Markets

Timera Energy is questioning the viability of SSE’s decision to invest £350 million in the 840MW Keadby-2 power plant even though there is currently no clear wholesale price signal to support CCGT economics, considering the £8.40/kW clearing price in the 2018 UK capacity auction. “The market risk sits firmly on the shoulders of project equity investors,” analysts said, and “without a 15 year capacity agreement the project will struggle to gain any significant advantage through debt financing.”

Exhilarated by the success of bringing electricity to every village in India, Prime Minister Narenda Modi has now moved the target of achieving ‘universal household electricity access’ to the end of this year. This next “last mile” challenge will not be easy to meet but will bring huge rewards: it will improve the lives of over 230 million people.

Gaining access to shale assets in Argentina, Qatar Petroleum has acquired a 30% stake in ExxonMobil’s prolific Vaca Muerta oil and gas play in the onshore Neuquén basin in Argentina. The deal is hoped to bring fresh drive to shale drilling in Argentina which had been rather slow due to local price controls for natural gas. However, President Mauricio Macri's right-of centre government lately doubled wellhead gas prices for existing fields and introduced incentive prices for new developments.

With falling battery technology costs, BP’s Technology Outlook predicts that buying, running and fuelling electric cars in Europe will become competitive with internal combustion engine-driven models before 2050. The question is, however, whether there are enough resources of lithium and cobalt globally for a battery-powered future.

Seeking to monetize Canada’s abundant natural gas reserves Shell has agreed to its former rival Petronas joining the US$11 billion LNG Canada project with the aim of making a financial investment decision by the end of this year. However, costs will remain a major concern of the project, Wood Mackenzie senior analyst Prasanth Kakaraparthi cautioned, advising the companies to try take advantage of the latest tax breaks announced by the government of British Columbia.

May just passed has been the month with the highest natural gas demand in Spain for industry since records began, with a total of 17,654 GWh, according to Enagas figures. Overall gas demand in Spain had grown by about 11.6% compared with May last year, reaching 26,255 GWh, largely driven by the industrial sector and some larger gas deliveries for power generation.

Fossil fuel consumption in the U.S. power sector has fallen to a 23-year record low with a slightly offsetting increase in the use of natural gas, the U.S. Energy Information Administration (EIA) finds. Overall fossil fuel-burn for power generation fell to 22.5 quadrillion British thermal units (quads) in 2017, the lowest level since 1994.

Singapore-based Sembcorp Industries has today reached an agreement to acquire the business and all assets of UK Power Reserve (UKPR) for £216 million ($167m). The deal gives Sembcorp an additional capacity of over 1,000 MW in the UK, where it currently supplies energy and services to industrial firms on Teesside.

For Austria, the decarbonization of electricity entails three major strategic initiatives: Generating 100% of its electricity from renewables by 2030; decarbonizing gas supply by adding biogases and later switching to hydrogen; and finally focussing on supply-side energy intelligence which allows consumers to produce and trading their own energy, independent of the big utilities.

Philippine’s dominant power producer First Gen is looking to cooperate with San Miguel Corp., a conglomerate invested in local energy infrastructure, to jointly realize a $1.2 billion LNG import terminal in Batangas province with a regasification capacity of 3-5 mtpa. The imported gas will be designated for the 1,200-MW Ilijan combined-cycle gas power plant, operated by San Miguel, that could be expanded by up to 1,800 MW.

South Korea coal-fired power plants will be mandated to meet a new 0.4% sulphur limit in coal consumption, effective from July 2018. The new law is meant to diversify the energy mix away from fossil power sources but WoodMackenzie analysts warn the new policy will push up the cost of power generation, impacting on electricity prices.

Canada, the largest energy trading partner of the United States, consistently exceeds the value of U.S. energy exports to Canada by a large margin. According to EIA figures, energy accounted for $73 billion, or about 24%, of the value of all U.S. imports from Canada in 2017, while Canada merely imported energy worth $18 billion from its southern neighbour.

The hype about electric car is not really translating into sales. Hybrid electric, plug-in hybrid electric, and battery electric vehicles have been sold in the United States as alternatives to conventional gasoline vehicles for a number of years, but their market share from 2012 through 2017 remained below 4% of total light-duty vehicle sales, even as the number of available models increased from 58 to nearly a hundred.

U.S. oil major ExxonMobil has set its first company-wide targets to reduce emission from operations across the gas value chain. The aims is to reduce methane leaks by 15% and gas flaring by 25% by 2020, and Exxon said it has started to deploy new equipment at it upstream and midstream operations to reach these goals.

Technology of battery-based energy storage has matured and industry stakeholders in some regions of the United States have gained experience financing, procuring, and operating power storage installations. Lithium-ion chemistries batteries currently make up 80% of large-scale U.S. power storage, and most of the capacity is being installed in California followed by the Pennsylvania-New Jersey-Maryland Interconnection (PJM).

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