Regulation & Policy

Though China’s energy market reform has made progress, and over 80% of gas consumed by industry is now being sold on market-orientated prices, leading economists are calling for further steps that reform the entire gas-value chain. “China could open the natural gas upstream and downstream markets and regulate the midstream pipeline transport market,” said ZhongXiang Zhang Professor at the Ma Yinchu School of Economics, Tianjin University.

Tender documents have been posted by the Public Gas Corporation of Cyprus (DEFA) in search for a counterparty that will supply and install a floating storage and regasification unit (FSRU) at the port of Vassilikos. The LNG import project comes at a cost of €300 million, with the imported volumes set to underpin the conversion of an oil-fired power station to run on natural gas.

Federal Energy Regulatory Commission (FERC) has approved Williams’ request to place its Atlantic Sunrise pipeline project into full service. Operations commenced as of Saturday, October 6, 2018, increasing design capacity of the Transco pipeline for natural gas from Marcellus Shale by 1.7 billion cubic feet per day (Bcf/d), or approximately 15%, to 15.8 Bcf/d.

Jeremy Corbyn, the leader of the UK Labour Party, has set out plans to transform the British energy market and “kickstart a green jobs revolution” that is meant to create over 400,000 jobs. At his party’s annual conference, he also pledged to double the number of onshore wind farms, if Labour comes to power in case of a UK snap election.

US Energy Secretary Rick Perry has openly confronted Russia over its energy politics by claiming the Gazprom-led Nord Stream-2 project would distort European energy market. Perry said Nord Stream extension project “would concentrate two-thirds of the imports of Russian gas to Europe in a single pipeline, creating a choke point [exposed to potential] disruption."

At the UK's first Zero Emission Vehicle Summit, Prime Minister Theresa May has committed £106 million for R&D in green vehicles, new batteries and low carbon technology. May said the Britain will “lead from the front” on zero-emission cars to meet a target for UK roads to be free of petrol and diesel cars by 2050.

Construction on a disputed 303-mile stretch of the Mountain Valley Pipeline is proceeding after the U.S. Federal Energy Regulatory Commission (FERC) has modified its stop-work order and permitted works to resume. Next Era Energy and ConEdison Transmission, co-developers of the 2 Bcf/d interstate pipeline, now aim to have the overall project built and in service by late 2019.

Rebuking the Trump administration’s plan to roll back the Obama-era Clean Power Plan, California’s Gov. Jerry Brown called the proposal a "a declaration of war against America and all of humanity." Trump’s EPA new proposal gives states more freedom to set their own emissions standards at plants - a barely disguised favour for the coal industry.

Analysts reckon Germany could still meet its 40% greenhouse gas reduction target by 2020, if several lignite-fired power plants are shut-down immediately and others curtailed in use, a study by the Fraunhofer Institute shows. “The technical possibilities aren’t lacking – only the political will,” commented Greenpeace energy expert, Anike Peters.

Environmental lawyers have launched legal action after Bulgarian authorities permitted a coal-fired power plant to burn petrochemicals, biomass and waste alongside lignite – a dirty, highly inefficient lignite coal. The first hearing in the Brikel case is scheduled for early October.

California Independent System Operator (CAISO) has issued two new reliability must-run designations to support grid reliability in the face of imminent power plant retirements near Los Angeles. NRG California South had notified the ISO it will retire its Ellwood, Etiwanda and Ormond Beach generating stations by October 2018.

Energy Transfer Partners (ETP), developer of the $4.3-billion Rover Pipeline, has accused the Ohio Environmental Protection Agency of attempting to delay the project’s completion. By raising this claim, ETP is trying to fight back against a regulatory notice over low-level contamination.

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News in Brief

EPRI tests early warning system

July 6– The Electric Power Research Institute (EPRI) is conducting trial tests with multiple utilities across the United States of an early warning system. It can detect an off-gassing event as a precursor to thermal runaway up to 30 minutes prior to a cascading failure. This gives plant operators time to mitigate the problem or shut down the system.

KKR buys stake in First Gen

July 3 – Valorous Asia Holdings, owned by KKR investment funds, has bought a 11.9% stake in First Gen through a voluntary tender offer. First Gen, one of the Philippines’ largest independent power producers with 3,492 MW installed capacity, is owned by First Philippine Holdings which is controlled by the Lopez family. KKR’s acquisition of the First Gen stake is worth nearly $192.3 million.

Gazprom’s ‘BBB’ rating affirmed

July 2 – S&P Global Ratings, Moody's Investors Service and Fitch Ratings have affirmed Gazprom's long-term credit ratings as part of their annual reviews. The ‘BBB’ ratings for Gazprom from S&P and Fitch are in line with the sovereign credit rating of the Russian Federation, while Moody's ‘Baa2’ rating is a notch higher.

MHIEC to refurbish WtE plant in Kushiro

July 1 – Mitsubishi Heavy Industries Environmental & Chemical Engineering Co (MHIEC) has received an order from the Kushiro Wide-Area Federation to repair and improve the core equipment at the local Waste-to-Energy plant in Takayama. The WtE plant has a capacity of 240 tonnes per day (tpd). Renovation will increase the energy efficiency of the fluidized bed type gasification and ash melting furnace facility, reducing emissions by around 15% annually. Works are due completed in September 2023.

Nigeria: Only two of six power projects on target

June 30 – Nigeria’s Bureau of Public Enterprises has disclosed that only two out of six privatized power plants were delivered on target. Only Transcorp Power Ltd and Geregu Power Ltd out of the six privatised electricity generation companies (GENCOs) were said to have met their performance targets since taking over.

German investors prefer solar over wind

June 29 – Energy infrastructure investors are keen to build solar power projects in Germany, but shun wind parks. In the latest solar power auction, investors offered to build almost 450 MW of capacity – more than four times the 96 MW of volume on offer– with the average successful bid at 5.27 cents per kilowatt-hour (ct/kWh). The wind auction, in contrast, was undersubscribed: The German network agency  (BNetzA) tendered around 826 MW, but successful bids only totalled 464 MW, at an average price of 6.14 ct/KWh.

MAN ventures into synthetic fuels

June 26 – MAN Energy Solutions has entered the hydrogen economy with the recent pro rata acquisition of H-TEC SYSTEMS, an electrolysis tech firm. The German OEM also committed itself to upgrading its gas turbines to run on 100% hydrogen by 2030.

Varegro starts using Cummins gas genset

June 25 – Belgian-based horticultural company Varegro, has started to use a Cummins HSK78G gas generator to power its greenhouses in Oostrozebeke, West Flanders. Varegro said it selected the Cummins HSK78G genset to produce combined heat and power (CHP) on its premises at a competitive cost for use in energy-intensive greenhouse facilities.

GE names Deloitte as independent auditor

June 24 – GE’s audit committee has selected Deloitte as the company’s independent auditor for the 2021 fiscal year, replacing KPMG. The selection of Deloitte concludes GE’s latest audit tender process.

Northern German states push for hydrogen pilot cluster

June 23 – Northern German states are pushing for greater hydrogen use with a pilot project cluster. Some 12 large demonstration plants for the production and use of green hydrogen are meant to be realised in Hamburg, Schleswig-Holstein and Mecklenburg-Western Pomerania. The aim is to demonstrate how 75% of CO2 emissions can be saved in the region by 2035.

Wärtsilä to design and equip battery-powered ferries

June 22– The Finish engine maker Wärtsilä has been awarded a contract to design and equip two new zero-emissions ferries on behalf of the Norwegian operator Boreal Sjö. For each ferry Wärtsilä will supply the thruster motors, batteries, onboard and shore-based battery charging equipment, the back-up generators, and various electrical systems. The equipment is scheduled for delivery to the yard in early 2021 for the ships to start commercial operations in autumn 2021.

Subsidy cut slashes Chinese wind turbine margins

June 19 – China’s wind turbine original equipment manufacturers (OEMs) could have their gross profit margins halved due to subsidy cuts, Wood Mackenzie forecasts. Commissioned onshore wind power capacity is expected to drop by more than 16% to 19 gigawatts (GW) from 2020 to 2021 as government subsidies were terminated. This could also lead to a 27% drop in turbine prices over the next five years, slashing OEMs’ gross profit margins by half.

PowerPHASE converts gas peakers into storage engine

June 18 – U.S. emergency power provider PowerPHASE has developed an upgrade to convert 7F gas turbine-based peaking plants (350 MW each) to a so-called Storage Engine (400 MW). The unit would be able to store 3500 MWh daily and discharge 4800 MWh daily. CEO Bob Kraft claims utility customers could dispatch the Storage Engine, despite its lower heat rate (4000), ahead of higher heat rate options (9000 for gas peakers) in a competitive market like ERCOT in Texas.

Cummins names Davis head of New Power unit

June 17 – Cummins has appointed Amy Davis as Vice President and President of the company’s New Power Segment, effective July 1. The new unit includes Cummins’ electrified powertrains, battery design and assembly, battery management, fuel cell and hydrogen generation.

GE powers USS Zumwalt

June 16 – The US Navy has taken delivery of the USS Zumwalt, its first full-electric power and propulsion ship, equipped by GE’s Power Conversion. The ship features a high-voltage system, propulsion drive trains with multi-phase VDM25000 power converters and advanced induction motors. Kevin Byrne, head of GE’s North America marine segment said “the full-electric power and propulsion ship has the flexibility to direct energy where it is needed on the platform.”

New England power prices down 40%

June 15 – Spot electricity prices in New England (NE) has fallen since winter 2019/20 when it stood at an average $28/MWh, down 40% from an average $47/MWh in the previous winter. Low natural gas prices, warmer-than-normal temperatures, lower loads, and reduced needs to run expensive peakload generators were the cause for the substantial drop in NE’s winter electricity prices, the U.S. Energy Information Administration (EIA) finds.

Calpine closes $1.1bn in financing for Geysers Power

June 12 – Calpine Corp has closed $1.1 billion Climate Bonds Certified financing for its subsidiary, Geysers Power, the largest complex of geothermal power plants in the U.S. Geyers will use the proceeds to repay some debt it owes to Calpine and to fund ongoing operations and maintenance.