Regulation & Policy

A new report from the Oxford Institute of Energy Studies (OIES) suggests that Mexico’s energy reforms are overly optimistic in the short term and proposes an alternative commercialisation path for the Comision Federal de Electricidad (CFE). The report suggests CFE should be retained as a state-owned enterprise but limited to serving household customers below a certain annual demand at regulated prices.

Within weeks, U.S. President Barack Obama's administration is set to unveil emission limits for operational fossil power plants, in a move that might hurt fellow Democrats who are running for election in energy-producing states. But Obama can't hold off as he wants to get the cornerstones of his policy to curb climate change enshrined in law before he leaves office.

As gas-fired plants are hit by shrinking spark spreads and decreasing load factors, industry association Eurelectric warns that widespread shutdown may lead to a lack of sufficient gas back-up capacity. Steve Rose, Chairman of Eurelectic's working group 'Gas to Power' called on policy makers to put "the right conditions in place to ensure that gas can support the further growth of variable renewables."

A day after the U.S. Supreme Court voted in new regulation to limit pollution crossing state borders, the Environmental Protection Agency (EPA) has moved to close a contentious coal-fired power plant. The San Juan Generating Station in New Mexico is located in the Four Corners region at the juncture of New Mexico, Colorado, Arizona and Utah.

As the June deadline for the transposition of the Energy Efficiency Directive approaches, industry association COGEN Europe calls on EU member states to harness the full potential of micro-CHP with a view to achieving Europe's 20% energy savings target for 2020.

Two nuclear power projects in Turkey, once operational, are estimated to help the government save $7.2 billion by reducing gas imports by one-third in addition to generating 32% of the country's electricity. The government is keen to fast-track a Rosatom-led reactor in Akkuyu, Mersin province, and aims to realise a further reactor on the Black Sea cost through a Japanese-French consortium by 2023. 

Mounting pressure is placed on the U.S. Federal Energy Regulatory Commission (FERC) to enact reforms in East and Midwest power transmission areas to create stronger capacity markets to strengthen electric grid reliability. Industry has been pushing for regulatory changes ahead of the next base residual power auctions on May 12.

The Intergovernmental Panel on Climate Change (IPCC) has recognized the key role played by combined heat and power (CHP) in reducing greenhouse gas emissions from energy supply. Industry association COGEN Europe consequentially calls on EU member states to reconsider cuts in national support schemes for cogeneration.

Power producers in the United States like American Electic Power, Duke Energy and Southern Co. must abide by federal limits on mercury and other power plant plants, a U.S. appeals court ruled, upholding the EPA's Mercury and Air Toxic Standards (MATS) regulation that was heavily criticized by the industry.

Dangerous levels of greenhouse gas emissions could be mitigated by replacing existing carbon-intensive coal plants with modern gas-fired combined cycle plants, according to new findings from the Intergovernmental Panel on Climate Change (IPCC). The report shows that gas power generation without CCS acts as a bridge technology towards greater renewable energy use with the aim of achieving 450 ppm CO2eq concentrations by 2100.

Japanese ministers voted today to reinstate some of the country's nuclear power plants in a bid to reduce crippling gas import costs for power producers. The government made no comment on how many plants will be restarted, but the new plan is hoped to alleviate the estimated $50 billion losses incurred by nuclear operators as they have been forced to switch to costly fossil fuel imports.

The European Commission's new rule book on what constitutes state aid in the energy sector recognizes a potential need to support conventional capacity to balance intermittent power output from renewables in the EU energy mix.

Page 49 of 71

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.