Regulation & Policy

Australia’s big LNG exporters – including Shell and Exxon - have agreed to a request from Prime Minister Malcolm Turnbull to supply more gas to the domestic market.

The UK government is preparing to intervene to control energy prices because the market is “manifestly not working” for consumers, according to Prime Minister May. The Government has faced repeated calls for a fixed price cap on energy tariffs amid accusations that the so-called Big Six energy companies are not competitive enough on pricing.

A switch from coal to gas helped keep energy-related carbon dioxide emissions flat in 2016 for the third year in a row, according to the International Energy Agency (IEA), after many years of steep growth. However, most of the improvement did not come as a result of policies designed to cut CO2 emissions.  

The European Commission has approved a €420 million (£364m) Czech support scheme for electricity generation from high-efficiency combined heat and power (CHP) plants under EU state aid rules. The Commission concluded the measure would support EU energy and climate change goals without unduly distorting competition.

The latest report by the Australian Energy Market Operator shows there could be both gas and electricity shortages within the next few years on the country’s populous east coast – despite the nation being among the biggest LNG exporters in the world (and set to be the biggest by 2021).

The U.S. Environmental Protection Agency (EPA) is withdrawing its request that owners and operators in the oil and natural gas industry provide information on equipment and emissions at existing oil and gas operations. The withdrawal is effective immediately, meaning owners and operators, including those who have received an extension to their due dates for providing the information, are no longer required to respond.

Singapore is to introduce a carbon tax on large direct emitters of greenhouse gases, including power stations from 2019. The tax is expected to affect between 30 and 40 emitters.

UK gas and power regulator, Ofgem, is proposing to cut the embedded subsidies enjoyed by smaller distributed generators, down from the current level of around £45/kW – double the clearing price for the 2016 Capacity Market auction – to just £2/kW. The changes could come as a blow to many smaller gas fired plants, which make up a significant share of such generators.

Last week finally saw an agreement between European Union national governments on the future of the Emission Trading System (ETS) carbon market, after talks that lasted 18 months. The deal could be bullish for gas demand, with the number of carbon credits constrained as the 2020s progress, adding to the cost of coal fired power generation, and making gas – which emits less than half the CO2 of coal – more attractive.

Mexico should pursue an “active competition policy” in order to harness the benefit of the reform of its energy market initiated in recent years, the International Energy Agency (IEA) said.

Italy's industry ministry is finalising a decree on incentives to the biomethane sector, which might be approved as early as this summer.

Economic growth and an expanding population are going to pose a challenge for New Zealand from an energy perspective, requiring increased efforts in terms of both technology and policy, the International Energy Agency said.

In its latest New Zealand 2017 review of energy policies in the country, IEA stressed that despite New Zealand having long been “a global leader in developing effective energy markets, renewable energy and establishing robust policies for electricity security”, over the past decade its growing energy needs have “outpaced improvements in energy efficiency, mainly because of the country’s expanding economy and growing population.”

Implementation of gas network codes by European countries as part of the gas regional initiative (GRI) showed a disconnect between progress in the south region and the south-southeast region, with the latter showing a somewhat slower progress in 2016.

It emerged from the Gas regional initiative status review report 2016 published in February by the Agency for the cooperation of energy regulators (ACER).

EU member states have agreed February 17 on the Commission's proposal to invest some Eur444 million in key European energy infrastructure projects.

The International Energy Agency (IEA) and China are stepping up cooperation on energy security, capacity building, data and statistics through a new three-year work programme that is also intended to support China’s energy transition and efforts to address environmental and air-quality issues.

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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.