Regulation & Policy

Though China’s energy market reform has made progress, and over 80% of gas consumed by industry is now being sold on market-orientated prices, leading economists are calling for further steps that reform the entire gas-value chain. “China could open the natural gas upstream and downstream markets and regulate the midstream pipeline transport market,” said ZhongXiang Zhang Professor at the Ma Yinchu School of Economics, Tianjin University.

Tender documents have been posted by the Public Gas Corporation of Cyprus (DEFA) in search for a counterparty that will supply and install a floating storage and regasification unit (FSRU) at the port of Vassilikos. The LNG import project comes at a cost of €300 million, with the imported volumes set to underpin the conversion of an oil-fired power station to run on natural gas.

Federal Energy Regulatory Commission (FERC) has approved Williams’ request to place its Atlantic Sunrise pipeline project into full service. Operations commenced as of Saturday, October 6, 2018, increasing design capacity of the Transco pipeline for natural gas from Marcellus Shale by 1.7 billion cubic feet per day (Bcf/d), or approximately 15%, to 15.8 Bcf/d.

Jeremy Corbyn, the leader of the UK Labour Party, has set out plans to transform the British energy market and “kickstart a green jobs revolution” that is meant to create over 400,000 jobs. At his party’s annual conference, he also pledged to double the number of onshore wind farms, if Labour comes to power in case of a UK snap election.

US Energy Secretary Rick Perry has openly confronted Russia over its energy politics by claiming the Gazprom-led Nord Stream-2 project would distort European energy market. Perry said Nord Stream extension project “would concentrate two-thirds of the imports of Russian gas to Europe in a single pipeline, creating a choke point [exposed to potential] disruption."

At the UK's first Zero Emission Vehicle Summit, Prime Minister Theresa May has committed £106 million for R&D in green vehicles, new batteries and low carbon technology. May said the Britain will “lead from the front” on zero-emission cars to meet a target for UK roads to be free of petrol and diesel cars by 2050.

Construction on a disputed 303-mile stretch of the Mountain Valley Pipeline is proceeding after the U.S. Federal Energy Regulatory Commission (FERC) has modified its stop-work order and permitted works to resume. Next Era Energy and ConEdison Transmission, co-developers of the 2 Bcf/d interstate pipeline, now aim to have the overall project built and in service by late 2019.

Rebuking the Trump administration’s plan to roll back the Obama-era Clean Power Plan, California’s Gov. Jerry Brown called the proposal a "a declaration of war against America and all of humanity." Trump’s EPA new proposal gives states more freedom to set their own emissions standards at plants - a barely disguised favour for the coal industry.

Analysts reckon Germany could still meet its 40% greenhouse gas reduction target by 2020, if several lignite-fired power plants are shut-down immediately and others curtailed in use, a study by the Fraunhofer Institute shows. “The technical possibilities aren’t lacking – only the political will,” commented Greenpeace energy expert, Anike Peters.

Environmental lawyers have launched legal action after Bulgarian authorities permitted a coal-fired power plant to burn petrochemicals, biomass and waste alongside lignite – a dirty, highly inefficient lignite coal. The first hearing in the Brikel case is scheduled for early October.

California Independent System Operator (CAISO) has issued two new reliability must-run designations to support grid reliability in the face of imminent power plant retirements near Los Angeles. NRG California South had notified the ISO it will retire its Ellwood, Etiwanda and Ormond Beach generating stations by October 2018.

Energy Transfer Partners (ETP), developer of the $4.3-billion Rover Pipeline, has accused the Ohio Environmental Protection Agency of attempting to delay the project’s completion. By raising this claim, ETP is trying to fight back against a regulatory notice over low-level contamination.

More than 45,000 businesses across Europe are at risk of being fined up to €1 million ($1.1m) if they fail to comply with the new EU Energy Efficiency Directive, the registrar DNV GL warned. The clock is ticking – deadline for compliance is 5 December 2019 in most countries.

Taking bold steps to curb air pollution, China’s State Council has extended the reach of the three-year 'blue sky defence' action plan to cities in Shanxi, Shaanxi and Henan provinces. The target area now includes ‘2+26’ cities and prioritizes switching from coal to gas for winter heating and power generation, as well as renewables. Accelerating air pollution now affects a region with 37% of China's population and contributes to 41% of the GDP.

Agreements reached by EU Institutions over the past fortnight on energy efficiency, energy governance and renewables “fall well short of a comprehensive approach,” according to COGEN Europe. The headline target of 32.5% energy efficiency by 2030 will be missed, the lobby group warns, in the absence of an “actionable framework”.

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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."