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News Update: 9th April 2012 |
Greetings!
Please find enclosed a copy of our weekly news summary. Please feel free to pass this to anyone who could benefit from it. |
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Energy Investment | |
Taxpayers to the Rescue As Banks Balk At Green Loans
The Times has learnt that ministers want the publicly funded Green Investment Bank to help to fund their own energy-saving programme after banks refused to provide any loans. TUNSE/The Times, 26th March.
UK's Nuclear Wobble Raises New Energy Fears
Questions are being asked about Britain's energy strategy following the withdrawal of RWE and E.ON from their nuclear new build plans. The three key questions facing the UK are: will enough nuclear power stations be built for the Government to meet its low carbon targets? Will the UK have enough power to keep the lights on? And, if so, at what cost to consumers? EDF makes a final decision this year on its plans for Hinkley Point. EDF Energy chief executive Vincent de Rivaz, says proposals for a 'contract for difference' guaranteeing the price paid for electricity ''will be the key single biggest element," in the Hinkley Point decision. TUNSE/The Sunday Telegraph (Business), 1st April.
Exxon Mobil Is No Longer The World's Biggest.
Exxon Mobil is no longer the world's biggest publicly traded oil producer. For the first time, that distinction belongs to a 13-year-old
Chinese company called Petro China. PO Review, 2nd April.
China's Aim Is to Become the World Leader in Smart Grid Technology
China intends to install over 300mn smart meters in 2015, a massive increase of 730% from the 36mn smart meters installed in 2011. Its State Grid Corporation of China is to invest US$47bn in power grid construction over five years. About US$100bn of this amount will be used to advance the smart grid technology. This investment will make China the world's largest smart grid market. Asia Power News, 4th April.
www.globalenergyadvisory.com |
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Gas | |
Return of the Dash for Gas
ED Davey (Secretary of State for Energy) seems to have changed the direction of the department (by) dramatically announcing a new gas generation strategy.....Gas is seen as providing greater certainty to investors as well as greater energy security and a better deal for consumers. Centrica is among energy players that have mothballed gas plants recently, as they seek to strengthen their bargaining power with government. TUNSE/Daily Mail, 27th March.
Coalbed Methane to Play Integral Role in China's Gas Production Goals
Coalbed methane (CBM) gas production should begin to take off within the next six to seven years, playing an integral role China's gas production growth...By 2015, CBM production is expected to (be) approximately 22.5 bcm/year, with a range of 21.5 to 23.5bcm/year, up significantly from current production of 5bcm/year. Rigzone, 2nd April.
Gasum Plans LNG Terminal in Southern Finland
Gasum Oy is considering the construction of an LNG terminal in Southern Finland which it estimates could meet up to 50% of Finland's annual gas needs. www.interfaxenergy.com, 3rd April.
www.globalenergyadvisory.com |
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Oil | |
Iranian Sanctions
President Barack Obama is likely to determine by Friday that there will be enough oil in the world market to allow countries to cut imports from Iran, taking another step toward sanctioning those nations that do not.....A congressional aide said. "Every indication we have received... gives us every assurance that the president will make the determination that sanctions can proceed," ...The law allows Obama after June 28 to sanction foreign banks that carry out oil-related transactions with Iran's central bank and effectively cut them off from the U.S. financial system. Reuters, 31st March.
The Iranian Confrontation
While awaiting the resumption of talks in about two weeks on Iran's nuclear program, both sides are manoeuvring for leverage. (Last week) President Obama released a statement saying that he was satisfied that the US could proceed with increased sanctions on Iran without raising oil prices by an unacceptable amount. A combination of increased production coupled with releases of SPR stocks is said to be sufficient to replace the 900,000 b/d or so of Iranian exports that the IEA estimates will be shut in by the sanctions. Even Moscow joined the pressure on Tehran last week by announcing that Tehran was breaching UN resolutions by increasing the size of its nuclear program. Most observers interpret the Russian statement as a clear warning to Tehran that it is walking a tightrope and that continued intransigence could easily lead to a war with devastating consequences for the world's economy. The US and EU sanctions program continues to make slow progress with Turkey announcing that it will reduce imports of Iranian oil by 10 % in an effort to dodge tightening sanctions on Iran's oil customers. South Korea also announced that it was working to reduce Iranian imports. On the other side of the ledger, China rejected President Obama's decision to move ahead with sanctions against countries buying Iranian oil saying that the US had no right to unilaterally punish other nations. While ostensibly on Iran's side in the conflict, Beijing has already reduced its imports of Iranian oil. With the Saudis and the other Gulf producers clearly lined up against Tehran, Beijing must tread a very narrow path in this confrontation. Also to Iran's favour was the announcement that India and, to an unknown extent, Beijing will pay for Iranian oil through a combination of barter and local currencies. India is to pay for some 45 % of its imports in rupees and the rest with food and manufactured goods. While this may solve an immediate problem, in the long run it will weaken Tehran's ability to fund its military programs and further weaken Iran's currency. PO Review, 2nd April.
US Senate to End Subsidies Fails
A US Senate vote to end $20bn in federal subsidies to the largest oil and gas companies failed when it did not reach the required 60 votes for cloture. PO Review, 2nd April.
Venezuela Pipeline Investment
A proposed 600,000-barrel-a-day oil pipeline that would run between Venezuelaand Colombiawould require $8bn in investment. The pipeline would give Venezuela access to Colombia's Pacific coast allowing for cheaper transport of crude to Asian markets. PO Review, 2nd April.
Anadarko Scores Another Drilling Success in Mozambique
Anadarko Petroleum Corporation has scored another success in the Rovuma Basin, offshore Mozambique, with a new gas find at its Barquentine-4 appraisal well. The Barquentine-4 well - located approximately 19 miles north of the Lagosta discovery well at the southern end of the Windjammer/Lagosta/Barquentine/Camaraogas complex - encountered 525 net feet of natural gas pay. This is Anadarko's ninth successful well in the complex, which is part of the larger Prosperidade complex that is estimated to hold recoverable resources of between 17 and 30tn cubic feet of gas. Rigzone, 3rd April.
www.globalenergyadvisory.com |
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Nuclear | |
Berlin Feels Fallout Amid Nuclear Shutdown
German energy experts talk of a daily struggle to keep the country's light on due to the phase-out of nuclear power. Eight out of 17 reactors were closed last year. TUNSE/Financial Times, 27th March.
Still Critical: Radiation Levels at Fukushima Can Kill In Minutes
Tepco engineers have said that readings of airborne radiation inside the containment vessel of Reactor 2 at Fukushima showed nearly 73 sieverts per hour this week, the highest level since the crisis began last March. Exposure to such radiation levels would be deadly within minutes. TUNSE/The Independent, 29th March.
Czech Price Guarantees To Ensure New Reactors
The Czech government sees building new nuclear power plants as a strategic priority and is considering minimum electricity price guarantees to ensure new reactors are built, the country's industry minister said on Friday. Reuters, 1st March.
Energy Resources of Australia's (ERA) Ranger Uranium Mine
Work is set to commence on the construction of the boxcut and decline for an exploration project that could eventually see Energy Resources of Australia's (ERA) Ranger uranium mine become an underground operation. ERA has awarded a A$50mn($52mn) contract for the boxcut, portal establishment and 2.2km decline in preparation for its own drilling program at Ranger (part of the work ) is scheduled for completion in early 2014. World Nuclear News, 30th March.
Japan's Shuts its Last Operating Nuclear Reactor
Japan's Tokyo Electric Power Company has shut its last operating nuclear reactor, leaving the country with only one nuclear facility still operating. Tepco has shut down the number 6 reactor at its Kashiwazaki Kariwa plant, the world's biggest nuclear power plant, raising concerns about a power shortage this summer. PO Review, 2nd April.
Federal Regulators Approved Two New Nuclear Power Stations
Federal regulators approved power company Scana Corp.'s proposal to build two nuclear reactors with a partner in South Carolina at a cost of some $11bn, the second such approval in two months after 30 years without an approval. PO Review, 2nd April.
Bulgaria Will Not Go Ahead With the Completion of a New Nuclear Power Plant at Belene
Bulgaria will not go ahead with the completion of a new nuclear power plant at Belene and instead wants the Russian-supplied reactor that was to have been installed there to become the seventh unit at the existing Kozloduy site....The project has been stymied by financing problems. Germany's RWE Power, which was to have been a 49% strategic investor in the project, withdrew in 2009. The same year, a newly elected Bulgarian government decided that it would not take the full 51% stake originally envisaged. World Nuclear News, 3rd April.
Spanish Uranium Projects in Arbitration
The partners in a joint venture to bring back uranium mining in Spain have entered an arbitration process that could result in the payment of over $200mn in damages from Enusa to Berkeley Resources. The Salamanca 1 project is unaffected and was said to remain on course for construction in 2013. Berkeley announced today that it has initiated proceedings against Enusa with the International Court of Arbitration at the International Chamber of Commerce. The Australian uranium firm blames the Spanish nuclear fuel company for delays in the setting up of a joint venture company. World Nuclear News, 3rd April.
GE Pushes for Prism
The UK has about 87 tonnes of plutonium extracted from nuclear fuel used in reactors that were built as part of a national program that ran from the 1950s to the 1990s. The fuel continues to build up and stocks will hit 140 tonnes by 2018. This stored at Sellafield...Various options are available for handling the plutonium, all of which are loss-making and most of which involve disposing of it. However, GE-Hitachi says the option of using two Prism reactors is attractive because they would generate 600 MWe of electricity while conditioning and disposing of the stocks. Income from this would go to the state (effectively returned to the Nuclear Decommissioning Authority). World Nuclear News, 3rd April.
www.globalenergyadvisory.com |
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Renewable Investment | |
Vestas 3MW Turbine Catches Fire in Germany
A 3MW V112 Vestas turbine caught fire in Germany on Friday, with three further units shut down for electrical safety reasons. Before the fire...the turbine had been operating normally, at the Gross Eilstorf wind farm in Lower Saxony, Germany. The turbine was quickly disconnected from the grid and early reports suggest that there were no injuries or casualties. www.awordaboutwind.com, 2nd April.
E.ON Outlines Renewable Energy Ambitions
EON sees renewable energy as more attractive than nuclear and has started to make steps towards developing its commercial strategy to match this belief. According to comments made by Johannes Teyssen, Chief Executive Officer...the firm is making the switch just days after it announced plans to scrap its nuclear ambitions in the UK. www.awordaboutwind.com , 2nd April.
Malta Plans Floating Offshore Turbines
The Mediterranean island of Malta has revealed a platform-based solution to deploying offshore wind turbines in the deep waters which make conventional monopile structures difficult to install...The scheme, devised by Copenhagen-based Hexicon AB, is a hexagon shaped lattice platform which can rotate around a central axis to align with wind direction. Secured to the seabed, the platform would support six 6.5MW turbines, along with a docking platform and a helipad to assist servicing and maintenance. The platform also supports a substation. Windpower Monthly, 2nd April.
EDF Set To Win Four French Offshore Projects
The French electricity regulator CRE has recommended the government award four of the five offshore projects currently out to tender to EDF Energies Nouvelles (EDF EN) and abandon the fifth. French financial daily Les Echos said the government received 10 bids from three consortia for the 3GW tender in January. That led by EDF EN submitted four bids for up to 2.25GW at Fécamp, Courseulles-sur-Mer, St-Brieuc and St-Nazaire. The EDF bid includes Dong Energy, Nass&Wind Offshore, Poweo Renewables, Wpd Offshore and Alstom, which recently constructed the prototype of its 6MW turbine. The other bidders were Iberdrola and GDF Suez. Windpower Monthly, 3rd April.
£20 Million Marine Scheme Now Open
The UK Government (has launched) its eagerly awaited £20mn Marine Energy Array Demonstrator scheme (MEAD). This scheme will support up to 2 pre-commercial projects to demonstrate the operation of wave and/or tidal devices in array formation over a period of time. DECC, 5th April.
www.globalenergyadvisory.com |
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Coal | |
Japanese Annual Coal Import Contract Price, $115
Xstrata Plc and Tohoku Electric Power Co have settled the first Japanese annual coal import contract for the fiscal year beginning April 1 slightly above $115/metric tonne. Market sources reported the contract was settled between $115.20 and $115.25 per tonne. Japan's annual April contract is often used as the yearly benchmark for Asia. The settlement price is often just a few dollars above Australian coal spot prices, but this year the settlement price is more than $8 per tonne, or more than 7%, above the Australian Newcastle coal index price of $107.01 per tonne. Reuters, 1st April.
BHP Billiton, Is Declaring Force Majeure at its Coal Mines in Australia's Bowen Basin
The world's biggest miner, BHP Billiton, is declaring force majeure at its coal mines in Australia's Bowen Basin due to prolonged union strikes and heavy rain.... (This could) spur prices of metallurgical coal...BHP Billiton operates seven coal mines in the Bowen Basin that supply about a fifth of the world's metallurgical coal, or coking coal used in steelmaking. The mines....have an annual capacity of about 58mn tonnes. Reuters, 2nd April.
Coal Consumption for Power Expected to Fall
The EIA projects that coal consumption in the electric power sector for 2012 is expected to fall to less than 900mn tons, the lowest level since the 1990s, as more of the industry switches to natural gas... PO Review, 2nd April.
Australian PWCS's Coal Exports to Japan Return To Pre-Earthquake Levels
Almost two-thirds of the coal shipments from Port Waratah Coal Service's two coal terminals at Newcastle in eastern Australia in March went to Japan, the highest share since the catastrophic earthquake and tsunami in March 2011. The coal terminal operator loaded 6.4mn mt of thermal and coking coal exports into ships bound for Japan in March, equating to 64.5% of its total exports of 7.15mn mt for the month. Platts, 2nd April.
Aquila Sells Isaac Plains Coal Mine Stake to Sumitomo Corp
Australia's Aquila Resources Ltd has agreed to sell its 50% joint venture interest in the Isaac Plains thermal and coking coal mine in Queensland to Japanese trading group Sumitomo Corp for A$430mn ($446.5mn), potentially ending a rocky relationship with mine partner Brazil's Vale.... The funds from the sale of its interest in the 2.8 mn mt/year output capacity Isaac Plains thermal and coking coal mine would be used to develop its 50%-owned West Pilbara iron ore project in Western Australia...The sale is subject to regulatory approval and also joint venture partner Vale not bettering the Japanese company's offer. Platts, 3rd April.
www.globalenergyadvisory.com |
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Energy Trading & Market Dynamics | |
Commission Exceeded Its Powers
The European Court of Justice ruled that the European Commission exceeded its powers by imposing a ceiling on greenhouse-gas emissions in Poland and Estonia in 2007. The European of First Instance ruled in 2009 that the ceilings should be scrapped. But the Commission appealed against the decision "to protect the integrity of the EU-wide market of allowances." Six other countries had also challenged the Commission's emissions ceilings - Bulgaria, the Czech Republic, Hungary, Latvia, Lithuania and Romania. The Global Warming Policy Foundation, 30th March.
CCP Clearing
At last European Regulators finally signed off last week new rules for the huge over the counter derivatives market. This means that most contracts will have to be processed through Centrally Cleared organisations (CCPs) and reported centrally by year end. The move aligns derivative trading in Europe with the US. The new regime has taken too long to set up mainly due to haggling over details such as who is exempt from these regulations.....Meanwhile banks which dominate the OTC market are likely to fight hard against the cost implications of higher margining- even if the forthcoming capital rules eventually mitigate against un-cleared business. FT, 2nd April. Global Energy Advisory comment: Finding margin capital will be a strategic issue for most traders going forward. Global Energy Advisory has structured a solution which could help.
http://www.globalenergyadvisory.com/index.php/our-products/center
Latvia Talks With Gazprom Over Market Liberalisation
Latvia aims to hold talks with Russia's Gazprom on an eventual liberalisation of the gas market in line with EU rules, the government, outlining a more go-slow approach than southern neighbour Lithuania...Gazprom last month launched legal arbitration proceedings against plans by Lithuania to strip Gazprom of its pipeline ownership as part of the EU's third energy package, which includes more opening of the market. Russia has suggested the third energy package also violates bilateral agreements with the EU. A Russian government source has said it could contest it at the World Trade Organisation when it becomes an active member. Reuters, 3rd April.
www.globalenergyadvisory.com |
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Our news update comments are provided by our Advisory CEO, Aily Armour-Biggs, if you want to talk to her then contact her on +44 207 692 0888 or aily@globalenergyadvisory.com.
Sincerely,
Anthony Francis
Global Energy Advisory |
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