US government approval for the Freeport LNG Terminal on Quintana Island, Texas to export LNG to countries with which the US does not have a Free Trade Agreement (FTA) have brought Japan a step closer to realising cheaper supplies of natural gas for power generation. Osaka Gas and Chubu Electric have already signed liquefaction tolling agreements with Freeport LNG, back in July 2012, to each acquire a 2.2mtpa production capacity of the first train at Freeport, potentially as early as in 2017.
The EU's Climate Action Commissioner Connie Hedegaard has called on the European Council and Parliament to approve the proposed back-loading of 900 billion carbon emission allowances (EUAs) in emissions trading scheme (EU ETS). Back-loading would reduce the surplus of emissions in the ETS, and the subsequent rise in carbon prices would encourage power producers to favour gas over coal.
The European Network of Transmission System Operators for Electricity (ENTSO-E) has called for fast tracking the adaptation of nine network codes as a way to improve the operation of Europe's interconnected transmission networks. The association earlier criticised national initiatives to implement capacity mechanisms, calling for an integrated European approach.
National Grid is tasked to provide analysis and modelling on the government's Electricity Market Reform (EMR) delivery plan, assess eligibility and the allocation of Contracts for Difference (CfD), and will run auctions for planned capacity mechanisms. In June, National Grid will deliver its final modelling report to the Department of Energy and Climate Change (DECC) to be appended to DECC's July Delivery Plan, Mark Ripley, Project Director EMR at National Grid told Gas to Power Journal.
The Montana Public Service Commission (PSC) has gone on record as opposed to proposed rules from the Environmental Protection Agency (EPA) to restrict greenhouse gas emissions for new power plants. In a letter to the EPA, the five members of the PSC called for a withdrawal of proposed rules for the New Source Performance Standards (NSPS) which they said would be particularly harmful to coal-fired power generation.
Promoting flexible generation and demand side response is likely to be more effective in helping the EU cope with three energy policy challenges – security of supply, decarbonisation and affordability – than capacity mechanisms, Simon Skillings, Senior Associate at Third Generation Environmentalism (E3G) told Gas to Power Journal in an interview. "If you make sure you really roll out cost effective demand response and if you have procured sufficient flexibility, the idea that you have then got a generation adequacy problem seems extremely unlikely," he said.
Capacity payments from the UK's planned capacity mechanism need to be brought forward from their expected 2018/19 date in order to help keep existing plants operational, Keith MacLean, Policy and Research Director at SSE said at a conference organised by Gas to Power Journal in London. "The most important factor is not just seeing the auction run in 2014 but we need to see the payments available early in order to keep existing plants on the system," he said, stressing that "another four or five years of high ongoing costs and low or negative earnings is just not sustainable."
The UK Government's Energy Bill which includes contracts to develop low carbon generation and market-wide capacity contracts is expected to pass through the House of Commons "within the next month or two", Tim Lord, Security of Supply Team at the Department of Energy and Climate Change (DECC) told a conference organised by Gas to Power Journal in London today.
"We expect the first capacity auction to be held in 2014 for a delivery year of 2018/19," he said.
Scottish Powers' Director of Regulation, Rupert Steele has called on the UK Department of Energy and Climate Change (DECC) policy to "maintain momentum" to deliver a workable scheme for a Capacity Mechanism and Contracts for Differences (CfDs) in 2014, though he strongly opposed a Carbon Floor Price.
The European Commission has warned Ireland that it must fully transpose the Electricity Directive of the third energy package into law or face referral to the European Court of Justice (ECJ). The directive contains provisions for the proper functioning of European Union electricity markets such as rules on the unbundling of networks, rules strengthening the independence and powers of national regulators and rules on the improvement and functioning of retail markets.
Germany's 'green' energy policies are failing to provide their intended emissions reductions , says John Rhys, Senior Research Fellow at the Oxford Institute for Energy Studies (OIES), arguing that phasing out nuclear will continue to increase coal use significantly. "Germany does not promote CCS (...) and it is also foregoing gas," he said in an opinion piece published by the Institute, claiming "Germany's simultaneous capitulation to anti-nuclear prejudice and willingness to compromise on cheap high CO2 emissions coal is therefore a disappointment to British supporters of EU ambitions to lead on climate change".
A coalition of 10 US states and 5 cities lead by New York Attorney General Eric T. Schneiderman has filed a court brief urging the US Supreme Court at the request of the Environmental Protection Agency (EPA) to review and reverse a lower court decision that invalidated an EPA rule requiring substantial cuts in the interstate transport of air pollution.
Gas-fired distributed power projects in the UK will benefit from specific support schemes, including capacity mechanisms, which are forthcoming as part of a new regulatory package stipulated under the Electricity Market Reform, says Dr. Jim Fitzgerald, Associate Partner at The Advisory House.
"Contracts for Difference (CfD) will differentiate on technology, with different auction prices for each low carbon technology. We expect a specific capacity mechanism to be put in place to enhance support available for distributed gas fired power generation projects," he told Gas to Power Journal in an interview.