fourth-quarter loss, largely due to $2.2 billion in charges related to works on Cameron LNG and Freeport LNG and higher construction costs for Calpine’s York 2 Energy Center. The Houston-based McDermott today reported a net fourth quarter loss of $2.8 billion – a stark contrast to its $26 million profit in Q4-2017.

Natural gas will become the fastest-growing energy source in the coming decade, displacing coal as a fuel for power plants and heavy industries, Royal Dutch Shell said in its 2019 LNG Outlook 2019. Global energy demand is seen grow 18% by 2035, spurred by clean-air policies in China and India, with gas set to meet 40% of that largely through expanding LNG trade.

Economic growth, combined with a rapidly expanding population, has led to an investment boost in the Indonesian power sector which forecast to expand at a rate of 18.7%, reaching a market value of $63.6 billion by the end of 2022. Coal-fired power will retain its leading position but decentralized LNG-fuelled projects are seen gaining attractiveness.

Nuclear restarts and rising coal-burn for power generation has decreased LNG imports to Japan. Nine of Japan's 54 nuclear power plants have re-started, leading to a 8.7% drop in LNG shipments to 7.54 million tonnes in January, down from 8.26 mt a year earlier.

Reciprocating internal combustion engines –  typically used for backup, standby, or emergency power – are playing a fast advancing role in utility-scale power generation applications, according to EIA findings. In Texas alone, the share of gas-fired recip engines surged 20% to over 4,600 MW largely as a reaction to the state’s rapid growth in installed wind power capacity.

The Japanese energy majors JERA and Tepco Power Grid have agreed to jointly invest up to $32.68 billion (£25 million) in Zenobe Energy, a UK-based battery storage company. Zenobe owns and operates some 73 MW of batteries and is currently looking to use its technology in related business areas, notably the charging of electric vehicles.

The Japanese trading house Itochu has pulled the plug on investments in thermal coal mines and coal-fired power projects. Having just sold its stake in the Rollestone mine in Queensland, the Japanese firm said it seeks to increase the renewables ratio in its power plant portfolio to over 20% by the end of fiscal 2031.

Abundant supply of cost-competitive shale gas, combined with technological advances, has led to an ever-increasing average size of a combined-cycle gas power block in the United States. While the average CCGT had about 500 MW installed capacity before 2014, the power block capacity has since then increased to an average 820 MW, according to the EIA’s electric generator report.

Indonesia's upstream regulator SKK Migas has announced a significant gas discovery at the Repsol-operated Sakakemang PSC onshore Central Sumatra, Indonesia. If pre-drill estimates are realised, it would be the largest discovery in the country since ExxonMobil's Cepu find in 2001. The latest discovery has the potential to alter Indonesia’s gas supply balance and power generation mix.

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News in Brief

Smart grid market to top $70bn by 2027

April 24 – The global Smart Grid Market is expected to reach around $70 billion, growing at an annual rate of 15.56% in the coming years through to 2027.North America is forecast to see the largest revenue growth, according to ResearchNester, while Europe also shows promising growth in smart grids due to high awareness for decentralized power generation, battery storage and conserving energy.

China eases ban on coal power

April 23 – The Chinese National Energy Administration (NEA) has allowed 11 provinces to resume building coal power plants in a move that lies bare the country’s dependency on thermal coal even after several hundred billion dollars were invested cleaner energy sources, notable wind, solar and natural gas. Areas earmarked by NEA for new coal power plants include Qinghai, Chongqing, Guangxi, Guangdong, Yunnan, Guizhou and Henan.

$500m Birdsboro plant gets powered up

April 17 – Birdsboro Power, a subsidiary of EmberClear of Canada, is in the process of commissioning the $500 million Birdsboro open-cycle gas power plant. Built on a site of the former Amourcast steel foundry, and driven by a GE 7H02 turbine, the new power unit will generate about $500,000 in revenue for the Reading Area Water Authority and another $125,000 city of Reading, Pennsylvania. All electricity will be supplied into PJM Interconnection, the power grid operator in the U.S. Northeast.

Gas now dominant fossil fuel in Europe

April 17 – Rising cost of carbon emissions and closures of coal power stations throughout Europe have led to gas-fired generation overtaking the output of other fossil fuels for the first time. According to EnAppSys figures, gas power plants in the EU produced 117 TWh of electricity in the first quarter of 2019, compared with a combined 110.9 TWh from coal, lignite and gas-to-coal plants.

ABB, Porsche co-develop electric vehicle chargers

April 16 – ABB and Porsche have agreed to develop electric vehicle chargers for Porsche Japan’s new electric vehicles, including Tayan – the carmakers’ first fully electric car due to be launched in 2020. Under the deal, Porsche will install ABB chargers at its public facilities across Japan, creating a network of fast-charging stations for its electric vehicles. The first installation is set to go live in mid-2020.

Power gen from biomass flatlines

April 15 – Increases of U.S. electricity generation from biomass have stopped after a decade of growth. Power produced from biomass totaled 70.6 million megawatthours (MWh) in 2018, or about 2% of total U.S. electricity generation, according to EIA figures. Having grown from 2004 through 2014, and the 2018 output was 2% below its peak generation of 71.7 million MWh.

Aeroderivative GT market to top $3.5bn by 2024

April 12 – The global market for aeroderivative gas turbines is seen grow at a 7% rate to surpass $3.5 billion by 2024. A main growth driver, according to Global Markets Insight, will be the rising adoption of small-scale turbine-driven cogeneration plant and the trend towards decentralized energy supply.

Lumenaza creates regional green power grids

April 11 – Utility-in-a-box software, developed by Lumenaza, creates a regional green power grid by connecting producers and consumers of locally produced wind and solar energy. The system monitors renewable power output, balances supply and demand, and can help organize the billing process. Pilot projects have been implemented with two of Germany’s big utilities, E.ON and EnBW as well as with various smaller players.

MHPS licenses H-25 turbine production to Chinese manufacturer

April 10 – Mitsubishi Hitachi Power Systems (MHPS) has agreed to license production technology for its H-25 series gas turbines to the Chinese manufacturer CSIC Longjiang GH Gas Turbine Co. The agreement will establish a small local supply chain which helps expands MHPS’ share in the Chinese market, the Japan-based company stated. So far, MHPS received five orders for H-25 Series gas turbines, or nine units in total, from Chinese power plant developers.

SIEW 2019 to focus on energy transformation

April 9 – “Accelerating Energy Transformation” will be the theme for the Singapore International Energy Week (SIEW) 2019. This theme has been chosen by the Energy Market Authority (EMA) of Singapore to address mounting challenges in Asia over meeting climate change commitments against a backdrop of continuously rising energy demand.

ENGIE launches 1st mini-grid in Zambia

April 8 – The French utility ENGIE has inaugurated its first PowerCorner – an off-grid renewable energy solution – in the Zambian village of Chitandika. Located in the East of Zambia, Chitandika counts 1500 inhabitants who previously had no access to electricity.

Global gas engine market to reach $4.4 billion by 2020

April 5 – Over the next five years, the global gas turbine market is forecast to grow 11.1% annually in terms of revenue, reaching a market size of $24,100 million by 2024, up from $14,300 million in 2019. Market-leading companies include: GE, Siemens, Ansaldo Energia, MAN Energy Solutions, Mitsubishi Hitachi Power Systems and Shanghai Electric Group.

EDAC, Siemens seek ‘industrial app’ for 3D-printing

April 4 – Siemens is intensifying its cooperation with the EDAG Group, an independent engineering company for the automotive industry, to promote industrial applications of additive manufacturing (AM), also known as 3D printing. The companies’ joint "NextGenerationSpaceframe 2.0" project is on show at the Hannover Messe this week.

ABB electrifies Lodi campus of Milan University

April 3 – The Swiss manufacturer ABB will ensure smarter, safer and more reliable electricity supply for students at the Milan University’s new campus in Lodi. Covering an area of 20,000 square meters, the campus has installed ABB’s UniSec switchgear and main distribution switchboard solution, System pro E power.

Chevron launches $90m Fund VII

April 2 – Chevron Technology Ventures (CTV) has set up Fund VII, a new $90 million fund focused on venture capital investment across the energy industry. Investments target early- to mid-stage companies as well as limited partnership funds with the aim of supporting breakthrough technologies that have the potential to improve Chevron’s oil and gas business performance.

Siemens to implement VW Industrial Cloud

April 1 – The German carmaker Volkswagen has chosen Siemens as integration partner for the VW Industrial Cloud. Based on Siemens’ MindSphere system, the VW Industrial Cloud will link production systems, machinery and equipment of various manufacturers at the 122 Volkswagen manufacturing plants worldwide. The resulting data transparency and analysis is meant to enhance productivity at the sites.

Marubeni, 4R Energy to deploy large refurbished batteries

March 29 – Marubeni Corp and 4R Energy, along with SIGNET EV have achieved a Proof of Concept (PoC) using 4RE’slarge refurbished batteries for the development of the world’s first mass-productional EV charger in Namie-machi, Fukushima-Prefecture. The installation, with an output of more than 50kW, helps the community reduce electricity demand from the central power grid, which saves costs.