Markets

Energy-intensive industries in Germany stand to benefit from the proposed coal exit. Implementing the coal phase-out will see 12.5 GW of coal-fired capacity being closed by 2022, and an Agora study finds replacing coal with renewables would lower wholesale prices by approximately 0.5 Euro cent.

Growth in small- and medium industries drives the need for low capacity gas turbines, which are affordable and easily transported. Gas turbines with less than 50 kW are expected to surpass 1 GW in annual installations by 2024, while the overall market will top 34 GW over the same period.

Simultaneous failures at a gas-fired power station and an offshore wind farm have cut electricity for almost 1 million people in England and Wales on Friday night. The energy watchdog Ofgem requested an urgent report from National Grid into the causes of the outage.

The US set a new daily record on 19th July, of 44.5 bill cu ft natural gas consumption by electric power plants, according to S&P Global Platts. US power sector natural gas consumption exceeded the previous record of 43.1 bill cu ft – set on 16th July, 2018 – on five days last month.

Siemens CEO Joe Kaeser has warned about a “significantly weaker” environment hitting profits in the company's key business units Digital Industries and Gas and Power. “Geopolitics and geoeconomics are harming an otherwise positive investment sentiment,” he said, stressing Siemens is still getting more orders that it executes.

Royal Dutch Shell has seen second quarter profits plummet 25% to $3.6 billion – way short of analysts’ forecast of $4.93 billion. Shell CEO Ben van Beurden blamed lower oil and gas prices and pointed out the company’s “good cash flow performance” not least due to the start-up of Prelude FLNG.

The European Investment Bank (EIB) is taking steps to stop funding new fossil fuel-reliant energy projects by the end of 2020. A draft of the EIB’s new leaning strategy states the bank will no longer support upstream oil and gas, coal mining and power generation from fossil fuel sources.

TC Energy, formerly known as TransCanada, has agreed to divest three gas-fired power stations in Ontario for around C$2.87 billion (US$2.18bn) to Ontario Power Generation (OPG). The proceeds will be used to pay for construction of the Coastal GasLink Pipeline that will deliver feedgas to the LNG Canada project in Kitimat, B.C.

Engas, the Spanish gas network operator, has reported record gas deliveries to the electricity sector. July demand grew by 45% compared to the same month last year due to a sharp rise in gas-burn compared to coal amid high temperatures and low hydroelectricity production.

Retirements of coal-fired power plants by U.S. utilities over fuel economics or environmental reasons is expected to reduce the country’s overall coal generating capacity by nearly 120 gigawatts (GW) by 2025. Several retired plants are getting repowered with combined-cycle turbine technology, as utilities shift to cheaper and cleaner burning natural gas.

Iain Conn, the Centrica CEO, has decided to step down 2020 after posting a statuary operation loss of £446 million, mainly due to the UK energy price cap. The departing CEO also announced Centrica will stop producing oil and gas to focus on customer-facing business such as supplying electricity and energy services.

Australia will see solar costs – already competitive against gas power – breaking through the coal-fired power price barrier. Levelised cost of electricity (LCOE) for solar power has fallen 42% in the past three years, according to Wood Mackenzie, and is forecast to reach $48/MWh in 2020 – beating all fossil fuel competitors.

With heat waves becoming more frequent and widespread, an additional 720 million people will seek to get access to air-conditioning by 2050. According to the International Energy Agency’s (IEA) ‘Cooling for All’ this would require roughly 105 terawatt-hours (TWh) of electricity in 2050.

Summer gas prices in the United States are increasingly likely to fall to record lows not seen over the past 20 years due to high gas inventories and abundant new supply. For June, July and August, Henry Hub spot prices will average $2.37/MMBtu – some 19% lower than last summer’s average, the U.S. Energy Information Administration (EIA) forecasts.

Indiana-based Cummins has made an indicative offer to acquire MAN Energy Solutions, the large engine unit of Volkswagen Group. The German car maker reportedly also approached other MAN rivals to divest the engine maker before year-end, hoping to fetch some 3 billion Euros.

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News in Brief

MHI-MME to take over turbocharger production

Sept 20 – Mitsubishi Hitachi Power Systems will no longer produce MET turbochargers, the standard worldwide exhaust gas turbochargers used in stationary engines. Starting from January 1, 2020, these devises will be produced by Mitsubishi Heavy Industries Marine Machinery & Equipment (MHI-MME) instead.

Japan starts electricity futures trading

Sept 19 – Tokyo Commodity Exchange (TOCOM) has launched trading in electricity futures to advance price competition in Japan’s liberalized energy market. The East Area peakload electricity contract for October delivery first traded at 10.9 Yen per kWh, lower than the standard price of 11 Yen set by TOCOM in advance.

Duke to reduce rates in 2020

Sept 18 – Duke Energy Florida (DEF) customers will see lower bills in 2020. The utility filed a proposal with the Florida Public Service Commission to reduce rates for electricity and gas by more than 3% while adding more solar power and making grid improvements.

Myanmar approves three power projects

Sept 17 – Myanmar’s Ministry of Electricity and Energy has given the green light to plans for a 1,230 MW gas-fired power plant in Kanpauk, Taninthayi region, a 377 MW gas-fired unit in Ahlon, Yangon region and a 1,390 MW thermal plant in Milaunggyine in Ayeyawady region. The conflict-ridden country is currently producing electricity from 5,600 MW installed capacity, derived both from state- private-owned power stations.

Bonny Train-7 to cost $6.5bn

Sept 16 – Nigeria LNG is preparing to add a seventh processing train to Bonny LNG, bringing total capacity from 22 million tons per annum (mtpa) to 30 mtpa. Estimated to cost $6.5 billion, Bonny Train-6 will include a new liquefaction unit, a storage and a condensate tank as well as three gas turbine generators.

Schneider to complete L&T takeover by early 2020

Sept 13 – Venturing into India, Schneider Electric hopes to finalise the Rs 14,000 crore acquisition of Larsen & Toubro's electrical and automation business by early 2020. After the transaction is completed, Schneider will have a 65% stake in L&T, while the remainder will be held by Temasek.

MHI to advice China on energy conservation

Sept 12 – Mitsubishi Heavy Industries Thermal Systems, part of MHI, has set up a joint venture withan affiliate of State Grid Corporation of China (SGCC) to perform technical consulting for energy conservation projects in China. The focus of SGCC lies on building new decentralized power stations, biomass-derived power gensets and energy saving solutions.

Tender extended

Sept 11 – Turkmengas has extended a tender for the overhaul of the gas turbine engines of the NK-12ST and NK-14ST brands. Bidders need to pay to receive the tender documents, and then submit a written application to Turkmenistan’s state gas company.

Gas power units to buffer Germany’s coal exit

Sept 10 – Electricity output of Germany’s fleet of gas-fired power plants has risen to a over 13,5 billion kilowatt-hours in the three months from June to August, Fraunhofer ISE figures show. These productivity gains put CCGTs in pole position to balance supply swings in connection with the German coal exit.

Power of Siberia gas flows to start on Dec 1

Sept 9 – Russian gas supplies to China via the eastern route are going to start on December 1, 2019, Gazprom chairman Alexey Miller told his counterpart at CNPC in Beijing. The huge Chayandinskoye field, containing some 1.2 trillion cbm of gas, had already been connected to the 38 Bcm per year ‘Power of Siberia’ gas pipeline in August.

Hurricane Dorian causes havoc in the Bahamas

Sept 6 – In the aftermath of Hurricane Doran, a Category 5 storm, Bahamas Power and Light has said there is a total blackout in New Providence, the most populous island of the archipelago. Dorian made landfall twice on Sunday, ripping off roofs and electricity lines. In most parts, electricity has not been restored.

LNG cargoes via Bab-el Mandeb decrease

Aug 30 – Northbound LNG shipments via Bab el-Mandeb, a sea route chokepoint between the Horn of Africa and the Middle East, have fallen over the past three years as Egypt imports less natural gas from the Persian Gulf. In 2015 and 2016, both Jordan and Egypt imported up to 1.4 Bcf/d of LNG into Red Sea ports but these shipments fell sharply following the development of large gas finds in the Mediterranean.

Hokuriku Electric buys LNG cargo

Aug 29 – Japanese utility Hokuriku Electric has purchased an LNG cargo for delivery in November as soaring temperatures drew down gas in storage for the autumn. The cargo is understood to be scheduled for delivery in the second half of November from Malaysia’s Petronas and may well be destined for Hokuriku Electric’s first LNG-fired power generation unit,  the Toyama Shinko plant.

Technip spins off LNG activities

Aug 28 – TechnipFMC, has decided to spin off its European-based engineering and construction operations into a separate business, leaving the American half of the firm as an equipment supplier to the oil and gas sector. The split is due to be completed in the first half of 2020.

FLNG power market to top $930m by 2023

Aug 27 – The global market for floating LNG power vessel is projected to reach $ 931.6 million by 2023, up from $ 860.1 million seen last year, according to ReportsnReports. Major vendors of FLNG power vessels are Siemens, MAN, Wärtsilä, Caterpilar and GE which are targeting to use the technology to supply decentralized power to island nations in Southeast Asia and along the coast of sub-Saharan Africa and the Americas.

EIA monitors grid hourly

Aug 26 – The U.S. Energy Information Administration (EIA) has launched a beta release of its hourly electric grid monitor. The enhanced version analyses hourly generation by energy source and hourly sub-regional demand for certain balancing authorities in the Lower 48 states.

Hiroshima waste-to-energy plant gets upgrade

Aug 23 – Mitsubishi Heavy Industries (MHI) has been chosen to upgrade and refurbish the combustion facilities at a waste to energy plant in Hiroshima. The Naka plant in Minamiyoshijima, Naka-ku, has a total waste treatment capacity of 600 tonnes per day and generates 15.2 MW of electricity to power the equipment in the factory, while selling the remainder to the grid.