Regulation & Policy

Bundesnetzagentur, Germany's energy regulator, has to decide on the 'system relevance' of 28 power plants with a combined capacity of 7GW that operators wish to shut-down due to a lack of profitability.

Views of industry observers vary on how the Government's nuclear deal with EDF and Chinese investors may impact investment in new gas-fired capacity. "It is very hard to see the nuclear announcement as particularly good for gas-fired power generation investment as, all things being equal, it means we need less new gas plants than we did before the announcement," Trevor Sikorski, senior analyst at Energy Aspectus told Gas to Power Journal.

Developers of gas-fired power plant projects in the UK can take some reassurance from the strike price and risk mitigation measures agreed for the Hinkley Point C nuclear power plant, suggests Jim Fitzgerald, associate partner at The Advisory House.

The US Supreme court has announced it will hear a challenge to the Environmental Protection Agency's (EPA) recent climate directives as the beleaguered coal power generation sector in the country fights the regulation. "Whatever happens will undoubtedly be important for the economic case for new gas-fired generation...what this does is buy some time for coal-fired plants," Trevor Skirkoski, analyst at EnergyAspects told Gas to Power Journal.

As South Korea transforms into a creative economy "the energy industry is one of the areas where this creative paradigm can shine," Park Geun-hye, President of the Republic of Korea told the World Energy Congress today, referring to her signature policy targets to utilise enhanced technology for energy storage and demand side management to reduce peak-load power consumption.

The cost of cancelling two high profile combined-cycle gas-fired power plant (CCPP) projects in the Canadian province of Ontario could hit taxpayers with as much as C$1.1 billion, the Auditor General of Ontario, Bonnie Lysyk estimated in a special report.

The US government shutdown looks set to weaken the ability of legislators to regulate energy policy related to natural gas as uncertainty hangs over the world's largest economy. "It reflects very poorly on the government's ability to pass legislation and this will have an impact on their ability to implement future energy bills," Trevor Sikorski, lead analyst at Energy Aspects told Gas to Power Journal.

India's cabinet agreed new rules for the allocation of domestic shale gas resources this week, in an effort to boost gas-fired power production and feed fuel-starved power plants. To dent rising gas demand, India was forced to import 1.2 million tons of LNG in August at prices between $12-15/MMBtu – a substantial premium to Henry Hub gas prices around $3.5/MMBtu.

Capacity markets look set to strengthen their role in assuring reliable power supply in the US, following a conference, hosted by John Norris of the Federal Energy Regulatory Commission (FERC), on Wednesday. Topics discussed ranged from the metrics used to measure success, design elements, key challenges and effective accommodation of federal and state policies in centralized capacity markets.

A tax on the use of fossil fuel for power generation in France was announced by prime minister Jean-Marc Ayrault this week. Scheduled to be in place from 2014 onwards, the carbon tax will be levied on power producers in proportion to carbon emissions.

Rebuking plans of Labour leader Ed Miliband to freeze gas and electricity prices for 20 months if he wins the 2015 election, the UK Big 6 energy companies have condemned this proposal – at a cost of £4.5 billion – as a roadblock to investment in new power plants which exacerbates the risk of blackouts.

Members of the US Federal Energy Regulatory Commission's (FERC) expert technical conference will discuss the impact of rising intermittent power supply on the country's capacity markets and potential solutions when they meet this Wednesday.

Germany's re-elected chancellor Angela Merkel is seeking a coalition partner before the new Government can jointly tackle rampant electricity costs that resulted from the 'Energiewende' policy of phasing-out nuclear energy in replacement of subsidised renewable power. Curbing the EEG levy – an extra charge for renewables imposed on the taxpayer – is one of the most likely options.

SSE sees an "acute need" for Capacity Auctions to stop further plant closures and bring mothballed power plants back into the market to help counter the imminent shortages in Britain's power generation capacity, says policy and research director, Dr. Keith MacLean.

"If the capacity auctions planned for next year were also targeted at immediate delivery, with payments starting straight away, this would help keep existing, but loss-making, plants operational, which is cheaper than building new ones at a later stage," he told Gas to Power Journal.

While both Portugal and Spain are weighted down under a sizeable electricity tariff deficit due to excess renewables capacity, that Portugal hopes to pay off by 2020 while Spain has no definite plan, Portugal has a better chance of ever climbing out of debt than Spain, found ratings agency Fitch Energy in its report Electric Shock: Iberian Tariff Deficit Comparison.

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News in Brief

Brookfield invest $2bn in Cove Point LNG

Oct 22 – Brookfield Asset Management, an investor in energy infrastructure and power storage, has agreed to take a 25% stake in Cove Point LNG for just over $2 billion in cash. The alternative investor also owns assets in hydro (7.9 GW), wind (4.9 GW), solar (1.7 GW), distributed generation (400 MW) and energy storage (2.7 GW).

Ansaldo appoints new CEO

Oct 21 – Ansaldo Energia’s board of directors has appointed Giuseppe Marino as new CEO. Together with the chairman, Giuseppe Zampini, he will decide on the company’s strategy particularly relating to the new Chinese joint ventures.

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.