Regulation & Policy

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.

Ofgem, the UK energy regulator, has awarded National Grid’s gas distribution arm together with DNV GL a £4.8 million, three-year contract to improve the way gas bills are calculated. The new billing method seeks to specifically assign the energy content of gas, rather than using the present flow-weighted average calorific value.

As Ireland moves towards an Integrated Single Electricity Market (I-SEM), the regulator has just set out a methodology for a transition to competitive power auctions in a bid to attract investment in new capacity. The first auction will be held on December 15 for the rest of the delivery year 2017/18.

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News in Brief

Supercapcitors to replace batteries

Sept 25 – The global market for supercapacitors was valued at over $487 million last year and is forecast to top $1,570 millio by 2025, growing at an annual rate of 21.8%. Supercapacitor, an emerging technology for energy storage systems, can offer higher power density than batteries was may soon replace the latter.

Atos, Siemens expand digital partnership

Sept 24 – Atos, a global leader in digital transformation, has expanded its strategic partnership with Siemens AG for five years, helping the latter with data driven digital, cloud transformation and cybersecurity. The extension comes in the context of 5-year total €3 billion agreements which were separately signed with Siemens AG, Siemens Energy and Siemens Healthineers.

Rotterdam Port to store CO2 beneath the North Sea

Sept 23 – The Porthos project, a joint venture between the Port of Rotterdam Authority, Gasunie and EBN, seeks to transport CO2 from industry in the port to empty gas fields beneath the North Sea. In its early years, the Carbon Capture Utilisation and Storage (CCUS) will be able to store approximately 2.5 million tonnes of CO2 per year with plans to be operational by 2024.

German power sector to reach net zero in 2040s

Sept 22 – Revisions to Germany’s Renewable Energy Act (EEG) stipulate the power sector should become greenhouse-gas neutral in the early 2040s. Despite the gradual electrification of heating and transport, the German energy ministry is so far sticking to its estimate of 580 terawatt-hours (TWh) of power consumption in 2030 – close to current levels.

B&W to supply superheaters to Lumiant

Sept 21 – Babcock & Wilcox’s thermal segment has been contracted to design, manufacture and supply new superheater components for a high-efficiency boiler at Luminant’s Oak Grove Power Plant near Franklin, Texas. Material delivery to Oak Grove is scheduled for February 2021.

EC targets 55% emission cut by 2030

Sept 17 – The European Commission’s latest 2030 Target Plan stipulates a 55% cut in emissions by 2030, compared to 1990-levels. The lobby group COGEN Europe stressed the importance of combined heat and power generation (CHP) to reach that goal, calling for more stable policies and supportive regulation.

Rolls-Royce may sell ITP Areo

Sept 17 – Britain’s prime manufacturer Rolls-Royce confirmed it is looking to strengthen its balance sheet, possibly by disposing of ITP Aero which his hoped to generate proceeds of more than £2bn over the next 18 months. Further cost cutting is meant to deliver £1 billion and revamping of the company’s Civil Areospace business should save another £1.3 billion.

China’s GDP may grow 1.8%

Sept 16 – China’s GDP is forecast to grow 1.8% this year as the economy recovers from the Covid-19 pandemic. The government slashed electricity tariffs to support manufacturing but the Asian Development Bank (ADB) warns of mounting credit risk for banks. Fiscal revenue pressure also intensifies as 1.5% of China’s GDP growth in the first half of 2020 was based on bond-funded investment by local governments.

Zeebrugge goes for green hydrogen

Sept 15 – Colruyt Group (Eoly), Parkwind and Fluxys aim to spend up to 35 million Euros to develop a green hydrogen plant in Zeebrugge, Belgium, by 2023. The plan is to convert off-shore wind energy into green hydrogen which can then be injected in the high-pressure natural gas transmission grid.

Shale gas market to top $41bn

Sept 14 – Global markets for unconventional gas, mostly developed by shale fracking, is forecast to grow at an annual rate of 7% to reach $ 41.76 billion by 2024. According to Technavio, the Americas region will remain dominant with an 87% market share as hydraulic fracturing technologies evolve. Top players in the market are BP, Chevron, ConocoPhillips, Exxon Mobil, PetroChina, Gazprom, Shell, Santos, Saudi Arabian Oil Co., and YPF.

SNAM, Saipem join forces on hydrogen

Sept 11 – Two Italian energy companies, SNAM and Saipem, have agreed to develop initiatives for green hydrogen production and transport, as well as for carbon dioxide capture, transport and reuse or storage (CCRS). The move supports the European Commission’s Hydrogen Strategy to reach net-zero emissions by 2050.

MAN, Wasco to drive Power-to-Gas Tech in Asia

Sept 10 – MAN Energy Solutions and Wasco have signed a Memorandum of Understanding (MOU) to promote and commercialize Power-to-X (PtX) projects in South-East Asia. The technology in question converts electricity into carbon-neutral synthetic fuels, gas or liquid, for use as a clean, carbon-neutral energy source.

Romgaz, GSP to realise 200 MW gas and solar project

Sept 9 – Romania’s state gas company Romgaz has agreed to build 200 MW power generation capacity with the privately-owned Grup Servicii Petroliere (GSP) which is controlled by the local businessman Gabriel Comanescu. The project entails a 150 MW gas-fired power plant and a 50 MW solar photovoltaic park, to be built on the site of a disused coal power plant in southern Romania.

Alaska uses twice as much energy for transport as NY

Sept 8 – More energy is used per person for transportation in U.S. states with low population density. According to the U.S. Energy Information Administration’s (EIA), people in geographically large states with small populations, such as Alaska, Wyoming and North Dakota, are useing twice as much energy for transportation than the U.S. average on a per capita basis. That’s in stark contrast to states with higher population density, such as Rhode Island and New York.

Hydrogen Council launched in Kobe/Kansai area

Sept 7 – Mitsubishi Power, part of MHI, and various Japanese energy companies have set up the so-called ‘Kobe/Kansai Hydrogen Utilization Council’ to develop new utilization methods and establish a regional hydrogen supply chain. The aim is to help Japan shift to a carbon-free, hydrogen-powered society by 2030.

B&W sets up Asia-Pacific HQ in Perth

Sept 4 – Babcock & Wilcox (B&W) has setup new Asia-Pacific headquarters in Perth, Australia, and named Nick Carter as managing director of the region. Headquartered in Akron, Ohio, the engineering company is also establishing or expanding operations in Indonesia, the Philippines, Vietnam, Thailand, China and India.

Germany boosts RES targets

Sept 3 – Striving to meet 2030 emission targets, the Germany government is increasing its renewable energy targets while adjusting the grid to accommodate a greater influx of fluctuating power supply. The draft reform of the Renewable Energy Act (EEG) stipulates raising the solar photovoltaic capacity to 100 GW (up from 52 GW today), onshore wind capacity to 71 GW (from 55 GW), offshore wind to 20 GW and biomass to 8.4 GW.

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