Regulation & Policy

Reacting to blackouts during Australia’s latest heatwave, the federal government is proposing to underwrite and partially fund new fossil power generation capacity. On the cards are large-scale fossil generators as well as decentralized hybrid plants, consisting of wind and solar plus energy storage.

Los Angeles Department of Water and Power (LADWP), the city’s municipal utility, has abandoned plans to retrofit three gas-fired power plants from water- to air-cooling. Instead, the utility will phase out the Scattergood, Haynes and Harbor gas-fired power units by 2029, and invest renewables to lower its carbon footprint.

Though EU member states decided to tighten unbundling rules on gas interconnectors, parliamentarians agreed to a French-German compromise for the €9.5 billion Nord Stream-2 pipeline. The deal places the controversial project “under European control”, but with Germany as the lead negotiator with Russia's Gazprom.

General Electric will have to pay a €50 million fine to the French government after creating just 25 out of a promised 1,000 jobs in the country in connection with the Alstom takeover.

The German ‘coal commission’ has reached a historic decision over the weekend to shut down all of the country’s lignite- and hard coal-fired power plants in less than 20 years. By 2038, at the latest, no more electricity will be generated from coal and Germany’s coal-dependent federal states will get €40 billion in compensation.

Exiting coal – in addition to nuclear – is likely to propel up Germany’s energy costs by up to €54 billion, industry leaders warn. About 10 GW of coal-fired capacity could be taken off the grid by 2022, in a political move that would make the cost of gas-fired power generation a critical factor for the Germany’s economic competitiveness.

Energy-intensive industries in Germany are pressing the government to limit the cost burden of the country’s green energy transition for their businesses. The much-discussed ‘coal exit’ will favour flexible gas power plants, but industries fear it could push up wholesale power prices by up to 50%.

Wisconsin’s state utility regulators will decide on whether the proposed 550-MW Nemadji Trail Energy Center will be built. The developers have filed plans to co-develop the $700 million facility, and now await an official permit.

The European Investment Bank (EIB) has embarked on a review of its lending criteria for energy infrastructure projects, notably a 550g CO2/kWh emissions performance standard. EU negotiators had adopted this limit just weeks earlier for a ban on capacity payments to power plants exceeding it.

Idled power plants in India that are stranded due to a lack in gas supply might soon get regasified LNG at a subsidized rate, financed the government-run Power System Development Fund. The aim is to revive flexible gas power plants through an e-bid RLNG scheme.

Smart electrically-driven heating is a “valuable field in which to invest”, Delta-ee research finds, pointing at the substantial installed base of electrically-driven heating – 30 million units across Europe. In the UK, new business models are emerging providing heat-as-a-service, with the customer avoiding the need for buying fuel and appliances by simply buying the heat, and comfort that comes with it.

Flexibility and system integration of renewable energy sources will be in focus of a Ministerial Summit co-hosted by the German government and the International Energy Agency (IEA) in Berlin in September. Tackling the intermittency challenge will be critical for 33 countries are likely to have up to 20% variable renewables in their power systems by 2023.

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News in Brief

Italy’s power exports Montenegro surge

Jan 22 – Italian electric power exports increased by 28% in 2020, largely driven by flows to Montenegro which surged 26% to 8.6 TWh. In contrast, domestic power demand fell 6% last year to 271.6 TWh with electricity sales from conventional plants down nearly 9% to 140.5 TWh, figures by the Italian energy exchange GME show.

US considers new nuclear

Jan 21 – The new US President Joe Biden has said his country could construct new nuclear power plants and reiterated plans to “swiftly rejoin” the Paris Climate Agreement swiftly. Germany’s environment minister, Svenja Schulze, called it illusionary to believe that newer, smaller reactors will be a technology of the future.

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.

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