Regulation & Policy

Unless Germany introduces measures to curb the costs of renewable feed-in-tariffs, the price tag for its energy transition policy (Energiewende) may amount to up to €1 trillion by the end of the 2030s , German environment minister Peter Altmaier warned.

The UK government will make best use of new powers in the Energy Bill to enforce energy regulator Ofgem's retail market reforms, Prime Minister David Cameron said Thursday.

Though discarding today's warning of the UK energy regulator Ofgem's on tightening reserve margins as "alarmist", IHS energy analysts suggest the Government should provide greater clarity on regulatory incentives for new low-carbon generation capacity.

The US Court of Appeals for the District of Columbia Circuit has ruled that the US Federal Energy Regulatory Commission (FERC) had acted lawfully when approving a capacity market rate structure for ISO New England.

The environment committee of the European Parliament has deferred a vote on backloading up to 900 million carbon emissions allowances by one week, prompting a plunge in carbon prices.

Spain's power producers are calling for new regulatory support mechanisms to help cover investment costs of existing fossil plants. "It is vital to establish a mechanism to reward the backup service of existing gas-fired plants, particularly because the current Spanish regulation does not allow the closure of loss-making units," says Carmen Vindel, Head of International Regulation, Gas Natural Fenosa.

Unless electricity market in India are deregulated and prices become competitive, operators will be hard pressed to make a profit from gas-fired power plants assets when considering the higher costs for imported LNG.

The U.S. Department of Energy (DoE) and the Treasury have made available $150 million in Advanced Energy Manufacturing Tax Credits for clean energy and energy efficiency manufacturing projects. The gas industry, however, criticizes President's Obama's 'all-of-the-above approach' to American energy sources.

Developing a blueprint for an EU-wide capacity remuneration mechanism (CRM) is "premature", Eurelectric said, suggesting that, if developed, CRM should guarantee the availability of peak-load capacity and not promote flexibility.

To help cash-strapped operators of gas-fired power plants, Jürgen Tzschoppe, managing director at Statkraft Markets has called for capacity payments of as much as €15/kW per year as a 'temporary solution'.

A new market design for German energy markets will not emerge in 2013, forecast Franzjosef Schafhausen, head of the German environment ministry's energy transition units, despite efforts of the government to reach a compromise with power producers in the debate over 'capacity payments' versus 'strategic reserve'.

Decarbonisation targets in the UK will have a profound effect on electricity markets, altering the patterns of demand and the power generation mix, says Stephen Woodhouse, director at Pöyry Management Consulting. A rise in low-carbon capacity, in his view, requires tradable balancing resource options.

The British government today unveiled new clauses to its proposed energy bill, specifying plans to largely decarbonise the power generation sector by 2030 in a move set to herald investment in new gas-fired capacity.

The proposal of Germany's environment minister Peter Altmaier to raise the threshold for companies being exempt from paying the renewables levy would hit the energy-intensive industry with a 10% rise in electricity costs, DIHK warned.

The UK Energy Bill in its current form is "unlikely to realise this potential" of Combined Heat and Power Generation, says Graham Meeks, director of the British Combined Heat & Power Association (CHPA). He called on policy makers to extend the small scale Feed-in Tariff capacity threshold in addition to the proposed Contracts for Difference (CfD).

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News in Brief

French court rejects appeal against Total CCGT

July 24 – Judges at an appeal court in Nantes have thrown out an appeal by environmentalist against Total’s planned Landivisiau combined-cycle gas power plant in Brittany. The 440 MW project, initiated by Direct Energy which was since acquired by Total, is over two years behind schedule. The French grid operator RTE has singled out the Landivisiau CCGT as “critical” in guaranteeing supply security in winter 2020/21 due to the planned shutdown of four coal power plants.

U.S. gas production falls in wake of ‘Barry’

July 23 – Shut-ins related to Hurricane Barry have scaled back U.S. gas production by 1.6 billion cubic feet per day, compared to last week, while power sector gas demand rose by just over 2.0 bcf/d. Consequently, there is significantly less gas available for storage so the injection rate has halved, according to Energy Aspects figures.

Blackout after fire at Madison substation

July 22 – Electricity is gradually being restored at Madison, Wisconsin, after 13,000 people experience a blackout following an explosion at a substation near Madison Gas & Electric’s 100 MW gas-fired Blount Generating Station. No injuries were reported.

Fuel switch could abate 1.2bn tons of CO2

July 19 – Some 1.2 billion tonnes of CO2 could be abated by switching to gas using existing infrastructure, if prices and regulation are supportive. According to the International Energy Agency (IEA), this would be enough to bring global CO2 emissions back down to where they were in 2013.

IEA launches methane tracker

July 18 – A new ‘methane tracker’, launched by the International Energy Agency (IEA), provides up-to-date estimates of current oil and gas methane emissions by drawing on the best available data. Analysts stressed methane emissions could be reduced by nearly half at no net cost.

Canada’s CO2 tax also affects gas power

July 17 – Change in Canada’s carbon tax regulation for new power plants has changed to also affect cleaner-burning, gas combined-cycle power stations starting from 2021. The move could cause SaskPower to reconsider its planned upcoming Moose Jaw gas power station.

MAN, Daewoo, HSD partner on engine digitalization

July 16 – MAN Energy Solutions, Daewoo Shipbuilding & Marine Engineering (DSME) and HSD Engine (HSD) have signed a strategic agreement to cooperate in the field of marine engine systems digitization. The three companies also work together on auxiliary systems and data analysis, aiming to apply part of their know-how to power generation and related sectors.

Canada launches first utility-scale smart microgid

July 15 – The Ontario-based municipal utility North Bay Hydro Services is cooperating with the smart grid solutions firm S&C Electric to launch Canada’s first utility-scale microgrid system. Among some solar power, the 789KW microgrid system will be powered by two 265kW natural gas generators.

Macquarie funds Mexican power plant

July 12 – Macquarie Capital has chosen Credit Agricole, Natixis and SMBC to co-finance a $380 million combined-cycle gas power plant. The 560 MW plant is designated to be built in San Louis Potosi, a city in central Mexico.

B&V launches distributed energy group

July 11 – Black & Veatch has launched a dedicated distributed energy group to place its conventional power business in the context of the global energy transition. The distribute energy group will look into new fuel sources such as hydrogen and aspires to “re-power the more-than-century-old power industry.”

Funding secured for Kazah CHP project

July 10 – Kazinform Erg has committed to spend $500 million on a gas cogeneration station that will provide heat and electricity to the south of Kazakhstan. Over 87% of Kazakhstan’s electricity is generated from fossil fuels, and in 2018 the country produced 107,060 billion kWh of electricity, a 3.8% increase over the previous year and enough to cover total power use of 103,228 kWh.

Bitcoin mining uses much energy

July 9 – Estimates of bitcoin’s electricity consumption are wide-ranging, on the order of 20‑80 TWh annually. According to George Kamiya, digital energy analyst at the International Energy Agency (IEA), bitcoin mining consumed around 45 TWh in 2018 although this has risen significantly this year. Through the first six months of 2019, bitcoin mining has already consumed an estimated 29 TWh.

Coal exit doesn’t impact Germany's supply security

July 8 – Electricity supply security in Germany is set to stay “very high” even as the country begins to phase out coal-fired power generation, the Federal Ministry for Economic Affairs and Energy (BMWi) said in a monitoring report. “Energy supply is adequately ensured”, the ministry said, in all scenarios examined up to 2030. Thereafter, things are less clear but the German Coal Commission is adamant that its proposal to exit coal power by 2038 is feasible and won’t seriously impact reserve margins.

Hydrogen demo plant starts in Adelaide

July 5 – The Australian Gas Networks (AGN), part of the Australian Gas Infrastructure Group (AGIG), has received A$4.9 million in government funding for an A$11.4m hydrogen electrolyser demonstration project at the Tonsley Innovation District in Adelaide. At the test site, AGN plans to blend 5% renewable hydrogen with natural gas for supply to customers using its existing gas distribution networks. The project is based on a Siemens proton exchange membrane (PEM) electrolyser, running based on wind and solar power.

Wärtsilä forms biogas solution

July 4 – Wärtsilä Puregas Solutions, specialists in biogas upgrading technology, has merged with Wärtsilä’s biogas liquefaction team to create a one-stop-shop service for biofuel production. Having installed the world’s largest bioLNG facility in Skogn, Norway, Wärtsilä will deliver two more bio-LNG plants to customers in Scandinavia. The company’s Puregas CA process recovers more than 99.9% of the biomethane present in raw biogas.

PNM to close San Juan Generating Station

July 3 — New Mexico's largest energy holding, PNM Resources, has filed an application to the Public Regulation Commission to close the coal-fired San Juan Generating Station. For replacement power, PNM said the preferred option was a mix of gas power plants, solar and wind farms and new battery storage facilities. The utility strives to be ‘emissions-free’ by 2040.

ADB opens office in Singapore

July 2 — The Asian Development Bank (ADB) has decided to open an office in Singapore. The lean office with twelve staff will focus on the expansion of its private sector operations, e.g. through Public-Private Partnerships. “We estimate that developing Asia will need $1.7 trillion per year in infrastructure investments until 2030 to maintain the region’s growth momentum,” commented Singapore’s finance minister Heng Swee Keat.