Markets

Prices European Electricity Exchange (EEX) have tripled to over €90/MWh since the end of Covid-related lockdowns, as the economic rebound pushed up prices for coal natural gas and carbon emissions. China’s hunger for hard coal in turn drove up the price to €15/MWh in Europe, while gas prices at the TTF hub surpassed €36/MWh.

Mitsubishi Heavy Industries (MHI) will absorb the business operations and employees of Mitsubishi Power by October 1, 2021. Design, manufacturing, sale, installation and engineering of thermal power generation systems will be transferred to MHI while the management of the two companies will be unified to become more efficient and dynamic.

Capital expenditure of oil and gas companies will rise around 3% in 2021 before accelerating to 9% in 2022, Fitch Rating forecasts, though this is “not enough” to recover to pre-crisis levels. The pandemic had reduced 2020 corporate Capex by €36 billion, or about 7% compared to 2019 amid crippling lockdowns.

Regardless of US approval, the Nord Stream 2 pipeline still needs to be given a license to operate by the German regulator BNetzA which is “unlikely to materialise before mid-October,” Energy Aspects assumes. LNG imports will have to make up for the missing supply, pushing up prices at the Dutch TTF gas trading hub.

Russia’s state-controlled Gazprom has been quick to stress its readiness to continue transiting gas across Ukraine, including after 2024. However, new volumes for transit via Ukraine need to be settled “under market conditions and at market prices,” Gazprom said, giving itself some leeway.

Ammonia is set to become a novel zero-emission fuel for Japanese power plants as Woodside Petroleum and Marubeni strive to set up a supply chain to ship the green fuel from Down Under to Hokuriku Electric and Kansai Electric to co-fire their gas-fuelled power plants.

Despite early signs of a recovery, Wärtsilä has faced a 13% plunge in net sales to €2,078 million in the first half of this year as many investments in new power plant capacity continue to be postponed. The build-out of energy storage was “at a good level,” especially when linked to thermal balancing power units.

Despite a rapid build-out, renewables cannot keep up with the pace of global electricity demand growth which requires more fossil generation. After falling by about 1% in 2020 due to the pandemic, demand is set to grow by nearly 5% in 2021 and 4% in 2022, the International Energy Agency (IEA) finds.

Tough talks about Nord Stream 2 are held today during the visit of German chancellor Angela Merkel to US President Jo Biden. To find a “common position” on the Russia pipeline link, Merkel will have to guarantee that Germany would cut it off if Gazprom stops deliveries through Ukraine.

A blistering heat wave and wildfires are forcing evacuations in northern California and severely damaged three interstate power transmission lines. California ISO issued a ‘flex alert’ as it misses out of 10% or 5,500 MW of electricity imports. Emergency gas gensets still prevent the worst.

Electrification of transport and industry is likely to push up Germany’s power demand by 18.7% on 2020 levels to 665 Terrawatt-hours (TWh) by 2030, economy minister Peter Altmaier disclosed today. This implies a renewables and hydrogen build-out, if Germany wants to meet its green energy target.

Utilities in the United States switch to burning thermal coal as gas deliveries to power stations get more expensive amid rising Henry Hub prices, currently around $3.22/MMBtu. Coal power consequently gained 4% in market share to 24% while the share of gas power fell 3% to around 36%, according to US government analysis.

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News in Brief

CCUS market to reach nearly $3bn in 2025

Oct 25 – The global carbon capture, utilization, and storage (CCUS) market will grow from $1.30 billion in 2020 to $1.46 billion in 2021, according to ResearchAndMarket estimates. The rebound comes as companies return to normal operations and sales, after a pandemic-related slowdown. Analysts expect the market will keep growing at a rate of nearly 20% annually to reach $2.97 billion by 2025.

SDG&E accelerates drive towards Net Zero by 2045

Oct 20 – San Diego Gas & Electric Company (SDG&E) has set a new sustainability strategy, outlining new and accelerated goals to help meet its pledge to reach net zero greenhouse gas (GHG) emissions by 2045. SDG&E it now seeks to operate a 100% zero emissions vehicle fleet by 2035 – five years earlier than planned.

B&W develops biomass-to-hydrogen plant in Australia

Oct 19 – B&W's Renewable segment and Port Anthony Renewables Ltd have started to develop a biomass-to-hydrogen energy project in Victoria, Australia, based on B&W’s BrightLoop technology. When completed, the plant is expected to be part of the largest green hydrogen hub in south-eastern Australia.

LNG prices rise faster than oil

Oct 18 – Liquefied natural gas and pipeline supplies have experienced an even sharper increase in prices in 2021 than oil, driven by a combination of circumstances that included a strong recovery in demand in North Asia, southeast Asia and Europe, unseasonal weather and planned and unplanned capacity outages.

Wärtsilä shaft gensets to power two LNG carriers

Oct 14 – The Finish technology group Wärtsilä has been awarded a contract to supply four shaft generators to provide electricity take-off from the main engines of two LNG carriers. The ships are being built at the Hyundai Heavy Industries (HHI) shipyard in Korea on behalf of the Capital Gas Ship Management of Greece.

VoltH2 gets green light for large hydrogen plant

Oct 13 – Vision Hydrogen Corp has announced that its affiliate VoltHe has received building and environmental permits to realise its first large-scale hydrogen plant at the Dutch North Sea Port of Vlissingen. The 5 MW hydrogen plant is located near existing high voltage power and gas infrastructure as well as large wind power assets. Once operational, it will produce around 3,500 tons of green hydrogen per year and will be scalable to 100 MW or 14,000 tons.

Tesla overtakes German e-cars

Oct 12 – Sales of Tesla in Germany has overtaken that of leading German carmakers. In September, more electric Tesla Model 3s were registered in the country than leading domestic models, such as the BMW 3 Series, Audi A4 and Mercedes C-Class combined.

EnerMech spends £500k on crane training tech

Oct 11 – EnerMech has invested £500,000 in new crane simulator training systems at its Luanda (Angola), Doha (Qatar) and Great Yarmouth (UK) facilities. The British company recently formed a joint venture with 3t Energy Group to bring the KraneSIM-6000 equipment to both Qatar and Angola and offer in-country training across client organisations globally.  

Germany finances green hydrogen projects abroad

Oct 8 – The German government has agreed to support green hydrogen projects in other countries with up to €350 million by 2024, the economy ministry said when publishing a directive with relevant guidelines. Moreover, financial support is given to projects that produce and process green hydrogen for storage, transport and use in countries outside the EU through investment grants worth up to €15 million each.

UK e-car sales surge 186%

Oct 6 – Sales electric cars in the UK have surged 186% to a total of 108,000 in 2020 during the pandemic, up from just 38,000 in the previous year. Latest statistics show there were nearly 300,000 pure-electric cars on UK roads at the end of August 2021, and more than 600,000 plug-in models if including plug-in hybrids (PHEVs).

FogHorn deploys AI software at Chugoku Electric Power in Japan

Oct 4 – FogHorn, developer of Edge AI software, has deployed its Internet of Things (IoT) software at the Chugoku Electric Power hydroelectric power plant. The AI solutions will make the power gen process more efficient and enhances workplace safety. Chugoku Electric Power employs nearly 9,200 workers across 114 power units in the western part of Honshū, the largest island of Japan.

Rolls-Royce supplies MTU engines for ferry propulsion

Oct 1 – Rolls-Royce's new MT engines, automation system, and MTU Go! tool for remote service have future-proofed the high-speed catamaran Avemar Dos, run by the Spanish operator Balearia. Four MTU 20V1163 M84 units replaced the previous 1163 units, taking the vessel to a "new level of ecological soundness," the manufacturer says.

GES appoints former Puma Energy Chairman as NED

Sept 30 – Global Energy Storage (GES) has appointed the former Puma Energy Chairman, Graham Sharp, as an NED. Graham will support GES on its ‘new energies’ strategy for the energy transition, focusing on hydrogen fuels and hydrogen carriers space.

Aggreko reaches 2 GW of live power gen capacity

Sept 29 – Aggreko has today announced it has reached 2GW of live global gas power capacity and growth in flare gas to power and stranded gas projects. This new record follows a milestone of exceeding 1GW of delivered flare gas power projects in 2020.

Wärtislä renews O&M agreement with Lafarge Africa

Sept 28 – The Finish technology group Wärtsilä has renewed a long-term Operation & Maintenance (O&M) agreement with Lafarge Africa, a large producer of building materials in Nigeria. The agreement covers the 100 MW Lafarge Ewekoro power plant, which provides a dedicated supply of electricity to the company’s concrete and cement manufacturing processes.

Rolls-Royce supplies MTU engines to Sanlorenzo

Sept 27 – Rolls-Royce business unit Power Systems will become one of the leading engine suppliers for Sanlorenzo, delivering MTU 10V, 12V and 16V 2000 yacht engines with a compact IMO 3 solution. A framework contract from 2022 through 2024 has been signed at the Monaco Yacht Show.

Shell exits Permian Basin

Sept 24 – Royal Dutch Shell has sold all its upstream interested in US Permian Basin to ConocoPhillips for $9.5 billion in cash. Shell’s assets in the Permian include around 225,000 net acres with a current production of around 175,000 barrels per day equivalent.

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