Regulation & Policy

Rebuking warnings of a looming gap in Britain’s power supply, the UK energy secretary Amber Rudd has clarified the government was taking long-term decisions “to tackle a legacy of under-investment.” She fell short, though, of specifying these decisions and their effects.

Sigmar Gabriel, Germany’s energy minister is seeking to set up a round table on the future of coal. Major utilities, notably RWE, claimed there would be no need for such a debate. Falling gas prices have, as of late, turned the use of CCGTs for peak-load power profitable again.

Producing more to consume more is accepted, but limits to capital as well as technical innovations for clean energy sources restricts aspired energy transformations. Hence, Frost & Sullivan’s Rajalingam Chinnasamy suggests “the energy landscape in 2030 may very well resemble today’s, or show a minimal shift towards eco-friendly sources.”

Most operators of UK coal power stations have decided to keep their units in the EU’s limited life derogation (LLD) scheme, which restricts runtime hours. Rather than enforcing a unilateral closure of unabated coal generation in the UK by 2025, the energy secretary Amber Rudd is about to launch a consultation in the coming weeks.

Turkey is at the brink of a gas supply shortage, exacerbated by the risk of a cut in Russian supplies. To avoid emergencies, the energy ministry can implement a ‘curtailment procedure’ that requests operators of major CCGTs to halve their gas burn or switch entirely to fuel oil.

Houshang Falahatian, Iran’s deputy energy minister, has announced plans to boost the efficiency of the country’s gas-fired power plants to 45% or even 47% over the next three years. Turning open-cycle into combined-cycle plants - without raising fuel needs - is meant to do the trick.

EU leaders reckon that Nord Stream-2 contradicts efforts to reduce Europe's energy dependency and undermines Poland and Ukraine’s role as gas transit countries. The pipeline extension is meant to transport another 55 Bcm of Russian gas to Germany, but there is little need for additional volumes as long as CCGT profit margins stay negative.

German electric utility provider E.ON has acquired Italian on-site power and heat generator Heat & Power. Headquartered in Tortona, Northern Italy, Heat & Power is specialised in developing power plant solutions for a range of commercial and industrial customers.

European countries need to work harder to encourage interconnection and develop more mature gas trading mechanisms if price discrepancies for gas power operators are to be reduced, according to a new report from the Oxford Institute of Energy Studies (OIES).

The second UK capacity market auction, held by National Grid, has secured 46.345 GW at a clearing price of £18/kW – over £1 cheaper than last year. This price is far below the £35/kW that some industry observers deem necessary to advance investment in new, large-scale gas power plant projects.

The second UK capacity auction is underway, with the Government seeking to procure 44.7 GW for delivery in 2019/20. Criticism has been mounting over the 57 GW of pre-qualified capacity as well as the inclusion of interconnectors, which is feared to drive down the clearing price.

Moscow has shelved Turkish Stream, a 63 Bcm gas pipeline through the Black Sea, as tensions with Ankara escalate following the downing of a Russian fighter jet. Aleksandr Novak, the Russian energy minister said talks are suspended and construction start on the pipeline, scheduled for July 2016, has been called off. Progress on the Akkuyu nuclear power station, built by Rosatom, may also be hit by Russia’s retaliatory sanctions.

Struggling to contain hazardous air pollution, China seeks to reduce emissions by 60% before 2020 through “major upgrades” of the country’s coal-fired power plants, a state official pledged as COP21 climate talks are underway in Paris.

In a blow to Obama’s green energy policy, the Republican-dominated Congress has passed two resolutions that block the Environmental Protection Agency (EPA)’s more stringent emission rules for US power plants. This move undermines Obama’s stance at the COP21 climate talks in Paris.

Britain’s balancing body of gas and electricity networks, National Grid, could be broken up as DECC plans to transfer its role as system operator to an independent entity. National Grid, meanwhile, would focus on pinpointing much-needed grid investments to accommodate new nuclear and more wind power capacity.