Regulation & Policy

The Japanese Prime Minister Yoshihide Suga has pledged to reduce the country’s emissions to net-zero by 2050. Power generators, car makers and steel mills will have to comply with stricter emission limits, but critics say Japan will not become carbon neutral without phasing out all coal power units.

Though common ground has been found on the planned EU climate law, environment ministers left the decision on a more ambitious 2030 target for heads of state and government to decide in December. The climate law will make the goal of climate neutrality 2050 legally binding.

‘Green’ LNG is the new trend, with six ‘carbon-neutral’ cargoes from Shell and Jera delivered or agreed with Asian buyers, and one long-term supply tender announced by Pavilion. “If LNG is to safeguard its position in the future energy mix, it must be carbon competitive,” Wood Mackenzie said.

City-gas distributors in China will benefit from timelier fuel-cost pass-through under the national gas market reform, Fitch Rating reckons. With pipeline access now open to all, those with access to cheap LNG enjoy lower gas procurement costs which will be passed on to end-customers.

Corporate power purchase agreements (CPPAs) are on the rise in Taiwan, underlined by the world’s largest CPPA deal over 920 MW between Ørsted and Taiwan Semiconductor Manufacturing Company (TSMC). Energy-intensive industries prefer CPPA as it allows them buying electricity in bulk for cheap, rather than from the state supplier.

The German parliament has voted in favour of increasing the starting price of one tonne of CO2 to 25 Euros as of January 1, 2021. Vendors of petrol, diesel, heating oil and natural gas will have to buy emissions allowances, whose price will rise to 55 Euros by 2025.

Wholesale power prices will increasingly hinge on zero marginal cost generators, such as variable renewables, which undermine the profitability of thermal power units. Cornwall Insight proposes to guarantee each generator at least their floor price for each MWh produced. The value would be determined in a competitive tender.

US oil and gas major ExxonMobil has been given regulatory approval to build a LNG import terminal and power project at the northern Vietnamese port city of Haiphong. The project is meant to start generating electricity by 2026, though ExxonMobil has yet to confirm it is going ahead.

Thailand’s B.Grimm Power gained approval from the Provincial Electricity Authority to service more industrial customers near the Map Ta Phut LNG regas terminal. The Thai IPP is building 700 MW of gas-fired capacity, and arranged two LNG licences with a view to start importing as early as 2022.

The latest round of Germany's green energy tenders has spurred a run on combined solar and storage, while onshore wind energy tenders were undersubscribed yet again. The German regulator initiated an ‘innovation auction’ for 650 MW projects that combine fluctuating onshore wind or solar PV with biomass and energy storage.

President Xi Jinping has told the UN General Assembly that China, the world’s largest carbon emitter, will reach peak emissions before 2030 and aspires to become carbon-neutral by 2060. President Xi called on all countries to “stop only pursuing development rather than environment protection.”

Striving to jump-start Australia’s economy, Prime Minister Scott Morrison has tabled a National Gas Development Plan, promising over $28 million to develop five gas basins and another $10.9 million on priority pipelines. Subsidies for gas-fired power are also on the cards as the PM aims for a “gas-led manufacturing recovery.”

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News in Brief

Mitsubishi produces methanol in Trinidad

Jan 20 – Mitsubishi Gas Chemical Company has launched commercial operations of a methanol and dimethyl ether plant in Trinidad and Tobago. The plant has an annual production capacity of one million tons of methanol and 20,000 tons of dimethyl ether, which can be used as an alternative fuel for cars and power generation.

First 8-cylinder B36:45 engine delivered

Jan 19 – Rolls-Royce has delivered the first 8-cylinder variant of its Bergen B36:45 gas engine to a tomato producer in Belgium. The medium speed genset is planned for delivery this spring and will drive an onsite power plant that generates 4700 kW electricity and 5520 kW heat. The new engine offers a 20% increase in power per cylinder and will replace an existing Bergen 12-cylinder B35:40 genset.

Moody’s upgrades Enel to Baa1

Jan 18 – Moody’s Investors Service has upgraded Enel’s long-term rating to Baa1, with a stable outlook. The upgrade reflects Enel’s progress in reducing its risk profile, analysts said, pointing at the Italian utilities ongoing investment in networks and renewables, growing geographical diversification and focus on centralised financing.

GE sues Siemens Energy

Jan 15 – General Electric has sued its German rival Siemens Energy over the alleged use of stolen trade secrets to win gas turbine contracts worth several billion dollars. GE told the US district court in Virginia that Siemens received the secret information from a Dominion Energy employee.

Orbital Energy launches Eclipse

Jan 14 – Nasdaq-listed Orbital Energy Group has launched a new subsidiary, Eclipse Foundation, a drilled shaft construction company. The new company specialises in providing services for power transmission and substations, communication tower and a disaster restoration through emergency power.

S’Korean coal and LNG imports slide

Jan 13 – South Korea’s imports of thermal coal and LNG have fallen 12% and 11%, respectively, as the government cracks down on fossil fuel usage to curb air pollution. Customs data shows that coal imports amounted to 10.2 million tons in December, down 1.4 million tons from the same month last year but up from November’s imports of 9.5 million tons.

SMC builds 1.7 GW CCGT in Batangas

Jan 13 – Excellent Energy Resources, part of SMC Global Power Holdings, is building a 1,700 MW combined cycle gas power plant in Barangay Dela Paz and Ilijan in Batangas City with investments of about 67.863 billion Philippine Pesos ($1.41bn). The project is estimated to be completed in 36 to 40 months.

UK’s National Grid issues supply warning

Jan 12 – Natural gas prices in the UK surged as National Grid issued warnings on supply deficit as LNG cargoes are being diverted to North Asia. Prices at the British NBP gas trading hub soared to the equivalent of $8.95 per MMBtu, while the JKM price for North Asian spot LNG cargoes for February 2021 was last at $19.700 per MMBt.

Fortistar invests in hydrogen

Jan 11 – Fortistar, a privately-held fund, has joined an equity investment of up to $157 million in hydrogen producer BayoTech. Cottonwood Technology Funds and the New Mexico State Investment Council also participated in the latest financing round. BayoTech’s systems produce local hydrogen close to the application, serving end users in the industrial gas and petrochemical segment as well as those who use of hydrogen to power fuel cells.

Ashtead appoints new CFO

Jan 5 - Ashtead Technology has appointed a chief financial officer (CFO) and five managers for newly created roles across its international team. The appointments are meant to cement the company’s position in the offshore energy market, including offshore wind and decommissioning of thermal power plants

NFE secures LNG for Puerto Rico, Mexico and Nicaragua

Dec 23 – New Fortress Energy (NFE) has agreed to purchase Henry-Hub-indexed LNG for its integrated gas and power businesses in Puerto Rico, Mexico and Nicaragua. The New York-based project developer said it now has covered 80% of its expected needs throughout Latin America, thus reducing its need for spot purchases and its exposure to changes in the market price for LNG.

China and Korea mandate coal-to-gas switch

Dec 22 – The Chinese government has launched a coal-to-gas boiler switching programme, targeting 7.1 million homes, which makes gas demand more weather-sensitive this winter. Similarly, South Korea mandated the closure of 15 coal-fired plants since the start of December in an effort to reduce air pollution. Analysts expect this will accelerate the drawdown of LNG terminal inventories going into Q1-2021.

GE repowers oil field in Brazil

Dec 21 – GE Power Conversion has been awarded a contract by Sulzer Pumps UK to supply motors for four water injection pumps of a Floating Production Storage and Offloading (FPSO) vessel. The 8,000 kW, two pole motors will run at 3,600 rpm with a limitation of the starting current at 300%, enabling the oil and gas field operator to optimise the generator which supplies electricity on the FPSO.

VELO distributes Sapphire Metal 3D-Printers in the US

Dec 18 – California-based VELO3D has formed a distribution partnership with GoEngineer for Flow pre-print software, Sapphire metal AM printer, and Assure quality assurance and controls. GoEngineer will be VELO’s only distributor in the United States.

Indian electric boats to achieve zero emissions

Dec 17 – Cochin Shipyard, India’s largest shipbuilder, has asked Siemens Energy to equip India’s first fleet of 23 boats with electric propulsion drive train, integrated with batteries and vessel automation. Combining the electric propulsion drive trains, energy storage, and automation systems is expected to significantly reduce fuel consumption.

Terna BESS auction six times oversubscribed

Dec 16 – A pilot auction, held by the Italian TSO Terna, for battery energy storage systems (BESS) to provide reserve grid services has been six times oversubscribed. The auction was held with an expectation that around 230 MW would be on offer, but Terna received 1,327 MW worth of bids and eventually awarded contracts for 249.9 MW.

New £150m link to UK’s Easington terminal

Dec 15 – National Grid has completed a gas pipeline under the River Humber, build in 18 months and at a cost £150 million, as new link to the import terminal at Easington. Following commissioning, the pipeline is now operational and can now transport between 70 to 100 million cubic metres - around a quarter of Britain's gas needs.

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