Origin Energy May Sell More Australia LNG Equity

Origin Energy Ltd. is willing to sell more equity in an Australian gas-export venture that will supply customers in China and Japan, as it works toward tying down finance for an expansion that will push the cost of the development to as high as US$20 bn.....Any decision on an equity sell-down is unlikely before the company decides whether to invest in a second liquefied natural gas processing unit at the plant being built at the port of Gladstone in Queensland state ....Origin said the project is 12% complete, and on course to produce its first LNG in 2015. Marketwatch, 13th May.

Opposition To Smart Meters Slows $29 Bn Upgrade Of U.S. Grid

A growing consumer backlash against new wireless digital technology for measuring power usage is slowing U.S. utilities' $29bn effort to upgrade their networks. States including California, Maine and Vermont have responded to customer concerns about higher bills and safety by offering them the option of keeping their conventional devices for an extra charge. The fee may discourage drop-outs from the "smart-meter" program, in which household usage data is transmitted over radio waves to local utilities such as PG&E, Central Maine Power and Central Vermont Public Service, which can use the information to charge higher rates during times of peak demand. Herald On Line, 12th May.

Germany Faces Green Energy Crisis

Old coal power plants need to stay in operation or Germany's power grid faces collapse. That is the warning of Germany's national grid agency. Because the danger of blackouts is growing as a result of the shut-down of six nuclear power plants last year, the Federal Network Agency is proposing to suspend legal emission limits for plants. Old power stations, which are due to be shut down due to their high environmental impact, should continue to operate. "Closures of more conventional power plants are currently not feasible in Germany," it says literally in the grid agency's report: "Given the present and future tense situation, it is necessary to suspend closures due to the emissions reduction law." -The Climate Policy Network/ D. Wetzel und D. Siems, Die Welt, 10 May 2012

Fortum To Bid For Major Stake In French Hydropower

Finnish utility Fortum will bid for a significant stake in French hydropower projects in a tender due to start later this year. State-controlled French power group EDF currently controls 80 % of France's hydropower capacity. TUNSE/Reuters UK, 11th May.

China Building World's Largest Capacity Transmission Line

A record-setting ultra-high voltage direct current (UHVDC) transmission line will transmit up to 8 mn kW upon completion in 2014. The State Grid Corporation of China (SGCC) said the transmission line will span over 2,000km in China's western Xinjiang Uyghur region. It will connect Hami prefecture in Xinjiang with the city of Zhengzhou in Henan province in north central China. Construction of the line designed with the world's largest capacity began this week. It will cost US$3.7bn and is designed to have a transmission capacity of 8 mn kW upon completion in 2014, a new world record.  Asia Power, 16th May.

Coalition Cautions On Green Spending

The Federal Coalition (in Australia) has warned the Gillard government that it would be irresponsible for the newly created $10bn Clean Energy Finance Corporation to begin distributing funds for green projects ahead of the next federal election. The corporation, part of the government's carbon tax package, plans to make its first investments in July next year after receiving the first of its $2bn-a-year budget allocations. The Australian, 17th May.

Argentine Electricity Groups Fear Collapse

Argentine electricity companies,....say a virtual 10 year freeze on energy tariffs is pushing them close to collapse, raising fears that the government might nationalise them. FT 17th May. 

 www.globalenergyadvisory.com  

OPEC Demand Forecast

OPEC has revised its 2012 world oil demand outlook slightly upwards, citing a stable US economy and the shutdown of nuclear plants in Japan. They predicted 2012 demand at 88.67 mn b/d, up 0.90 mn bpd from 2011. PO Review, 14th May.

China Slows

The economic news from China shows its economy slowing and the IEA reports that OPEC production for April increased to 31.2 (Platts puts it at 31.7) mn b/d even as stockpiles continue to grow around the world. All this news has combined to give oil prices their longest string of losses since 2009. PO Review, 14th May.

Oil Market Still Faces Supply Side Risks

The oil market has loosened slightly in the first quarter of 2012, but there are still key risks on the supply side, International Energy Agency Executive Director Maria Van der Hoeven told the Australian Petroleum Production & Exploration Association's annual conference in Adelaide. "Uncertainty has been a major driver of current price levels and we should be ready for further surprises....Unplanned non-OPEC outages reduced world production by 1.1 mn b/d in the first quarter, and with political turmoil affecting output from Yemen, Syria, Sudan and South Sudan, around 1 mn b/d of non-OPEC output may remain off the market through 2012...But the IEA is cautiously optimistic that production elsewhere in non-OPEC countries will pick up in the second half of this year. Platts, 14th May.

Blood on the Floor as Market Hunts WTI Longs

U.S. crude futures have been offered aggressively lower over the last fortnight as the market scents distress and hunts for the last remaining traders trapped on the losing side of a Brent/WTI arbitrage that has gone spectacularly wrong. For months, prominent oil analysts have been sharply divided about whether the reversal of the Seaway pipeline from Cushing in the U.S. midcontinent to Houston on the Gulf Coast would be enough to cure the glut of crude which has built up in the central United States, pushing U.S. crude futures to a record discount against the international marker Brent. Back in February, Goldman Sachs warned "with the Seaway flowing crude from Cushing to the U.S. Gulf Coast, we expect WTI prices to be closely tied to Brent prices, with WTI likely trading at a $3-5 per barrel discount, reflecting the pipeline tariff economics." ....In contrast, the research team at Barclays told Reuters reporters recently "Our view is that Seaway's reversal does not make much of a difference to Midwest balances....Most hedge funds appeared to have backed Goldman's convergence thesis, either with an outright long position in futures and options linked to WTI, or with an arbitrage position (long WTI, short Brent) designed to pay off if WTI prices rose faster than Brent (or fell more slowly). Hedge funds, commodity trading advisers (CTAs) and other money managers accumulated a near-record net long position equivalent to 304 mn barrels in WTI-linked futures and options by the end of February, up from 165 mn in October, according to an analysis of reports published by the U.S. Commodity Futures Trading Commission (CFTC). Reuters, 16th May.

End of Week Pricing

Oil prices continued to slump this week, continuing the trend which began in early May. A combination of weak economic data from the EU and China coupled with mixed US data and growing crude inventories sent NY oil futures down another $4 a barrel this week to close Wednesday at $92.81. NY gasoline futures followed crude prices down to settle at $2.92 a gallon, some 45 cents a gallon below the March highs. In London, Brent crude was not quite as weak, widening the spread with NY to $18.90 on Wednesday. PO Notes, 17th May.

www.globalenergyadvisory.com

Soaring Costs Threaten To Blow Nuclear Plans Apart

EDF Energy has briefed its partner Centrica about the internal cost review, which makes it even harder for the owner of British Gas to come on board. Speculation has mounted in recent weeks, fuelled by briefings by Centrica advisers that the British company will pull out of the joint venture. One analyst said that the £14bn price for the reactors would put even more pressure on the Government to offer big subsidies for nuclear power to persuade EDF Energy to go ahead. TUNSE/The Times 7th May.

TEPCO Let There Be Light

The net loss for the year ended at Y782bn ($9.8bn) compared to Y1.2tn last year. FT, 15th May.

Nuclear Power Plans in Doubt As Hinkley Earthworks Are Delayed

Massive earthworks needed to prepare the ground for a new nuclear power station at Hinkley in Somerset have been delayed, dealing a further blow to the government's energy plans. EDF staff have been told the work will now start in 2013. Internally, EDF blamed the delay on cost over-runs on the preparatory work. TUNSE/The Guardian, 15th May.

Japanese Town Votes to Restart Nuclear Reactors

The western province of Fukui has voted to restart 2 nuclear reactors... potentially opening the way to limited nuclear generation for the country. FT, 15th May.

Critical Time for UK Government and Industry

One week before the UK government tables its energy market reforms some key aspects of the package are still being decided. Its success will be vital to plans for nuclear new build, including the sale of Horizon Nuclear Power. All these matters were discussed by MPs at a session of the Energy and Climate Change Committee. They heard evidence from the energy minister Charles Hendry as well as the chiefs of the Horizon Nuclear Power joint venture, Volker Beckers of RWE and Tony Cocker of EOn. The executives said it "would be very speculative" to isolate any of the factors that prompted them to pull out of the Horizon development and put it up for sale. They said their decision was based on three things: the current low price of gas in Germany and continental Europe, the margins on power production across Europe and the financial impact of Germany's reaction to the Fukushima accident. World Nuclear News, 15th May.

Spanish Government Starts Turnaround

Moves to partially revoke an order to close the Garoña nuclear power plant in 2013 have formally begun. Spanish nuclear regulators ruled in 2009 that Garoña could safely operate until 2019, but the government of the time only extended its licence to 2013. At the time, the four-year extension was seen as indicative of a shift away from a government policy of an arbitrary 40-year life limit for nuclear plants: Garoña's single 446 MWe boiling water reactor started operation in 1971, and would have operated for 42 years by July 2013. The Spanish government voted in February 2011 to remove the statutory 40-year limit for the country's nuclear plants. World Nuclear News, 15th May.

Tails Deal Gives Paducah Another Year

Newly finalised plans to transfer US Department of Energy (DoE) depleted uranium into the civil nuclear fuel cycle for re-enrichment will see the Paducah enrichment plant continue to operate for an extra year and secure long-term nuclear fuel supplies for two US utilities. DoE's plan, developed in collaboration with Energy Northwest, the Tennessee Valley Authority (TVA) and Paducah operator USEC, will see a portion of DoE's high-assay depleted uranium tails transferred to Energy Northwest. The uranium will be re-enriched at Paducah under commercial contracts between the utility and USEC. Energy Northwest will use the resulting low-enriched uranium to fuel its Columbia Generating Station and will also transfer some of the low-enriched uranium to TVA. World Nuclear News, 16th May.

www.globalenergyadvisory.com   

Saudi Arabia Eyes $109bn Plan For Solar Industry

Saudi Arabia is seeking investors in a $109bn plan to create a solar industry that generates a third of the nation's electricity within two decades, according to officials at the government agency developing the plan. The worlds largest crude oil exporter aims to have 41GW of solar capacity by 2032 (nuclear, wind and geothermal would contribute 21GW). Power Engineering, 12th May.

SNP Energy Plan Needs Bigger Wind Turbines

Scotland's renewable energy target could only be met if planning rules were relaxed to allow the construction of wind turbines 60% taller than those currently allowed. TUNSE/The Daily Telegraph, 9th May.

Energy Secretary Steven Chu Touts Arizona Solar Project
 

U.S. Energy Secretary Steven Chu said Tuesday that Phoenix is a leading example of how to roll out more solar energy across the country. As many as 1,000 metro Phoenix residents could lease solar-electric systems for their homes with no money down thanks to a $25 mn program from National Bank of Arizona, and President. Arizona Business and Money, 15th May.

Hain Quits Shadow Cabinet to Promote Severn Barrage

Peter Hain has stepped down from the Shadow Cabinet to use his political influence to help turn the perennial idea of the Severn Barrage into a reality. (It could produce 5% of the UK electricity or the equivalent of 3 nuclear power stations, the MP said). FT, 15th May.

TEPCO Subsidiary Acquires Australian Wind Farm

Tokyo Electric Power Company steps-up its move into renewable energy overseas. Its RE subsidiary, Eurus Energy Holdings Corporation, has bought the Hallett 5 wind farm of AGL Energy Ltd. for US$174 mn. The acquisition is the first for Eurus Energy in Australia. The 53MW wind farm in South Australia is operational and has 25 turbines made by the Indian firm; Suzlon Energy Ltd.  Asia Power News, 15th May.

Gamesa's Calvet Acts On Spanish Job Cut Threat

Gamesa chief executive Jorge Calvet is fulfilling his February 2011 threat to halve the company's Spanish turbine production capacity by 2013, unless the government renews the wind power support model. So far, the Spanish manufacturer has reduced capacity by 800MW. This represents a 40% cut on Gamesa's 2GW national capacity at the start of 2010. Windpower Monthly, 11th May.

www.globalenergyadvisory.com