Regulation & Policy

Chinese authorities have mandated power producers in some regions to return to burning coal, responding to acute gas shortages. Coal imports rebounded from a three-month low in November as utilities seek to replenish stocks prior to the period of peak winter demand.

Toning down its green energy ambitions, the Government of South Korea has backed away from plans to convert four out of nine planed coal-fired power plant projects to run on natural gas. Instead, only one coal-to-gas conversion is now likely to go ahead, the country’s energy minister said over the weekend.

South Africa’s national utility, Eskom, would benefit its ratepayers and investors by decommissioning its older coal-fired power units and scaling back construction of the controversial 4,800-MW Kusile coal power plant project, said Grové Steyn, lead economist at Meridian Economics in Cape Town. In his view, “South Africa does not for the foreseeable future need a new national nuclear-, coal- or gas-to-power construction program.”

US regulators have reached a settlement with Mississippi Power on the split of the remaining costs associated with the troubled $7.5 billion Kemper County power plant – once intended as a pilot coal gasfication plant before developers pulled the plug over technical issues.  After months of quarrels at court, Southern Co. agreed to lower the price tag on the project by $85 million to $853 million, lowering the burden on ratepayers.

As persistent overhang in global gas supplies reduces state revenues, energy ministers from Qatar, Iran, Russia and Venezuela are gathering at this week’s Gas Exporting Countries Forum (GECF) in Santa Cruz, Bolivia. The question is how GECF countries – often referred to as the Gas OPEC – should react to the rampant US gas exports which has adopted a price-setting function on global spot LNG markets.

Differences on energy policy and migration have brought down lengthy and difficult coalition talks between Germany’s Conservatives, the Green Party and the Liberals (FDP). Shortly before midnight on Sunday, FDP head Christian Lindner abandoned negotiations, stating: “The four discussion partners have no common vision for the modernisation of the country, and lack a common basis of trust.”

Angela Merkel’s Christian Democratic Party (CDU) sees the much-debated option of a successive closure of coal power plants as a “last resort to meet Germany’s 2020 climate goals.” However, the timeline of such a coal exit is subject to fierce debate in the ongoing talks to form a coalition government, with the Conservatives stressing the importance of “reliable and reasonably priced power supply.”

Coal has been singled out as one of the key culprits for global warming at the Bonn climate talks and several European countries have come forward with plans to phase out coal-fired power plants. Italy aims to exit coal by 2025 and boost the role of renewables, the government in Rome said on Friday. In Berlin meanwhile, the issue is a subject to fierce debate as coalition talks drag on between the Conservatives, Liberals and the Green Party.

Hydraulic fracturing, commonly known as fracking, has been proposed as a solution to Australia’s current energy crisis, with advocates calling for the removal of state bans to allow the production of unconventional oil and gas resources. Matthew Meagher, researcher at Northern Australia and Landcare Research Programme says “fracking is cheaper than current renewable technologies and refurbishing old coal-fired plants.”

Greece has made noticeable progress in recent years on plans to state-owned energy companies and liberalize electricity and gas markets, and the IEA Executive Dr Fatih Birol expects this “impressive programme will lead to more competitive and financially viable energy markets offering choices and low prices to consumers.”

Several major US energy companies plan to accompany US President Donald Trump and Commerce Secretary Wilbur Ross on a visit to Beijing, starting November 8. The aim is to close deals on selling US LNG to China, along with other American-made products, in order to close the widening trade deficit between the world’s two biggest economies.

Neil Chatterjee, the chairman of the Federal Energy Regulatory Commission (FERC), has dismissed comments from PJM Interconnection saying coal power plants are more prone to cold-weather failures than natural gas-fired plants. Chatterjee, who leads FERC’s evaluation of Energy Secretary Rick Perry’s plan to subsidize coal and nuclear power stations, insisted both are “firm, non-interruptible fuel sources.” He announced FERC will conclude its review by December 11.

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News in Brief

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.

Central Hudson links solar farms to VPP

July 9 – Central Hudson Gas & Electric Corp has established its distributed generation program within the broader context of New York State’s energy plan. Together with Sensus and their Remote Telemetry Module (RTM-III), the Central Hudson will monitor decentralized solar PV backed up by flexible gas gensets.

Siemens and GREEN Solar turn German town CO2-free

July 8 – GREEN Solar and Siemens Energy are jointly developing a concept for making Herzogenrath CO2-free. The plan is to provide an energy-efficient and economical combination of solar power plants, wind turbines, batteries, CHP and combined cycle power plants, as well as heat and hydrogen storage. The hybrid system will be built on the grounds of Nivelsteiner Sandwerke and will be large enough to cover the city’s entire energy demand with zero CO2 emissions by 2030.

Denmark paves the way for Nord Stream 2

July 7– Denmark on late Monday gave the Nord Stream 2 consortium permission to utilize pipe-laying vessels with anchors in Danish waters, paving the way for the Gazprom-led consortium to complete the interconnector. Construction of the 1,230-kilometre pipeline is nearly complete, except for a final stretch of about 120-kilometers in Danish waters. The project was halted in December when the Swiss-Dutch pipe-laying company Allseas suspended works over threats of U.S. sanctions.

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.

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