Regulation & Policy

Issuing a stark warning about the risk of power shortages from 2018, Sri Lanka's energy regulator has called on utilities to immediately start construction works for a first series of approved power plant projects. Pressure to add much-needed capacity has been put in particular on Ceylon Electricity Board (CEB), Sri Lanka’s main energy supplier.

Ten judges on the US Court of Appeals in Washington have heard supporters and opponents clash during a 7-hour hearing on the Clean Power Plan (CPP) – a controversial cornerstone of President Obama’s legacy on environmental law. Facing opposition from Republican-led states in the Senate, he was using federal administration such as the Environmental Protection Agency (EPA) to drive through his climate agenda.

Outcome of a court ruling could determine whether the Obama administration’s plan to curb power plant emissions by 32% by 2030 will become a reality. Republican-led states and the coal lobby filed various lawsuits – a key decision will be made by the US Court of Appeals for the District of Columbia on Tuesday.

The Energy Technologies Institute (ETI) has commissioned four industry experts to examine options for ‘whole system’ reform, given the mounting pressure on UK power grids. A more decentralised dimension to decisions on energy networks was agreed on by all experts – though there are differences on governance.

While power producers like EDF cashed in on record electricity prices during last week’s heat wave in the UK, capacity constraints provided an early test for National Grid which seeks to keep the lights on with ever tighter capacity margins. Winter 2016/17 might prove challenging in the face of mass retirements of coal-fired plants earlier this year.

Ceylon Electricity Board (CEB), the incumbent utility in Sri Lanka, has started preparations to add 1,275 MW of generation capacity over the next four years. The regulator is pushing for a swift execution of new-builds to avert an energy crisis which is anticipated as early as 2018.

Critics of Germany’s reform of the Renewable Energy Act (EEG) have warned that the abolition of Feed-in Tarrifs (FITs) will “make the country’s once vaunted Energiewende policy run out of steam”. From the start of 2017, FITs will be replaced with a competitive auction system as Berlin seeks to keep costs for renewables under control. Caps on new-build wind and solar power will limit the deployment of intermittent power sources.

Yuval Steinitz, the Israeli energy minister, has mandated the closure of four old coal-fired power units and their replacement with two new combined-cycle gas power plants. Earlier this year, Steinitz ordered state-run Israel Electric Corp (IEC) to use 15% more gas, replacing an equivalent amount of coal generation.

Flexibility of power systems can be enhanced by thermostat-based demand response, aggregators and small energy storage. However, high transaction costs - relative to the size of resource - prevent these emerging small resources from participating directly in electricity markets, the Oxford Institute of Energy Studies (OIES) finds. Remunerating different kinds of flexibility – MW, MW/min and emission performance – would facilitate a more balanced competition.

In the aftermath of a month-long leak at SoCalGas’ storage, California is taking urgent measures to cap the gas use in the power sector. Looking ahead to the autumn and winter season, the State Energy Commission, CPUC and the California ISO evaluate the option of importing LNG.

Offshore wind and gas power plants are expected to fill Britain’s capacity gap amid uncertainty over the future of the contested Hinkley Point nuclear project. The UK government approved plans by Dong Energy to expand a wind farm in the North Sea to a size that would produce nearly as much electricity as the two Hinkely Point reactors.

Lack of regulatory certainty is counteracting South Africa’s ambition to get over 3,000 MW of gas-fired generating capacity online between 2019 and 2055. Eskom, the country’s state-owned utility, even said it would no longer sign any independent PPA that it had not negotiated itself.

Determined to end load shedding, Pakistan’s Prime Minister Nawaz Sharif has requested a “timely completion” of power projects across the country. Several plant conversions and new-builds with a combined capacity of nearly 5.8 GW are targeted to supply electricity to the grid by mid-2018.

Called on by the Competition Markets Authority (CMA) to cap some of the most expensive retail power tariffs in Britain, energy regulator Ofgem has now committed to implementing measures that will improve competition. One utility boss criticised, however, that “too much onus” is being put on consumers.

Britain’s energy regulator Ofgem has voiced concerns that so-called embedded benefits, paid by power suppliers to distribution grid-connected generators, seems to put them at an advantage over larger plants connected to the high-voltage grid. Distributed generators cash in on £45/kW in embedded benefits in addition to selling electricity.

Page 17 of 54

News in Brief

Slow start of STT pipeline

Oct 18 – U.S. gas exports to Mexico have not picked up substantially despite the start of the Sur de Texas-Tuxpan (STT) pipeline. Exports are still below 6.0 billion cubic feet per day (bcf/d), although there no current postings regarding maintenance on the Sistrangas pipeline that feeds from NET Mexico.

EIB defers ban on fossil projects

Oct 17 – Luxembourg-based European Investment Bank (EIB) has bowed to pressure from Germany and the European Commission and deferred its decision to ban loans to fossil-fuel projects until mid-November. Germany wants the bank to keep financing gas-fired power projects as it views the cleaner-burning fossil fuel as a vital backup for renewable energy sources.

Brexit will not impact UK gas supply

Oct 16 – Security of power and gas supply in the UK will not be jeopardized this winter by the country’s imminent departure from the European Union, even in the event of a hard Brexit, National Grid said. In its assessment, the TSO factored in a halt to flows via the Belgium and Dutch gas interconnectors “from EU exit day one”, but said ongoing deliveries from Norway, the UK Continental Shelf and storage will continue as usual.

Ferrybridge C gets demolished

Oct 15 – Four cooling towers at the Ferrybridge Power Station have been taken down as the coal-fired power station will make way to a new, high-efficiency gas power station. Operator SSE shut down the 500 MW Ferrybridge C unit in March 2016 and now started to tear it down.

Global energy storage tops 10 GW by 2025

Oct 14 – The global market for grid-connected energy storage will grow by 6,900 MW, or 16.6% to reach over 10,500 MW by the end of 2025, according to Reportlinker.com. Germany will add over 267 MW energy storage installations over the next five to six years, while 330 MW will come from other European markets. These numbers are dwarfed by China, where up to 1,200 MW energy storage units could be connected to the grid by 2025.

Wärtsilä services EDL plant

Oct 11 – Energy Developments Ltd (EDL) of Australia has awarded Wärtsilä a service contract for gas engine-based baseload power plant at the McArthur River zinc mine in Northern Territory. The maintenance approach for the 53 MW onsite power plant is no longer pre-planned and scheduled but has been changed to condition-based and predictive maintenance, with an advisory contract.

EPH buys CCGT in Galway

Oct 10 – The Czech energy company EPH has received regulatory approval to purchase an 80% stake in the 400 MW Tynagh Energy combined-cycle gas power plant in Galway, Ireland. Mountainside Partners will continue to own the remaining stake in the CCGT, which operates based on a security-of-supply contract from the Irish TSO based on guaranteed power prices.

ITM gets £38m boost from Linde

Oct 9 – Sheffield-based ITM Power, maker of electrolysers for hydrogen production, has been boosted by a £38 million cash injection, as Linde acquired a 20% stake in ITM at 40 pence per share. Looking ahead, ITM said it is seeking to raise £14 million from new and existing institutional investors.

Drax to convert two power units

Oct 8 – Drax Group has received government approval to convert up to two coal-fired generating units at its power station in North Yorkshire to run on natural gas. With this ruling, the UK regulator overturned objections by ClientEarth, stressing some fossil power is vital for the UK to backup intermittent renewable power source.

Storage use tops 80% in key U.S. regions

Oct 7 – Gas storage utilization in the United States is rising in the autumn, with net injections topping 112 billion cubic feet (Bcf) in the first week of October. According to EIA figures, underground storages are at least 80% full in the East, Midwest, and South Central non-salt regions, allowing for seasonal withdrawals to help meet peak-day gas demand throughout the upcoming winter.

Maine, NY aspire to 100% clean energy

Oct 4 – Three U.S. states—Maine, New York, and Ohio—have updated their renewable portfolio standards (RPS), since May 2019. As a result, Maine and New York joined California, Hawaii, Nevada, New Mexico, and the District of Columbia in requiring 100% clean electricity by 2050.

TransAlta to built CHP in Alberta

Oct 3 – Canada-based Transalta and SemCAMS Midstream have agreed to develop, construct and operate a new cogeneration facility at the Kaybob South No. 3 sour gas processing plant in Alberta. To be built at a cost of some 105 million, the CHP will have an installed capacity of 40 MW. Start of commercial operation is targeted for late 2021.

GE’s 100th HA turbine sold in Greece

Oct 2 – Greek industrial firm Mytilineos has ordered a GE 9HA.02 gas turbine to be the heart of the 826 MW Agios Nikolaos combined-cycle gas power plant. This deal also marks the 100th unit of GE’s HA gas turbine sold. Construction of the CCGT is due to start before the end of the year.

ABB launches M4M analyzer

Oct 1 – Swiss technology firm ABB has launches its first Bluetooth-equipped network analyzers, called M4M. The system gathers data from distribution grids and connects them to a cloud-based control system, allowing users to react on energy consumption and on-site power generation trends.

Microsoft invests in wind power

Sept 30 – Microsoft and ENGIE have entered a long-term solar and wind energy power purchase agreement (PPA) in the United States. The deal will see Microsoft purchase a total of 230 MW from two ENGIE projects in Texas, bringing Microsoft’s renewable energy portfolio to more than 1,900 MW.

Gazprom tackles issue of ownerless gas grid

Sept 27 – Gazprom, the main supplier of pipeline gas to Europe, is trying to settle the issue of ownerless gas pipelines – a relic of the former Soviet Union. Abandoned gas transmission pipeline spanned 6,651 kilometers as of March 1, with the issue seen as “especially acute” in the North Caucasus region where half of this infrastructure is located. If no owner registers these facilities within three months, Gazprom will take over to ensure reliability and safety.

Investors flock to Myanmar

Sept 26 – Fitch Ratings has singled out Myanmar’s power sector as one of the largest beneficiaries of foreign direct investments (FDI) worldwide. Nearly $21.2 billion was poured into power generation and energy infrastructure projects thus far in 2019, which is 27% of total FDI under the Myanmar Investment Law.