Regulation & Policy

The US state of California has teamed up with several German states in the ‘Under2Coaltion’ to tackle climate change. Edmund G. Brown, Governor of California said US President Trump’s withdrawal from the Paris Agreement underscored the “significance of subnational actors.” California, the sixth-largest economy in the world, is adamant to pursue its clean energy targets and, together, with several German federal states, aims to provide strong leadership in the COP23 climate talks in Bonn this November.

Alan Finkel, Australia’s top scientist and author of a prominent energy market review, has urged the Government to set a clean energy target that does not be put any fuel-type at a disadvantage. His modelling work shows a scenario under which power prices could fall, if Australia’s stringent emission targets are lowered.

Ambitious plans, set out by South Korea’s newly instated Government, herald a U-turn away from coal and nuclear towards cleaner-burning natural gas and renewables. Responding to public concern over air pollution the administration of President Moon Jae-in, who took office in early May, is considering a construction stop for several coal and nuclear projects – a move poised to cause electricity prices spikes and medium-term capacity shortages.

Despite U.S. President Trump’s withdrawal from the Paris Climate Accord, and his open support for fossil fuels, Energy Aspects forecasts his move is “unlikely to halt the transition towards cleaner energy globally, although it is likely to slow it.” The EU, but also largest emitters like India and China are expected to follow through on their clean energy policies.

Dealing a blow to concerted multi-national efforts of mitigating emissions from the energy and transport sector to help prevent global, the U.S. President Donald Trump has vowed to pull out of the 2015 Paris Climate Agreement. “I was elected to represent the citizens of Pittsburg, not Paris,” he said, indicating that he will put US business interests first.

The International Energy Agency (IEA) has singled out Norway’s large hydropower generation as a “valuable asset” for European electricity markets at a time when renewable energy supply is growing. More interconnectors will allow for hydropower to balance regional variations in demand and supply, the IEA said, but it called on Nordic countries to better coordinate their renewable energy incentives.

As mankind enters a period of change akin to the last industrial revolution, Rudy Koenig, Principal at QENIQ Advisory and POWER-GEN Europe, discusses three trends – digitalisation, decarbonisation and decentralisation. Peter Terium, CEO of Innogy, called attention to these mega-trends last year. Koenig examines the three Ds through the prism of Germany as a key industrial nation, and suggests they will shape the power generation industry for years to come.

Risk of power cuts in Britain seems unheard of for most electricity customers. But if coal power capacity comes off the grid more quickly than in 7 to 10 years’ time, subsidy-free renewables expand, and less interconnectors get built in the wake of Brexit – fast-ramping gas generator sets are best placed to fill the supply gap, Phil Grant partner at Baringa consultancy told industry stakeholders at the Finish embassy in London.

The cleanest and safest power plant is the one you don’t have to build thanks to higher energy efficiency, says Noé van Hulst, OECD ambassador of the Netherlands and IEA board chairman. Dubbed the “hidden fuel”, energy efficiency is demand-side driven, meaning it lacks the headline-grabbing milestones of big power plant projects, or other energy supply infrastructure. And through the energy efficiency trend accelerates, “progress on a global scale is still happening too slowly.”

Mexico has published a preliminary schedule for a third power auction and is calling for bids, with the winners set to sign long-term power purchase agreements (PPAs) for clean energy supply, the energy secretariat SENER and the state energy control centre CENACE stated.

The spread of policy drivers, as well as falling costs of solar and wind power, will ensure the de-carbonisation of the energy system continues globally, according to projections made by the Economist Intelligence Unit (EIU). Analysts cautioned however that the extent to which Mr Trump reverses the momentum of the Obama administration on green issues, and whether he will pull out of the 2016 Paris Climate Agreement, will be a key development to watch.

Nigeria has approached the World Bank for a $5.2 billion loan to expand power generation capacity and help the West African nation recover from its first recession in over two decades. Observers doubt, however, that the government in Abuja can reach its goal to triple Nigeria’s installed electric capacity by 2025.

In the run-up to the 2017 UK General Election, Theresa May has promised to impose a cap on standard variable power tariffs in the Tory manifesto to end what she calls the “injustice” of rising energy costs. Under the proposed plan, the energy regulator Ofgem would set a limit for the standard variable tariffs that customers move to by default after their existing deals run out. This measure is meant to save about 17 million customers up to £100 a year.

The UK energy regulator Ofgem has been reviewing, and revising downward, some incentive schemes for small gas- and diesel-fired power plants. Proponents of decentralized power solution warn a withdrawal of subsidies could make developers scrap 2,000 MW of planned capacity. In contrast, operators of larger power plants claim that larger payouts to distributed gensets would lead to a ‘market distortion’ and discourage investments in flexible combined-cycle gas power units.

Decentralized power generation is high on the agenda in Tanzania, with the Rural Energy Agency (REA) pleading support for individuals or companies that intend to supply ‘mini-grid electricity’. This initiative is meant to help close Tanzania's 1,290MW power deficit and give more of its rural population access to electricity.

Page 12 of 53

News in Brief

MHI-MME to take over turbocharger production

Sept 20 – Mitsubishi Hitachi Power Systems will no longer produce MET turbochargers, the standard worldwide exhaust gas turbochargers used in stationary engines. Starting from January 1, 2020, these devises will be produced by Mitsubishi Heavy Industries Marine Machinery & Equipment (MHI-MME) instead.

Japan starts electricity futures trading

Sept 19 – Tokyo Commodity Exchange (TOCOM) has launched trading in electricity futures to advance price competition in Japan’s liberalized energy market. The East Area peakload electricity contract for October delivery first traded at 10.9 Yen per kWh, lower than the standard price of 11 Yen set by TOCOM in advance.

Duke to reduce rates in 2020

Sept 18 – Duke Energy Florida (DEF) customers will see lower bills in 2020. The utility filed a proposal with the Florida Public Service Commission to reduce rates for electricity and gas by more than 3% while adding more solar power and making grid improvements.

Myanmar approves three power projects

Sept 17 – Myanmar’s Ministry of Electricity and Energy has given the green light to plans for a 1,230 MW gas-fired power plant in Kanpauk, Taninthayi region, a 377 MW gas-fired unit in Ahlon, Yangon region and a 1,390 MW thermal plant in Milaunggyine in Ayeyawady region. The conflict-ridden country is currently producing electricity from 5,600 MW installed capacity, derived both from state- private-owned power stations.

Bonny Train-7 to cost $6.5bn

Sept 16 – Nigeria LNG is preparing to add a seventh processing train to Bonny LNG, bringing total capacity from 22 million tons per annum (mtpa) to 30 mtpa. Estimated to cost $6.5 billion, Bonny Train-6 will include a new liquefaction unit, a storage and a condensate tank as well as three gas turbine generators.

Schneider to complete L&T takeover by early 2020

Sept 13 – Venturing into India, Schneider Electric hopes to finalise the Rs 14,000 crore acquisition of Larsen & Toubro's electrical and automation business by early 2020. After the transaction is completed, Schneider will have a 65% stake in L&T, while the remainder will be held by Temasek.

MHI to advice China on energy conservation

Sept 12 – Mitsubishi Heavy Industries Thermal Systems, part of MHI, has set up a joint venture withan affiliate of State Grid Corporation of China (SGCC) to perform technical consulting for energy conservation projects in China. The focus of SGCC lies on building new decentralized power stations, biomass-derived power gensets and energy saving solutions.

Tender extended

Sept 11 – Turkmengas has extended a tender for the overhaul of the gas turbine engines of the NK-12ST and NK-14ST brands. Bidders need to pay to receive the tender documents, and then submit a written application to Turkmenistan’s state gas company.

Gas power units to buffer Germany’s coal exit

Sept 10 – Electricity output of Germany’s fleet of gas-fired power plants has risen to a over 13,5 billion kilowatt-hours in the three months from June to August, Fraunhofer ISE figures show. These productivity gains put CCGTs in pole position to balance supply swings in connection with the German coal exit.

Power of Siberia gas flows to start on Dec 1

Sept 9 – Russian gas supplies to China via the eastern route are going to start on December 1, 2019, Gazprom chairman Alexey Miller told his counterpart at CNPC in Beijing. The huge Chayandinskoye field, containing some 1.2 trillion cbm of gas, had already been connected to the 38 Bcm per year ‘Power of Siberia’ gas pipeline in August.

Hurricane Dorian causes havoc in the Bahamas

Sept 6 – In the aftermath of Hurricane Doran, a Category 5 storm, Bahamas Power and Light has said there is a total blackout in New Providence, the most populous island of the archipelago. Dorian made landfall twice on Sunday, ripping off roofs and electricity lines. In most parts, electricity has not been restored.

LNG cargoes via Bab-el Mandeb decrease

Aug 30 – Northbound LNG shipments via Bab el-Mandeb, a sea route chokepoint between the Horn of Africa and the Middle East, have fallen over the past three years as Egypt imports less natural gas from the Persian Gulf. In 2015 and 2016, both Jordan and Egypt imported up to 1.4 Bcf/d of LNG into Red Sea ports but these shipments fell sharply following the development of large gas finds in the Mediterranean.

Hokuriku Electric buys LNG cargo

Aug 29 – Japanese utility Hokuriku Electric has purchased an LNG cargo for delivery in November as soaring temperatures drew down gas in storage for the autumn. The cargo is understood to be scheduled for delivery in the second half of November from Malaysia’s Petronas and may well be destined for Hokuriku Electric’s first LNG-fired power generation unit,  the Toyama Shinko plant.

Technip spins off LNG activities

Aug 28 – TechnipFMC, has decided to spin off its European-based engineering and construction operations into a separate business, leaving the American half of the firm as an equipment supplier to the oil and gas sector. The split is due to be completed in the first half of 2020.

FLNG power market to top $930m by 2023

Aug 27 – The global market for floating LNG power vessel is projected to reach $ 931.6 million by 2023, up from $ 860.1 million seen last year, according to ReportsnReports. Major vendors of FLNG power vessels are Siemens, MAN, Wärtsilä, Caterpilar and GE which are targeting to use the technology to supply decentralized power to island nations in Southeast Asia and along the coast of sub-Saharan Africa and the Americas.

EIA monitors grid hourly

Aug 26 – The U.S. Energy Information Administration (EIA) has launched a beta release of its hourly electric grid monitor. The enhanced version analyses hourly generation by energy source and hourly sub-regional demand for certain balancing authorities in the Lower 48 states.

Hiroshima waste-to-energy plant gets upgrade

Aug 23 – Mitsubishi Heavy Industries (MHI) has been chosen to upgrade and refurbish the combustion facilities at a waste to energy plant in Hiroshima. The Naka plant in Minamiyoshijima, Naka-ku, has a total waste treatment capacity of 600 tonnes per day and generates 15.2 MW of electricity to power the equipment in the factory, while selling the remainder to the grid.