Regulation & Policy

UK capacity markets, pitched by proponents as a necessary to balance rising amounts of variable generation, “simply are no longer needed,” IEEFA’s Gerard Wynn claims. He referred to some European markets with far higher levels of variable renewables that are investing in flexible grids, capable of sourcing up to 50% of their energy from wind and solar.

The New Northern Policy, launched by the South Korean president Moon Jae-in, is seeking new growth drivers in Russia and Northeast Asia. The Korean energy ministry announced Korea Electric Power Corp (KEPCO) will sign a memorandum of understanding with Russia's energy firm Rosseti later this year. The aim is to create a multinational power grid interconnection in the Northeast Asia region that also includes China and Japan.

West-to-east power flows on the ERCOT transmission system are bound to rise substantially, following a surge in wind capacity addition in the Panhandle northwestern Texas, and new solar PV resources in far southwest Texas. Rising supply of inherently intermittent renewable energy is proving difficult to integrate; hence transmission line upgrades need to be fast-tracked to allow the grid operator ERCOT balance wind energy in the Northwest with flexible gas-fired generation in the eastern part of the state.

Aspirations to build and extend heat networks across the UK have been rekindled by Whitehall’s recently published Clean Growth Strategy. If all implemented, the recommended measures could deliver capital cost reductions of 30 to 40% and save the UK grid operator up to £30 billion.

US President Donald Trump has made reforms of the environmental permitting process for pipelines a key part of his $1.5 trillion infrastructure plan. Speeding up regulatory approvals will help fast-track both gas export pipelines to Mexico and interstate pipelines to transport cheap, domestic shale gas to the second wave of US LNG export projects.

China's National Development and Reform Commission (NDRC) imposed a cap on thermal coal prices imports through Qinhuangdao port at RMB750/t from 5 February. Strong demand due to colder-than-normal weather in January had propelled up prices to a record RMB780/t for FOB Qinhuangdao 5500 kcal/kg coal. According to WoodMackenzie estimates, the new price cap will have an impact from now until mid-March.

Passing the final verdict after an eight-year quarrel over the failed Kemper “clean coal” power plant, the Mississippi Public Service Commission (MPSC) ordered to keep the plant running solely on natural gas and not pass any losses on to ratepayers. Commissioners voted unanimously that all risk needs to be removed from ratepayers for the lignite coal related assets at the facility. More so, a forthcoming compliance filing will decrease the bill of an average residential customer by 2.4%, or over $3.00 per month.

CNMC, the Spanish energy regulator has rejected a government proposal to prop up the nation’s oldest and most polluting coal power plants. Dealing a blow to subsidies for coal-fired generating capacity, the regulator suggested a “significant part” of the Spain’s coal fleet could be closed without putting national energy security at risk.

Divestment of the 650-MW Malaya coal power plant and its subsequent conversion to run on natural gas can only proceed if the current operator is able to prove the plant’s status as a “must-run-unit,” the Department of Energy (DOE) of the Philippines ruled. This new requirement risks to likely delay, if not derail, the coal-to-gas conversion.

One of the UK’s major remaining coal generators, the 1,960-MW Eggborough Power Station in North Yorkshire, is set to fizzle out in September 2018 after it failed to win a 2018-19 capacity contract. As a consequence, the operator has just updated its planning application to convert the 51-year-old Eggborough facility into a new 2-Gigawatt (GW) combined-cycle gas power plant.

Eco-friendly combined cycle power plants are serving as a “bridge” for South Korea along the road of an energy paradigm shift from nuclear power and coal-fired plants towards new and renewable energies, according to Kim Kyung-won, president of Korea District Heating Corp. (KDHC). Kim pointed out the strengths of the recently commissioned 800-MW Dongtan CCGT which powers Dongtan, a new town under development near Hwaseong City.

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.

Page 14 of 72

News in Brief

Tokyo Gas snaps up US shale assets

July 31 – The Japanese utility Tokyo Gas has agreed to raise its stake in the U.S. firm Castleton Resources to 70 percent from 46 percent to increase its foothold in shale gas production in Texas and Louisiana.  Castleton Resources holds acreage in the Haynesville and Cotton Valley formations. The transaction is scheduled to be completed on August 14.

Electrical PE market to grow 1.7% through 2027

July 30 – The market for electrical protective equipment (PE) in North America, valued at $2,787 million in 2019, is forecast to rise at an annual rate of 1.7 percent to reach $3,163 million by 2027. Main growth drivers, according to ResearchandMarkets, are ongoing power transmission projects in the context with U.S. LNG export infrastructure expansions.

GE wins turbine order from Italian paper mill

July 29 – DS Smith Paper Italia has ordered a GE LM6000PF aero-derivative gas turbine for its paper mill in Lucca, Italy. The paper mill is currently powered by two aero-derivative turbines, and the additional unit will increase plant efficiency by 2%, while assuring steam supply for the industrial process.

Aceleron secures £2m green energy investment

July 28 – UK battery developer Aceleron today announced receipt of a £2 million equity investment from BGF and Mercia Asset Management. Aceleron is BGF’s second investment into a pure clean technology, signalling a shift in behaviour as more and more fund managers support a green recovery and the UK’s policy of net-zero carbon by 2050.

NRG buys Centrica’s North American arm for over $3.6bn

July 27 – U.S. utility NRG Energy has agreed with Centrica to acquire the latter’s North American subsidiary Direct Energy for $3.625 billion in an all-cash transaction. The transaction will diversify NRG’s earnings by adding more than three million retail customers and generate an estimated $740 million in adjusted EBITDA upon closing.

Siemens rolls out Comfy app

July 24 – Siemens is deploying its workplace experience solution Comfy across its global offices, including major utility customers. The aim is to equip approximately 600 company locations by October 2020.

BlackRock puts $18bn into sustainable investment

July 23 – Sustainability aspects are poised to bring about "fundamental change" to the way financial market actors operate, said Philipp Hildebrand, vice head of U.S. investment company BlackRock. About 18 billion dollars have been put into BlackRock's sustainable investment products since the beginning of 2020, he told the German business daily FAZ, arguing this would be "only the beginning" of a much larger shift in investment practices.

Vaca Muerta output slows

July 22 – Argentina has resorted to importing LNG for the Southern Hemisphere winter as domestic production at the vast Vaca Muerta shale formation fell in the first half of 2020. State-owned IEASA purchased 28 LNG cargoes at average prices of $2.87 million British thermal units (mmBtu).

GE to implement air quality control systems in India

July 21 – GE Power India Ltd (GEPIL) has won three contracts with a combined value of $112.57 million to supply air quality control systems. One semi-dry flue-gas desulfurization (FDG) unit will be installed for Hindalco Industries’ 1x150MW power plant at the Aditya aluminium smelter in Sambalpur. A wet FDGs system will be installed on behalf of NTPC for their Feroze Gandhi Unchahar thermal power plant (2x210MW plus 2x210 MW plus 1x210MW units) in Rae Bareli, Uttar Pradesh.

Wärtsilä CEO sees “tough” H2 ahead

July 20 – Wärtsilä CEO Jaakko Eskola has told analysts he sees a “tough second half of the year ahead,” as the Finish manufacturer seeks to mitigate Covid-related business disruptions. In the segment of up to 500 MW, Wärtsilä’s market share fell from 9% to 8%, while orders for gas- and liquid- power plants increased by 1% to 17.8 GW during the twelve-month period ending in March 2020.

GE launches update to digital plant software

July 17 – GE Digital has unveiled updates to its digital power plant software: Proficy Plant Applications, Proficy Operations Hub, Proficy Historian, and Proficy CSense. The software accelerates digitization for industries and integrates related onsite power generation units.

Germany EEG fund slips into the red

July 16 – Germany's green energy fund, funded through the renewable energy surcharge (EEG levy), has slipped into the red for the first time since 2013, according to TSO data. The account, funded by end-customers through a surcharge on their power bill, fell from about €2 billion in available funds to €-1.16 billion in the first six months of 2020.

China seen overtake Japan as worlds’ largest LNG buyer by 2025

July 15 – The International Energy Agency (IEA) expects China to overtake Japan as the world’s biggest LNG buyer with imports of 128 Bcm a year by 2025, equivalent to around 174 million tonnes. However, IEA analysts cautioned this scenario is “highly dependent on China’s future policy direction” and whether that includes an ongoing push for coal-to-gas switching for industry, residential heating and power generation.

IEA stages Clean Energy Transitions Summit

July 14 – Ministers from dozens of countries, accounting for over 80% of the world economy, have participated in the first Clean Energy Transitions Summit organised by the International Energy Agency (IEA). Dr Fatih Birol, the IEA’s Executive Director, said there “clearly is momentum” behind a sustainable recovery from the economic impacts of the Covid-19 pandemic. Participants agreed to reconvene in mid-2021.

Siemens Energy to exit coal

Jul 13 – Newly formed technology company Siemens Energy wants to phase-out any operations and technology to related to coal-fired power generation, CEO Joe Kaeser said, without giving a specific timeline. Siemens had been harshly criticised earlier this year for participating in the Adani coal mine project in Australia.

Statkraft, GE enhance GB grid stability

July 10 – Statkraft and GE Power Conversion are working together to stabilise Britain’s power grid. To that end, GE will manufacture and install two Rotating Stabiliser synchronous machines at Statkraft’s site in Keith, Moray. Statkraft was awarded four stability contracts (two at Keith and two at Lister Drive) by National Grid ESO (NGESO) earlier this year.

Siemens Energy spin-off approved

July 9 – A large majority of Siemens shareholders have voted to approve the spin-off of the company’s energy business. The spin-off was approved by 99.36 percent of capital stock represented at today’s extraordinary shareholders’ meeting.

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