Regulation & Policy

The Supreme Court of the Philippines has heard testimony suggesting that a 30 day shutdown of key gas-fired power plants was orchestrated by a cartel of operators. “It appears there were power plants that violated the real time dispatch (RTD) and must-offer rule (MOR),” Energy Secretary Carlos Jericho Petilla said, commenting on the case.

The state of California is considering relaxing environmental regulations in order to allow older gas-fired power plants to continue operating and meet supply shortages. Commenting on a recent debate over the state's future energy mix, California Energy Commission Chair Robert Weisenmiller said that there was a case "for extending the lives of some of these units".

A total of 26 local authorities across England and Wales have been awarded over £1.9 million from the Department of Energy and Climate Change (DECC) to support the development of heat network projects with a view to promoting low-carbon, cost effective heat supply from cogeneration and landfill waste heat projects.

UK energy minister Ed Davey has written to the chief executive of Ofgem, the market watchdog, urging for tougher regulation of Britain’s big 6 energy companies and suggested a future break-up of British Gas and Scottish & Southern Energy (SSE). “This might lead to more contracting in the wholesale market, so greater liquidity across the power market, but the intent of the split would be to make the retail end more competitive,” Trevor Skiroski, analyst at Energy Aspects told Gas to Power Journal.

The growth of the gas industry is under threat from a worldwide skills shortage, delegates at GE’s Oil & Gas annual meeting were told this week. “We are running out of capable people – technicians, field service support through to engineers in this particular space. We need to develop a competency base dramatically higher than it what it is now,” said Erik Bonino, vice president of project & engineering services  at Shell.

In a move to maximise production from the UK’s estimated 1,300 trillion cubic feet (Tcf) of shale gas, the government has announced generous tax breaks to producers and promised local councils 100% of fees from resultant business rates. Figures from the Department of Energy and Climate Change (DECC) predict that widespread UK shale gas production could reduce the implied price of dispatchable gas-fired power generation to around £50/MWh.

The U.S. Environmental Protection Agency (EPA) has published revised limits for carbon dioxide emissions from power plants today, for the first time providing separate rules for coal-fired and natural gas-fired plants. The new proposal outlines a limit for coal-fired plants with attached carbon capture and storage (CCS) of 1,100 lb CO2/MWh.

Malta Environment and Planning Authority (MEPA) finds that new gas-fired power on the island will improve air quality. The environmental impact assessment, compiled by consultants ERSLI, states that the proposed 215-megawatt power plant at Delimara will contribute towards a "substantial reduction" in air pollution.

The European Commission has been urged to consider renewed support for industrial combined heat and power (CHP) plants by parliamentary vice-president, Alejo Vidal-Quadras. "Current national energy market policies could lead to decreasing use of CHP in a number of countries because of growing investor uncertainty and a lack of clearly-defined long term policy structures," he warned, commenting on the EU's current regulatory environment.

The Latvian parliament has approved amendments to energy regulation with a view to liberalising the gas markets and encourage greater competition in the power sector. The new laws will ensure third party access to gas transport infrastructure and reduce Latvia's reliance on Russian gas supply.

Determined to switch from coal to gas power generation to improve air quality, China's CNPC, PetroChina and Sinopec Group have been given the target to produce 6.5 billion cubic meters of shale gas by 2015 to help source more domestic gas supplies to fuel power plants.

The leader of German's Social Democrats (SPD), Sigmar Gabriel, will head a new combined Economics and Energy Ministry after his party voted over the weekend to enter a grand coalition with the Conservatives (CDU/CSU). Gabriel said he will focus on finalising the Energiewende without threatening the Germany's attractiveness for industrial production.

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News in Brief

Wärtsilä to retrofit CHP in Spain

May 26 – The Finish engine maker Wärtsilä has bagged an order to supply and install a 34SG gas-fuelled engine generating set for Rofeica Energia's combined heat and power plant in Barcelona, Spain. The installation of the gas engine will allow Rofeica to switch the CHP from heavy fuel oil to gas-fuelled operation, reducing emissions.

New York body rejects William’s plans for gas pipeline expansion

May 21 – New York’s and New Jersey’s state bodies for environmental conservation have rejected Williams’ plans for the Northeast Supply Enhancement project, designed to transport 400 million cubic feet per day of gas from Pennsylvania to New York. The state bodies had already denied wetland permits in 2019, but Williams pipeline subsidiary Transco filed another application with the U.S. Federal Energy Regulatory Commission (FERC), arguing firm services under the project were agreed with UK’s National Grid for customers in New York City districts of Brooklyn, Queens, Staten Island and Long Island.

UK inflation at 4-year low amid falling energy costs

May 20 – The rate of inflation in the UK has fallen to a four-year low as the pandemic pushed down global oil and fuel prices which translate into lower wholesale power prices. The consumer price index fell to an annual rate of 0.8% in April, down from 1.5% in March, according to the Office for National Statistics.

Deficit grows in German green energy fund

May 19 – German regional grid operator TransnetBW has warned of a growing shortfall in the country’s fund for green energy sources, financed under the so-called renewable energy (EEG) levy. TransnetBW, the TSO in southwest Germany, said “due to the EEG cost allocations defined for 2020, we anticipate there will be a negative year end bank account balance in the high three-digit million euro range for 2020.”

Spanish gas companies ‘resilient’

May 18 – Spain’s regulated gas companies “should prove to be resilient” to external shocks arising from coronavirus containment measures, Standard & Poor’s analysis finds, calculating with an average drop in EBITBA at less than 3% in 2020. A new remuneration framework for 2021-2026, recently enacted by the Spanish government, provides enhanced visibility rated grid operators amid the pandemic.

German electricity prices second highest in EU

May 15 – Taxes and the renewable energy surcharge have pushed up Germany’s household electricity prices to the second highest level in Europe, topped only by prices in Denmark. While Danish households paid 29.2 Euros per 100 kWh on average in the second half of 2019, prices in Germany averaged 28.7 Euros, according to the EU statistics office Eurostat.

Calpine’s Q1 earnings fall

May 14 – Calpine, America’s largest generator of electricity from gas and geothermal, has reported a net income of $128 million for the first quarter of 2020, down from $175 million in the prior year period. Lower commodity margins and unfavourable change in income taxes were partially offset by earnings from hedge positions for the three month ending March 31.

Siemens to supply hybrid plant in the Philippines

May 13 – Berkley Energy has contracted Siemens Energy to build a hybrid power project on the island of Mindoro in the Philippines. The project links 16 MW wind power with battery storage, stabilizing energy supply in a remote location with a weak link to the grid and reducing its dependence on diesel.

U.S. energy emissions fall

May 12 – Energy-related carbon emissions in the United States have fallen more than energy consumption, down 2.8% over the course of last year to 5,130 million metric tons (MMmt). Power sector emissions were down 145 MMmt, due to a switch from coal to gas and renewables. In April 2020, emissions experienced another unprecedented fall in due to Covid-19 lockdowns.

MAN expands Omincare concept

March 11 – MAN Energy Solutions’ service brand has extended its ‘PrimeServ Omnicare’ concept from turbomachinery to the marine and power segments. The one-stop service solution is now also applicable for maintenance of third-party machinery, including engines, turbochargers and related auxiliaries.

MIVOLT launches cooling fluid

May 7 – MIVOLT, part of the British company M&I Materials, has launched two specialist fluids to improve cooling efficiency at data centres. The electricity demand of data centres is forecast to rise to 20% of global supply to accommodate lifestyle changes like 5G internet network, autonomous vehicles and bitcoin mining.

Germany adds 1,300 km to power grid

May 6 – Germany has made progress in expanding its strained power grid. According to the Federal Network Agency (BNetzA), over 1,300 kilometres of new power transmission lines have been built and another 830km approved. A further 3,600km are planned to be built by 2030 to alleviate grid bottlenecks and allow transporting rising volumes of offshore wind southbound.




Oman nationalizes first IPP

May 5 – Manah Power, the first privately-run Independent Power Project (IPP) in Oman, has been transferred to state ownership, following the expiry of a Power Purchase Agreement (PPA) between United Power Company and state-owned OPWP. Manah IPP was developed under Build-Own-Operate-Transfer (BOOT) model, which stipulates an eventual nationalization of the assets – a feature absent in subsequent IPPs.

U.S inventories at record highs

May 4 – Inventories for crude oil and natural gas have reached a new record high in the United States, as fuel demand declines both for transport and the electric power sector. From March 13 – when a national emergency was declared due to the Covid-19 pandemic – to April 24, U.S. commercial crude oil inventories increased by 74 million barrels, or 16%, according to government figures. The acute scarcity of crude storage on April 20 led to a sell-off of future contracts at negative prices.

Wärtsilä to service Argentinean power plant

May 1 – Wärtsilä has signed a 10-year maintenance and service agreement with one of Argentina’s upstream companies. Under the deal, Wärtsilä provides a guaranteed performance for a 57.6 MW onsite power plant in the southern part of Argentina, with excess power sold to the national grid.

Zink-Air batteries for NY

April 30 – Zinc8 Energy Solutions has entered a cooperation with the New York Power Authority (NYPA) to install a zinc-air battery energy storage, backed by $2.55 million in state funding over a three year period. The Zinc8 ESS units can deliver power in the range 20-50 MW, with capacity of 8 hours of storage duration. The project will help New York State achieve its goal of installing 3 GW of energy storage by 2030.

UK again ‘coal-free’

April 29 – The UK continues to break its coal-free record as thermal coal-fired power plants currently remain off the system, according to National Grid data. Faltering demand due to the pandemic and high renewable energy supply radically altered the energy mix in many developed countries, with power in-feed from solar PV reaching 10 GW in Britain at the start of this week. “Coal is due off the system by 2025 and renewables have shown they are cost competitive with a viable route to market,” Delta-EE director Andy Bradley commented.