Eager to expand its foothold in the power sector, the Russian gas giant Gazprom has formulated strategy for the group’s electricity generating assets between 2018 and 2027. Today, Gazprom’s plants provide for about 16% of the electricity in Russia’s Unified Energy System, running primarily on proprietary gas.
Strengthening its presence in India, Sembcorp Industries of Singapore announced it is acquiring IDFC Private Equity Fund III (IDFC)’s remaining stake in Sembcorp Green Infra (SGI), for INR 1410.2 Crores (about S$301 million). Sembcorp CEO Said Neil McGregor said the deal will “increase our investment in a wind and solar generation portfolio that complements our thermal power assets in the country.”
Drilling activity and production of crude oil and natural gas is picking up in Oklahoma’s Anadarko Region, notably in two areas commonly known as the STACK (Sooner Trend Anadarko Canadian and Kingfisher) and the SCOOP (South Central Oklahoma Oil Province) plays. According to EIA’s Drilling Productivity Report, the rig count in the region has risen from 84 in January to 129 in July.
Over 250,000 inhabitants of Texas were left without electricity and electric utilities were struggling to restore supply as Hurricane Harvey barely moved away from the greater Houston area. With rescuers still working around the clock to help flooded citizens, utilities in the southeastern parts of Texas are facing days, or even weeks, before the floodwaters recede and they can begin to repair the damage.
Multiple record-breaking heat waves swept across the western United States this summer, with temperatures reaching 105 degrees in Portland – some 23 degress higher than the 30-year average. Record peak summer demand for electricity has been challenging some of the largest electricity balancing authorities in the area.
Rebuking reports about a recovery of U.S. coal industry, IEEFA energy data analyst Seth Feaster stressed that in actual fact coal companies keep losing money. AEP, one of the country's largest electric utilities, just purchased a wind farm while it is looking to retire, or sell two coal power plants by 2022.
Heat rates of gas-fired power plants in the U.S., and notably of combined-cycle units, have decreased 7% between 2006 and 2015 – indicating more efficient generation, because less fuel is needed per kilowatthour. In contrast, heat rates of coal power plants remained stable, according to EIA data, showing no improvement.
SoCal’s inability this summer to fully utilize Aliso Canyon, California’s largest storage with a capacity of 86 Bcf, is impacting flow, pricing and storage dynamics in the U.S. Pacific Region. Peak summer demand conjured up fierce competition for gas between Northern and Southern California which let to tighter price spreads between the two regional gas trading hubs, SoCal and PG&E, this August.
Dirty king coal is still on track to surpass natural gas generation for 2017, with total shares of almost 32 % and 31%, respectively, the latest short-term energy outlook from the Energy Information Administration (EIA) shows. That near-tie comes after natural gas generated 34% of the nation’s electricity needs in 2016, with coal finishing at 30%.
The re-balancing of global oil markets is viewed by the IEA as “a stubborn process” given that some producers, party to the OPEC’s output cut agreement, are "showing signs of weakening their resolve." The compliance rate fell again in July to a new low of 75% from June’s 77%. Still, IEA analysts believe “the market is re-balancing” as the price of Brent crude recently stabilised above $50/bbl.
A tender for the procurement of LNG for 500 MW decentralized power in Indonesia will be opened by Singapore in due course. Maritime minister Luhut Pandjaitan announced the LNG cargoes will be shipped to small-scale, decentralized power plants (25-50 MW) in seven locations in close proximity to Singapore.
Driven by falling costs, increasing investor confidence and policy support, renewable power and decarbonisation technologies are reshaping global energy markets. In Wood Mackenzie and GTM Research’s latest report ‘Future of renewables: a radical disruption,’ over 21% of all cars on the road are estimated to be electric by 2035 under the carbon-constrained scenario. Such a stark shift to EVs can displace up to 6.5 million barrels of oil demand.
Excess growth in global LNG supply, notably through the ramp-up of US LNG through 2018 and into 2019, will make European gas prices “move through the coal floor [price]”. Fuel-switching in the Western European power market, according to Societe Generale, will ultimately be determined by short-term gas prices hinging at the variable cost of shipping a US LNG cargo to Europe.