Regulation & Policy

Idled power plants in India that are stranded due to a lack in gas supply might soon get regasified LNG at a subsidized rate, financed the government-run Power System Development Fund. The aim is to revive flexible gas power plants through an e-bid RLNG scheme.

Smart electrically-driven heating is a “valuable field in which to invest”, Delta-ee research finds, pointing at the substantial installed base of electrically-driven heating – 30 million units across Europe. In the UK, new business models are emerging providing heat-as-a-service, with the customer avoiding the need for buying fuel and appliances by simply buying the heat, and comfort that comes with it.

Flexibility and system integration of renewable energy sources will be in focus of a Ministerial Summit co-hosted by the German government and the International Energy Agency (IEA) in Berlin in September. Tackling the intermittency challenge will be critical for 33 countries are likely to have up to 20% variable renewables in their power systems by 2023.

The Chinese government is watering down its pledges to reign in climate change and focuses on stepping up energy imports instead. Over the past year, China’s has demand surged 15% and a big part of these additional needs will soon be met through the Russian ‘Power of Siberia’ pipeline project as well as more LNG.

U.S. Environmental Protection Agency (EPA) is about to initiate more rollback regulations in favour of coal in the power sectors. The proposals included loosening the New Source Performance Standards which mandate how much CO2 new power plants can emit. However, these rollbacks are unlikely to stop the demise of the U.S. coal industry as natural gas is outcompeting coal on cost.

Adamant to end coal-burn in Israel’s power sector, the energy minister Yuval Steinitz foresees natural gas to make up 83% of the country’s energy mix by 2030, and renewables account for the remainder. If implemented, Israel’s new energy policy would herald a quantum shift in the county’s resource use given that the transport sector is also meant to run entirely on gas.

Distributed energy sources will be tested as a way to restart of electricity supplies under a £11.7 million project, partly funded by the UK energy regulator Ofgem. The project will see National Grid, SP Energy Networks and TNEI explore how distributed gensets can be put to use to get the grid up and running again, should a ‘Black Start’ event occur.

German authorities want to test the country’s resilience to a severe natural gas shortage with a large-scale emergency drill held over two days, the energy regulator BNetzA and Federal Ministry for Economic Affairs & Energy (BMWi) announced. “Germany’s gas supply is very secure and reliable,” said BNetzA head Jochen Homann. “However, it is prudent to be also prepared for unlikely emergencies.”

The German Chancellor Angela Merkel has extended the deadline for a much-awaited report from the country’s coal exit commissions. Elections in three coal states in eastern Germany in 2019, as well as lobbying from utilities prompted her to effectively axe the opportunity of having a report on pre-2020 action ready before the COP24 climate meeting in Poland in early December.

Leaked drafts of a report of Germany’s coal commission show the country’s coal exist will likely be delayed to 2022, rather than starting in 2020. The pathway of the coal exit is now in focus, rather than the exit date. Forced plant closure should be avoided, the commission said, stressing shut-downs need to agreed with operators who will claim compensation.

Flexible gas power plants will have to fill the capacity gap after Toshiba abandoned its £15 billion Moorside nuclear power venture in Cumbria, and will start to wind up NuGen in January. Moorside could have covered 7% of the UK’s electricity needs by 2025 – a share that now needs to be filled by fossil fuels, notably natural gas.

Northern Indiana Public Service Co. (NIPSCO) has alerted state regulators about plans to retire four coal-fired power units by 2023, and another one by 2028. The utility’s latest Integrated Resource Plan details NIPSCO’s efforts to produce 65% of its electricity from renewables and at least 25% of its output from natural gas.

Weakened by losses in state elections in Hesse and Bavaria, the German Chancellor Angela Merkel has decided to give way for a new leader of her conservative CDU party. Merkel’s decision could help the ruling coalition regain focus and make important decisions on energy, climate and other key areas. Uncertainty abounds about the timeline for Germany's coal exit.

India's Prime Minister Narenda Modi has voiced concerns over excessive delays in joint venture projects with Sri Lanka. The neigbouring island nation is expected to fast-track a LNG-fuelled power plant after a coal power project was halted, just when the Indian JV was about to start construction. Despite approval for a $250 million LNG import terminal near Colombo, the Indian-Japanese JV has not yet followed through with the project.

Siemens and General Electric, two rival global engineering companies, are at loggerheads over a multi-million dollar power generation deal in Iraq. The Trump administration now intervened and put severe pressure on the Iraqi government to award part of a $15 billion contract – first discussed and pre-arranged with Siemens – to GE Power & Gas.

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News in Brief

Wärtsilä wins contract in Barbados

Jan 23 – Barbados Light & Power Company Ltd (BLPC) has contracted Wärtsilä to fast-track the supply of a 33 MW flexible power plant, as an EPC project. The plant, set to run on four Wärtsilä-32 engines, will be built at a site adjacent to BLPC’s 10 MW solar photovoltaic plant at Trents, St. Lucy, located on the northwestern coast of Barbados.

Azito power plant takes FID

Jan 23 – Globeleq and IPS have reached financial close on a 253 MW expansion of the Azito gas-fired power plant near Abidjan. An MXL3 upgrade will boost the capacity of the combined-cycle plant from 460 MW currently to 713 MW, equaling about 30 percent Ivory Coast’s total capacity installed.

Climate risks become urgent

Jan 22 – Adaptation to climate change is now “urgent,” McKinsey claims, suggesting there would be “many adaptation opportunities.” Climate science shows that the risk from further warming can only be stopped by achieving zero net greenhouse gas emissions through renewable built-out and energy storage.

India’s electricity demand may triple, IEA finds

Jan 21 – Energy demand in India is set to double by 2040, and its electricity demand may triple, according to the International Energy Agency (IEA). Oil consumption in India is seen grow faster than that of any other major economy, making energy security a key priority, the IEA said in its first in-depth review of India’s energy policies. Amid strong growth, renewables now account for almost 23 percent of India’s installed capacity, while energy efficiency improvements helped avoid 15 percent of India’s additional energy demand, oil and gas imports, and air pollution.

Regulators approve CCGT in Wisconsin

Jan 20 – State regulators have approved a permit for Dairyland Power Cooperative to build a $700 million combined-cycle gas power plant in northwestern Wisconsin. The Nemadji Trail Energy Center will produce 625 MW and is scheduled to begin operations by 2025.

ExxonMobil enhances turbine oils

Jan 17 – New high performance turbine oils, developed by ExxonMobil Lubricants, are  entering the market which are formulated to prevent build-up of lacquer, varnish and deposits. The oils are designed to protect against thermal and oxidative degradation, one of the root causes of deposit build-up.

Wärtsilä signs O&M deals in the Bahamas

Jan 16 – Following the commissioning of a Wärtsilä-built 132 MW power plant in Bahamas in December, the Finish manufacturer now signed a two-year operation and maintenance (O&M) accord with the plant owner, the Bahamas Power and Light Company (BPL). Wärtsilä will transition, train, and develop the owner’s Bahamian work force and provide key performance guarantees.

China, S'Korea curtail coal to tackle air pollution

Jan 15 – Beijing city government’s aggressive approach to tackling air pollution is working and South Korea’s spring coal-fired curtailments show some success in cutting seasonal emissions. According to Wood Mackenzie, this should benefit LNG, particularly while spot prices remain low.

Sri Lanka at brink of power shortages

Jan 14 – Sri Lanka could face power cuts by March, after plans for a large-scale coal power plant were been cancelled just prior to start of construction, and a tender for a 300 MW diesel plants ended up in court. On the demand side, pressure is building up as the region is moving into the dry season in February and March. Weather warnings say the island is likely to receive lower than average rainfall in the first quarter of 2020.

Caterpillar’s new genset comply with UK & German grid codes

Jan 13 – Caterpillar Inc. has launched a series of new generator sets that comply with the new G99 United Kingdom, VDE-AR-N 4110 German and Belgium C10/C11 grid codes. The following gensets – G3500H, CG132B, CG170, and CG260 (rated from 280-4,500kVA) – have been verified to be able to accommodate different reactive power modes, active power functions, and connection conditions for normal operation or reconnection after mains decoupling.

Transneft launches battery-based power supply for ILI tools

Jan 10 – Transneft Diascan, the largest Russian inspection service provider for pipelines, has developed and put into operation a power supply system for in-line inspection (ILI) tools based on rechargeable batteries. Flaw detectors performing inspections of trunk oil pipelines, gas pipelines and oil product pipelines can now use the energy from rechargeable batteries, which helps save time and reduces the cost of in-line inspection.

Pavilion starts trading LNG out of Madrid

Jan 9 – Singapore-based Pavilion Energy has completed the acquisition of all gas and LNG assets of the Spanish utility Iberdrola. From its new European headquarters in Madrid, Pavilion said has launched 2020 LNG trading operations with supplies focusing on Spain and the UK market.

Gazprom extends gas transits via Belarus until 2021

Jan 8 – Gazprom and Gazprom Transgaz Belarus have sealed additional agreements to extend the contracts for gas supplies to and gas transportation across Belarus until 2021. According to the newly-signed documents, the contractual supply and transit volumes in 2020 will remain at the level of 2019.

EastMed pipeline to take FID by 2022

Jan 7 – Greece, Cyprus and Israel have signed an agreement to build the 1,900-kilometre EastMed pipeline at an estimated cost of 6 billion Euros. The subsea pipeline, spanning over 1,900-kilometres would initially carry 10 Bcm of gas per annum from Israeli and Cypriot waters to Crete and then on to the Greek mainland and into the European gas network via Italy. A final investment decision (FID) is meant to be reached in 2022, given that the pipeline is scheduled for completion by 2025.

U.S. energy-related emissions drop over 2%

Jan 6 – Fewer emissions from coal consumption, combined with lower energy demand, have helped to significantly reduce the overall energy-related carbon emissions in the United States. According to government statistics, energy-related CO2 emissions fell 2.2 percent last year, and the downward trend is forecast to continue into 2020.

Brent crude prices surge

Jan 3 – North Sea Brent crude prices have risen to their highest level since September 2019, up nearly $3 per barrel because of Middle East tensions coupled with improved Chinese economic forecasts. Brent crude futures for March 2020 delivery were last seen trading at 69.21 per barrel the Intercontinental Exchange (ICE). This bullish price sentiment will feed through to oil-indexed natural gas contracts and LNG deliveries, linked to the Japanese crude cocktail (JCC) basket price.

IEA says coal’s fate tied to Asia

Dec 23 – Rapid rise of wind and solar power in many parts of the world has pushed coal-fired power generation into steep decline in most developed countries. "But this is not the end of coal, since demand continues to expand in Asia," analysts at the International Energy Agency commented: "The region’s share of global coal power generation has climbed from just over 20 percent in 1990 to almost 80 percent in 2019, meaning coal’s fate is increasingly tied to decisions made in Asian capitals."