Regulation & Policy

The UK Government has been urged by the House of Commons Business, Energy and Industrial Strategy (BEIS) Committee that it needs to do more, and act quicker, on vital clean energy technology such as carbon capture and storage (CCS). The Committee calls for firm targets for storing CO₂, and to deploy CCS sooner and in more places than government’s current plan.

South Korean Ministry of Trade, Industry and Energy (MOTIE) has released a briefing note, detailing the nation’s ambition to move away from coal and towards renewable energy. If realized, these policies are expected to significantly reduce Korea’s coal imports from Australia. Analysts see significant implications for KEPCO’s Bylong Coal mine proposal.

“Enormous efforts” still have to be made if Germany wants to reach its climate and energy targets in the transport and buildings sectors. Government calculations show that renewables will cover more than their target share but energy use in transport keeps growing and is likely to exceed 2005 levels next year and in 2030.

The U.S. Environmental Protection Agency (EPA) has proposed to expand the reach of National Emission Standards for Hazardous Air Pollutants (NESHAP) for stationary combustion turbines. Lifting a 15-year stay on NESHAP standards, the environmental watchdog is now working on a long overdue residual risk and technology review (RTR). New rules will impact lean pre-mix and diffusion flame gas combustion turbines.

Lawmakers in the U.S. state of Colorado are debating a bill that proposes the Colorado Public Utilities Commission (PUC) should consider the ‘social cost of carbon emissions’ before issuing permits for new fossil power plants. The concept seeks to put a price on harms caused by emissions and, if enacted, the new carbon tax would be $46/ton of CO2 emitted, starting from 2020.

Just prior to the first meeting of Germany’s newly installed ‘climate cabinet’ this week, Finance Minister Olaf Scholz has tabled his vision of the country’s energy transition. In his ‘Energy Concept 2038’, Scholz urges the government to show “more commitment for climate action” and focus on electricity supply and grid stability.

The German government is evaluating the launch of CO2 pricing across various emission-intensive economic sectors, including transport. So far, no proposal for a CO2 tax has been included in the German Transport Ministry’s official recommendations because the Conservative CDU/CSU alliance prefers to expand the scope of the European Emissions Trading System (EU-ETS) instead.

The CEO of German regional utility EnBW, Frank Mastiaux, has forecast Germany will see a significant number of new gas-fired power stations being built over the coming years. Flexible combined-cycle gas turbine (CCGT) capacity, in particular, is deemed vital to guarantee cost-efficient supply of electricity and grid stability as the country exits coal and nuclear energy.

China has chosen April 1 as the date when two-digit reductions in Value-Added Tax (VAT) will have to be implemented by key industries, including electric power producers, in bid to lower fuel costs and ultimately reduce electricity prices. Manufacturing companies will benefit from 13% to 16% VAT cuts, while construction and transport firms will pay around 10% less VAT and industrial users of thermal coal, including power producers will see VAT drop by 3%.

Striving to streamline China’s energy market, the National Development and Reform Commission (NDRC) is advancing plans to create a single oil and gas pipeline company by mid-2019. The new China-wide TSO will integrate the pipeline assets of former competitors, notably CNPC and its listed arm PetroChina, Sinopec and CNOOC.

Since the start of the February billing cycles, customers of the Dominion Energy subsidiary SCE&G are enjoying a 15% drop in their expenses for electricity. Dominion had to commit to lower energy bills to get approval from South Carolina’s state regulators for the $7.9 billion SCANA takeover.

Alarmed by an air pollution crisis in Seoul and other key cities, the South Korean government is proposing measures to help utilities to convert their power plants from coal to natural gas in order to reduce worsening levels of toxic fine dust and mercury emissions in Seoul and other northern cities.

U.S. Democrats have voiced concern that Andrew Wheeler, the new head of the Environmental Protection Agency (EPA), will undermine the Obama-era Clean Power Plan by rolling back regulation on power plant emissions. President Trump-nominee Wheeler was instated at the top of the EPA after winning a vote in the Senate by 52-47.

Andrew Cuomo, the Democratic Governor of New York, has proposed to phase out less efficient gas peaking plants to meet the state’s target of reducing greenhouse gases by 40% by 2030, and achieve zero-carbon electricity supply by 2040. The new rules lower the NOx emission threshold, with more stringent controls set to start in five years’ time.

Nearly half of the German public wants a nuclear exit to happen before a coal phase-out: 49.5% of respondents of a Verivox survey say closing the last nuclear plant by 2022, and the last coal plant by 2038, is ‘the right order’. But 44.1% of respondents say nuclear closures are ‘wrong’ from a climate perspective.

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News in Brief

Tohoku Electric tenders for LNG cargo

Aug 19 – Tohoku Electric Power, the fourth-largest electric utility in Japan in terms of revenue behind Tepco, Kepco and Chubu, is understood to be seeking an LNG cargo for delivery in September. A tender process is ongoing.

Cost for decarbonizing industry tops $21tr

Aug 16 – Total costs to fully decarbonize the four most polluting industries – cement, steel, ammonia and ethylene – are estimated to amount to $21 trillion between today and 2050. McKinsey said this could be lowered to about $11 trillion if zero-carbon electricity prices come down further compared to fossil fuel prices. In this event, industry could switch to using electricity for heating processes.

Co-firing Braskem plant with hydrogen

Aug 15 – Siemens is making fossil energy greener at the Braskem onsite power plant in Brazil. In this modernization project two SGT-600 gas turbines are co-fired up to 60% with hydrogen, enhancing efficiency for the production process of the adjacent the petrochemical complex.

Canada's CO2 tax to hit CCGTs

Aug 5 – Change in Canada’s carbon emissions tax regulation for new power plants has changed to also affect cleaner-burning, gas combined-cycle power stations starting from 2021. The move could significantly lower the profitability of gas generation and could prompt SaskPower reconsider its planned Moose Jaw gas power station.

GE CFO steps down

Aug 2 – Jamie S. Miller, General Electric’s chief financial officer, has decided to quit after two years in the job and 11 years with the company. Having overseen GE’s fiscal activities during a period of intense restructuring, Miller will remain in office while the GE board is looking for a successor.

Siemens HR boss quits

Aug 1 – Janina Kugel, Siemens chief HR officer, is leaving the company amid an apparently scattered working relationship and stark personal differences with CEO Joe Kaeser. Her contract will expire by mutual agreement on January 31, 2020.

ABB standardizes eBus chargers

July 31 – Zurich-based ABB, a member of the ASSURED consortium, is working on standardizing the specifications for automatic charging of heavy vehicles. The aim is to drive down the total cost of ownership for electric fleet operators, helping increase adoption of eBuses and eTrucks. Conformance and interoperability tests will be carried out in Q4-2019.

U.S. Senate helps fund EV charging stations

July 30 – The need for expanded electric vehicle charging infrastructure is greater than expected given that there had been over 1.75 million electric vehicles (EV) in North America at the end of 2018, a nearly 60% increase from the previous year. To help fund additional charging stations, among other things, the U.S. Senate approved the $287 billion America’s Transportation Infrastructure Act (ATIA).

PNOC, Lloyds to develop merchant LNG-to-Power projects

July 29 – Philippine National Oil Co. (PNOC) has signed a Memorandum of Understanding (MoU) with Lloyds Energy to develop a 1,200 MW LNG-fuelled power plant in partnership with Mitsubishi. Dubai-based Lloyds Energy is looking at ways to develop integrated LNG import facilities and gas power plants on a merchant basis in Bataan and Batangas provinces.

Macquarie finances CCGT in Mexico

July 26 – Macquarie Capital has chosen Credit Agricole, Natixis and SMBC to co-finance a $380 million combined-cycle gas power plant. The 560 MW plant is designated to be built in San Louis Potosi, a city in central Mexico.

Naturgy cashes in on gas network

July 25 – Spanish gas utility Naturgy has posted a 7% rise in core earnings for the first half of the year due to strong gains from its gas network business that helped offset falling revenues from power generation and slimmer LNG margins.

French court rejects appeal against Total CCGT

July 24 – Judges at an appeal court in Nantes have thrown out an appeal by environmentalist against Total’s planned Landivisiau combined-cycle gas power plant in Brittany. The 440 MW project, initiated by Direct Energy which was since acquired by Total, is over two years behind schedule. The French grid operator RTE has singled out the Landivisiau CCGT as “critical” in guaranteeing supply security in winter 2020/21 due to the planned shutdown of four coal power plants.

U.S. gas production falls in wake of ‘Barry’

July 23 – Shut-ins related to Hurricane Barry have scaled back U.S. gas production by 1.6 billion cubic feet per day, compared to last week, while power sector gas demand rose by just over 2.0 bcf/d. Consequently, there is significantly less gas available for storage so the injection rate has halved, according to Energy Aspects figures.

Blackout after fire at Madison substation

July 22 – Electricity is gradually being restored at Madison, Wisconsin, after 13,000 people experience a blackout following an explosion at a substation near Madison Gas & Electric’s 100 MW gas-fired Blount Generating Station. No injuries were reported.

Fuel switch could abate 1.2bn tons of CO2

July 19 – Some 1.2 billion tonnes of CO2 could be abated by switching to gas using existing infrastructure, if prices and regulation are supportive. According to the International Energy Agency (IEA), this would be enough to bring global CO2 emissions back down to where they were in 2013.

IEA launches methane tracker

July 18 – A new ‘methane tracker’, launched by the International Energy Agency (IEA), provides up-to-date estimates of current oil and gas methane emissions by drawing on the best available data. Analysts stressed methane emissions could be reduced by nearly half at no net cost.

Canada’s CO2 tax also affects gas power

July 17 – Change in Canada’s carbon tax regulation for new power plants has changed to also affect cleaner-burning, gas combined-cycle power stations starting from 2021. The move could cause SaskPower to reconsider its planned upcoming Moose Jaw gas power station.