Projects & Finance

Saudi Electricity Company (SEC), one of the largest utility worldwide in terms of installed power generation capacity, has contracted Shaw Group to implement a fleetwide services program for its oil and gas-fired power plants. Shaw did not disclose the contract value but said it will be included in the orderbook for Q4 2012.

Rolls-Royce, the global power systems company, has won a contract to supply two industrial Trent 60 gas turbines to power Lukoil's Stavrolen Power Plant in Budennovsk, Russia. The equipment will be manufactured at Rolls-Royce facilities in Montreal, Canada, and Mount Vernon, U.S., ready for shipment from 3Q 2012 and entry into commercial service in 4Q 2013.

MAN Diesel & Turbo has been selected to build an 88 megawatt diesel power plant in Thika City, near Kenya's capital Nairobi. Construction works at the site have started and MAN Diesel & Turbo said it expects the plant to start operations in 2013.

Black & Veatch has won several contracts from Harbin Electric Company Ltd to deliver three combined cycle power plants in China. "We are entering a golden age for natural gas powered plants and we're seeing accelerated advances in China," Dr Suqing Wang, senior project manager for Black & Veatch's global energy business commented on the deal.

Austria's most efficient thermal power plant has started operations after Siemens Energy officially handed over the Mellach combined-cycle power plant (CCPP) to the Austrian utility Verbund Thermal Power on Friday. The plant's record district heating output of 400 MWth facilitates that more than 80 percent of the energy in the fuel is put to effective use, according to Siemens Energy.

Braden, an operating division of Global Power Equipment Group, has won a contract worth 8 million Euros to provide gas turbine exhaust systems to Siemens Energy for the Khormala phase I Combined Cycle Power Plant (CCPP).

Gama Energji is in talks with two potential partners about setting up a tolling agreement to market the electricity generated at its Kirikkale CCGT project with the aim of reducing financing costs.
"We want to have a tolling accord in place - as a hedging instrument - before we close project financing for Kirikkale, as it could give us a reduction in interest of about 150 basis points," Orkun Eyilik, Commercial Manager, Gama Energji told 'Gas to Power Journal' today.

Financing for new gas-fired power plant is getting tight in Turkey and fewer projects will come to fruition. "Combined-cycle gas turbine (CCGTs)  plants with less than 50% operational efficiency will not get financed in Turkey" Emre Hatem, Manager, Project and Acquisition Finance, Garanti Bank said at a conference organised by 'Gas to Power Journal' in Istanbul today. He forecast a reduction of the share of gas in Turkey's energy mix from currently 45% to 25% by 2020.

General Electric (GE) will supply the Japanes steel producer JFE Steel Co. with a heavy duty Frame 9E gas turbine system for a steel gas-to-energy recovery project at its East Japan Iron Works in Chiba City, east of Tokyo. GE said today it will start delivering the equipment to Japan in December 2013.

Karoo Sustainable Energy (KSE) has won the 2012 Africa Competitive Strategy Leadership award after it negotiated the first Power Purchase Agreement (PPA) with Botswana Power Corporation (BPC) as a step towards structuring the financing of a 180 MW gas-fired power plant project.

Sasol New Energy plans to start operations of its gas engine power plant project in Sasolbury, South Africa, before the end of the year. The 140 MW plant is currently under construction and is set to run on 18 Wärtsilä 20V34SG generating units, fuelled by natural gas imported from Mozambique.

Investment into new power generation capacity in the U.K. has ground to a halt as utilities and banks lack certainty about the U.K.'s future market design. "The uncertainty surrounding the Electricity Market Reform (EMR) has put a complete block on financing," Alan White, Head of Conventional Energy at Lloyds Bank Corporate Markets told delegates at PowerGen2012.

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News in Brief

BelGAS launches new pressure regulator

May 29 – BelGAS has introduced its new P1098 High-Capacity Pressure Reducing Regulator, a large-volume regulator for natural gas, propane and other fuels. The pilot-operated device has a large-area actuator diaphragm, allowing for fast and accurate response to modulating gas flow conditions. It is adaptable for low to extra-high pressure—up to 400 psi main valve inlet.

GE to sell lightning business

May 28 – GE has signed a definitive agreement to sell its lighting business to Savant Systems, a provider of smart homes. CEO H. Lawrence Culp called the divestment “an important step in the transformation of GE into a more focused industrial company.” The transaction is expected to close in mid-2020.

China’s fuel demand recovers

May 27 – The Chinese government has lifted restrictions on private travel since April which pushed up demand for transport fuels. Gasoline demand has recovered particularly fast and is expected to return to last year’s levels by June 2020. Wood Mackenzie estimates gasoline consumption to reach 3.4 million barrels per day (b/d) in the second quarter, down just a 0.8% year on year. Diesel or gasoil demand is expected to reach 3.4 million b/d in Q2 2020, a 3% decline year-on-year. Overall, China’s oil demand is seen rise a “modest” 13.6 million bpd, or 2.3%, in the second half of 2020.

Wärtsilä to retrofit CHP in Spain

May 26 – The Finish engine maker Wärtsilä has bagged an order to supply and install a 34SG gas-fuelled engine generating set for Rofeica Energia's combined heat and power plant in Barcelona, Spain. The installation of the gas engine will allow Rofeica to switch the CHP from heavy fuel oil to gas-fuelled operation, reducing emissions.

New York body rejects William’s plans for gas pipeline expansion

May 21 – New York’s and New Jersey’s state bodies for environmental conservation have rejected Williams’ plans for the Northeast Supply Enhancement project, designed to transport 400 million cubic feet per day of gas from Pennsylvania to New York. The state bodies had already denied wetland permits in 2019, but Williams pipeline subsidiary Transco filed another application with the U.S. Federal Energy Regulatory Commission (FERC), arguing firm services under the project were agreed with UK’s National Grid for customers in New York City districts of Brooklyn, Queens, Staten Island and Long Island.

UK inflation at 4-year low amid falling energy costs

May 20 – The rate of inflation in the UK has fallen to a four-year low as the pandemic pushed down global oil and fuel prices which translate into lower wholesale power prices. The consumer price index fell to an annual rate of 0.8% in April, down from 1.5% in March, according to the Office for National Statistics.

Deficit grows in German green energy fund

May 19 – German regional grid operator TransnetBW has warned of a growing shortfall in the country’s fund for green energy sources, financed under the so-called renewable energy (EEG) levy. TransnetBW, the TSO in southwest Germany, said “due to the EEG cost allocations defined for 2020, we anticipate there will be a negative year end bank account balance in the high three-digit million euro range for 2020.”

Spanish gas companies ‘resilient’

May 18 – Spain’s regulated gas companies “should prove to be resilient” to external shocks arising from coronavirus containment measures, Standard & Poor’s analysis finds, calculating with an average drop in EBITBA at less than 3% in 2020. A new remuneration framework for 2021-2026, recently enacted by the Spanish government, provides enhanced visibility rated grid operators amid the pandemic.

German electricity prices second highest in EU

May 15 – Taxes and the renewable energy surcharge have pushed up Germany’s household electricity prices to the second highest level in Europe, topped only by prices in Denmark. While Danish households paid 29.2 Euros per 100 kWh on average in the second half of 2019, prices in Germany averaged 28.7 Euros, according to the EU statistics office Eurostat.

Calpine’s Q1 earnings fall

May 14 – Calpine, America’s largest generator of electricity from gas and geothermal, has reported a net income of $128 million for the first quarter of 2020, down from $175 million in the prior year period. Lower commodity margins and unfavourable change in income taxes were partially offset by earnings from hedge positions for the three month ending March 31.

Siemens to supply hybrid plant in the Philippines

May 13 – Berkley Energy has contracted Siemens Energy to build a hybrid power project on the island of Mindoro in the Philippines. The project links 16 MW wind power with battery storage, stabilizing energy supply in a remote location with a weak link to the grid and reducing its dependence on diesel.

U.S. energy emissions fall

May 12 – Energy-related carbon emissions in the United States have fallen more than energy consumption, down 2.8% over the course of last year to 5,130 million metric tons (MMmt). Power sector emissions were down 145 MMmt, due to a switch from coal to gas and renewables. In April 2020, emissions experienced another unprecedented fall in due to Covid-19 lockdowns.

MAN expands Omincare concept

March 11 – MAN Energy Solutions’ service brand has extended its ‘PrimeServ Omnicare’ concept from turbomachinery to the marine and power segments. The one-stop service solution is now also applicable for maintenance of third-party machinery, including engines, turbochargers and related auxiliaries.

MIVOLT launches cooling fluid

May 7 – MIVOLT, part of the British company M&I Materials, has launched two specialist fluids to improve cooling efficiency at data centres. The electricity demand of data centres is forecast to rise to 20% of global supply to accommodate lifestyle changes like 5G internet network, autonomous vehicles and bitcoin mining.

Germany adds 1,300 km to power grid

May 6 – Germany has made progress in expanding its strained power grid. According to the Federal Network Agency (BNetzA), over 1,300 kilometres of new power transmission lines have been built and another 830km approved. A further 3,600km are planned to be built by 2030 to alleviate grid bottlenecks and allow transporting rising volumes of offshore wind southbound.

 

 

 

Oman nationalizes first IPP

May 5 – Manah Power, the first privately-run Independent Power Project (IPP) in Oman, has been transferred to state ownership, following the expiry of a Power Purchase Agreement (PPA) between United Power Company and state-owned OPWP. Manah IPP was developed under Build-Own-Operate-Transfer (BOOT) model, which stipulates an eventual nationalization of the assets – a feature absent in subsequent IPPs.

U.S inventories at record highs

May 4 – Inventories for crude oil and natural gas have reached a new record high in the United States, as fuel demand declines both for transport and the electric power sector. From March 13 – when a national emergency was declared due to the Covid-19 pandemic – to April 24, U.S. commercial crude oil inventories increased by 74 million barrels, or 16%, according to government figures. The acute scarcity of crude storage on April 20 led to a sell-off of future contracts at negative prices.