Regulation & Policy

Ontario Power Authority's (OPA) latest report, issued at the request of the Canadian energy ministry, is likely to shake-up the top-down planning process for gas-fired power stations in the region and might spark a flurry of follow-up consultations.

The federal government of Nigeria has affirmed plans to triple power generation capacity by 2015, as more domestically produced gas will be earmarked to fuel power plant, rather than for export.

Japan's Prime Minister Shinzo Abe has won a majority in the upper house, ending a political stalemate as he now controls both houses of parliament. The reshuffle paves the way for Japan to return to nuclear power, in a move poised to curb LNG imports and reduce the share of gas for power generation.

UK Chancellor George Osborne has granted tax breaks to shale gas developers of more than half the amount they pay on profits, in an effort to kick-start shale gas drilling to boost Britain's domestic supply of gas for power generation.

The UK Department for Energy and Climate Change (DECC) has published a draft delivery plan for Contract for Differences (CfDs) and the reliability standard of the future Capacity Market to guide how much capacity is auctioned in 2014 for delivery in 2018 to 2019.

British consumers will be hit with rising energy bills as utilities are passing on the costs for power grid updates allowing greater volumes of intermittent renewable energy, warned RWE Npower, one of the UK's Big Six power producers.

With about 10 GW of offshore wind power expected to come on the system in the UK by 2020, balancing the additional intermittent capacity, mostly through gas-fired plants, will "not pose a major challenge," Dong Energy's UK country manager, Benji Sykes said in an evening debate in Westminster on 'Cutting the costs of Carbon'.

Impending reforms of Spain's electricity market will reduce Red Electrica's regulated revenues by up to 100 million euros this year from 1,628 million euros, the TSO said with the aim of limiting downside risk for investors.

The European Commission will open a state aid infringement case against Germany on Wednesday to investigate alleged state aid for the energy-intensive under the country's renewable energies act (EEG), a report in Der Spiegel states today.

Plans to allow more natural gas exports from the US will become more difficult in two years once the proposed emissions restrictions on existing power plants come into effect, Juscelino Colares, law professor at Case Western Reserve University told Gas to Power Journal.  

"Power plants are subject to regulations that are designed to turn them towards fewer emissions, and the way they are meeting them is by switching to [cleaner burning] natural gas," he said calling the process "a very dramatic transformation in the history of the US in the past 6-7 years."

Development banks with a combined annual lending pot of $166 billlion (€130 billion) should stop to support fossil power generation projects, the European Commissioner for Climate Action, Connie Hedegaard has urged.

Robert Bradley, CEO of The Institute for Energy Research (IER), has denounced the US President's Climate Action Plan for its subsidies for clean coal. "The new proposal would throw good money after bad," he said. "Not only is taxpayer money being wasted, businesses are being enticed into investments that are costing their shareholders dearly as real-world experience shows."

Diminishing price spreads between peak and off-peak load, and a flattening seasonal profile of price differentials have emerged in Germany as a consequence of the expansion of renewables, says Dr. Kathrin Thomaschki, Vice Chair of the Ruling Chamber 6, Access to Electricity Grid at the German Federal Energy Regulator (BNetzA).

Competition in Europe's energy sector is shrinking and investment has stalled amid growing regulatory intervention in the market, Olga Mikhailova, Advisor Market Units at Eurelectric warned at Gas to Power Journal's conference in Düsseldorf. 

"The European energy sector is unable to invest, as credit rating of utilities is deteriorating and most generation assets are valued at close to zero by financial investors," she said, suggesting regulatory risk has become the main cause of concern, overtaking market risk.

The political tide in Berlin is turning in favour for a strategic reserve, ideally implemented on a regional level, though there is no sense of urgency as reserve margins are healthy until 2018/19, Franzjosef Schafhausen, Head of Department for Energy at the German Federal Environment Ministry (BMU) said in a keynote speech at Gas to Power Journal's conference in Düsseldorf. "What we need is an evolution, not a revolution towards a capacity mechanism."

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News in Brief

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.

Gazprom tackles issue of ownerless gas grid

Sept 27 – Gazprom, the main supplier of pipeline gas to Europe, is trying to settle the issue of ownerless gas pipelines – a relic of the former Soviet Union. Abandoned gas transmission pipeline spanned 6,651 kilometers as of March 1, with the issue seen as “especially acute” in the North Caucasus region where half of this infrastructure is located. If no owner registers these facilities within three months, Gazprom will take over to ensure reliability and safety.

Investors flock to Myanmar

Sept 26 – Fitch Ratings has singled out Myanmar’s power sector as one of the largest beneficiaries of foreign direct investments (FDI) worldwide. Nearly $21.2 billion was poured into power generation and energy infrastructure projects thus far in 2019, which is 27% of total FDI under the Myanmar Investment Law.