Regulation & Policy

Tightening supply of thermal coal ahead of the Lunar New Year risks to cause power shortages in some of China’s northern metropolis, regional utilities warned. In a letter to the National Development and Reform Commission (NDRC), four electric utilities pleaded the government to ease regulations that incentives a switch from coal to gas and increase coal supplies temporarily in order to put a lid on spiraling prices.

The US Federal Energy Regulatory Commission (FERC) has approved the PennEast pipeline in a 4-1 vote, acknowledging the clear need for more gas transport infrastructure along the East Coast. The $1 billion PennEast interstate pipeline will bring up to 1 billion cubic feet of daily low-cost Marcellus gas to customers in southeast Pennsylvania and New Jersey.

Oklahoma Gas and Electric (OG&E) has filed to the state’s public utilities commission for permission to increase rates, seeking to recover its $390 million investment in the Mustang Energy Center. The 462-MW peaking power plant is the first gas-fired generator that OG&E has built in more than 30 years.

New York mayor Bill de Blasio on January 10, 2018, announced a lawsuit against ExxonMobil, Shell, Chevron, BP and ConocoPhillips, claiming the companies intentionally misled the public about the effects of climate change in order to protect their profits.  Together with comptroller Scott Stringer, de Blasio submitted a resolution instructing the city's five pension funds to explore ways to divest their fossil fuel holdings.  Between them, the funds hold $5 billion worth of securities in over 190 fossil fuel-related companies. 

Aspirations of the Trump administration to prop up America’s coal industry have been dealt a blow by the Federal Energy Regulatory Commission (FERC) which rejected U.S. Energy Rick Perry’s proposal to subsidize coal and nuclear power stations if they stockpiled 90-days worth of fuel. Republican and Democrat members of FERC earlier this week unanimously voted against the Department of Energy’s (DoE) proposed “Grid Resiliency Pricing Rule.”

Clarity on the UK coal phase-out will bring the Conservative party’s long-awaited implementation plan which Theresa May will introduce in a speech on her party’s green energy policies this week. One of the UK’s eight remaining coal power stations is expected to shut down this year, the Government said as it reaffirms rules that mandate the closure of all unabated coal-fired generators. Poor economics of coal power stations, combined with effects of the UK carbon floor price and existing EU emission regulations, are likely to lead to all but 1.5 gigawatts of Britain's coal power stations to shut before the 2025 deadline.

South Korea today announced an energy roadmap for 2017-2031 which sets out steps on how to shift the country’s reliance on coal and nuclear power towards renewable energy and natural gas. Paik Ungyu, Minister of Trade, Industry and Energy confirmed the government's plan to shut down seven ageing coal power stations and convert six coal power projects to run on LNG.

France, Germany, the Netherlands, Sweden and the UK have announced at the One Planet Summit in Paris that they would “examine or introduce” an effective CO2 price in "relevant sectors." The UK already in April 2013 unilaterally introduced a carbon tax in the power sector, and the five EU energy ministers underlined their new joint initiative could be “an effective tool to comprehensively decarbonise the world economy.”

Chinese authorities have mandated power producers in some regions to return to burning coal, responding to acute gas shortages. Coal imports rebounded from a three-month low in November as utilities seek to replenish stocks prior to the period of peak winter demand.

Toning down its green energy ambitions, the Government of South Korea has backed away from plans to convert four out of nine planed coal-fired power plant projects to run on natural gas. Instead, only one coal-to-gas conversion is now likely to go ahead, the country’s energy minister said over the weekend.

South Africa’s national utility, Eskom, would benefit its ratepayers and investors by decommissioning its older coal-fired power units and scaling back construction of the controversial 4,800-MW Kusile coal power plant project, said Grové Steyn, lead economist at Meridian Economics in Cape Town. In his view, “South Africa does not for the foreseeable future need a new national nuclear-, coal- or gas-to-power construction program.”

US regulators have reached a settlement with Mississippi Power on the split of the remaining costs associated with the troubled $7.5 billion Kemper County power plant – once intended as a pilot coal gasfication plant before developers pulled the plug over technical issues.  After months of quarrels at court, Southern Co. agreed to lower the price tag on the project by $85 million to $853 million, lowering the burden on ratepayers.

As persistent overhang in global gas supplies reduces state revenues, energy ministers from Qatar, Iran, Russia and Venezuela are gathering at this week’s Gas Exporting Countries Forum (GECF) in Santa Cruz, Bolivia. The question is how GECF countries – often referred to as the Gas OPEC – should react to the rampant US gas exports which has adopted a price-setting function on global spot LNG markets.

Differences on energy policy and migration have brought down lengthy and difficult coalition talks between Germany’s Conservatives, the Green Party and the Liberals (FDP). Shortly before midnight on Sunday, FDP head Christian Lindner abandoned negotiations, stating: “The four discussion partners have no common vision for the modernisation of the country, and lack a common basis of trust.”

Angela Merkel’s Christian Democratic Party (CDU) sees the much-debated option of a successive closure of coal power plants as a “last resort to meet Germany’s 2020 climate goals.” However, the timeline of such a coal exit is subject to fierce debate in the ongoing talks to form a coalition government, with the Conservatives stressing the importance of “reliable and reasonably priced power supply.”

Page 9 of 54

News in Brief

Slow start of STT pipeline

Oct 18 – U.S. gas exports to Mexico have not picked up substantially despite the start of the Sur de Texas-Tuxpan (STT) pipeline. Exports are still below 6.0 billion cubic feet per day (bcf/d), although there no current postings regarding maintenance on the Sistrangas pipeline that feeds from NET Mexico.

EIB defers ban on fossil projects

Oct 17 – Luxembourg-based European Investment Bank (EIB) has bowed to pressure from Germany and the European Commission and deferred its decision to ban loans to fossil-fuel projects until mid-November. Germany wants the bank to keep financing gas-fired power projects as it views the cleaner-burning fossil fuel as a vital backup for renewable energy sources.

Brexit will not impact UK gas supply

Oct 16 – Security of power and gas supply in the UK will not be jeopardized this winter by the country’s imminent departure from the European Union, even in the event of a hard Brexit, National Grid said. In its assessment, the TSO factored in a halt to flows via the Belgium and Dutch gas interconnectors “from EU exit day one”, but said ongoing deliveries from Norway, the UK Continental Shelf and storage will continue as usual.

Ferrybridge C gets demolished

Oct 15 – Four cooling towers at the Ferrybridge Power Station have been taken down as the coal-fired power station will make way to a new, high-efficiency gas power station. Operator SSE shut down the 500 MW Ferrybridge C unit in March 2016 and now started to tear it down.

Global energy storage tops 10 GW by 2025

Oct 14 – The global market for grid-connected energy storage will grow by 6,900 MW, or 16.6% to reach over 10,500 MW by the end of 2025, according to Reportlinker.com. Germany will add over 267 MW energy storage installations over the next five to six years, while 330 MW will come from other European markets. These numbers are dwarfed by China, where up to 1,200 MW energy storage units could be connected to the grid by 2025.

Wärtsilä services EDL plant

Oct 11 – Energy Developments Ltd (EDL) of Australia has awarded Wärtsilä a service contract for gas engine-based baseload power plant at the McArthur River zinc mine in Northern Territory. The maintenance approach for the 53 MW onsite power plant is no longer pre-planned and scheduled but has been changed to condition-based and predictive maintenance, with an advisory contract.

EPH buys CCGT in Galway

Oct 10 – The Czech energy company EPH has received regulatory approval to purchase an 80% stake in the 400 MW Tynagh Energy combined-cycle gas power plant in Galway, Ireland. Mountainside Partners will continue to own the remaining stake in the CCGT, which operates based on a security-of-supply contract from the Irish TSO based on guaranteed power prices.

ITM gets £38m boost from Linde

Oct 9 – Sheffield-based ITM Power, maker of electrolysers for hydrogen production, has been boosted by a £38 million cash injection, as Linde acquired a 20% stake in ITM at 40 pence per share. Looking ahead, ITM said it is seeking to raise £14 million from new and existing institutional investors.

Drax to convert two power units

Oct 8 – Drax Group has received government approval to convert up to two coal-fired generating units at its power station in North Yorkshire to run on natural gas. With this ruling, the UK regulator overturned objections by ClientEarth, stressing some fossil power is vital for the UK to backup intermittent renewable power source.

Storage use tops 80% in key U.S. regions

Oct 7 – Gas storage utilization in the United States is rising in the autumn, with net injections topping 112 billion cubic feet (Bcf) in the first week of October. According to EIA figures, underground storages are at least 80% full in the East, Midwest, and South Central non-salt regions, allowing for seasonal withdrawals to help meet peak-day gas demand throughout the upcoming winter.

Maine, NY aspire to 100% clean energy

Oct 4 – Three U.S. states—Maine, New York, and Ohio—have updated their renewable portfolio standards (RPS), since May 2019. As a result, Maine and New York joined California, Hawaii, Nevada, New Mexico, and the District of Columbia in requiring 100% clean electricity by 2050.

TransAlta to built CHP in Alberta

Oct 3 – Canada-based Transalta and SemCAMS Midstream have agreed to develop, construct and operate a new cogeneration facility at the Kaybob South No. 3 sour gas processing plant in Alberta. To be built at a cost of some 105 million, the CHP will have an installed capacity of 40 MW. Start of commercial operation is targeted for late 2021.

GE’s 100th HA turbine sold in Greece

Oct 2 – Greek industrial firm Mytilineos has ordered a GE 9HA.02 gas turbine to be the heart of the 826 MW Agios Nikolaos combined-cycle gas power plant. This deal also marks the 100th unit of GE’s HA gas turbine sold. Construction of the CCGT is due to start before the end of the year.

ABB launches M4M analyzer

Oct 1 – Swiss technology firm ABB has launches its first Bluetooth-equipped network analyzers, called M4M. The system gathers data from distribution grids and connects them to a cloud-based control system, allowing users to react on energy consumption and on-site power generation trends.

Microsoft invests in wind power

Sept 30 – Microsoft and ENGIE have entered a long-term solar and wind energy power purchase agreement (PPA) in the United States. The deal will see Microsoft purchase a total of 230 MW from two ENGIE projects in Texas, bringing Microsoft’s renewable energy portfolio to more than 1,900 MW.

Gazprom tackles issue of ownerless gas grid

Sept 27 – Gazprom, the main supplier of pipeline gas to Europe, is trying to settle the issue of ownerless gas pipelines – a relic of the former Soviet Union. Abandoned gas transmission pipeline spanned 6,651 kilometers as of March 1, with the issue seen as “especially acute” in the North Caucasus region where half of this infrastructure is located. If no owner registers these facilities within three months, Gazprom will take over to ensure reliability and safety.

Investors flock to Myanmar

Sept 26 – Fitch Ratings has singled out Myanmar’s power sector as one of the largest beneficiaries of foreign direct investments (FDI) worldwide. Nearly $21.2 billion was poured into power generation and energy infrastructure projects thus far in 2019, which is 27% of total FDI under the Myanmar Investment Law.