Markets

Operating profit of Statkraft, Norway's largest utility, eased off slightly in the first quarter as the negative impact of lower power prices was offset by higher electricity production.

Japan's hunger for LNG imports to fuel gas-fired power plants is set to ease off gradually as a regional government approves the restart of nuclear reactors. Global LNG markets, however, are forecast to stay tight, investment bank JP Morgan forecasts.

E.ON has not decided on whether to close three gas-fired power plants with a combined capacity of 1,420 MW in southern Germany. "We have not taken a formal decision on whether to close these or other gas-fired plants but we in the process of evaluation the profitability of each plant," an E.ON spokesman said today, dismissing contrary news reports.

Investment bank Societe Generale anticipates a drop in traded prices for natural gas in the U.S.  due to lower demand. The NYMEX front month is forecast to drop to US$2/MMBtu, with falling gas prices set to increase the share of gas-fired power generation in the U.S. energy mix.

Alstom, the French manufacturer of power generation technology, is ramping up manufacturing capacity and output at its Chattanooga facility in Tennessee, with a view to boosting its share in the buoyant U.S. market.

"Our investment in Chattanooga is a reflection of our confidence in the U.S. market," Patrick Fetzer, Regional Vice President of Alstom's gas power plant business in North America said with reference to forecasts about "a substantial short-term grow of the country's gas-fired power generation sector.

RWE posted a 14% drop in operating result to €2.4 billion today. "Declining margins in electricity generation and burdens suffered by the gas midstream business in particular adversely affected the result for the quarter," the Essen-based company said.

The share of power generation from natural gas is forecast to surge by 24% in 2012 amid a 15% decline in coal-fired generation, the U.S Energy Information Administration (EIA) said in its short-term energy outlook today.

Market participants in power and gas trading can fulfil their REMIT reporting requirements by disclosing generation data on the newly created 'Transparency in Energy Market's platform' of the European Energy Exchange (EEX).

E.ON, Germany's biggest utility, today posted a € 250 million drop in Q1 earnings, owing to lower prices in Europe power generation markets and the mandatory shut down of nuclear power stations in Germany.

The trend of gas displacing coal has accelerated in the U.S. as "the differential between gas and coal economics in the power generation sector has widened further," Deutsche Bank said in a research report today.

The shutdown of two power plants in Nigeria - due to a lack of gas to fuel the plants - has exacerbated the country's electricity shortage. Operators were forced to shut down two gas-fired plants at Sapele in Delta State and Oben in Edo state for an undetermined timeframe.

Analysts at Société Générale are "not overly optimistic" on an upside for German power prices. Spark spreads are likely to remain unattractive, while overall power consumption dropped, the French investment bank said in a research note.

Combined marketed production from the top five natural gas producing states - Texas, Louisiana, Wyoming, Oklahoma, and Colorado – has risen about 7.5% in 2011, according to latest EIA statistics. Abundant domestic supplies and low gas prices reinforce the trend among U.S. power producers of switching from coal to gas.

The share of electricity production from gas-fired power plants has fallen to the lowest levels in 14 years due to "unfavourable market conditions and low demand," data published by the department of energy and climate change (Decc) shows.

Transco, a key gas transmission pipeline in the U.S., is preparing to increase gas transport capacity to satisfy rising gas demand for power generation. "Power generation is the driver behind about a third of the volumes in proposed projects in development on our Transco pipeline," Alan Armstrong, chief executive of Williams Partners' said.