Regulation & Policy

Cogeneration in Spain could become a causality of current changes in electricity legislation, with an estimated 6 GW at risk of closure. Proposed reductions of the CHP tariff will immediately drive roughly half of the existing capacity into negative gross margins and force them to shut-down, industry association COGEN Spain warns.

The German government and the European Commission have ended a lengthy dispute over exemptions and rebates to industry from paying the full levy charged for subsidizing renewable energy. A compromise allows firms to pay less than the 20% share of the EGG levy which the EC had proposed, German media reported.

A proposed reform of Germany's renewable energy act (EEG) is set to hit manufacturers with substantial extra costs for energy which may lead to closures, the industry warns. The renewables levy will rise to €77/MWh in 2020 from currently €62.40/MWh and the extent of industry exceptions is still uncertain.

 

Reviewing the EU Energy Efficiency Directive by July, the Commission is likely to set more stringent targets after the European parliament voted for 40% improvements in efficiency by 2030. "The parliament is expecting an ambitious energy efficiency target from us," Mechthild Wörsdörfer, Director Energy Policy at DG Energy said in Brussels today.

Warning that the UK Energy Bill may not realise the full potential of Combined Heat and Power (CHP) Generation, the British industry association CHPA is calling on policy makers to extend the small scale Feed-in Tariff capacity threshold in addition to the proposed Contracts for Difference (CfD).

U.S. power provider Invenergy is in talks with the Federal Energy Regulatory Commission (FERC) to get a waiver approved for its 600MW gas-fired Nelson Energy Center in Illinois. The waiver, if grantedwill allow the facility to sell some of its capacity outside of the Base Residual Auction (BRA) of PJM Interconnection's Reliability Pricing Model (RPM).

Faced with high costs for retrofitting coal-fired power plants to comply with the Environmental Protection Agency's (EPA) Mercury and Air Toxics Standards (MATS), operators are keen on developing cost-effective measures to curb emissions, acid gas, toxic metals and mercury.

In a bid to increase the reliability of the U.S. power sector the Federal Energy Regulatory Commission (FERC) has ordered gas and electric providers to create closer ties to improve shipping and dispatch timetables. Providers must “better coordinate the scheduling of natural gas and electricity markets in light of increased reliance on natural gas for electric generation,” according to a FERC statement.

The chief executive of UK energy firm Centrica has stated the company has ‘concerns’ over the recently announced Competition and Markets Commission (CMA) inquiry into the UK energy market and suggested the company may hold off on any  investments in new gas power plants in the short term.

Any delay to the UK’s proposed capacity market mechanism could result in power brownouts and hold ups for power plant construction, according to the chief of National Grid's Electricity Market Reform team. “The risk has clearly increased and we are close to being in the position of experiencing brown outs". Mark Ripley, project director at National Grid said at the Future of Utilities conference in London.

The U.S. Federal Energy Regulatory Commission (FERC) has approved plans to ship natural gas from Texas to Mexico via a border-crossing interconnector. FERC noted that the project was needed to “meet [Mexico’s] expanding fuel demand for power generation and industrial activity.”

Gas-fired power plants in Spain may be in line for government subsidy to prevent further closure of facilities. The government is understood to be in private negotiation with power providers in a bid to reduce the countries €30 billion electricity deficit.

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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.