Regulation & Policy

Germany’s coalition government has approved a ‘climate pact’ that allocates up to €8 billion to finance initiatives from 2022. Urgent action is required in energy, industry and transport as Chancellor Angela Merkel vowed Germany will reach Net Zero emissions five years earlier than planned in 2045. The steel, chemicals and cement industry has come under intense scrutiny.

US electric car maker Tesla has said it was “irritated” by administrative delays to its new Gigafactory and urged the German government to speed up the permitting process. Construction of Tesla’s new factory is advancing in Grünheide near Berlin, though the project has not received final approval.

President Joe Biden’s latest announcement to reduce US greenhouse gas emissions by “at least 50% by 2030” has been welcomed by policy makers in the EU. The target more than doubles the US prior commitment under the Paris Agreement. A few days earlier, the UK announced a radical new 78% emission reduction target by 2035.

The United Kingdom, host of the COP26 climate summit in November, plans to announce more ambitious climate targets “in the coming days.” According to the Financial Times, the UK’s new pledge will be to cut emissions by 78% compared to 1990-levels by 2035. If realised, Britain would outperform other major economies, notably in Europe.

German gas TSOs are carrying out substantial infrastructure investments to convert the country’s gas supply system from low calorific gas (L-gas) to high calorific gas (H-gas). Almost one million appliances, mostly in western Germany, have already been switched with the aim to finish works by 2030.

Germany’s Federal Network Agency (BNetzA) has defined the route for a much-debated new direct current power transmission line that will bring wind power from the North to the Germany’s industrial south. The regulator approved the last 190-km stretch of the 700-km grid connection, called SuedLink, set to be built by the TSOs TenneT and TransnetBW.

Germany's Federal Network Agency (BNetzA) has granted approval for the upgrade of over 24 transmission pipelines to also transport hydrogen. German gas grid operators had said an initial hydrogen grid could be established at “justifiable cost” of around €660 million, largely by converting current pipelines.

Japan’s largest LNG importer and power producer JERA has submitted the environmental impact assessment and scoping document for Units 7&8 at its Chita Thermal Power Station. The plan involves the decommissioning of the ageing coal-fired Units 1 through 5, and replacing them with two LNG-fuelled combined-cycle power units with 63.2% thermal efficiency.

The German Chancellor Angela Merkel has urged industry and private households to do more to expand the renewable energy rollout, especially in the heating sector where most energy is still produced from fossil fuels. Speaking at a VKU event, she called the 46% renewables share in the power sector “remarkable” but looking at 2030 this was “not yet enough.”

In today’s budget, the UK Chancellor Rishi Sunak is expected to commit £27 million for the Aberdeen Energy Transition Zone, designed to turn the area into a renewable energy hub. The UK oil and gas industry also welcomed the Chancellor’s announcement that Scottish businesses will receive a boost of over £57 million to create local jobs in key sectors.

Rishi Sunak, the UK Chancellor is expected to set out new mechanisms to reach the 2050 Net Zero emission target in the Government’s 2021 budget on March 3. With November’s Climate Change Conference in mind, the Government is looking at novel ways to tax carbon emissions.

Germany’s investments under the European recovery programme are below the required minimum share. The government proposed a €130 billion recovery package in 2020 and promised to add another €300 billion to the EU Recovery and Resilience Facility, but green energy spending is still significantly below the 37% benchmark set by the European Commission.

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News in Brief

Growing production puts a lid on oil price

June 18 – Rising crude oil production – driven by OPEC, Russia and the United States – will limit price rises for global crude oil benchmarks Brent and West Texas Intermediate (WTI), which impacts long-term natural gas prices. In the June Short-Term Energy Outlook (STEO), US government analysts expect the Brent crude oil price will average $68 per barrel in the third quarter of 2021, fall to $64/bbl in the fourth quarter and decline further to average $60/bbl in 2022.

CPH2 to install 1 MW electrolyser in Belfast

June 16 – Clean Power Hydrogen (CPH2), together with B9 Energy, has won an order from Northern Ireland Water for a MFE220 1-MW membrane-free electrolyser via its main contractor LaganMEICA. Oxygen, generally regarded as a by-product of hydrogen production is used to more efficiently treat wastewater at NI Water’s Belfast plant. Due to be installed by September this year, the MFE220 electrolyser will produce up to 451 kilograms of hydrogen and up to 3609 kg of medical-grade oxygen per day.

MTU subsidiaries to bear Rolls-Royce brand name

June 15  As of today, Rolls-Royce's Power Systems has implemented a new brand architecture for its five MTU subsidiaries. MTU Friedrichshafen GmbH, for example, will become Rolls-Royce Solutions GmbH. German subsidiaries in Augsburg and Ruhstorf, as well as regional companies in America and Asia will be renamed with geographical references. All others will be rebranded by the end of September 2021.

KBC adopts BakerHughes AI simulation

June 11 – Yokogawa Electric subsidiary KBC will deploy artificial intelligence (AI) technology from the BakerHughesC3.ai (BHC3) alliance to better simulate its oil and gas processes. The AI solution will continuously update physics-based simulations through a flexible modelling, scalable to any industry. KBP anticipates customers’ improved will yield more than $0.65 per barrel.

OneSubsea selects Siemens sensors for deepwater project in Brazil

June 10 – Houston-based OneSubsea has selected Siemens Energy to provide pressure and temperature sensors for the subsea production system for the Bacalhau oil and gas condensate field in Brazil’s Santos basin. The sensors will provide monitoring data for the production system on the seabed at a water depth of 6,726 feet. Installation and commissioning of the equipment is slated for 2022 and 2024.

Wärtsilä to service Malta power plant

June 9 – Wärtsilä has signed a second long-term service agreement renewal for the Delimara Power Plant 3 (D3) in Malta. The accord covers four 50DF dual-fuel engines and four 50SG gas engines. The flexible Delimara plant is vital to ensure stability of power supply for Malta’s island grid.

BV launches digital simulation tool

June 8 – Classification society Bureau Veritas (BV) has launched Opera, its new digital simulation tool for testing and certifying floating power units. The integrated modelling can inspect all components, e.g. those of a floating wind turbine, from mooring systems to blades.

Linde selected to build Russian GPP

June 7 – Linde and Renaissance Heavy Industries have been contracted by Gazprom to carry out the design works, equipment supplies, construction, and commissioning of gas processing plant (GPP) and off-site facilities at the Gas Processing Complex near Ust-Luga. The consortium intends to start construction this June.

Start-up of Tema LNG delayed

June 4 – Ghana sees LNG as a “relatively quick and inexpensive way” to meet growing gas demand for power generation but country’s aspirations to become sub-Saharan Africa's first LNG importer is being delayed to later in June. The commissioning cargo was meant to arrive at Ghana’s new Tema LNG terminal by the end of May, but our data indicates the FSU Torman II is still at Singapore’s Sembawang shipyard.

ACWA sources biofuel to power tourism

June 3 – Saudi developer, investor and operator ACWA Power has teamed up with the Gulf’s largest biofuel producer Neutral Fuels to supply green energy for Saudi Arabia’s most ambitious regenerative tourism project on the Red Sea coast.

CNE sets up Houston offices

June 2 – Carbon Neutral Energy (CNE) is setting up in Houston due to the huge demand for mobile energy storage systems to mitigate the risk of emergencies like the Texas blackout earlier this year. CNE raised $420 million funding in the UK and is now seeking to strengthen its foothold in the US.

AEG equips Swedish hydrogen plant

June 1 – Amsterdam-based AEG Power Solutions has supplied components for a high-pressure electrolysis process at a pilot plant, built by Hydrogen Pro on behalf of the metal research institute Swerim. The electrolysis process selected by Swerim is an alkaline electrolyser with a high level of dynamics driven by Thyrobox DC2, industrial DC power supply.

Li-ion batteries lose their lead

May 31 – Li-ion batteries have dominated the energy storage field, but are expected to lose their leading role in stationary applications. According to IDTechEx findings, Redox flow batteries are gaining traction and likely to overtake the installed Li-ion battery energy capacity before the end of 2030.

Kuwait Petroleum supports Jenbacher S engine oil

May 21 – The Austrian engine maker INNIO and Q8Oils, part of Kuwait Petroleum, have launched the Jenbacher S Oil 40 gas engine oil designed to lubricate engines that run on biogas and landfill gas. The new product is based on INNIO’s high-performing oil for stationary gas engines and provides very long drain intervals, reduces oil consumption and extends oil filter life.

J320 engine powers pasta factory

May 19 – Clarke Energy and INNIO have commissioned a Jenbacher gas engine to power a new Pasta factory in Cameroon. The gas-fuelled J320 engine installed is now delivering a resilient on-site power supply to the manufacturing facility, situated in the town of Douala.

Magma delivers composite riser pipe to HWCG

May 17 – Houston-based Magma Global has delivered the world’s first high-pressure composite riser pipe to HWCG’s gas storage location on the U.S Gulf Coast. HWCG is one of two deepwater oil and gas emergency response consortiums, set up after the Macondo blowout in 2010. It provides a capping stack within 7-14 days and the restart of contingent hydrocarbon flow and capture operations within 18 days of an incident

SynCraft orders J412 engines for biomass plant

May 14 – INNIO Jenbacher has received orders to supply two J412 gas engines, with 500 kW electrical output, for SynCraft biomass power plants in Austria. Each year the two units will process 6,000 metric tons of residual wood into 7,000,000 kWh of renewable power and 10,000,000 kWh of process heat.

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