Regulation & Policy

Germany's energy industry association BDEW on behalf of its members has submitted a discussion paper to the Ministry of Economics (BMWi) pushing for a deal to compensate operators for refraining from carrying out planned closures of fossil power plants to guarantee supply security during the upcoming winter period.

The German government has abandoned plans to help finance up to 15 percent of the investment costs of new coal-fired power plants, with carbon capture and storage (CCS) technology. The lack of public support for storing carbon underground could shift political support towards gas generation.

German utilities E.on and RWE  have spoken out in favor of a strategic reserve as a quick solution to resolve a capacity squeeze in southern Germany in the coming winter. The debate over capacity markets, by contrast, would take years and the scheme is believed to proof counterproductive to energy-only-markets.

Turkey's Privatization Administration (OIB) will launch a tender to sell the 1,200-MW gas-fired Hamitabat power station in Tekirdag, in the north-western region of Turkey.

Doubts on the effectiveness of the energy bill have been raised by the industry. The reform "comes too late" and regulations are "unclear", is the verdict of some investors: "We have long been pushing for greater clarity on the detailed design of the EMR proposals, and greater expediency in the process as a whole," Volker Beckers, chief executive of RWE npower said in a statement to Gas to Power Journal.

Facing up what it calls the "Red Tap Challenge", the UK Department of Energy and Climate Change (DECC) has announced it will scrap unnecessary regulation with the aim of stipulating 100 billion pounds of investment in the electricity sector.

The complexity of proposals to establish a Feed-in Tariff with a Contract for Difference (CfD) under the UK's draft energy bill is freezing new investment. "The proposal has now arguably become unworkable," the Common's energy and climate change select committee warned today.

The introduction of a strategic reserve capacity is more effective and better compatible with the current energy-only market model than a capacity payment scheme, according to an Ecofys study published today on behalf to the German federal environmental ministry (UBA).

Subsidies are not the right approach to encourage investment in new gas-fired power plant projects in Germany, environment minister Peter Altmaier told the business daily 'Handelsblatt' late Wednesday.

Improved energy efficiency measures could reduce the anticipated UK power demand for 2030 by up to 40%, an initial Electricity Demand Reduction Assessment by the British government finds.

The British energy regulator Ofgem will continue to develop detailed proposals on a mandatory power auction "ahead of the autumn" with the aim of increasing market liquidity, Ofgem said in a liquidity update letter.

EMRA, Turkey's Energy Market Regulatory Authority, is considering introducing 'paid-in capital' criteria as a precondition for granting licences to power plant developers. By taking this step the regulator intends to limit so-called 'speculative licence applications', Muhammed Demir, Group Head, at EMRA's Electricity Market Department said in Istanbul today.

Plant operators in the UK are requested to apply for funding under the UK's carbon capture and storage (CCS) competition by July 3, the Department of Energy and Climate Change (DECC) confirmed. Designed to develop commercial-scale CCS facilities, the competition will make available £1bn in funding to up to four coal or gas-fired CCS projects.

The Department of Energy and Climate Change (DECC) is fine-tuning last details of an upcoming capacity market in the U.K.  "There is currently a lot of discussion about a penalty regime [for delays and non-delivery] and the eligibility of power plants for capacity payments," Neil Bush, Head Energy Economics at DECC told delegates at PowerGen 2012. "More details will be announced in late October," he said in Cologne today.

To close the nuclear gap in Germany's power generation capacity, "more new gas- and coal-fired power plants need to be built than we had estimated," Rainer Brüderle, head of the German liberal party FDP, said over the weekend. "And this may well cost more than we thought," he told the paper "Welt am Sonntag".

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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.