Regulation & Policy

The UK parliament rejected plans for tougher regulation on coal-fired power on Wednesday, giving older coal plants a longer lease of life and raising further uncertainty over the shape of proposed capacity markets. "The government is already worried about peak capacity issues given the loss of the LCPD plant and losing more would have meant that the UK would really have struggled to keep the lights on," Trevor Skiroski, analyst at Energy Aspects told Gas to Power Journal.

The Mexican Senate has approved far-ranging electoral reforms that open the path for energy sector reforms to follow, allowing state-controlled energy major Pemex to open up the sector to private investors. The bill has now been passed to the lower house of the Mexican parliament for review, with a vote expected by 15 December 2013.

The market of gas-fired power in India is expected to expand even as gas prices are set to reach as high as $20/MMbtu, Wärtsilä's chief executive, Bjorn Rosengren, said ahead of the government's revision of natural gas pricing in 20 days' time.

Two month after the general election, Germany's Christian Democrat alliance (CDU/CSU) and the Social Democrats (SPD) have agreed to form a coalition, including a 60% target for renewable energy while postponing a decision on capacity markets to 2015.

German chancellor Angela Merkel has promised a support mechanism for conventional power plants, when stressing these plants should operate in a profitable manner as they help insure security of supply.

Bundesnetzagentur (BNetzA), the German energy regulation authority, has received applications for the closure of 30 power plants, with a capacity of more than 6.5 GW, according to a list seen by Gas to Power Journal. Of the 30 plants involved, five ENBW power plants have been declared vital for the system, so a shutdown is not permitted.

Though dismissing EDF's announcement of a 3.9% price hike, UK energy secretary Ed Davey has ruled out government intervention to cap energy prices. "Price fixing would crush competition rather than encourage it," he said at the annual conference of EnergyUK this week.

The European Commission has published guidelines to limit regulatory interventions in electricity markets through capacity payments and renewable subsidies with a view of making support schemes more cost-effective. Researchers at the Oxford Institute of Energy Studies criticised, however, "the guidance ....shows little sense of the urgency needed to address the increasingly dire situation of conventional back-up capacity for intermittent renewables."

In a letter to Parliament, the UK Secretary for Energy & Climate Change, Ed Davey has asked for a cash advance of $4,069,000 from the Contingencies Fund to fast-track the launch of institutional frameworks to implement the Electricity Market Reform (EMR).

The design of capacity mechanisms, if introduces on a national level, should be drawn up "with a European perspective in mind", the European Commission said in a non-binding guidance paper on renewable support and capacity remuneration.

Policy makers in the U.S. have cast doubt over the technological readiness of carbon capture and sequestration (CCS) to provide a future for coal fired-power as it faces tougher emissions control from Environmental Protection Agency's (EPA) regulation. The Environment and Energy Subcommittee of the House of Representatives held a joint hearing this week to discuss the role of CCS but participants were largely doubtful that current technology could meet demand.

Debate raged over the future direction of UK energy policy as the revised Energy Bill reached the report stage at the House of Lords on Monday. The bill proposed tough targets for decarbonisation, limiting the economic viability of fossil fuel generation, and was narrowly rejected by the house. Some members of the Lords criticized the proposed capacity mechanisms saying they risk increasing energy costs and have not yet brought forward investment in new gas power plants.

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News in Brief

BelGAS launches new pressure regulator

May 29 – BelGAS has introduced its new P1098 High-Capacity Pressure Reducing Regulator, a large-volume regulator for natural gas, propane and other fuels. The pilot-operated device has a large-area actuator diaphragm, allowing for fast and accurate response to modulating gas flow conditions. It is adaptable for low to extra-high pressure—up to 400 psi main valve inlet.

GE to sell lightning business

May 28 – GE has signed a definitive agreement to sell its lighting business to Savant Systems, a provider of smart homes. CEO H. Lawrence Culp called the divestment “an important step in the transformation of GE into a more focused industrial company.” The transaction is expected to close in mid-2020.

China’s fuel demand recovers

May 27 – The Chinese government has lifted restrictions on private travel since April which pushed up demand for transport fuels. Gasoline demand has recovered particularly fast and is expected to return to last year’s levels by June 2020. Wood Mackenzie estimates gasoline consumption to reach 3.4 million barrels per day (b/d) in the second quarter, down just a 0.8% year on year. Diesel or gasoil demand is expected to reach 3.4 million b/d in Q2 2020, a 3% decline year-on-year. Overall, China’s oil demand is seen rise a “modest” 13.6 million bpd, or 2.3%, in the second half of 2020.

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.