Regulation & Policy

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.

E.ON, Germany's largest utility by market value, will take legal action before December 20 against Germany's energy regulator BNA over compensation levels for power plant re-dispatch, it confirmed today.

The launch of capacity markets may come too late, the Department of Energy and Climate Change (Decc) has acknowledged, and decreasing generation margins are threatening Europe's energy trading market. "Decc may well find that once they intervene, find they have to intervene again which causes the risk that we will go back to a regulated energy market," says Jim Fitzgerald, associate partner at The Advisory House.

A 'dash for gas' scenario, unveiled by UK Chancellor George Osborne as part of the Gas Generation Strategy, may threaten the country's climate targets, critics warn. As one of three proposed scenarios, the 'dash for gas' case calls for 37 GW of new gas-fired power plant capacity, or up to 40 plants, by 2030 and implies a rewrite of a draft law that sets out Britain's carbon emissions reduction goals by the mid-2020s.

Prospects of a carbon floor price, introduced as part of the UK Electricity Market Reform (EMR), could render coal uneconomic compared with gas generation which may led to plant closures, says David Brewer, director general of the confederation of UK Coal Producers (CoalPro).

Up to 40 gas-fired power plants will have to be build across the UK by 2030, raising the need for new gas generation capacity to 37 GW - up from current estimates of 20 GW, according to the Gas Generation Strategy. 

Britain's Chancellor George Osborne has put his political weight behind realising new gas-fired capacity to provide baseload electricity beyond 2030, rather than using it merely as backup capacity for renewables. The Chancellor will use his Autumn Statement on December 5 to unveil the much-awaited Gas Generation Strategy.

The UK energy bill, unveiled today, does not specify details on 'strike prices' – the financial support levels to be available to low-carbon generation. Strike prices are of central importance under the planned contract for difference (CfD) regime, aimed at incentivising new-build capacity by guaranteeing operators a steady return of the plant's lifetime. 

The British government has published proposals to "dramatically reduce" electricity demand across the whole economy with a view to reducing the need for new power generation capacity.

The Beijing government has stepped back from interfering with pricing of coal as a fuel for power stations, adopting a hands-off approach following a 25 percent drop in the price of the fuel. This move may herald a liberalisation in the tight electricity tariff regime which would prompt investment in more gas generation for peak-load power demand.

A strike, called by the French union CGT for Wednesday, is meant to halt production at E.on's French coal- and gas-fired power plants with a combined output of 3,000 MW, according to union officials.

The British government has published details of its long-awaited Energy Bill, postponing setting a carbon target until 2016. Power producer were given the green light to charge household customers an extra £7.6 billion, to go towards low-carbon electricity infrastructure by 2020.

A strategic alliance aimed at creating a European energy market based on the complementary use of renewable energy and gas has been founded by GE and Dong Energy alongside with Alpine Energie, First Solar and Shell.

Angered by a delay in the UK energy bill amid rows within the coalition over policies on gas, wind and decarbonisation targets, Tim Yeo, the Tory chairman of the energy select committee, has called the conundrum which hampers investment and risks raising bills "a laughable plot".

German's largest utility Eon has confirmed it will shut-down 1,037 MW of gas-fired power generation capacity, mothballing both it the 622 MW Staudinger 4 plant unit and the 415 MW Irsching 3 unit by the end of this year. The plants will operate as winter reserve, once E.on has transferred responsibility to the regulator BNA.

Page 49 of 54

News in Brief

BOL finances entire 220 MW plant in Nassau

Dec 6 – Bahamas Power and Light (BPL) has agreed to cover the entire costs to build a 220 MW power plant at the Clifton Pier site in Nassau, and transfer the assets to Shell North America. BPL and Shell had agreed to jointly develop a 220 MW power plant plus LNG regas terminal, but the Bahamas state utility later signed a $95 million contract with Wärtsilä to install a 132 MW engine-driven power plant at the same site.

Kepco to operate CCGT in Uruguay

Dec 5 – Kepco KPS has been awarded a contract to operate and maintain the recently commissioned combined cycle gas turbine (CCGT) power plant in Punta del Tigre, Uruguay. Under the O&M contract, Kepco said it expects to earn 17 billion Won in sales every year, for a maximum eight years.

Siemens to create thermal twin for Bajaj Energy plant

Dec 4 – Lalitpur Power Generation Company Ltd (LPGCL), part of Bajaj Group, has contracted Siemens to create a complete twin for its fossil power plant in Uttar Pradesh, India. The thermal twin, powered by thermodynamic analysis and machine learning, allows power plant operators to diagnose performance gaps for every asset in the cycle in real time.

Talks between Gazprom and Naftogaz continue

Dec 3 – Russia’s Gazprom and Naftogaz Ukrainy have continued difficult negotiations about an extension of Russian gas supplies and transit after the current contract expires on December 31, 2019. The two state-run companies are embroiled in a legal dispute that still needs resolving, however, they confirmed talks are underway and focus on the technical aspects of transiting Russian gas to Europe from 2020 onwards.

Asia seen add 400 GW by 2030

Dec 2 – Asian nations are expected to add more than 400 gigawatts (GW) of electrical capacity to the grid over the next decade — equaling about twice the installed capacity of Germany. Much of the new capacity will be renewables, backed up by some 140 GW of dependable gas-fired capacity, according to GE Energy findings. Hence, the U.S. turbine manufacturer decided to invest up to US$60 million to convert its Singapore repair center into a HA engineering and development center.

Total starts up hybrid plant with energy storage

Nov 29 – Total Quadran has started up the largest hybrid power plant combined with energy storage to harness the ample solar power potential of New Caledonia, a French overseas territory. With an installed capacity of 16 MW-peak, the plant also features a 10 MW lithium-ion energy storage system. Combining of hybrid solar PV units and possibly gas-powered generator sets with energy storage balance out supply swings and enhances the reliability of the electricity grid.

Rolls-Royce, AVK partner on standby gensets

Nov 28 – AVK, Britain’s largest supplier of critical power solutions for data centres and the financial sector, has partnered with Rolls-Royce’s MTU brand for standby gensets in UK and Ireland. The deal covers MTU Series 2000 and 4000 diesel systems in a range from 825 to 4,000 kVA. In the past 30 years, AVK has developed into the largest solutions provider in the UK’s critical power market and has to date supplied gensets equipped with MTU engines with a total capacity of more than 3.5 GW.

Golar suffers setback amid restructuring

Nov 27 – Golar LNG, owner of a fleet of 27 vessels, has seen operating revenues plunge 20% to $98.67 million, in the first nine month of this year, while net losses amounted to over $236 million. Bermuda-registered Golar in May 2019 announced plans to spin off its LNG carrier fleet with the aim of becoming a gas project developer. It recently won a contract for the Barcarena power project (605 MW) in northeastern Brazil.

Burckhardt buys remaining share of Arkos

Nov 26 – Burckhardt Compression’s subsidiary in North America has purchased the remaining 60% of Arkos Group. The US has the world’s largest installed base of reciprocating compressors, and the integration of Burckhardt and Arkos Field Services, will turn the company into the only independent one-stop provider for equipment and service in the upstream, midstream and downstream business.

Gazprom’s exports to Austria reach fresh record

Nov 25 – Supplies of Russian gas to Austria and transits to Western Europe have already exceeded record levels set last year. From January 1 through November 21, 2019, Gazprom delivered over 12.7 billion cubic meters of natural gas – 33.5% more than in the same period in 2018. Austria’s OMV imports Russian gas under a long-term contract that was recently extended until 2040.

OGUK responds to Labour Party Manifesto

Nov 21 – The UK North Sea industry association Oil & Gas UK (OGUK) has warned of an investment hiatus in reaction to Labour’s pledge to introduce a windfall tax on oil and gas companies, if it wins the General Election on December 12. Responding to this, OGUK said any increase in tax rates would drive investors away, damage the competitiveness of the UK’s offshore oil and gas industry, and could potentially increase the country’s reliance on imports. OGUK underlined it has put in place a ‘Roadmap 2035 a blueprint for net zero emission’ and is investing in technology to achieve this goal.

France, Germany and UK led on demand-side flexibility

Nov 21 – France, Germany and the UK are leading on demand-side flexibility (DSF) and grid-integration of decentralized energy sources while Sweden, Spain and Portugal are lagging behind the rest of Europe, the consultancy Delta-EE and SmartEN finds. Areas covered by their new DSF monitoring tool include availability and accessibility of demand-side response, and its monetization across the gas value chain.

AI predicts peak in power use

Nov 20 – ABB and Verdigris Technologies have developed machine-learning algorithms to predict unplanned peaks in electricity consumption and help avoid them. The Energy Forecasting app will enable users to reduce their electricity bills by reducing peak demand charges.

India’s first UHVDC link commissioned

Nov 19 – GE Grid Solutions has commissioned Pole-3 - the ultra high-voltage direct current (UHVDC) transmission line in India, capable to transmit 4,500 MW of electricity. Once completed the Champa-Kurukshetra UHVDC project will be expanded to transmit 6,000 MW of electricity at 800 kV, serving customers in the areas of Punjab, Haryana, Delhi, Uttar Pradesh.

COP25 urged to step up climate efforts

Nov 18 – The COP25 UN climate conference in Madrid is urged to enshrine greater commitments from the world's industrialised nations to curb their greenhouse gas emissions. “Europe will have to play a key role in this regard,“ environment minister Svenja Schulze said, adding Germany's recently announced climate package marks a "restart" in the country's climate policy.

Wärtsilä launches ‘Expertise Centre’ in Singapore

Nov 15 – The Finish technology group Wärtsilä has chosen Singapore as the location for its latest Expertise Centre (EC) that provides operational support and dynamic maintenance planning, both for marine and energy business customers. All of Wärtsilä’s Expertise Centres combined currently monitor some 900 installations with more than 2,000 engines around the world.

U.S. storage injection hits record high

Nov 14 – Near-record volumes of natural gas have been placed into storage in the United States in the current injection season. According to the U.S. Energy Information Administration (EIA), the amount of gas held in storage in 2019 surged from a relatively low value of 1,155 billion cubic feet (Bcf) at the beginning of April to 3,724 Bcf at the end of October.