Regulation & Policy

Mexican president Enrique Peña Nieto signed a historic energy reform bill into law on Monday in a move that is expected to drive further investment in the country’s energy sector. When the majority of the new laws take effect on the 1st January 2105 it will be the first time that foreign energy firms can compete in the country's energy sector since 1938.

The Greek government will hold a bidding round next month to award of the first new oil and gas exploration leases in the country for nearly 20 years, in a bid to reduce the country's reliance on costly fuel imports and source domestic gas supply for power production.

 

Despite Dutch the 2015 spark spreads being stuck in deeply negative territory at €7/MWh, power producers disagree on whether the launch of a capacity market would be an adapt remedy for depressed profit margins.

India needs to expand the role of renewables and grid reliability to tackle “significant challenges” in the power sector if it aims to achieve its low-carbon growth strategy, according to a report from the International Energy Agency (IEA). To do this authorities must use “all available options” and further exploit domestic natural gas reserves.

The Brazilian government’s Energy Research Office (EPE) expects 20GW of gas-fired capacity to bid into planned energy auctions later this year. The auctions will take place in September and October this year and 36 gas power plants are expected to bid.

U.S. power plant developer Global Edison is to build a new 1,500 MW gas-fired plant in Anambra State, Nigeria. The plant is expected to cost a total of $2.5 billion and will be fuelled by gas from the Nigeria’s eastern supply axis.

The government of Tanzania is keen to implement reforms to increase gas and coal power capacity in a bid to meet increasing shortfall in electricity generation. Grid operator Tanesco said this week that only two independent power producers are currently generating electricity in the country despite pressure for more output.

Israel's Public Utilities Authority (PUA) has issued new guidelines for power generators of how to handle domestic gas supply shortages. In such circumstances, private power producers will take priority as state-owned utility Israel Electric Corp (IEC) can switch to alternative fuels, such as gasoil or fuel oil.

Senate committees in Mexico have backed laws that regulate the opening of state-run oil and gas industries to private investment. The latest bill includes a raft of secondary laws supporting energy reforms, including a hydrocarbons law, which sets out contracts, fines and the ownership of Mexican oil and gas resources.

Questioning the government's ability to predict the UK's future power demand and criticising its risk appetite, analysts at Cornwall Energy suggest the 53 GW of de-rated capacity up for grabs in the upcoming capacity auctions would be" larger than necessary" due to difficulties in predicting supply and demand four years out from a delivery year as well as a too low a de-rating of interconnector.

The UK’s Secretary of State for Energy and Climate Change, Ed Davey has announced that the government will procure a total of 53.3 GW of power generation capacity in upcoming capacity auctions. While the main parameters for the December auctions had already been outlined the total amount of capacity up for auction had remained uncertain.

After relying on shale gas for over a decade, public opinion in the Texan town of Denton has shifted and the city council is considering imposing a ban on fracking as inhabitants want to preserve the livability of their surroundings.

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News in Brief

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.

PowerPHASE converts gas peakers into storage engine

June 18 – U.S. emergency power provider PowerPHASE has developed an upgrade to convert 7F gas turbine-based peaking plants (350 MW each) to a so-called Storage Engine (400 MW). The unit would be able to store 3500 MWh daily and discharge 4800 MWh daily. CEO Bob Kraft claims utility customers could dispatch the Storage Engine, despite its lower heat rate (4000), ahead of higher heat rate options (9000 for gas peakers) in a competitive market like ERCOT in Texas.

Cummins names Davis head of New Power unit

June 17 – Cummins has appointed Amy Davis as Vice President and President of the company’s New Power Segment, effective July 1. The new unit includes Cummins’ electrified powertrains, battery design and assembly, battery management, fuel cell and hydrogen generation.

GE powers USS Zumwalt

June 16 – The US Navy has taken delivery of the USS Zumwalt, its first full-electric power and propulsion ship, equipped by GE’s Power Conversion. The ship features a high-voltage system, propulsion drive trains with multi-phase VDM25000 power converters and advanced induction motors. Kevin Byrne, head of GE’s North America marine segment said “the full-electric power and propulsion ship has the flexibility to direct energy where it is needed on the platform.”

New England power prices down 40%

June 15 – Spot electricity prices in New England (NE) has fallen since winter 2019/20 when it stood at an average $28/MWh, down 40% from an average $47/MWh in the previous winter. Low natural gas prices, warmer-than-normal temperatures, lower loads, and reduced needs to run expensive peakload generators were the cause for the substantial drop in NE’s winter electricity prices, the U.S. Energy Information Administration (EIA) finds.