Shale gas from the US has been brand marked as ‘a new rival’ by the Gas Exporting Countries Forum (GECF) as it undermines the alliance’s strategy on pricing and production volumes. Leaders of Russia and Iran, whose countries hold 44% of global gas reserves, have forged closer ties at the side-lines of latest Gas OPEC meeting in Tehran.
The UK treasury confirmed that following Chancellor George Osborne’s autumn statement, the £1bn ring-fenced capital budget for the Carbon Capture and Storage (CCS) Competition is “no longer available.” Cuts on CCS development come in a stark contrast to new research commitments on small nuclear reactors.
Fossil power plant operators have to decide by year-end on whether to keep their units in the EU’s limited life derogation (LLD) scheme or rather enlist them in a transitional national plan (TNP). The first option restricts run-time hours from January 1, 2016, while Britain’s TNP gives the operator until 2020 to invest in emission abatement. RWE, EDF and SSE already entered several plants into the LLD – but this decision is rescindable until December 31.
Russia’s energy ministry has declared a ‘state of emergency’ in Crimea after an explosion cut off all electricity supply to the peninsular from Ukraine. Repairs to the four destroyed power transmission lines in Kherson oblast will reportedly not be carried out until the activists, who claim responsibility for the attack, are released.
Wholesale gas prices in China will be reduced by 25% from today, the second price cut this year, as the government aims to prop up the sluggish growth in demand from utilities and industries for the cleaner-burning fuel. Regulators permit a 20% upward float in prices, while giving no downward limit.
If all UK coal-fired power plants will be closed as planned by 2025, National Grid may well struggle to keep balance without substantial new-build gas and nuclear capacity additions. Plant closures due to EU regulation are already jeopardising security of power supply, with Britain’s reserve margins at risk of falling to a record low of 1.2% from October to March.
Though a record 130 GW of new renewable capacity was installed in 2014, all eyes stay on carbon cuts in the power sector. The US Clean Power Plan and China’s 2017 launch of carbon trading will help, however, investment of $13.5 trillion in low-carbon technologies would be needed until 2030 to put a lid on emissions growth rate at around 5% per year, the International Energy Agency’s (IEA) said when assessing policy pledges in the run-up to COP21.
Ireland’s ESB is helping to prop up UK power reserve margins this winter, having been awarded a strategic balancing reserve contract by National Grid for its 350 MW Corby gas-fired plant in Northamptonshire.
The reserve contract runs for one year until September 2016, whereby the operator gets remunerated for holding the plant on standby for emergency dispatch but it cannot sell into the regular GB wholesale electricity market. Corby had missed out in the first UK capacity auction.