Daily News

Prospects and profitability for US LNG exports shrink as the oil price plunge has narrowed the gap between Henry Hub-traded and crude-linked gas prices in Europe and Asia.

Having spent $100 million to build a new test centre just outside Berlin, Siemens engineers are now further optimising the combustion process of gas turbines and check how they can best handle various fuel types.
"We don't sell green bananas to the customer. We thoroughly test every innovation and the Berlin facility is tailor-made for combustion testing," said Jerry Klopf, director at the Clean Energy Center near Berlin, part of Siemens' Gas Turbines, Engineering.

The administration of Hawaii’s Governor David Ige has reconsidered the costs of retrofitting or building new power plants based on LNG, and found that they do not make economic sense for the island.

Materials Solutions, a Worcester-based metals additive manufacturing centre, has announced a strategic investment from the Venture Capital Unit of Siemens (SVC). Nickel superalloys, produced through laser melting or 3D printing, are the speciality of the UK firm - a technology also used by Siemens’ turbine manufacturing arm.

Growing supply of hydropower and a fall in overall electricity demand has prompted the Brazilian Ministry of Mines and Energy to authorize Petrobras to re-export LNG.

Hit by the early termination of its Libya contract, APR Energy’s revenue fell 52% in the first six month to June. Low equipment utilisation and a slowdown in orders caused a drop in EBITDA to $48.3 million from $141.7m.

Australia's Clean Energy Finance Corporation (CEFC) was directed to stop investing in future wind power projects, with Prime Minister Tony Abbott suggesting it should instead focus on the development of new technologies including energy storage and flexible gas power.

The latest Reliability Pricing Model Base Residual Auction, held by the US independent power grid operator PJM, has been cleared by PSEG Power’s new 540 MW Sewaren-7 dual-fuel combined-cycle power plant.

Keen to get the delayed Azura-Edo Independent Power Plant (IPP) build and operational by 2018, the government of Nigeria has signed its backing for $237 million partial risk guarantees given by the World Bank.

Flexible operation of Repsol's combined head and power (CHP) stations makes it difficult to optimize production costs. To alleviate uncertainties the operator developed and installed a real-time thermodynamic model, made up of 70 independent variables and over 900 functions or dependent variables, that controls operations of the CHP's three high-pressure boilers and one auxiliary boiler.

Prepared to perform whenever needed, many operators of flexible power plants have participated in the first PJM Interconnection capacity auction that includes a new Capacity Performance requirement. Resources will be called on during extreme weather or other system emergencies.

Alaska, North Dakota, and Wyoming – the US states that produce large amounts of fossil fuels are relying heavily on severance tax revenue—taxes based on the volume and/or value of oil, natural gas, coal, and other natural resources. The budget of Alaska relies almost totally on oil and gas revenues.

News in Brief

Caterpillar to deliver gas gensets to Mexican steelmaker

Aug 28 – Altos Hornos de Mexico (AHMSA), the largest steelmaking company in Mexico, has ordered 40 Cat CG260-16 natural gas generator sets to produce 160 MW of power from four onsite gas power plants in Monclova, Coahuila.
“With the power derived from these Cat units, we are producing energy that is 55% cheaper than the power supplied by the Federal Commission,” said Emigdio Valades, power plant area superintendent with AHMSA.

Eagle Ford to produce 2m bbl/d by 2020

Aug 27 – Production growth from the Eagle Ford – one of the largest US shale formations – is proving resilient to the slowdown, with crude/condensate output seen at 2 million barrels per day in 2020. According to WoodMackenzie, most companies have increased production beyond 2014 averages as active rigs are yielding more, which moderates the adverse impact of lower oil prices.

MRO market edges toward $14.5bn by 2018

Aug 27 – The global market for gas turbine maintenance, repair, and overhaul (MRO) in the power industry is expected to reach $14.48 billion by 2018, with moderate growth over the next five years. Lucintel consulting pointed out that the industry faces challenge to recruit and retain the skilled workers while the price of labour is increasing.

Denham Capital partners with Nexif Energy in Asia

Aug 26 –Private equity firm Denham Capital and Singapore-based Nexif have announced to develop, finance, construct and acquire conventional and renewable power generation assets across Southeast Asia.
During the last five years, the Nexif team managed InfraCo Asia, an infrastructure platform funded by several European government development finance institutions.

Testing of gas pipeline for Carrington Power Station

Aug 25 – Alstom and DF Energy, consortium partners for the construction of Carrington Power Station, are carrying out pneumatic testing of the gas pipeline to the 880 MW combined-cycle plant until 11 September 2015.

MEA gas engine market to grow 25.2%

Aug 25 – The gas engines market in Asia and the Middle East (MEA) is anticipated to grow at a combined annual growth rate (CAGR) of 25.2% from 2015 to 2022. It was valued at $283.6 million in 2013 and is expected to reach $2,137.7 million by 2022, according to Transparency Market Research.
Apart from the power sector, the fast growth is spurred by rising use of gas fired reciprocating engines at pipeline compressor and storage stations and at gas processing plants.

TVA hikes electricity rates

Aug 24 – Tennessee Valley Authority (TVA) on Friday adopted a $10.7 billion spending plan for fiscal 2016 that will raise electricity rates by 1.5 percent. The rate hike, the same as in each of the past two years, will raise an extra $200 million from customers in TVA's seven-state territory.

APR gets payment from Yemen

Aug 21 – Fast-track power solution provider APR Energy has received a payment of $8.4 million from its terminated project in Yemen, which covers the outstanding project balance. It also has gained access to the Yemen project sites and its equipment, which will result in a re-evaluation of the $24 million impairment taken in the second quarter due to its inability to safely enter the sites at that time.

Singapore: Power tariff to rise 7.5% in Q3

Aug 20 – Electricity tariffs in Singapore will increase by an average of 1.5cts/kWh, or 7.5%, rising up to 22.41 cts/kWh in the third quarter of this year. SP Services said the hike in the third quarter is due to a 15.1 per cent increase in the cost of natural gas for electricity generation from the second quarter.
Power tariffs consist of four components: energy cost, network cost, market support services fee, and the market administration and power system operation fee.

MTU Onsite to power dairy farm

Aug 20 – Rolls-Royce has won a contract from Wisconsin-based Statz Bros to provide an MTU Onsite Energy Series 4000 combined heat and power (CHP) system for its newly developed dairy facility in Sun Prairie. MTU Onsite Energy is part of Rolls-Royce Power Systems.

Sulzer wins $1m gas turbine repair contract

Aug 19 – The Piqua City Commission in Ohio has awarded contract worth $1 million to Sulzer Turbo Services for the inspection and repair of the #9 gas turbine. The Piqua Power System has two gas turbines, and the #9 gas turbine will be 50 years old in 2016.

RWE launches power-to-gas energy storage system

Aug 18 – RWE has officially launched its power-to-gas energy storage system in Ibbenbüren, North Rhine Westphalia. Test results of the PEM electrolyser system, delivered by ITM Power, measured an overall energy efficiency of 86%.

Korea’s turbine market to grow 6.4%

Aug 17 – Market research suggests that the turbine market in South Korea is poised to see a 6.4% annual growth rate over the period 2014-2019. Most new-builds are CCGTs as the government is incentivising cleaner-burning gas power over coal.

Edging closer to building Lordstown CCGT

Aug 14 – Clean Energy Future is one step closer to building an 800 MW gas-fired power plant in Lordstown, after an adjudicatory hearing this week in Columbus. The Ohio Power Siting Board still needs to give final approval for the $800 million project. Construction on the facility is meant to start in the coming months with a view to start operation in May 2018.

Underutilization of gas plant costs Ghana $219m/year

Aug 13 – The Atuabo gas processing plant is meant to provide cheap fuel for power generation but since its commissioning, the facility has run mostly one-third of its design capacity. Build at a cost of over $1 billion, the plant underutilisation is estimated to cost operators over $219 million per year.

RWG secures Siemens Industrial Avon maintenance dea

Aug 12 – AES UK & Ireland has awarded RWG a contract for inspection of eight Siemens Industrial Avon gas generators installed at Ballylumford Power Station, Northern Ireland’s largest power station. The scope of work involves a comprehensive inspection of each gas generator including video borescope of the engine compressor, combustion system and turbine section.

Gas price floor at $6/MBtu

Aug 11 – Steep drop in gas production from the Dutch Groningen field allows Russia’s Gazprom to pursue its longterm rent-maximisation process unchanged. Analysts at Societe General said “this has allowed the $6/MBtu (38p/th) floor to hold so far in Q3 15e.”