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News Update: 4th June 2012 |
Greetings!
Please find enclosed our weekly news summary. Please feel free to pass this to anyone who could benefit from it. |
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Energy Investment | |
Australia's 'Green Bank' to Attract Clean Energy Investors
Australia's proposed Aus$10 bn ($9.8 bn) Clean Energy Finance Corporation (CEFC) is likely to prove the "last piece of the puzzle" in financing large-scale renewable energy projects in the short to medium term - but it should avoid crowding out private investment. Climate Change Minister Greg Combet tabled legislation in the House of Representatives on 23 May to establish and finance the CEFC with A$2 bn a year in public funds for five years. Climate Finance, 29th May.
China to Spend $315 mn Yearly on Alternative Energy Cars
China's government will spend as much as 2 bn Yuan ($315 mn) a year to develop alternative-energy vehicles to reduce fuel consumption. Bloomberg, 29th May.
New Energy Minister for Germany
Germany has a new minister for energy, environment and nuclear safety in Peter Altmaier, a CDU/CSU heavyweight who has been charged with making the country's '(renewable) energy transition' a reality. World Nuclear News, 29th May.
U.K. Energy Policy May Fail to Meet Carbon Goals, IEA Says
The U.K.'s energy policies may fail to deliver nuclear power and renewables needed for the nation to meet its goals for reducing greenhouse gases, the International Energy Agency said. Britain's new electricity generation capacity is coming mainly from natural gas fired plants. (IEA said) The government should spur an "efficient mix of new, cleaner generation, more efficient use of existing infrastructure and more flexible demand". Bloomberg News, 30th May.
Distrust Could Hamper Green Deal
Public mistrust of the "big six" energy firms may undermine the UK government's planned Green Deal, according to the International Energy Agency. The energy firms are supposed to deliver a mass programme of home insulation under the Deal. The IEA warns that customers could be deterred by high prices and instances of poor service and mis-selling. ...This international attention on the Green Deal may prove uncomfortable for ministers who have already been facing complaints that The Green Deal does not do enough to help the 8.5 mn people heading for fuel poverty, and has not been publicised enough. BBC News, 30th May.
China's First Offshore Programme "At an End"
Speaking at the country's Offshore Wind China 2012 conference CREA director Li Junfeng said China needs to rethink its approach to offshore after the failure of the first concession projects. The four projects, in Yancheng, Jiangsu province, making up the tender were handed out at the end of 2010. Li said: "Officially, the first offshore concession projects still exist. But in reality, they have all ended. The locales for the projects have changed. The water depth of the sea areas have changed. The types of offshore wind turbines will surely change. Windpower Monthly. 30th May.
www.globalenergyadvisory.com |
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Gas | |
Shtokman
Norway's Statoil may leave the international consortium that is to develop the Shtokman LNG offshore project in the Russian Barents Sea and may be replaced by Royal Dutch Shell, Kommersant reports citing unnamed sources. Russian gas giant Gazprom owns 51% of the Shtokman gas field, Total of France owns 25% and Statoil owns 24%. The project has suffered a number of delays on the investment decision recently. Rigzone, 26th May.
Energy/BP Scales Back Plans to Break Russian Hold on Gas Supplies
Having concluded that the Nabucco pipeline is economically unfeasible, BP says it no longer plans to use it to ship gas from its Shah Deniz Stage 2 Gas field in Azerbaijan. BP and partners are, however, considering an alternative - Nabucco West - which would run to Austria from the border of Turkey and Bulgaria. TUNSE/The Independent, 26th May.
Chinese Natural Gas Project Receives Funding
Funding has been raised to finance and construct the first phase of a one tn cubic feet per year coal to natural gas production facility. GreatPoint Energy has raised US$1.25 bn from China Wanxiang Holdings to finance the project to be located near Turpan, Xinjiang Uyghur Autonomous Region. The project will utilize GreatPoint Energy's proprietary Bluegas technology to produce one tn cubic feet of natural gas per year. The first phase is expected to begin operation in 2015 with an initial annual natural gas production capacity of 30 bn cubic feet, which will expand to 116 bn cubic feet of annual natural gas output within two years. Asian Power, 30th May.
Sale of ENI's Stake in Snam in Pipeline
ENI has announced details of its plans to sell its entire 52.5% in gas network operator SNAM, which is expected to raise €6.5bn in cash and offload €11.5bn in debt....The sale, will allow the company to press ahead with expenditures on recent discoveries. FT, 31st May
www.globalenergyadvisory.com |
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Oil | |
Chinese Oil Demand
New data on Chinese industrial production show that its economy is not doing well in the first half of the year. Downturns in real estate and exports, and declining consumer confidence, have combined to create a "sharp slowdown in the economy." Some believe the economy which has been humming along at 9+ % for several years is barely growing in 2012. The implications for increasing oil imports are obvious. PO Review, 28th May.
Iran
The meeting in Baghdad last week between Iran and the Group of 6 is generally deemed to have been unsuccessful although another meeting is scheduled for Moscow on 18 June. Prior to the meeting, Tehran did agree with reservations that the IAEA could conduct additional inspections of some suspect weapons related areas, but over the weekend announced that it would not halt its 20 % enrichment program, a key western demand. Until the announcement, the West believed that the offer to stop 20 % enrichment was on the table as it is only useful for one aging medical reactor and as a step towards weapons-grade uranium. So far the talks have been mostly jockeying for position and the need to save face before domestic audiences on both sides. Some say the talks have become so ensnared in Washington politics that the US is paralyzed so that the EU will have to take a leading role in working out a compromise. Harsher sanctions are due to take effect on July 1st which is only another five weeks away. Until then we might no see much more progress. At some point it is easy to see the "war risk" returning to oil prices which will resume climbing. PO Review, 28th May.
Kurdish Pipeline
Plans for Iraq's semiautonomous Kurdish region to build an oil pipeline to Turkey point to a major political and economic realignment in the Middle East that will impact heavily on Iraq. PO Review, 28th May.
Egyptian Discovery
Eni has made a big oil discovery in the Western Desert of Egypt. The discovery, at the Emry Deep exploration prospect, located in the Meleiha Concession 290 km south west of Alexandria, is estimated at 150-250 mn barrels of oil in place and will require further appraisal drilling. PO Review, 28th May.
Global Oil Supplies
Although the world oil market is "better supplied" than in other recent times, world oil-market conditions could swiftly change this summer as Iran sanctions bite into supply, potentially compelling the International Energy Agency to tap global emergency stockpiles, an IEA official said...Iranian oil delivered to the market in April was 1 mn barrels a day below the 2.5 mn barrels a day average level for the whole of 2011, as sanctions take hold. But what happens in the next month or two will be crucial -- particularly if more data show that's a trend or reveal an even larger hit to Iranian supply after a European embargo of Iranian oil takes effect July 1.Rigzone, 29th May.
Oil Up Near $104, But Eyes Worst Month in 2 Years
Oil edged up near $104 on Thursday as buyers moved back in after Wednesday's heavy sell off, but continuing nervousness around the demand outlook and the euro zone crisis kept oil on course for its biggest monthly percentage drop in two years. Brent crude futures for July delivery were up 50 cents at $103.97 per barrel by 0945 GMT, off a low of $102.90 hit earlier in the session. Prices were on track for a monthly loss of around 13 %, the biggest since May 2010, after slipping 3 % on Thursday. Reuters, 31st May.
www.globalenergyadvisory.com |
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Nuclear | |
New Plants Out of Step with Europe
According to the International Atomic Energy Agency, about 30 countries, Britain included, still consider nuclear power a serious option, despite declining interest in some European countries. TUNSE/FT, 23rd May.
Poll Shows Public Support for Nuclear Waste Dump
According to a poll, over half the people living in Cumbria are
prepared to talk to the Government over proposals to host 300,000 tonnes of underground radioactive waste around Copeland and Allerdale in the Lake District, despite an assertion by David Smythe, emeritus professor of geophysics at the University of Glasgow, that the area is unsuitable. TUNSE/The Times, 23rd May.
Lifetime of Sizewell B Could Be Extended By 20 Years
EDF Energy could extend the life of Sizewell B nuclear power station by a further 20 years. The firm is currently working with the Office for Nuclear Regulation (ONR) regarding the extension of the operational lifetime of its existing fleet of nuclear power reactors. It means that the Suffolk reactor could see its decommissioning date extended from 2035 to 2055. TUNSE/East Anglian Daily Times (Web), 23rd May.
Tepco Revises up Amount of Radiation Released
The amount of radiation released from the March 2011 Fukushima Daiichi nuclear-plant accident in northern Japan was higher than previous government figures have shown, representing about 17% of the release from the 1986 Chernobyl accident, the plant's operator said in a report. TUNSE/The Wall Street Journal, 25th May.
Holtec Seeks Funding With Guarantee
Holtec International has promised to pay back public money if it fails to secure a licence for its SMR-160 reactor. The pledge forms part of its formal proposal seeking a share of US Department of Energy (DoE) funding. The proposal has been submitted by Holtec subsidiary SMR in response to a draft Funding Opportunity Announcement (FOA) announced earlier in the year by DoE. Under the initiative, the DoE intends to fund up two designs for small modular reactors (SMRs) through a cost-shared partnership which will support first-of-a-kind engineering, design certification and licensing. Babcock & Wilcox (B&W), NuScale Nuclear and Westinghouse have also applied for the funding. World Nuclear News, 28th May.
www.globalenergyadvisory.com |
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Renewable Investment | |
Israel's Arava Power to Build Eight Solar Fields
Israel's Arava Power said ...it secured 780 mn shekels in funding to build eight medium-sized solar energy fields - the largest financial closing in the country's solar power industry. Five of Arava's fields, totalling 35 MW, will be built by Siemens Israel in the southern Negev desert at a cost of $130 mn. The other three fields, totalling 23 MW, will be built in southern kibbutzim, or agricultural communes, in partnership with EDF Israel. TUNSE/Reuters UK 22nd May.
Government Could Plug into Earth Core
The Department of Energy and Climate Change is investing more than £5 mn in viability programmes, whilst in Scotland, Energetica and Scottish Enterprise are examining the geothermal potential of the granite areas of north-east Scotland. TUNSE/The Scotsman, 23rd May.
Terra Firma Plans £1bn Float of Infinis
Terra Firma has met with a series of banks to discuss the possibility of floating its energy company Infinis, which has a 10% hold on the renewable market in the UK. Infinis has seen double-digit increases since 2010 and is regarded as being a popular prospect for fund managers in the public markets. TUNSE/The Sunday Telegraph, 27th May.
Republic Could Supply Renewable Power to UK
Talks on a deal that could open up Britain s electricity market to exports from renewable generators in the Republic will take place next month, according to Minister for Communications, Energy and Natural Resources Pat Rabbitte (who) launched the Government s Strategy for Renewable Energy 2012-2020, which covers wind power, bio energy, wave and tidal power and research and development. .....The agreement will cover electricity generated both onshore and offshore. Power Engineering, 29th May.
Blade Snaps off Repower 2MW Motorway Turbine
A 46-metre blade has fallen off a Repower 2MW turbine at a project alongside the A10 motorway in France. The incident, which did not cause any damage, took place early Friday morning. While the winds were strong, they were within the operational limits of the machine, given as 11-90km/h. Windpower Monthly, 24th May.
www.globalenergyadvisory.com |
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Coal | |
Record Coal Stockpiles Could Squelch U.S. Natgas Recovery
A mountain of excess U.S. coal supplies may squash this spring's recovery in natural gas prices that came as power plants snatched up the fuel as it plumbed 10-year lows. Even if gas prices remain cheaper than coal in terms of the energy they generate, as they have since 2010, utilities may be forced to burn more of the dirtier fuel in order to prevent a record rise in coal stockpiles from overflowing..That could reduce an estimated 7 bn cubic feet per day of additional natural gas demand this spring stemming from utilities that have switched off coal-fired plants in order to maximize gas use in power generation. Demand from coal-to-gas switching is up 35 % from a year ago. Reuters, 27th May.
Chinese Coal, Iron Ore Defaults Prompt Mystery
Over the last two weeks, Chinese consumers of thermal coal and iron ore have been defaulting on their contracts, sending prices sharply down. The reason behind the cancellations is a hotly debated topic in the physical commodities market. Analysts and traders have put forward two radically different theories - with almost opposite implications to global commodities markets: either Chinese buyers do not need the raw materials because weak demand and high inventories - a bearish scenario - or they need the shipments, but they are defaulting to take advantage of falling prices and they plan to rebook at a lower costs - neutral to bullish. The Global Exchange, 28th May.
Russia Coal Flows to Syria as Trade Shifts to Euro
International sanctions have failed to halt trade in Russian coal at Syrian ports, with buyers switching to the euro from the dollar in deals facilitated by the Syrian state bank and black market players, a cement company executive said. "We use banks in Damascus and Moscow," Al Badia Cement procurement official Tarik Al-Akkari said at the Adam Smith CIS Coal Conference. "We use the National Bank of Syria and we use the black market. The black market is very active." International sanctions have made it difficult for Syrian businesses to obtain U.S. dollars and deterred many shippers from trading with local firms. Reuters, 28th May.
American Companies Beating Europe to First Commercial CCS Plant
Air Products & Chemicals Inc, based in Allentown, Pennsylvania, and Sask Power International Inc. of Canada are the closest to building a utility-sized carbon capture and storage plant... Carbon capture and storage (CCS) is one of the most promising technologies to redirect emissions from burning fossil fuel. The International Energy Agency estimates 3,400 CCS plants are needed by 2050 to meet a goal to cut carbon emissions in half. Bloomberg, 29th May.
AEP Drops Scrubber Request for Big Sandy Coal Unit
American Electric Power's Kentucky utility withdrew its request to spend $940 mn to install environmental equipment to keep its 800MW Big Sandy 2 coal-fired unit running...Citing changing market conditions over the last few months. Reuters, 31st May.
Queensland Coal Strike Costs $120 mn
A week-long strike by workers at some of the biggest coal mines in Queensland has cost a massive $120 mn. The strike, which ended on Thursday, halted production at six Bowen Basin mines, run by the BHP-Mitsubishi Alliance. Industry sources say the strike by more than 3,000 miners cost $114 mn in lost production, $9.8 mn in royalties and $6.5 mn in wages. 9 News, 31st May.
www.globalenergyadvisory.com |
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Energy Trading & Market Dynamics | |
Small Emitters Can Opt Out of EU ETS From 2013
The UK is offering small emitters and hospital installations the opportunity to 'opt out' from the EU ETS from 2013 as part of Government efforts to cut down on red-tape. The Opt Out scheme could save industry up to £80 mn from 2013-2020, depending on take up from the around 250 eligible installations, accounting for 1% of UK EU ETS emissions. DECC, 25th May.
Goldman to JPM Swap Trades Soar on Risks
Investors are buying more credit-default swaps on Wall Street banks than any other companies as they seek insurance against the prospects for diminished revenue amid tighter regulations, downgrades and Europe's debt crisis. Contracts tied to the debt of Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Bank of America Corp. were the most traded among companies last week, with a combined gross notional amount of $7.45 bn, according to the latest data from the Depository Trust & Clearing Corp., which runs a central registry for the market. Swaps on New York-based Goldman Sachs were the most active, up from 13th the previous week. Bloomberg, 27th May.
Europe Power Spot Rises on Low Nuclear Power
European electricity prices rose across the board on Tuesday, with spot contracts driven higher by low nuclear energy availability in France and forwards pushed by stronger coal prices, traders said. Wednesday delivery electricity contracts for base load in the over counter market rose by 5.50 €/MWh in France and Germany to 48.00 € /MWh and 46.00 €/MWh, respectively. "This is because the French nuclear power availability is particularly low for the time of year," one trader said. "Last year we were 8GW higher," he said. According to a Reuters estimate, 24,650 MW or 38.97 % of France's nuclear production capacity is currently offline. This puts the online availability at 38,610 MW or 61.03 %. Reuters, 29th May
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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