Regulation & Policy

Conservative politicians in Germany call for new gas-fired power plants as a vital “bridge technology.” Exiting both coal and nuclear would not be possible „only with wind power, mandatory solar roofs, climate neutral heating and the hope that our neighbours have some energy left for us,” said Raimund Haser, environment expert for the Christian Democrats (CDU).

Markus Söder, premier of the southern German state of Bavaria, propagates the use of hydraulic fracking to extract more domestic gas to accelerate the shift away from Russian imports. But economy minister Robert Habeck opposes lifting a ban on fracking and favours a shift to hydrogen instead.

Though Germany just ushered in the biggest renewables reform in decades, power generators have to burn more domestic coal to fill the short-term gap caused by lower Russian gas imports, economy minister Robert Habeck admits. By 2035, however, Europe’s biggest economy aims to almost fully rely on wind and solar power – the government’s “Easter package” stipulates.

The British government wants to reduce the country’s reliance on fossil fuels by building eight new nuclear power stations, plus two additional units at Sizewell. Up to 24 GW will come from nuclear power, while approvals for offshore wind farms and hydrogen plants will be accelerated and a new licensing round for North Sea upstream projects launched this summer.

The German economy ministry aims to double onshore wind capacity to 110 GW while quadrupling offshore wind and solar PV capacity to 30 GW and 200 GW, respectively, with the aim of covering the country’s entire electricity needs from green sources by 2035. Tender volumes need to be adjusted – as will availability of flexible peaking plants and energy storage.

Rebuking calls for a ban on Russian oil and gas imports, the German chancellor Olaf Scholz underlined Europe has “deliberately exempted” supply from Gazprom from sanctions as there are no shortterm alternatives. EU leaders are at loggerheads over the phase-out date for Russian energy imports – some say 2030, some suggest 2027, others want it now.

The European Commission wants to wean Europe off Russian fossil fuels well before 2030. The proposed plan ‘REPowerEU’ seeks to gradually remove at least 155 bcm of natural gas – equivalent to the volume imported from Russia in 2021. Nearly two-thirds of that reduction is meant to be achieved before year-end.

Germany wants to spend over €200 billion on clean energy sources by 2026 to reduce its dependence on imported fossil fuels, especially those from Russia. Finance minister Christian Lindner announced the funds will be used to increase hydrogen production, e-car charging infrastructure and accelerate the build out of renewables which he called “freedom energies.”

The German government aims to cover the country’s entire electricity needs with renewable energy sources (RES) by 2035 to gain independence from Russian gas imports. But this move also requires a substantial build-out of energy storage to handle the rapid increase of fluctuating wind and solar power, critics caution.

Germany is considering extending the run-time of coal power stations to insulate against the threat of a halt in Russian gas deliveries. In the short run, coal-fired plant could be kept in reserve or even left running as a precautionary measure, economy minister Robert Habeck said, though he ruled out delays to the planned nuclear exit.

Five European energy companies – lead by RWE, Uniper and UK’s Rockhopper – have filed a €4 billion lawsuit against Italy, Poland, Slovenia and the Netherlands under the Energy Charter Treaty. The claimants oppose government decisions that mandate the closure of coal-fired power plants without compensation, or block the development of upstream oil projects.

German chancellor Olaf Scholz is meeting the Russian President Vladimir Putin in Moscow to deescalate tensions, knowing the US will levy sanctions to derail the Nord Stream 2 gas pipeline if Russia attacks Ukraine. An outright war could put 155 Bcm/y, or 30% of Europe’s annual gas imports at risk, Rystad Energy warns.

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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.