Germany’s engineering giant Siemens is evaluating the sale of its flagship large gas turbine division, trying to ease pressure and cut costs after sales of large turbines fell off a cliff. Deliberations include merging the PG business unit with a rival, further downsizing or bracing for another downturn and keeping the business.
Britain’s top engineering company Rolls-Royce has announced it will cut 4,600 jobs over the next 24 months in a bid to achieve run-rate net cost savings of £400 million per year by the end of 2020. Earlier this week, Rolls-Royce had to admit the costly compressor failure in its Trent 1000 package C engine has now also been found in a different type of engine.
Dry natural gas production in the United States is about to reach a fresh record of 81 Bcf per day, spurring LNG export growth and pushing down prices this year. According to the U.S. Energy Agency (EIA), Henry Hub prices are forecast to average $2.99/MMBtu for the full year 2018, but notch up to $3.08/MMBtu in 2019.
Competition in the U.S. power market keeps heating up with marketers supplying about 21% of retail electricity sold, up from just 11% in 2005. Investor-owned utilities, in contrast, lost market share from 62% in 2005 to currently just above 52%. According to EIA analysts, this shift was driven by the Energy Policy Act of 2005, which closed the original federal regulatory structure established by New Deal-era legislation.
Struggling through a tough year, GE Power has communicated a tentative plan to shut down most of its manufacturing plant in Salem, Virginia, by the end of 2019. GE justified the move with persistent challenges in the power industry and a steep decline in order-wins, the decision helps executives brace for a tough second quarter.
UK Power Reserve has partnered with Fluence to deliver the first phase of its 120 MW battery storage portfolio to the British power grid. Fluence agreed to provide three 20 MW storage systems at sites in the Midlands and North West using its Advancion technology. All three new sites are due operational during winter 2018/19.
Southern California Gas Company (SoCalGas) and Aliso Canyon Technical Assessment Group have both voiced concerns that regional natural gas infrastructure issues in Southern California could affect electricity reliability this summer. Should these bottlenecks result in lower gas inflows into storage, there is a risk of significantly reduced gas availability in the upcoming winter.
National Grid has projected Britain’s de-rated power margin for winter 2017/18 projected will be 6.2 GW, or 10.3%, anticipating a net flow of electricity from Continental Europe to the UK at peak times. Considering the current price spread, the TSO also expects a net flow from the UK to Ireland, though this may be reversed in cases of high wind levels in Ireland.
Shifting tact, Uniper CEO Klaus Schäfer has announced plans to expand the utility’s business supplying LNG to power generators in South America, Middle East and Asia. Speaking to investors he was adamant about Uniper’s aim to “remain independent” even after Fortum of Finland will acquire a significant stake in the German utility.
Rick Perry, the U.S. Secretary of Energy, is convinced “clean coal” will remain at the centre of his energy agenda, using “American innovation” to advance cleaner, cheaper coal which is also meant to help create jobs. Asked about President Trump’s favouritism of coal – in disregard of climate change concerns – Perry underlined “clean coal is not only pragmatic, but will become commonplace.”
China’s LNG trucking capacity is set to double in medium term and WoodMackenzie analysts see trucked LNG and distributed generation have the potential to create synergies. Yet, few distributed generation is currently fuelled by trucked LNG because most of these power units are in areas with pipeline coverage and enjoy discounted gas prices already.
Accelerating China’s global drive, President Xi Jinping has declared the two day Belt and Road Forum in Beijing “a success” after Chinese companies signed deals with 68 countries to jointly develop energy infrastructure along the new Silk Road trade routes. Siemens, alone, entered into more than ten agreements with Chinese partners.