As Germany exits both nuclear and coal generation simultaneously over the next few years, more flexible gas-fired generating capacity and energy storage will be required to balance the grid. The gas industry hence urges the Government to introduce regulation to launch capacity markets to incentivize enough new-build gas power units by 2030.
Lawmakers in the U.S. Congress are preparing to hit European investors in the Nord Stream 2 pipeline with a new set of sanctions in an effort to derail the project. Uniper, Winterhall, Engie, OMW and Shell are invested in the Baltic Sea interconnector, and the sanctions could come as soon as February or March.
Concerns over China’s gas demand grow after the government said it would hand out ‘force majeure’ certificates to domestic companies if they cannot fulfill their offtake obligations. Beijing apparently tries to mitigate potential losses of state-owned gas companies though the impact on LNG imports is still unclear.
Spain’s new government has revised the 2021-2030 Energy Plan, speeding up the country’s coal exit and stepping up solar PV targets. Coal-fired power units will “cease to be competitive by 2030,” the plan reads, given that CO2 prices in Europe are likely to rise to €35 per ton and considering the relative price of gas.
The German renewables energy surcharge (EEG) has swept a record payout into the coffers of wind, solar, biomass and hydropower producers. Proceeds totaled 27.5 billion Euros 2019, triple the amount paid in the previous year which sparked anger amongst end-users who have to pay the EEG surcharge with their electricity bills.
Utilities, trade unions and Germany’s federal and regional policy makers have agreed a landmark €40 billion deal to phase out all coal-fired power plants by 2038. The latest coal exit adds to the earlier agreed nuclear exit, under a scheme to compensate electric utilities, workers and coal-mining regions.
Self-reliance of German electric vehicle produces needs to increase substantially, according to government advisors. "If the need to import battery cells and e-cars grows in line with the roll-out, effects on the employment would be significant," analysts noted. Under the most pessimistic scenario, there could be up to 410,000 fewer jobs in the sector by 2030.
Germany’s second largest utility RWE could receive up to two billion Euros in compensation for closing its lignite power station under a coal exit agreement currently drawn up by the economy ministry. The Czech energy holding EPH, however, is asking for significantly more compensation for its power assets in eastern Germany than the government is willing to pay.
Adani Power and NTPC, two of India’s largest power producers, have pleaded to the government in Delhi to extend the deadlines of retrofitting coal power stations by two to three years. High costs for retrofits and India’s continued reliance on cheap thermal coal now needs to be weighed up against rampant air pollution.
‘Wider Access’ – the latest project launched by National Grid ESO to increase accessibility to the UK balancing mechanism – is already attracting new market entrants. Aggregated power units, notably hybrid and battery-based units, are increasingly being dispatched in this regulated market, providing the grid operator with much-needed flexibly.
While global climate talks in Madrid ended with lackluster results, German lawmakers agreed to raise the entry-level price for CO2 emissions from the buildings and transport sector from 10 Euros to 25 Euros starting from 2021. Thereafter, it will rise to 55 Euros by 2025, with state revenues to be used to lower the renewables levy on consumers' electricity bills.
News in Brief
Castleton buys CCGT in Spain
Feb 21 – Castleton Commodities International (CCI), a British independent power producer, has acquired the Amorebieta combined-cycle gas power plant in Bilbao, Spain, for an undisclosed amount. CCI claims the 786 MW plant is “one of the most efficient CCGTs in the Iberian Peninsula.”
NNPC scrutinizes Abuja IPP project
Feb 20 – Nigerian National Petroleum Corporation (NNPC) is scrutinizing technicality and economics of developing a 1,350 MW Independent Power Plant (IPP) project in Abuja. The project is likely to be realized, as it is backed by a $1.1 million grant from the US Trade and Development Agency (USTDA) and will be powered by GE gas turbines.
Batteries vs. hydro power
Feb 19 – More than 28 GW of lithium batteries deployed for stationary storage applications by the year 2028, according Navigant Research. Pumped hydro power plants, however, dominate the market as they account for 96 percent of installed energy storage worldwide.
Micro CHP market to top $3bn by 2026
Feb 18 – The global micro CHP market revenue is forecast to exceed $3 billion by 2026 amid rising demand for captive combined heat and power units by industry. According to Global Market Insights, micro CHPs are also increasingly combined with solar PV and energy storage into hybrid power units.
Rio Tinto uses battery to power Pilbara mine
Feb 18 – Australian mining company Rio Tinto has freed up $98 million for a new solar PV unit and a lithium-ion battery energy storage system to help power its entire Pilbara mining network. The 12 MWh battery storage at Tom Price will provide spinning reserve to help stabilize the local grid.
Japan and Korea eager to build ‘hydrogen economy’
Feb 17 – Liquid hydrogen is meant to become the basis of Japan’s and South Korea’s new energy economy. Several public-private partnerships accelerate efforts to produce hydrogen fuel cell vehicles and use hydrogen as a clean energy source, gradually replacing oil and natural gas.
MHPS teams up with KBR to expand sales
Feb 14 – Mitsubishi Hitachi Power Systems (MHPS) has agreed to cooperate with U.S. firm KBR to expand sales of SDA pitch-fired power plants. The fuel for these plants is insoluble matter (SDA pitch), which remains when light oil fractions are recovered from heavy oil fractions using the solvent de-asphalting (SDA) process. The petroleum industry can now utilize this residual material for power generation.
Turboden provides CHP to First Nations
Feb 13 – Brescia-based Turboden, part of Mitsubishi Heavy Industries (MHI), has agreed to an 8,000 kW combined heat and power (CHP) plant, running on woody biomass to indigenous First Nations in Saskatchewan, Canada. The Organic Rankine Cycle (ORC) power gen system will uses sawmill residual woody biomass as fuel and help electrify some 5,000 homes.
Himoinsa gensets win award
Feb 12 – Himoinsa has received an Innovation Trail Live award for its rental gas generator sets. Three gensets – HRGO 30, HRGO 40 and HRGO 70 – were distinguished due to their long running time, low operational costs, as well as reduced emissions and sound level.
Ofgem lowers default price cap
Feb 11 – UK energy regulator Ofgem has announced it will lower the default price cap by £17 to £1,162 for the six months effective from 1 April 2020. Analysts say Ofgem’s decision comes amid a “warm winter” and “healthy LNG supply,” which pushed down wholesales gas prices to a 13-month low. Looking ahead, there might well be “another slight reduction to the cap later this year.”
Opel plans Gigafactory for battery cells
Feb 10 – German carmaker Opel, part of French PSA, plans to manufacture enough battery cells for half a million e-cars annually in a new factory in the western German town of Kaiserslautern from 2024. Two billion Euros would be invested in the factory, designed to house three units with 8 GWhs each, which would be the largest in Europe so far.
GE adds 235 MW in Ivory Coast
Feb 7 – GE is carrying out a gas turbine extension at the Azito power plant in the Ivory Coast. Under the contract, GE will supply its GT13E2 gas turbine in combined-cycle configuration, one HRSG, one steam turbine and associated equipment. The upgrade will boost the plant’s capacity by 30 percent, or 253 MW to reach a total of 710 MW.
FID on Azito extension
Feb 6 – Independent power producer Globeleq and IPS have reached financial close on expanding the Azito gas-fired power plant in Ivory Coast. The plant currently has 460 MW installed capacity and provides 25 percent of the country’s power supply. Once the lasted upgrade will be completed, Azito’s capacity will be boosted to 713 MW.
Batteries vs. hydro power
Feb 5 – More than 28 GW of lithium batteries deployed for stationary storage applications by the year 2028, according Navigant Research. Pumped hydro power plants, however, dominate the market as they account for 96% of installed energy storage worldwide.
Ofgem expects green energy to cost more
Feb 4 – Britain’s energy regulator Ofgem has been seeking to incentivize investment in green energy. However, the watchdog’s new head, Johnathan Brearly, cautioned “more investment does mean higher cost.” Though investors’ returns could come down, technology improvements will reduce down capital costs further in the long run.
FES takes over 1.3 GW Pleasants Power Station
Feb 3 – FirstEnergy Solutions (FES), soon to be renamed Energy Harbor, has completed the ownership transfer of the Pleasants Power Station, a 1,300-MW thermal plant located in Pleasants County, West Virginia. FES took over the power unit from Allegheny Energy Supply Company.
Körte heads Siemens Strategy
Jan 31 – Peter Körte, aged 44, has been appointed the new head of Siemens’ Strategy Department, effective February 1, 2020. In his new role, he will develop Siemens’ strategies for digitalization and the Internet of Things (IoT) which are deemed “crucial growth drivers.”
