Iceland, Liechtenstein and Norway – the European Free Trade Association (EFTA) states – will be able to auction their emission allowances on the common EU Emission Trading System (EU-ETS) starting from June. The European Energy Exchange (EEX) said it is about to publish an auction calendar that includes the EFTA states volumes.
The UK Shale Gas Commissioner Natascha Engel has resigned after just six months in office, stating she quit over “ridiculously low” tremor limits which effectively prevent fracking. Under current law, the fracking process must be halted every time a 0.5 magnitude tremor occurs. Opposing these stringent rules, Ms Engel said this cautious approach had created a ‘de-facto ban on fracking’.
The UK Government has been urged by the House of Commons Business, Energy and Industrial Strategy (BEIS) Committee that it needs to do more, and act quicker, on vital clean energy technology such as carbon capture and storage (CCS). The Committee calls for firm targets for storing CO₂, and to deploy CCS sooner and in more places than government’s current plan.
South Korean Ministry of Trade, Industry and Energy (MOTIE) has released a briefing note, detailing the nation’s ambition to move away from coal and towards renewable energy. If realized, these policies are expected to significantly reduce Korea’s coal imports from Australia. Analysts see significant implications for KEPCO’s Bylong Coal mine proposal.
“Enormous efforts” still have to be made if Germany wants to reach its climate and energy targets in the transport and buildings sectors. Government calculations show that renewables will cover more than their target share but energy use in transport keeps growing and is likely to exceed 2005 levels next year and in 2030.
The U.S. Environmental Protection Agency (EPA) has proposed to expand the reach of National Emission Standards for Hazardous Air Pollutants (NESHAP) for stationary combustion turbines. Lifting a 15-year stay on NESHAP standards, the environmental watchdog is now working on a long overdue residual risk and technology review (RTR). New rules will impact lean pre-mix and diffusion flame gas combustion turbines.
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.
News in Brief
Zhonghua’s profits halve
April 1 – Hong Kong-listed Zhonghua Gas Holdings has recorded a staggering 46.7% fall in profit, citing a lower margin for LNG supplies and reduced subsidies, although full-year revenue rose by 7.3%. In December, Zhonghua partnered with Shanghai Shenergy to supply LNG in the Yangtze River Delta region, and also has strong business relationships with Tractebel Engineering and Tianjin Jinre Heat-Supply Group.
Endesa donates $28m to fight coronavirus
March 31 – Endesa has created a 25 million euros ($27.8 million) fund to help fight the coronavirus pandemic in Spain. The Spanish utility, subsidiary of Enel, said the fund will be designated for purchases of protective equipment for health-care workers.
MAN develops liquid methane terminal in Swedish port
March 30 – OxGas has commissioned MAN Energy Solutions to act as ‘owners engineer’ to develop and build a liquefied methane-based fuels terminal in the Swedish Port of Oxelösund. The terminal will feed both LNG and green methane derived from bio gas to SSAB ’s local steel production, and to re-distribute it via train and trailers to other parts of Sweden for use in the steel industry and decentralized power generation.
American ISOs to delay grid investments
March 27 – North America’s independent system operators (ISO) are considering delaying investments in grid upgrades and enhancement as electricity demand weakens due to industry shutdowns to contain the coronavirus pandemic. PJM Interconnection, the largest U.S. bulk power market which spans 13 Mid-Atlantic and Midwestern states, revised its daily forecast of about 100,000 MW of load but actual demand came in at 95,500 MW.
Wärtsilä starts combustion trials using ammonia
March 26 – The Finish technology group Wärtsilä has initiated combustion trials using ammonia in an effort to reduce emissions. Based on initial results, the tests will be continued on both dual-fuel and spark-ignited gas engines, followed by field tests in collaboration with ship owners from 2022, and potentially also with energy customers.
Xodus sees growth in cable services
March 25 – Xodus Group has stepped up services related to subsea power cables over the last twelve months. The number of new consulting assignments grew by more than 50%, resulting in more than 70 active work streams that are handled by more 30 permanent staff.
Electricity “more indispensible than ever”
March 24 – Disruptions caused by the coronavirus crisis lay bare how much modern societies rely on electricity, according to the International Energy Agency (IAE). Millions of people are mandated to stay home, causing a surge in teleworking, e-commerce and video streaming which pushes up domestic electricity use.
U.S. frackers cut Capex
March 23 – Sharp cuts in capital spending among Appalachian gas producers are now being replicated in other U.S. basis, with Energy Aspects anticipating the deepest impact on production and earnings to take place starting from the second half of 2020. So far, E&P companies just hedged 52% of this year’s expected production even though some Appalachian producers are seen “lock in some pure gas volumes at prices above the curve.”
EV makers face bankrupcy
March 20 – Electric vehicles (EVs) remain particularly exposed to the corona effect of supply-side constraints and demand erosion. Gigafactory facilities are likely to be delayed and fledging EV manufacturers could face bankruptcy, Wood Mackenzie warns. On the flip side, declines in EV sector demand may be gains for the stationary energy storage segment.
Manufacturing rebounds in Asia
March 19 – Asian-dominant supply chains for solar and energy storage are gradually rebounding after contractions in February. Moving forward, Wood Mackenzie expects near-term development activity and local logistics in leading European and North American markets will outweigh lingering supply issues.
Italy’s gas demand plunges
March 18 – Corona-struck Italy has seen demand for natural gas plunge 8% from the previous week, with similar declines likely in other EU countries as national governments impose lockdowns to contain the virus. Industrial demand is “particularly volatile,” while gas generators will bear the brunt of demand loss, Wood Mackenzie says, as a carbon price decline is bolstering thermal coal.
Nexif raises funds for Rayong CHP
March 17 – Nexif Energy, a joint venture between Singapore-based Nexif and Denham Capital, has raised project financing for the Rayong gas-fired cogeneration project in Thailand. The 92 MW plant is being developed project with Ratch Group, based on 25-year power purchase agreement with Electricity Generating Authority of Thailand (EGAT).
ADB provides $10m loan for Afghan IPP
March 16 – The Asian Development Bank (ADB) has agreed to provide $10 million in debt financing for a gas-fired power unit in Mazari Sharif with a capacity of nearly 60 MW. Phase-1 of the Independent Power Project (IPP) will get another $10 million loan from the Leading Asia's Private Sector Infrastructure Fund (LEAP).
IEA models 50% Carbon-Free Generation
March 13 – Analysts at the U.S. Energy Information Administration (EIA) have drawn up the 50% Carbon-Free Generation case - assuming a stark shift in state-level policies. In this event, the U.S. would have 19% more nuclear power generation, 10% more wind power and 17% more solar PV contribution than in its Annual Energy Outlook 2020 (AEO2020) reference case.
E-charging market to top $15bn by 2030
March 12 – By 2030, the U.S. market for energy-optimisation in support of charging electric-vehicles could be worth $15 billion per year, McKinsey finds. The consultancy expects high demand for home-charging appliances as residential power tariffs are comparatively cheap and most charging can happen overnight when off-peak electricity prices are lower.
Oversupply builds up
March 10 – Energy Aspects’ end-March forecast has added on another 100+ billion cubic feet of natural gas supply while demand remains subdued. In the U.S., the seasonal decline in heating degree days nearly halved the natural gas withdrawal rate. Gas-burn in the power sector and residential/commercial demand are forecast to fall by 1.7 billion cubic feet per day (bcf/d) and 4.0 bcf/d, respectively.
Small-scale LNG cuts cost for power plants
March 10 – Decentralized gas power plants in remote locations can source cheaper fuel from small-scale LNG regas terminals than from trucking the super-chilled gas across long distances. “Trucking LNG further inland would entail additional costs as well as logistical challenges,” IEA analysts noted. For example, a 100 MW baseload power plant would require, on average, around 20 daily deliveries from tanker trucks.
