Electricite de France (EDF) has signed a deal buy GE’s steam turbine factory for nuclear power plants in Belfort, as the American OEM seeks to cut debt while the French government wants to build new reactors. Finance minister Bruno Le Maire said “tens of billions of euros” would have to be spent to generate CO2-free energy, mostly from new nuclear.
Siemens Energy has cut its outlook after wind division Gamesa warned of continuing supply chain issues, piling more pressure on the German company to fully take over and restructure the unit. CEO Christian Bruch called the setback “disappointing” but pointed at the strong order intake of the company’s Gas and Power segment.
Russian gas deliveries to Europe has already fallen – and replaced by LNG – to such a degree that halting the remaining flows through Ukraine would have “a limited additional impact.” According to IHS Markit figures, LNG shipments to Europe surged in January, covering 34% of total supply while Russian pipeline gas fell to just 17%.
BP has reported a profit of $12.8 billion for 2021, the highest in eight years, as commodity prices soared during the post-pandemic economy rebound. Shifting focus, the British oil major aims to earn $9-10 billion from “resilient hydrocarbons” by 2030 – mostly from bioenergy, electric vehicle charging, renewables and hydrogen.
Risk of unseasonably cold weather and geopolitical tensions will keep gas and electricity prices very volatile in the coming weeks, the International Energy Agency (IEA) reckons. Global gas consumption rebounded 4.6% in 2021, more than double the scale of the pandemic-induced decline, and supply could not keep pace which resulted in steep price spikes.
Russia’s state-dominated Gazprom is pivoting East and has agreed to boost long-term supplies to China National Petroleum Corporation (CNPC) via the so-called Far Eastern route. Once the pipeline reaches full capacity, supplies will grow by 10 Bcm to a total 48 Bcm, including deliveries via the Power of Siberia gas trunkline.
Price-savvy Chinese energy importers are buying less LNG, particularly spot cargoes, as import cost are higher than domestic sales prices. These sky-high prices make it financially unattractive for China’s numerous smaller third-party importers to pay for regas terminal slots from the state infrastructure company PipeChina.
Russia’s state-dominated Gazprom has admitted supplies to Western Europe were reduced by more than 41% year-on-year in January 2022, though it claims “gas deliveries are carried out in full compliance with contractual obligations.” Production in January notched up 1%, or 0.5 Bcm to 47.4 Bcm but most additional volumes were sent to Bulgaria and China.
Sharp spikes in electricity prices have hit businesses and households around the world which could cause political tensions, the head of the International Energy Agency (IEA), Fatih Birol warned. In Europe, wholesale electricity prices in Q4-2021 were more than four times their 2015-2020 average and gas shortages also propelled up prices in Japan and India.
Germany’s new government considers enacting minimum gas storage levels and a strategic reserve as storage facilities are only 40% full – far less than in previous years. Storage levels are very low across Europe as Gazprom deliberately lowered gas flows by 25% since November, sending prices soaring and forcing the EU to shield against a possible halt of all Russian imports.
Finish technology group Wärtsilä has reported a 92% surge in order intake in the fourth quarter of 2021 amid solid sales and profits but its operating margin disappointed investors. CEO Hakan Agnevall said the situation in the energy market had stabilised not least thanks to major power plant orders from Mexico and Brazil.