Markets

This week, the UK’s National Grid claimed it had produced electricity without using coal for seven days. The UK pioneered the use of coal-fired power stations back in the 1880s and became a prolific user of coal as well as a major exporter, which lasted for nearly a century. “As more and more renewables come onto our energy system, coal-free runs like this are going to be a regular occurrence," said Fintan Slye, director of National Grid Group’s Electricity System Operator.

Siemens is to spin-off its Gas and Power (GP) division as part of the next phase in its ‘Vision 2020+’ plan. The plan involves creating a major new player in the energy market with a business volume of €30 billion and over 80,000 employees through the spin-off and the transfer of Siemens’ SGRE stake.

With a wave of coal-fired power plant closures in Alberta, Canada over the next several years, natural gas demand in the province is projected to surge. Alberta has told power companies to shut all coal-fired facilities by 2030.

Britain’s energy needs may be entirely covered by non-fossil fuels for short periods starting from 2025, National Grid said, stressing it aims to be “zero-carbon capable” by then. To achieve this goal, flywheels and supercharged capacitator technology need to be deployed to ensure the grid has the necessary resilience, known as inertia.

Occidental Petroleum has sweetened its buyout bid for Anadarko, now offering 78% cash and 22% stock rather than a 50:50 split, in an effort to outbid Chevron. Anadarko reacted by stressing the Chevron Merger Agreement is still valid, but analysts reckon the revised terms and Occidental’s pledge to sell Anadarko’s Mozambique LNG stake to Total could force Chevron to improve its offer.

NRG Energy’s latest quarterly earnings came in at $0.34 earnings per share (EPS) for the quarter, just below analysts’ estimate of $0.39. During the second quarter of 2019, the utility accumulated revenues of $2.17 billion, up 4.8% compared to the same quarter last year. Return on equity was 129.32% that quarter, resulting in a net margin of 2.58%.

The French oil major Total has announced plans to invest between $1.5 billion and $2 billion per year on low-carbon power sources in a strategic shift to the retail energy sector. CEO Patrick Pouyanne said the Group’s target of 7 million retail energy clients in France and Belgium, equaling about 15% of the market, would be achievable before 2022.

Neonenergia, a Brazilian electric utility with 4.5 GW installed capacity and majority-held by Iberdrola, has started a second attempt for an IPO after it had to call off an effort to get listed on the Sao Paulo Stock Exchange in 2017. Iberdrola shareholders now hope for higher price in the IPO, based on Neonenergia’s improved results since its merger with Elektro.

Although the owners of three new Dutch coal power stations – ENGIE, RWE and Uniper – are burdened with around €4 billion in losses due to market headwinds and a mandated coal phase-out, only ENGIE has chosen to divested its assets. RWE and Uniper, in contrast, seek compensation for shutting down their plants which risks delaying the shift to clean energy in the Netherlands.

JERA, the world’s largest LNG buyer and owner of half of Japan’s power generating capacity, has pledged to reduce its reliance on coal power faster than the government’s official target. The aim is to scale down the contribution of coal in Japan’s energy mix from 33% in 2016 to less than 26% by 2030.

The Finish marine and energy technology company Wärtsilä has posted an 8% growth in net sales to €1,151 million for the period from January to March 2019, and a 6% rise in order intake to € 1,416 million. “Demand improved in the gas carrier segment but despite this positive development, reduced activity in the energy markets resulted in a decline in group order intake,” Wärtsilä CEO Jaakko Eskola said.

Energy trade between Mexico and the United States has undergone massive change. The value of U.S. exports of petroleum products nearly tripled from $10.4 billion in 2008 to a record high of $30.5 billion in 2018, while U.S. energy imports from Mexico stayed a near record low of $15.8 billion for a second year in a row.

The U.S.-based Fortune 500 power company AES Corp is divesting its interests in six power plants in Jordan and the United Kingdom for a total of $211 million. Andrés Gluski, AES’ President and CEO said the company decided to cut back the number of countries in which it operates and will shift its focus to renewables, energy storage and LNG.

Natural gas future prices for May at the U.S. benchmark Henry Hub have firmed to $2.535/MMBtu due to increased demand from the power sector and for feedgas for a growing number of liquefaction and export plants. Energy Aspects flow data shows Sabine Pass LNG is taking 3.4 bcf/d would indicate all five trains are operating.

Imports of liquefied natural gas to Japan have dropped for a fifth straight month as thermal coal imports is outcompeting gas in the power sector. In March, some 9.58 million tons of thermal coal was imported, up 3% on February, while LNG cargoes delivered in the same month totaled nearly 7.3 mt, down from 7.93 mt a month earlier, according to Japanese custom’s data.

Page 5 of 151

News in Brief

Gazprom seeks to partner with Fortum

June 27 – The heads of Gazprom and Forum, Alexey Miller and Pekka Lundmark, have met in St. Petersburg to discuss a potential cooperation in the field of power generation. The Finish energy company Fortum owns 29.5% of the Russian power plant TGC-1 as well as a 49.99% share in the German utility Uniper. Through the talks, Gazprom could gain Fortum’s support to expand its firm long-term deliveries of Russian gas to Finland and Germany.

Quarrels over contract award

June 26 – Guam Power Authority’s decision to award a contract to finance, build and operate a new 180 MW power station on the island to Korea Electric Power has sparked protest by rival bidders. Four companies had submitted proposals – Korea Electric, Osaka Gas, Powerflex and Hanwha Energy Corp. Declining to comment on the quarrels over the contract awarding process, GPA said the deal with Korea Electric is expected to close by September 9, pending a related impact study.

PTT steps up power sector investment

June 25 – Thailand's state-run PTT Pcl has decided to boost investments in the retail and industrial power sectors to help insulate the energy company against the impact of a global economic slowdown on its oil refining and chemical businesses. Referring to the Sino-U.S. trade war as a global challenge, PTT chief executive Chansin Treenuchagron said the company is looking “how we can survive in the short term.”

APR helps power Libya’s recovery

June 24 – Libya’s state-owned GECOL has asked APR Energy to bring in temporary generators to provide a rapid 450 MW boost. Under the latest contracts, APR provided mobile gas turbines at four key sites in Libya (250 MW) as well as 200 MW of diesel generators at two sites.

GE supplies SCADA to New Zealand

June 21 – GE’s Renewable Energy Grid Solution’s business has won an order from two New Zealand utilities to upgrade their traditional Supervisory Control and Data Acquisition (SCADA) systems with GE’s Advanced Distribution Management Solutions (ADMS). The orders were placed by Top Energy Ltd with some 31,000 customers and Northpower serving over 60,000 customers, though the contract values were not disclosed.

Top 5 OEMs to rule two thirds of global wind market

June 20 – After a decade of fragmentation, the top 5 turbine OEMs are consolidating again and Wood Mackenzie anticipates key players will surpass a combined market share of 68% by 2020, up from 47% five years ago. Vestas, SGRE and GE remain the top 3 wind turbine producers wwhile the Chinese leaders, Goldwind and Envision, are becoming increasingly popular due to their product reliability and track record.

Keane to merge with C&J Energy

June 19 – Oil- and gasfield service providers C&J Energy Services and Keane Group have agreed a merger-of-equals in a $746 deal that will give the two companies the necessary uplift in an industry burdened by budget cuts of hydrocarbon producers. The 50:50 merger will create a company will create a company with a combined enterprise value of $1.8 billion, including $255 million in debt. The deal is expected to close in the fourth quarter of this year.

Evol LNG helps power Australian gold mine

June 18 – Kirkalocka Gold Mine in Western Australia will use Evol LNG to fuel Zenith Energy’s 14.5 MW power station with regasified natural gas starting from September 2019. The mine is run by Adaman Resources and had been relying on diesel to cover its energy needs. Based on the current diesel price, Adaman Resources expects to reduce fuel costs by more than A$13 million (US$9 million) during the first six years of operation of the new onsite LNG-to-Power plant.

Shell Energy ordered to refund overcharged UK customers

June 17 – UK energy regulator Ofgem has ordered Shell Energy Retail to refund around 12000 customers who were overcharged after the Government’s cap on gas and electricity prices came into force in January. Shell Energy Retail s agreed to refund these customers by paying £29,000 in compensation (£5 per fuel), and also pay an additional £200,000 into Ofgem’s voluntary redress fund.

BASF enters battery market

June 14 – German chemical company BASF is using NGK Insulators’ sodium sulfur batteries as its entry point into the energy market. The Japanese manufacturer NGK is currently the only maker of the large-scale sodium sulfur (NAS) batteries, capable to store several hours of energy. A joint project in northern Germany uses NAS batteries that store energy for five hours, while a recently completed project in Abu Dhabi using 108MW / 648MWh of the systems with a full six hours storage duration.

CNPC boosts domestic gas production

June 13 – China National Petroleum Corp (CNPC), the largest Chinese oil and gas company, has announced plans for domestic natural gas output to reach 55% of overall domestic supply by 2025. Last year, CNPC managed to boost production by 5.9% to reach 138.02 billion cubic metres, while also increasing imports of pipeline gas and LNG.

Gazprom taps new gas deposits for Nord Stream 2

June 12 – Gazprom is fast-tracking hydrocarbon production in northwest Russia to boost reserves for export through the Nord Stream 2 pipeline (55 Bcm/y), currently being built through the Baltic Sea. At a meeting with Nord Stream shareholders, Gazprom noted that its Yuzhno-Russkoye field has yielded about 276 Bcm of natural gas, including 0.9 Bcm of hard-to-recover Turonian gas, since the start of operations. Turonian gas reserves, consisting of about 99% methane with no heavy residues, lie at a depth of 800–850 meters in reservoirs with low permeability. Commercial production at the Turonian deposit is scheduled to start in late 2019.

PG&E turns off electricity to avoid wild fires

June 11 – Pacific Gas and Electric Company (PG&E) has turned off electricity for some Californian communities at risk of a wildfire during the lastest heat wave. The authorized blackout started on Saturday in Napa, Solano and Yolo counties, with electricity being gradually restored over the course of Monday. Approximately 16,000 customers have been affected.

Gazprom to build power plants in Serbia

June 10 – Gazprom Energoholding has signed an Agreement of Intent (AoI) to build an upgrade several gas-fired power plants in Serbia. Together with Novi Sad, Gazprom Energoholding is already building a CCGT with some 200 MW capacity near a refinery in the Serbian town of Pancevo.

U.S. fund splashes out $4bn to buy El Paso Electric

June 7 – Infrastructure Investment Fund (IIF), a private investment vehicle within J.P. Morgan Inc., has agreed to acquire the U.S. utility El Paso Electric Co for $68.25 per share in a cash transaction. The enterprise value on the transaction is estimated at $4.3 billion. El Paso Electric customers will receive a total $21 million in bill credits over three years.

Caterpillar gensets back up Finnish data center

June 6 – The Swedish telecom giant Telia has ordered 12 Caterpillar gensets to provide standby emergency power to back up operations at its new data center in Helsinki. The Cat dealer Witraktor figured a system which includes eight Cat 3516B and four 3516E generator sets. The Telia Helsinki Data Center is the largest such facility in Finland, and its primary electric power supply comes from a combination of wind, hydroelectric and biomass.

Capstone wins orders in Iraq

June 5 – Micro-turbine producer Capstone has secured an order for two C600 Signature Series microturbines to provide 1.2 MW of energy to power a triethylene glycol (TEG) dehydration facility near Basra, in southern Iraq. The contract also includes Capstone’s new self-cleaning pulse filtration system, allowing the turbines to better withstand hot and sandy conditions with minimal maintenance.