As the first Tesla cars are rolling off the production line at the new Gigafactory near Berlin, the US carmaker helps accelerate Germany’s move to e-mobility in order to wean itself off fossil fuel imports. Energy minister Robert Habeck underlined: “We can not only replace [Russian] oil with different oil, but we can electrify.”
Fitch Ratings has more than doubled its forecast for prices at Europe’s benchmark gas trading hub TTF to $20 per thousand cubic feet (mcf), reflecting the risk of a halt in Russian supplies and the struggle of EU importers to secure alternative volumes in a tight market. Over in the US, Henry Hub prices are fairly unaffected.
European gas companies struggle to source enough additional LNG to fulfil the Commission’s plan of reducing Russian gas supplies by 102 bcm before year-end. Persuading Asia to use more coal could free up around 50 Bcm of LNG, analysts reckon, though it would be cheaper if EU power generators switched from gas to coal and nuclear instead.
Energy-related CO2 emissions have risen to their highest-ever level, as the global economy rebounded strongly from the pandemic and relied heavily on coal to power that growth. Fuel-by-fuel analysis by the International Energy Agency (IEA) shows that global CO2 emissions surged 6% in 2021 to 36.3 billion tonnes, more than offsetting the pandemic-induced decline.
Germany’s minister for economic affairs Robert Habeck has entered an energy partnership with Qatar, paving the way for LNG importers to fine-tune contract details. Bracing for a period without Russian gas, Berlin is considering all options – LNG but also extending the lifetime of coal- and nuclear power plants, scheduled to close this year.
Following a 7.4-magnitude earthquake near Fukushima, some 6.5 GW of large-sized coal and gas power capacity has been shut down, leaving 2.2 million Japanese households in the dark. PowerRT monitoring platform shows that several LNG-fuelled power stations – like Futtsu – seem to fill the demand gap of about 2 GW, caused by the coal power outages.
Population growth and rapid urbanisation has doubled electricity demand in sub-Saharan Africa over the last 15 years, with solar PV and energy storage installations set to reshape the region’s power sector. Wood Mackenzie said it would cost an estimated $350 billion to electrify the region by 2030, with service providers advised to focus on off-grid solutions.
Italy, Germany, as well as Czechia, Romania and Bulgaria have suspended plans to phase-out coal power in order to wean of their reliance on Russian gas imports. Several Czech utilities already switched from gas back to coal, while RWE as well as Vattenfall, EnBW and Steag review decommissioning timelines for coal-fired power plants in Germany.
Ambitious renewable energy targets in Africa are the “soundest and cheapest strategy” for electrifying the continent, says Wärtsilä’s VP Energy for Europe and Africa, Kenneth Engblom. In Africa, wind and solar must become the new baseload even though they are intermittent, he argues, as combining them to flexible gas engine gensets keeps the system in balance.
Inflationary pressures limit the EU Commission’s plan to replace 112 bcm of Russian gas imports by end-2022 through greater LNG purchases, Fitch Ratings reckons. Considering “extremely high” prices for spot LNG, the Commission is expected to relax windfall taxes on energy companies and recycle revenues from the EU Emission Trading Scheme to support households and small businesses.
Europe is struggling to offset Russian gas due to import capacity constraints, ING bank says, estimating EU countries could boost LNG imports by about 68 bcm, or 63%, in a ‘best-case scenario’. But that's far short of the 155 bcm imported from Russia last year – hence a quick shift to green power sources is essential.
News in Brief
FlatFish drone inspects Shell fields off Brazil
May 25 – Shell and Petrobras have contracted Saipem to use its FlatFish subsea drone in pilot projects to inspect two ultra-deepwater oil and gas fields offshore Brazil in over 2,000-meter depth. Initial tests will be carried out at Saipem’s base in Trieste, Italy, with a view to deploying the drone to Brazilian waters in the third quarter of 2022.
Gazprom cuts off supplies to Finland
May 24 – Gazprom has completely suspended gas supplies to Gasum after the Finish company refused to pay in roubles, the two companies said in separate statements. Gasum is confident it will be able to supply all its customers with gas imported through the Balticconnector (2.6 Bcm/y) from Estonia.
Heisco wins tender in Kuwait
May 23 – Heavy Engineering Industries and Shipbuilding Company (Heisco) has won a KD1.8 million ($6.4 million) tender – floated by the energy ministry of Kuwait – to install, examine and test four high voltage transformers at the Doha East Power Generation and Water Distillation Station. Heisco, founded in 1974 and listed on the Kuwait Stock Exchange, has developed into one of the largest energy engineering groups in the emirate.
JERA issues bond to finance power plant upgrades
May 20 – Japan’s leading LNG importer and power producer JERA has issued its first energy transition bond to help finance the accelerated deployment of decarbonisation technologies like hydrogen and ammonia co-firing, as well as the decommissioning of older thermal power stations. The bond is offered in two tranches: a 12 billion yen ($83 million) for a 5-year bond with a 0.420% per annum coupon, and a 8 billion yen $62 million) for a 10-year bond with a 0.664% rate coupon.
Rolls-Royce conducts laser field tests in the US
May 18 – Rolls-Royce has successfully conducted laser field tests to demonstrate ‘deep magazine’ power capability for directed applications in connection with Lockheed Martin’s layered laser defense project. Deep magazine power can be provided by a battery-only system, but the Rolls-Royce ColdFire system includes both battery-powered and near-continuous firing modes provided by M250 gas turbine engines.
Gas vs oil ratio increases in the Bakken
May 17 – The ratio of natural gas to crude oil production has risen in North Dakota’s Bakken region since 2008, and continues to accelerate. According to the US Energy Information Administration's (EIA) Drilling Productivity Report, annual gas gross withdrawals in the Bakken increased by 9% to an annual high of 2.97 Bcf/d in 2021, even though the region’s crude oil production fell by 6%.
Middle East shifts to gas power
May 16 – The Middle East, a region vulnerable to climate change, is undergoing a major shift from petroleum-based power plants towards gas-fired generation and renewable power sources. Capacity additions of over 185.46 GW are the pipeline, according to ResearchandMarkets, as the regions electricity demand for industry and residential cooling is set to grow. In fact, cooling already accounts for 70% of residential power demand.
Carbon utilisation in strong demand
May 13 – The market for carbon utilisation is forecast to grow rapidly from the 2030s onwards to surpass $285 billion by 2042, driven by rising climate commitments and a favourable regulatory framework. In its latest report IDTechEx also highlights the role of technology advances such as thermodynamics which help sequester CO2 permanently.
MTU gensets approved for biofuels
May 12 – Rolls-Royce has gained approval to use synthetic fuels in its MTU Series 4000 and Series 1600 diesel engines for power generation application. Field testing confirmed both engines can use a range of sustainable fuels including biomass-to-liquid, hydrotreated vegetable oil and power-to-liquid fuels such as e-diesel.
E.ON tells Germans how to save gas
May 11 – A large-scale switch to heat pumps, solar power and better demand-side management could help save Germany nearly 100 TWh of natural gas per year, E.ON has said, calling on households to contribute to Europe’s efforts to reduce reliance on Russian gas imports. “If 10% of the homes in Germany are equipped with solar PV installations, 20% of gas boilers are replaced by heat pumps, and the average temperature in all households is reduced by one degree Celsius on average, this would lead to natural gas savings of 103 TWh per year," E.ON Energy CEO Filip Thon said, noting this volume would equate to about 30% of Germany’s current gas imports from Russia.
Exelon Q1 earnings lower following Constellation cave-out
May 10 – Exelon has reported lower first quarter earnings and a higher operating revenue, having completed the separation of Constellation Energy – Excelon’s former power gen business. Focussing now solely on transmission and distribution, Exelon’s net income from continuing operations for the first quarter of 2022 decreased to $0.49 per share from $0.53 a share in pre-year period. In contrast, adjusted operating earnings notched up to $0.64 per share, primarily due to due to higher electric distribution earnings at ComEd from higher rate base and higher allowed electric distribution. Rate increases at Excelon’s group companies PECO, BGE, and PHI were partially offset by higher depreciation expenses at BGE and PHI.
South Africa to add 2.6 GW of new capacity
May 9 – South Africa’s Department of Mineral Resources and Energy, has just announced the REIPPPP BW6 Request for Proposals (RFP). The bid round will add 2,600 MWs of new capacity to the energy mix. The ministry seeks to procure 11,813 MW of electricity from various power sources including renewable energy, storage, gas and coal.
GE Gas Power authorized as CVE Numbering Authority
May 6 – GE Gas Power’s increased focus on cybersecurity has been recognized by the Common Vulnerability and Exposures Programm as a ‘CVE Numbering Authority (CNA). As such, GE Gas Power can now assign CVE identification numbers to newly discovered vulnerabilities potentially related to its products and allow GE Gas Power to directly publish new CVE Records and streamline the reporting process.
Heliogen gets nearly $90m in funding
May 5 – Heliogen has moved from design into testing and implementation of its supercritical CO2 power gen system that will be deployed for Woodside in California. The system consists of a 5 MWe sCO2 power block integrated with high temperature solid media thermal energy storage. The demonstration project is being funded with up to $50 million from Woodside, along with $39 million from the U.S. Department of Energy (DoE).
Capstone to install microturbine in the Caribbean
May 4 – E-Finity Distributed Generation, Capstone's distributor for the Mid-Atlantic, Southeastern United States and the Caribbean, has secured an order for two C1000S microturbines for a government water authority in the Caribbean. The 2 MW system will provide emergency standby power to several pumping stations throughout the remote island community and is scheduled to be commissioned towards the end of 2022.
Forecasting solar and energy storage in CAISO
May 3 – Marubeni has chosen Veritone’s AI-based distributed energy resource management solution (iDERMS) to provide price, demand and generation forecasts at their pilot project in the California Independent System Operator (CAISO) SP-15 region. In addition to day-ahead and real-time generation figures, Veritone will also forecast production and demand for the overall CAISO region.
Forecasting solar and energy storage in CAISO
May 2 – Marubeni has chosen Veritone’s AI-based distributed energy resource management solution (iDERMS) to provide price, demand and generation forecasts at their pilot project in the California Independent System Operator (CAISO) SP-15 region. In addition to day-ahead and real-time generation figures, Veritone will also forecast production and demand for the overall CAISO region.
