Regulation & Policy

The Danish government pledges the country can rely entirely on renewable energy by 2050, however gas-fired power generation and increased interconnection capacity are vital to balance electricity supply and demand. "Gas will be needed as a backup for renewable energies, but we are working on replacing natural gas with biogas and other renewable gases," Marlene Hein Nybroe, gas development and preparedness manager at Energinet DK told Gas-to-Power Journal.

The Spanish Congress of Deputies supports the timely introduction of a new cogeneration tariff, with Acogen, Spain's cogeneration association, calling the congress support a "very positive step". Investment into new CHP plants in Spain has come to standstill, following the decision of Spain's government to enact a temporary halt to new feed-in-tariff contracts for renewable energies starting January 2013.

The share of gas-fired power generation in the U.S. energy mix is set to rise as the first carbon pollution standard issued by the U.S. Environmental Protection Agency (EPA) entrenches the current cost advantage for natural gas over coal.

The rulemaking only concerns new generating units that will be built in the future, and does not apply to existing units already operating or units that will start construction over the next 12 months, EPA said today.

The majority of Europe's gas-fired power plants will be unready or unable to use carbon capture and storage (CCS) technology by 2030 without a U-turn in Britain's energy policy, Green Alliance said in a report published late Tuesday. The lobby group warns further delays in CCS will jeopardise the U.K.'s climate goals.

California Public Utilities Commission (CPUC) has approved a resolution on ordering California's three investor-owned utilities (IOUs) - Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric - to finalise the contract with Calpine Corporation's Sutter Energy Center within the next 30 days.

India's Central Electricity Agency (CEA) has spoken out against the construction of any new gas-fired power plant in the country until 2015-16, as restrained domestic production of natural gas is hampering reliable gas supply for power generation.

Operators of gas-fired plants should be allowed to resell natural gas hubs back to virtual trading hubs as a way of offering demand-side responses on balancing platforms, Eurelectric said in a gas strategy paper today.

Spain's National Energy Commission (CNE) is calling for an increase in electricity prices paid by consumers to curtail Government debts worth €24 billion. The so-called 'tariff-deficit' piled up over the past 10 years as utilities had to sell electricity to end-customers at regulated rates below nominal generation and distribution costs.

German E.ON, Italian Enel, Swedish Vattenfall and Swiss Alpig have launched Afiegm, an energy lobby group, urging the French governments to open France's power generation market and to curtail the dominance of EDF. "The question of competition concerns not only supply but also equally production," Afiegm chairwoman Fleur Thesmar said.

Investment in new gas-fired and nuclear plants, rather than wind power, could save the U.K. £45 billion in meeting its 2050 carbon reduction, AF Consult, a Sweden-headquartered technical consultancy, said in a recent report sponsored by the global accountancy firm KPMG.

The U.S. Clean Heat & Power Association (USCHPA) is backing the Smart Energy Act that set a national goal to double the amount of power generated by combined heat and power systems to 170 GW by 2020. The technical potential for additional Combined Heat and Power (CHP) plants at existing sites in the U.S. is between 130 and 170 GW, plus an additional 10 GW of waste heat recovery, according to USCHPA estimates.

In an effort to end shortages of gas supply to power plants, Nigeria's Petroleum Minister, Diezani Alison-Madueke, has called on energy companies to comply with the country's new gas price regime. The Government is concerned that gas companies are not implementing the new, higher price regime that had been designed to attract investment to Nigeria's domestic gas-to-power sector.

Pöyry Energy Consulting calls for a marked-based alternative to introducing formal capacity payments under the UK Electricity Market Reform (EMR). "Market-traded reserve products combined with imbalance prices could deliver a better outcome to support flexible power generation capacity," James Cox, Principal Consultant at Pöyry Energy Consulting told 'Gas-to-Power Journal'.

The new UK energy minister, Charles Hendry, has criticised proposals and time-schedules of the European Commission's (EC) energy infrastructure plan as "overly prescriptive".

A rise in gas-to-power generation would be a bet on the failure of U.K. energy policies under the Electricity Market Reform that favour renewables and nuclear energy, Pierre Noel, senior researcher at the Energy Policy Forum at the University of Cambridge said today. Calling for a level playing field for all power generation technologies, Noel opposed the introduction of subsidies for capital-intensive technologies that infringe on the role of gas in the European energy mix.

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News in Brief

Evol LNG helps power Australian gold mine

June 18 – Kirkalocka Gold Mine in Western Australia will use Evol LNG to fuel Zenith Energy’s 14.5 MW power station with regasified natural gas starting from September 2019. The mine is run by Adaman Resources and had been relying on diesel to cover its energy needs. Based on the current diesel price, Adaman Resources expects to reduce fuel costs by more than A$13 million (US$9 million) during the first six years of operation of the new onsite LNG-to-Power plant.

Shell Energy ordered to refund overcharged UK customers

June 17 – UK energy regulator Ofgem has ordered Shell Energy Retail to refund around 12000 customers who were overcharged after the Government’s cap on gas and electricity prices came into force in January. Shell Energy Retail s agreed to refund these customers by paying £29,000 in compensation (£5 per fuel), and also pay an additional £200,000 into Ofgem’s voluntary redress fund.

BASF enters battery market

June 14 – German chemical company BASF is using NGK Insulators’ sodium sulfur batteries as its entry point into the energy market. The Japanese manufacturer NGK is currently the only maker of the large-scale sodium sulfur (NAS) batteries, capable to store several hours of energy. A joint project in northern Germany uses NAS batteries that store energy for five hours, while a recently completed project in Abu Dhabi using 108MW / 648MWh of the systems with a full six hours storage duration.

CNPC boosts domestic gas production

June 13 – China National Petroleum Corp (CNPC), the largest Chinese oil and gas company, has announced plans for domestic natural gas output to reach 55% of overall domestic supply by 2025. Last year, CNPC managed to boost production by 5.9% to reach 138.02 billion cubic metres, while also increasing imports of pipeline gas and LNG.

Gazprom taps new gas deposits for Nord Stream 2

June 12 – Gazprom is fast-tracking hydrocarbon production in northwest Russia to boost reserves for export through the Nord Stream 2 pipeline (55 Bcm/y), currently being built through the Baltic Sea. At a meeting with Nord Stream shareholders, Gazprom noted that its Yuzhno-Russkoye field has yielded about 276 Bcm of natural gas, including 0.9 Bcm of hard-to-recover Turonian gas, since the start of operations. Turonian gas reserves, consisting of about 99% methane with no heavy residues, lie at a depth of 800–850 meters in reservoirs with low permeability. Commercial production at the Turonian deposit is scheduled to start in late 2019.

PG&E turns off electricity to avoid wild fires

June 11 – Pacific Gas and Electric Company (PG&E) has turned off electricity for some Californian communities at risk of a wildfire during the lastest heat wave. The authorized blackout started on Saturday in Napa, Solano and Yolo counties, with electricity being gradually restored over the course of Monday. Approximately 16,000 customers have been affected.

Gazprom to build power plants in Serbia

June 10 – Gazprom Energoholding has signed an Agreement of Intent (AoI) to build an upgrade several gas-fired power plants in Serbia. Together with Novi Sad, Gazprom Energoholding is already building a CCGT with some 200 MW capacity near a refinery in the Serbian town of Pancevo.

U.S. fund splashes out $4bn to buy El Paso Electric

June 7 – Infrastructure Investment Fund (IIF), a private investment vehicle within J.P. Morgan Inc., has agreed to acquire the U.S. utility El Paso Electric Co for $68.25 per share in a cash transaction. The enterprise value on the transaction is estimated at $4.3 billion. El Paso Electric customers will receive a total $21 million in bill credits over three years.

Caterpillar gensets back up Finnish data center

June 6 – The Swedish telecom giant Telia has ordered 12 Caterpillar gensets to provide standby emergency power to back up operations at its new data center in Helsinki. The Cat dealer Witraktor figured a system which includes eight Cat 3516B and four 3516E generator sets. The Telia Helsinki Data Center is the largest such facility in Finland, and its primary electric power supply comes from a combination of wind, hydroelectric and biomass.

Capstone wins orders in Iraq

June 5 – Micro-turbine producer Capstone has secured an order for two C600 Signature Series microturbines to provide 1.2 MW of energy to power a triethylene glycol (TEG) dehydration facility near Basra, in southern Iraq. The contract also includes Capstone’s new self-cleaning pulse filtration system, allowing the turbines to better withstand hot and sandy conditions with minimal maintenance.

Gas to supply record 43% of US power needs

June 4 – This summer, natural gas is forecast to cover between 40% and 43% of 2019 peak electricity demand in all U.S. states except Texas, according to projections by the Energy Information Administration (EIA). Gas demand soared to nearly 10,700 billion cubic feet (Bcf) last summer, a 16% rise from 2017 levels. Should there be another heat wave this year, that record may well be broken. Capacity wise, natural gas is on course to top its 45% share in the U.S. power mix.

Lukoil to upgrade CHP at Krasnodar

June 3 – Russia’s oil and gas company Lukoil has received government approval to modernize and expand three combined heat and power units in Krasnodar. The gas-fired CHP units have more than 400,000 hours and ran an average 74% utilization rate, the operator said. The upgrade will add 150 MW of power generation capacity and Lukoil said it expects the revamped power plant to be ready for commissioning as early as 2022.

GE commissions Al-Qudus CCGT in Iraq

May 31 – GE Power has installed and commissioned a new 9E gas turbine at the Al-Qudus combined-cycle gas power plant, run by the Iraqi Ministry of Electricity’s (MoE). The CCGT was previously capable of generating up to 1,125 MW and the turbine upgrade adds another 125 MW of capacity.

Groundbreaking takes place for Ohio CCGT project

May 30 – This Thursday morning, groundbreaking will take place for the $500 million Long Ridge Energy Generation Project in Hannibal, Ohio. Long Ridge, a 485 MW combined-cycle power project, is being developed by Fortress Transportation and Infrastructure Investors (FTAI). It will create up to 350 construction jobs and some 25 permanent jobs. The CCGT is expected to open in 2021.

Asia to spend more on renewables than oil & gas by 2020

May 29 – Utilities in Asia-Pacific region will invest more in renewables than on oil and gas exploration by 2020. Total capital expenditure in renewables will rise above $30 billion in the region by 2020, according to forecast of the consultancy Rystad Energy. India, Australia, Japan, Vietnam and South Korea will led the way in Asia’s green energy transition.

Ichthys LNG looses court claim against power sub-contractor

May 28 – JKC Australia LNG consortium, developer of the US$34 billion Inpex-built Ichthys LNG plant near Darwin, has lost a US$1.9 billion court case claim against a power station sub-contractor. Construction of the power station was subcontracted to UGL-led group which CIMIC took over in 2016 and subsequently cancelled the Ichthys power contract. The Western Australian Supreme Court in Perth now dismissed an application by JKC Australia LNG for upfront payment of damages. The power plant’s five gas turbines have already been handed over to Inpex, and KBR aims for the plant to be ready for commissioning this autumn.

San Miguel Energy claims $6.19bn subsidy for Ilijan plant

May 24 – South Premier Power Corp. (SPPC), San Miguel Energy’s development vehicle for the 1,200-MW Ilijan gas power project, has claimed that it already paid $6.19 billion in subsidies to state-run Power Sector Assets and Liabilities Management Corp (PSALM) for its financial obligations as independent administrator. The build-operate-transfer (BOT) contract for the Ilijan plant will expire in 2022; and by that time, SPPC will get ownership of the plant.