Regulation & Policy

German Chancellor Angela Merkel has thrown her political weight behind the introduction of a price on CO2 emissions in the transport and buildings sector, although her climate cabinet will have the last say on September 20. “I advocate such a price,” Merkel said, stressing new paths had to be tried to reach the country’s climate targets.

Germany’s Council of Economic Experts have urged the government to put a price on carbon emissions in the transport and heating sector as a quick and easy fix to help meet the country’s climate goals. This unilateral move would work as an interim solution before integrating the sectors into the European Emission Trading System (EU-ETS).

Transforming India to a “gas-based economy” has been President Narendra Modi’s vision for years but the country can ill afford subsidizing LNG imports to reduce fuel costs for power plants. Banks invested some Rs50,000 crores ($7.18bn) in these projects – many unable to repay their debt, leaving Indian public money at risk.

Trump-alley Andrew Wheeler, the head of the U.S. Environmental Protection Agency (EPA), has signed a final ruling that roles back Obama-era emission limits for thermal power plants. The new rule gives U.S. states wide discretion in deciding whether coal power plants need efficiency upgrades or retrofits, hence benefiting the local mining industry.

The International Energy Agency (IEA) is calling on governments and businesses around the world to increase the use of clean hydrogen not only for power generation but also for transport and heating. There are currently around 11,200 hydrogen-fuelled cars on the road worldwide. Existing government targets call for that number to increase dramatically to 2.5 million by 2030.

Outgoing UK Prime Minister Theresa May has committed to a 2050 emissions target of reducing emissions by 80% to “almost zero”. Massive investment in clean energy generation – renewables, hydrogen, flexible gas power and energy storage – will be needed to achieve this goal, but funding is still uncertain.  

Burning wood pellets is deemed “carbon neutral” under new EU policy rules, and so-called “biomass energy” is also increasingly popular in Japan and Korea. But some scientists dismiss the policy as “shortsighted” or outright damaging, given that is leads to old forests being chopped down in rural parts of the U.S. and in Eastern Europe.

By mid-June, the German government will receive a comprehensive report on the effects of a carbon price compared with the option of allowing sectoral pathways to reduce emissions. “Transport, buildings and agriculture so far have no form of [carbon] pricing but just some more or less effective mix of measures,” Chancellor Angela Merkel remarked as her cabinet is divided on how to meet Germany’s 2030 climate targets.

Johannes Teyssen, CEO of the European energy giant E.ON, is supporting plans for a CO2 price to be levied on all sectors of the German economy: power generation, transport and housing. “We propose a cross-sector CO2 tax of 30 Euros starting from next year, which could be gradually increased to 35 Euros,” he told German media.

The German Chancellor Angela Merkel has vowed her new Climate Cabinet is seeking ways for the country to reach climate neutrality. Should the ministers find a “sound” way to achieve net-zero greenhouse gas emissions by 2050, Germany would be able to join France and Sweden, in drafting a long-term EU climate strategy, said Merkel at the 10th Petersberg Climate Dialogue in Berlin.

The Nigerian government has announced plans to implement a new gas pricing regime on May 29 in an effort to reduce chronic supply shortfalls and subsequent electric power cuts. Payment issues, and problems with debt collections, have so far made it difficult to enforce domestic gas supply obligations for critical infrastructure such as power stations.

“The path towards a de-carbonised future is unstoppable,” claims David Ledesma, Energy & Strategy Consultant and Senior Research Fellow at the Oxford Institute for Energy Studies (OIES). The industry must, therefore, develop long-term strategies as to what it will do to achieve the European carbon emission targets and set out what additional costs will be incurred and who will pay them.

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News in Brief

MAN to maintain power plant in Benin

Oct 23 – PrimeServ, the after-sales brand of MAN Energy Solutions, has signed a service agreement with BWSC for the Maria Gleta power plant near the city of Cotonou, Benin. The 127 MW plant is powered by seven MAN 18V51/60DF engines. The ten-year contract covers the supply of spare parts and the provision of technical services for scheduled maintenance.

Gas saves Virginia over $14bn

Oct 22 – Virginia’s businesses and families saved more than $14.2 billion between 2008 and 2018 thanks to low-cost natural gas and expanded energy infrastructure, according to a new Consumer Energy Alliance (CEA) report. Almost 60% of power generation relies on natural gas and a third of its households use gas for home heating.

Energy storage for LNG-powered vessels

Oct 21 – Louisiana-based Harvey Gulf has asked Wärtsilä to retrofit its energy storage system (ESS) on four LNG-fuelled platform support vessels. Once upgraded in early 2022, all vessels will be of full tri-fuel operation.

Mott McDonald starts construction on ALCP6

Oct 20 – US construction firm Mott McDonald has started building the ALCP6 waste to energy project in Krabi province, southern Thailand. The plant will incinerate 144,000 tonnes per year of municipal solid waste, and the heat obtained will be converted into 6 MW of electricity to be exported to the Thai national grid.

Brace for EU sustainable finance rules

Oct 19 – Sustainable finance practices, drawn up by the European Commission, could create a "bureaucratic monster" that smaller companies and energy investors would find overbearing, the Munich-based Institute for Economic Research (ifo) warned. The regulation should hence prioritise closer scrutiny of large and listed companies.

UK could become net power exporter

Oct 16 – Increased interconnection could provide a route for excess offshore wind power in Britain to be consumed elsewhere in Europe. National Grid Interconnector Register shows up to 16 GW of interconnection could be operational by 2025 and up to 25.4 GW by 2030.

Wärtsilä to deploy GridSolv in US city

Oct 15 – AEP OnSite Partners has contracted Wärtsilä to deploy its GridSolv Quantum energy storage in the city of Martinsville, Virginia. The system includes an UL9540A limiting 2-hour battery firewall and will help lower the city’s energy costs.

Rolls-Royce spends $13.9m in Mankato

Oct 14 – Britain’s engine maker Rolls-Royce has decided to invest nearly $14 million in its Power System business to build a new R&D centre at its MTU manufacturing plant in Mankato, Minnesota, US. The expansion will see 28,000 square foot added to the facility’s existing hall, making room for the production of high-power MTU gas gensets, enhanced product testing and the creation of 20 new manufacturing positions.

Clarke commissions Vitalait power unit in Tunisia

Oct 13 – Clarke Energy and INNIO Jenbacher have completed the commissioning of an onsite power plant of a milk producer in Tunisia. The installation of another Jenbacher gas engine has increased the plant’s output to 4 MW of electricity as well as 1,100 kW of hot water and 800 kW of steam.

Secondary battery market to top $55bn

Oct 12 – Technavio expects the secondary battery market to grow by $55.62 billion through 2024, rising at an 11% rate over the forecast period. Falling costs for lithium-ion batteries as well as growing demand in Asia Pacific allowed the market to grow 2.01% this year, despite adverse effects of the pandemic. Top battery suppliers are Tesla, Clarious, Exide, LG Chem, GS Yuasa and Samsung.

Shift to sustainable tech

Oct 9 – Three quarters of utilities, surveyed by EIT InnoEnergy, are considering adopting sustainable technology over the next 12-18 months. However, over one third of the respondents found it hard to recruit the skills they need.

Generator rentals slow

Oct 8 – The rental market for power generators has slowed down due to the pandemic, with genset rentals from the oil and gas industry forecast to grow by just $153.87 million this year. However, Technavio expects the market will return to a 3% annual growth rate by 2024.

GE upgrades Italian CHP

Oct 7 – GE has completed an axial fuel staging upgrade on its 9E gas turbine at an onsite combined heat and power (CHP) plant at the Milazzo refinery in Sicily. The entire electricity needs of the refinery, over 780 GWh in 2019, will soon be supplied by the upgraded and more flexible gas turbine.

Operating assets ‘from anywhere’

Oct 6 – GE Digital’s latest software gives electric utilities remote and mobile control over their power stations for remote start-up, external monitoring and operational fine-tuning. The goal is to safe cost through autonomous operation from any location.

Chart wins order from New Fortress Energy

Oct 5 – Chart Industries has secured a second leasing order, worth $7.7 million, for ISO containers for LNG applications from New Fortress Energy for a project in the Caribbean. The US equipment maker sees double digit near-term growth in its repair, service and leasing business, notably from growing demand for LNG equipment for infrastructure.

Siemens energises Togo

Oct 2 – Siemens Energy has delivered a SGT-800 gas turbine and other components for the Kékéli Efficient Power plant project. Located in the Togolese capital Lomé, the 65 MW plant will cover almost 40% of country’s expected electricity demand.

Batteries get cheaper

Oct 1 – Cost for battery production is falling rapidly as manufacturers bring large Gigafactories on-line. By 2030, Bloomberg New Energy Finance anticipates battery pack prices to drop to $73 per kilowatt-hour, down from a current volume-weighted average of below $270/kWh.

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