Regulation & Policy

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).

The Canadian province of Ontario is will phase out almost its entire fleet of coal-fired power plants by year-end. Gas generation capacity and wind power is set to fill the gap, according to the government's long-term energy plan.

The first capacity auction in the UK, to be held in 2014, will be on Demand Side Management (DSM) and not power generation capacity. "The potential prioritisation of these technologies could, depending on the volumes and prices auctioned, materially reduce the need for subsequent auctions for new build gas to power assets," warns Jim Fitzgerald, associate partner at The Advisory House.

The German government has allocated a €750 million budget to underpin its objective of raising the market share of Combined Heat and Power (CHP) installations to 25 percent by 2020.

Unfavourable market conditions and persistent policy uncertainty has reversed growth in the Dutch Combined Heat and Power (CHP) sector following a period of rapid growth in the 1990s, industry association COGEN Europe said in a report published today.

The Indiana Utility Regulatory Commission (IURC) has modified a settlement reached in the Duke Energy Indiana case, setting a hard cost cap for the utility's new integrated gasification combined cycle facility (IGCC) in Edwardsport at $2.595 billion.

Investment in US wind power is expected to plunge this year in spite Congress agreeing to a one-year extension of the wind energy Production Tax Credit (PTC) and Investment Tax Credits (ITC), analysts warn. Gas power generation at record low costs and a flurry of wind capacity start-ups in Q4-2012 is set to put a lid on new projects.

"Disruptive changes" such as slowing electric load growth, falling peak-load power prices due to demand response mechanisms and expanding distributive generation are challenging power producers in the US. "We as an industry have to meet the challenge and embrace these trends. If we don't, they are going to run over us," says Jon Wellinghoff, chairman, Federal Energy Regulatory Commission (FERC).

Flexible rather than conventional gas generation could save Britain between £380 million to £550 million by 2020 and up to £1.54 billion by 2030 alone through reduced balancing costs incurred by National Grid, research commissioned by Wärtsilä through Redpoint Energy and Imperial College London shows. The modelling is based on replacing 4.8GW of conventional CCGTs with 4.8GW of gas-fired Smart Power Generation.

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News in Brief

SPIG wins contract for Al Dur Phase II

Sept 23 – Italy-based SPIG, part of Babcock & Wilcox Enterprises, has won a contract to provide seawater cooling tower system to SEPCOIII for the Al Dur Phase II project in Bahrain. The Al Dur Phase II is a combined-cycle gas-turbine plant to generate 1,500 MW of electricity and approximately 50 million gallons fresh water per day.

MHI-MME to take over turbocharger production

Sept 20 – Mitsubishi Hitachi Power Systems will no longer produce MET turbochargers, the standard worldwide exhaust gas turbochargers used in stationary engines. Starting from January 1, 2020, these devises will be produced by Mitsubishi Heavy Industries Marine Machinery & Equipment (MHI-MME) instead.

Japan starts electricity futures trading

Sept 19 – Tokyo Commodity Exchange (TOCOM) has launched trading in electricity futures to advance price competition in Japan’s liberalized energy market. The East Area peakload electricity contract for October delivery first traded at 10.9 Yen per kWh, lower than the standard price of 11 Yen set by TOCOM in advance.

Duke to reduce rates in 2020

Sept 18 – Duke Energy Florida (DEF) customers will see lower bills in 2020. The utility filed a proposal with the Florida Public Service Commission to reduce rates for electricity and gas by more than 3% while adding more solar power and making grid improvements.

Myanmar approves three power projects

Sept 17 – Myanmar’s Ministry of Electricity and Energy has given the green light to plans for a 1,230 MW gas-fired power plant in Kanpauk, Taninthayi region, a 377 MW gas-fired unit in Ahlon, Yangon region and a 1,390 MW thermal plant in Milaunggyine in Ayeyawady region. The conflict-ridden country is currently producing electricity from 5,600 MW installed capacity, derived both from state- private-owned power stations.

Bonny Train-7 to cost $6.5bn

Sept 16 – Nigeria LNG is preparing to add a seventh processing train to Bonny LNG, bringing total capacity from 22 million tons per annum (mtpa) to 30 mtpa. Estimated to cost $6.5 billion, Bonny Train-6 will include a new liquefaction unit, a storage and a condensate tank as well as three gas turbine generators.

Schneider to complete L&T takeover by early 2020

Sept 13 – Venturing into India, Schneider Electric hopes to finalise the Rs 14,000 crore acquisition of Larsen & Toubro's electrical and automation business by early 2020. After the transaction is completed, Schneider will have a 65% stake in L&T, while the remainder will be held by Temasek.

MHI to advice China on energy conservation

Sept 12 – Mitsubishi Heavy Industries Thermal Systems, part of MHI, has set up a joint venture withan affiliate of State Grid Corporation of China (SGCC) to perform technical consulting for energy conservation projects in China. The focus of SGCC lies on building new decentralized power stations, biomass-derived power gensets and energy saving solutions.

Tender extended

Sept 11 – Turkmengas has extended a tender for the overhaul of the gas turbine engines of the NK-12ST and NK-14ST brands. Bidders need to pay to receive the tender documents, and then submit a written application to Turkmenistan’s state gas company.

Gas power units to buffer Germany’s coal exit

Sept 10 – Electricity output of Germany’s fleet of gas-fired power plants has risen to a over 13,5 billion kilowatt-hours in the three months from June to August, Fraunhofer ISE figures show. These productivity gains put CCGTs in pole position to balance supply swings in connection with the German coal exit.

Power of Siberia gas flows to start on Dec 1

Sept 9 – Russian gas supplies to China via the eastern route are going to start on December 1, 2019, Gazprom chairman Alexey Miller told his counterpart at CNPC in Beijing. The huge Chayandinskoye field, containing some 1.2 trillion cbm of gas, had already been connected to the 38 Bcm per year ‘Power of Siberia’ gas pipeline in August.

Hurricane Dorian causes havoc in the Bahamas

Sept 6 – In the aftermath of Hurricane Doran, a Category 5 storm, Bahamas Power and Light has said there is a total blackout in New Providence, the most populous island of the archipelago. Dorian made landfall twice on Sunday, ripping off roofs and electricity lines. In most parts, electricity has not been restored.

LNG cargoes via Bab-el Mandeb decrease

Aug 30 – Northbound LNG shipments via Bab el-Mandeb, a sea route chokepoint between the Horn of Africa and the Middle East, have fallen over the past three years as Egypt imports less natural gas from the Persian Gulf. In 2015 and 2016, both Jordan and Egypt imported up to 1.4 Bcf/d of LNG into Red Sea ports but these shipments fell sharply following the development of large gas finds in the Mediterranean.

Hokuriku Electric buys LNG cargo

Aug 29 – Japanese utility Hokuriku Electric has purchased an LNG cargo for delivery in November as soaring temperatures drew down gas in storage for the autumn. The cargo is understood to be scheduled for delivery in the second half of November from Malaysia’s Petronas and may well be destined for Hokuriku Electric’s first LNG-fired power generation unit,  the Toyama Shinko plant.

Technip spins off LNG activities

Aug 28 – TechnipFMC, has decided to spin off its European-based engineering and construction operations into a separate business, leaving the American half of the firm as an equipment supplier to the oil and gas sector. The split is due to be completed in the first half of 2020.

FLNG power market to top $930m by 2023

Aug 27 – The global market for floating LNG power vessel is projected to reach $ 931.6 million by 2023, up from $ 860.1 million seen last year, according to ReportsnReports. Major vendors of FLNG power vessels are Siemens, MAN, Wärtsilä, Caterpilar and GE which are targeting to use the technology to supply decentralized power to island nations in Southeast Asia and along the coast of sub-Saharan Africa and the Americas.

EIA monitors grid hourly

Aug 26 – The U.S. Energy Information Administration (EIA) has launched a beta release of its hourly electric grid monitor. The enhanced version analyses hourly generation by energy source and hourly sub-regional demand for certain balancing authorities in the Lower 48 states.