Regulation & Policy

On the eve of the COP21 talks getting underway, world-wide protest marches were staged to demand decisive moves to combat climate change. Protests in Paris turned violent after it became clear that not all of the climate accords to be struck in the coming 12 days will be legally binding.

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.

Amber Rudd, the UK energy secretary, is willing to hold a consultation on plans to close all unabated coal-fired power stations by 2025 and restrict their use from 2023. This may water-down her initial proposal, although Rudd is adamant about the urgency of more gas power generation.

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.

Reacting to Russian warnings of a halt in gas and coal supplies to Ukraine, workers in Kherson Oblast have started repairing one of four sabotaged pylons that carry power lines to the Crimean peninsula.

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.

Expanding interconnection capacity is bound to further increase electricity trade between Canada and the US. Regulators recently gave the environmental nod to the Great Northern Transmission Line, allowing Minnesota Public Utilities Commission (MPUC) to take a route permit decision in early 2016.

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.

Ali Rıza Alaboyun, the Turkish energy minister, announced plans to invest $125 billion to meet the country’s “tremendous” energy demand that is growing at a rate of 7% each year. The government seeks to almost double installed power generation capacity from currently 72 GW to over 130 GW by 2023.

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.

In a policy shift towards nuclear and gas power, the UK energy secretary Amber Rudd today announced plans to restrict the use of coal-fired power stations by 2023 and enforce the shutdown of all unabated coal power capacity in Britain by 2025.

A new report from the Oxford Institute of Energy Studies (OIES) has proposed a revised framework to describe a ‘comprehensive joint profile’ of the power and gas industries.

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.