Regulation & Policy

Lawmakers in the U.S. state of Colorado are debating a bill that proposes the Colorado Public Utilities Commission (PUC) should consider the ‘social cost of carbon emissions’ before issuing permits for new fossil power plants. The concept seeks to put a price on harms caused by emissions and, if enacted, the new carbon tax would be $46/ton of CO2 emitted, starting from 2020.

Just prior to the first meeting of Germany’s newly installed ‘climate cabinet’ this week, Finance Minister Olaf Scholz has tabled his vision of the country’s energy transition. In his ‘Energy Concept 2038’, Scholz urges the government to show “more commitment for climate action” and focus on electricity supply and grid stability.

The German government is evaluating the launch of CO2 pricing across various emission-intensive economic sectors, including transport. So far, no proposal for a CO2 tax has been included in the German Transport Ministry’s official recommendations because the Conservative CDU/CSU alliance prefers to expand the scope of the European Emissions Trading System (EU-ETS) instead.

The CEO of German regional utility EnBW, Frank Mastiaux, has forecast Germany will see a significant number of new gas-fired power stations being built over the coming years. Flexible combined-cycle gas turbine (CCGT) capacity, in particular, is deemed vital to guarantee cost-efficient supply of electricity and grid stability as the country exits coal and nuclear energy.

China has chosen April 1 as the date when two-digit reductions in Value-Added Tax (VAT) will have to be implemented by key industries, including electric power producers, in bid to lower fuel costs and ultimately reduce electricity prices. Manufacturing companies will benefit from 13% to 16% VAT cuts, while construction and transport firms will pay around 10% less VAT and industrial users of thermal coal, including power producers will see VAT drop by 3%.

Striving to streamline China’s energy market, the National Development and Reform Commission (NDRC) is advancing plans to create a single oil and gas pipeline company by mid-2019. The new China-wide TSO will integrate the pipeline assets of former competitors, notably CNPC and its listed arm PetroChina, Sinopec and CNOOC.

Since the start of the February billing cycles, customers of the Dominion Energy subsidiary SCE&G are enjoying a 15% drop in their expenses for electricity. Dominion had to commit to lower energy bills to get approval from South Carolina’s state regulators for the $7.9 billion SCANA takeover.

Alarmed by an air pollution crisis in Seoul and other key cities, the South Korean government is proposing measures to help utilities to convert their power plants from coal to natural gas in order to reduce worsening levels of toxic fine dust and mercury emissions in Seoul and other northern cities.

U.S. Democrats have voiced concern that Andrew Wheeler, the new head of the Environmental Protection Agency (EPA), will undermine the Obama-era Clean Power Plan by rolling back regulation on power plant emissions. President Trump-nominee Wheeler was instated at the top of the EPA after winning a vote in the Senate by 52-47.

Andrew Cuomo, the Democratic Governor of New York, has proposed to phase out less efficient gas peaking plants to meet the state’s target of reducing greenhouse gases by 40% by 2030, and achieve zero-carbon electricity supply by 2040. The new rules lower the NOx emission threshold, with more stringent controls set to start in five years’ time.

Nearly half of the German public wants a nuclear exit to happen before a coal phase-out: 49.5% of respondents of a Verivox survey say closing the last nuclear plant by 2022, and the last coal plant by 2038, is ‘the right order’. But 44.1% of respondents say nuclear closures are ‘wrong’ from a climate perspective.

Pakistan’s Economic Coordination Committee (ECC) has approved the terms of a power purchase agreement (PPA) and a gas supply deal for what will be the fourth LNG-fuelled power project in Punjab province. Built by a Chinese EPC company near the city of Jhang, the start-up of the 1,263 MW plant is being fast-tracked to help avert a regional energy crisis this summer.

Voters in a referendum have approved developers to proceed with a long-delayed gas power plant in central Mexico, one of seven projects halted in the region. About 60% of the votes cast were in favour of finalizing construction of the $1.3 billion power plant project in Huexca, southeast of Mexico City.

Proposals to put a price on carbon emissions – in the form of a CO2 tax – will not be realise in the current legislative period, Germany’s energy state secretary Andreas Feicht said. The Conservative-led Government had earlier dismissed the initiative, saying it was not in the governing coalition’s agreed agenda.

Reacting to blackouts during Australia’s latest heatwave, the federal government is proposing to underwrite and partially fund new fossil power generation capacity. On the cards are large-scale fossil generators as well as decentralized hybrid plants, consisting of wind and solar plus energy storage.

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News in Brief

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.

Is hydrogen Singapore’s future fuel?

Sept 25 – KBR and Argus have been selected to conduct a feasibility study on hydrogen imports and downstream applications for Singapore through to 2050. The aim is to assess the feasibility and cost-effectiveness of hydrogen use in Singapore’s power generation and transport sectors

Diablo Unit-2 offline

Sept 24 – Unit-2 at the Diablo Canyon nuclear power plant in California is offline for a scheduled maintenance and refuelling, the operator PG&E said. During the outage, several gas-fired power plants will be dispatched to make up for the missing capacity.