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French presidency favourite cites renewables preference

February 10th, 2017

Emmanuel Macron, the favourite to be France’s next president, wants to marginalise fossil fuel, curb nuclear and facilitate renewable energy.Macron

At a press call on Thursday Macron said he would close all coal-fired power plants in France by 2022 and ban oil and gas exploration in French territorial waters.

He added that he would launch a tender for 26,000 MW of renewable energy capacity at beginning of his term and would reduce the share of nuclear in the energy mix to 50 per cent by 2025, in line with existing government targets.

Nuclear accounts for 67 percent of France's power generation. Coal accounts for just 1 per cent.

Strategy aimed at bridging UK energy and utility skills gap

February 9th, 2017

The energy and utilities sector requires 221,000 new recruits by 2027, in order to provide the essential services its customers seek and the infrastructure the UK needs for its economic growth.

The Energy & Utilities Skills Partnership has been set up to build and launch the first ever joint Workforce Renewal and Skills Strategy for the sector, in a bid to ensure that the country’s energy and utilities sector retains a safe, skilled, resilient and sustainable workforce.

Nick Ellins, the Chief Executive of Energy & Utility Skills, who will manage the Strategy on behalf of the energy and utilities industry, said “The National Infrastructure Plan is now widely recognised as forming the backbone of industrial strategy, and more than half (56 per cent) of that plan is required to be delivered by the power, water, gas, wastewater and waste management industries. To date the accompanying infrastructure skills strategy has not explicitly recognised this critical contribution or done enough to ensure that the businesses involved have the right environment to ensure a sustainable and talented workforce exists.”
Tony Cocker
“This document begins the discussion, providing a framework that seeks to secure successful UK-wide skills provision through to 2020.”

Tony Cocker, Chief Executive of E.ON UK and Chair of the Energy & Utilities Skills Partnership, said: “We face an ageing workforce, increasing competition for talent with unemployment reaching its lowest recorded levels and a lack of proficient skills leading to over a third of vacancies being hard-to-fill. Therefore, as a partnership we seek to be the catalyst for change, sharing an ambition to achieve a more sustainable future.”

“It is key that businesses across our sector work together to raise the profile of the issues and recommendations outlined in the strategy and, ultimately, encourage and support more people, whatever their background, into training and long-term career opportunities in the energy and utilities industry.”

The Energy & Utilities Skills Partnership has already started to take action – including a commitment from 20 utility-based businesses to a new 12-month pilot programme that seeks to encourage people into industry careers and develop a significant future sector talent pool. The Talent Source Network aims to help employers access hard-to-reach and diverse individuals as well as encourage professionals who are looking for new opportunities or to retrain.

Britain’s decision to leave the Europe Union is raising risks for 66,000 workers in the nuclear power industry and threatening to disrupt the flow of atomic fuel across international borders.

The need to produce a new generation of skilled workers has been further emphasised by the decision of the UK to leave both the EU and Euratom, the continent’s 60-year-old nuclear safety and research organization.

As well as workers there is also the problem of supply. Industry officials say leaving the European Atomic Community, or Euratom, would require the U.K. to spend years replicating rules and international agreements needed to trade radioactive materials with other nations.

Keeping UK nuclear-industry workers employed after Euratom will require new deals with non-EU countries including Australia, Canada, Japan and the U.S., according to Persbo, who called the impending negotiations “tricky business” for the international uranium trade.

Exiting Euratom could also exact a heavy price on British scientists and engineers developing next-generation nuclear technologies. While Euratom has guaranteed the 283 million euro $302m budget for the U.K.’s flagship research project, the Joint European Torus, or JET fusion reactor, future funding is uncertain unless EU workers retain the right to work and live in the UK.

Global power and utilities deal value falls

February 9th, 2017

Global power and utilities deal value fell 4 per cent year-on-year to $192.3bn in 2016 compared to US$200bn in 2015, according to EY report Power transactions and trends: 2016 review and 2017 outlook. However there was good news for the European sector.

Regulated assets accounted for the greatest share of 2016 deal value (46 per cent) with $89.3bn as investors continued to seek stable returns. Interest in renewable energy assets also remained high with deal value totaling $28.4bn – including 10 multibillion-dollar transactions. There were 46 renewable energy deals totaling $8.3bn in the Americas alone.

Last year also saw a noticeable trend – though smaller in scale – of some of the world’s biggest utilities investing in new energy technology, particularly in storage. Enel, Innogy and National Grid were among these companies. Deals involving new energy technology (storage, smart metering and electric vehicle charging) totaled $898m.
Matt Rennie, EY Global Power & Utilities Transactions Leader, said, “Investors face a difficult suite of choices due to ongoing low wholesale prices and an absence of new greenfield conventional generation deals in developed markets. The result in 2016 was a surge in valuations of network assets and power purchase agreement-backed renewables deals as investors sought methods of putting their money into safe, stable assets with guaranteed returns at scale.”

“A noticeable shift in the appetite for new energy technology is underway as investors embrace the need to diversify.”

Deal value in Europe’s power and utilities sector totaled $51bn in 2016 – the highest value since 2012. Activity in the fourth quarter accounted for more than half of the year’s deal value with $27.8bn. Transmission and distribution transactions accounted for $22.7bn of deal value in the region. Excluding T&D assets, deal value fell 7 per cent from 2015 as investment in generation and renewables dropped year-on-year.

Rennie said, “The dynamics of the European electricity market are increasingly challenging. Wholesale prices have halved in the last five years, resulting in significant losses for utilities. The result has been increased investment in more profitable regulated networks and renewable businesses and a drop-off in conventional generation assets.”

The Americas power and utilities sector concluded 2016 at a six-year deal value high of more than $99bn. The majority of activity came at the start of the year, spurred by investor confidence and an abundance of capital. Deal value in the fourth quarter, however, fell to $13.9bn from $26.3bn in Q3 2016.

The US led transaction activity in the region with deal value totaling $8.2bn in Q4 2016. Rising interest rates could, however, dampen activity in 2017 while the impact of energy policy changes in the country are still not clear.

Asia-Pacific power and utilities deal value reached $23bn in Q4 2016 – more than four times that of Q3 2016 ($5.7bn). Fifty-five percent ($12.7bn) of total deal value in the region came from T&D assets.

According to Rennie, “Asia-Pacific offers a diverse range of investment opportunities, from renewable energy to development of conventional generation assets in countries with a supply and demand imbalance and energy reform. This, coupled with a more stable political environment, will attract ongoing investment in 2017, particularly from Europe and the Americas.”

New Killinghome gas power plant to be entered into UK auction

February 9th, 2017

C.GEN Killingholme Ltd, the developer of the 470MW North Killingholme gas-fired power station project, is aiming to enter it into the Government’s next Capacity Market Auction that will be held in December 2017. 

The highly-flexible North Killingholme combined cycle gas turbine (CCGT) power project is located near the Humber port of Immingham in North Lincolnshire. It was granted a Development Consent Order (DCO) by the Secretary of State for Energy & Climate Change in September 2014.
Killingholme gas-fired power plant
Progress on the C.GEN project has been facilitated by the company’s recent acquisition of the adjacent Centrica Killingholme ‘A’ gas-fired power station which permanently ceased operations in March 2016.

The acquisition of Centrica Killingholme “A”, which will be demolished over the next 12-18 months, gives C.GEN Killingholme secure connections to the electrical and high pressure gas grids for its new CCGT and gives C.GEN the opportunity to develop other new energy projects on the 50 acre site.

C.GEN has appointed Credit Suisse to assist with the financing of the North Killingholme project and appointed Uniper as the project’s engineer, and C.GEN has recently embarked on the tender process for the main construction contract.

Florent Maes, C.GEN Killingholme’s project director said: “We are now in a good position with the project and we will be working hard over the coming months to be fully prepared for the Capacity Market Auction in December.  If we are successful in the Auction, we could expect to start the construction in 2018 to ensure timely completion and commercial operation by 2021.”

Hydrogen power project planned in Austria

February 8th, 2017

Siemens, steel maker Voestalpine and Verbund are planning a plant in Linz, Austria aimed at optimising the use of hydrogen for power generation purposes in an industrial setting.

The companies hope to use excess power generated by renewable energy sources to create hydrogen from water with electrolysis. The hydrogen can then be stored for reconversion into power or for direct industrial use, with the aim of eventually replacing coal power in the steel making process altogether.

The new research plant will be the biggest in the world to use so-called Proton Exchange Membrane (PEM) technology developed by Siemens, which the German company says smoothes out power supply fluctuations better than other technologies.

The 6 MW, $19.2m plant will be more closely integrated into the steel-making process than similar green hydrogen projects. Experiments are likely to start in about two years, Voestalpine said.

"It will be capable of very quickly varying its output to follow renewable energy sources production," said Bart Biebuyck, executive director of the European Commission's fuel cells and hydrogen joint undertaking.

Voestalpine Chief Executive Wolfgang Eder said, however, that it would take at least 15 years to work out how green hydrogen could replace coal in the steel-making process without major cost increases.

"On the path towards decarbonisation we must walk from coal via natural gas as an interim solution ... towards hydrogen in the long term."

Positive order news for ABB

February 8th, 2017

ABB has recorded an increase in its orders for the first time in two years.
Ulrich Spiesshofer
The power technology and automation group posted a small increase in new business on Wednesday. Orders increased 0.2 percent to $8.277bn in the three months ended Dec. 31 from the same period a year earlier and  marked an improvement from the $7.53bn in the previous quarter.

"We delivered growth in the fourth quarter, driven by the strong performance of Power Grids, in a continued tough market," said Chief Executive Ulrich Spiesshofer in a statement.

New projects amounting to $842m, including one to provide an 1,800 km power link connecting southern and central India, helped reverse the recent order decline.

The company said macroeconomic and geopolitical developments are signalling a mixed picture with continued uncertainty, although there were positive signs in the United States and it expected growth to continue in China.

Japanese giants face-off over coal power projects

February 8th, 2017

Hitachi and Mitsubishi Heavy Industries continue to be in conflict over costs associated with works intended for the Medupi and Kusile coal-fired power plants in South Africa.

Hitachi won a contract to build 12 boilers for the Eskom-owned plants in 2007. It later transferred the contract to a joint venture with MHI.
Medupi coal-fired power plant
The venture, Mitsubishi Hitachi Power Systems Ltd, is majority owned by MHI and was formed in February 2014 by combining the two companies' thermal power generation businesses. But Hitachi and MHI fell out after being unable to agree on whether certain costs were incurred before or after the creation of the venture, a regulatory filing showed.

Hitachi announced midweek that is has received a request from Mitsubishi Heavy Industries for $6.65bn to cover costs from their joint venture, which the former has rejected as lacking legal ground.

Reuters reports that the amount is almost double an initial request MHI made at the beginning of a 10-month-old dispute over which of the Japanese firms should bear costs from the power plant project.

Armenian power sector gets $140m boost

February 8th, 2017

International Financial Organisation (IFC) has arranged a $140m financing package for Armenia's major power generating facilities.

The financial injection is aimed at improving the country’s supply of clean energy.

The funding was allocated to ContourGlobal Hydro Cascade, a subsidiary of ContourGlobal, an international power-generation company, to upgrade the 404 MW Vorotan hydroelectric power complex.

The package includes the IFC's own loan of $45 million as well as loans of $65 million from FMO, the Dutch development bank, and $30 million from DEG, the German Investment and Development Corporation.

The IFC, a member of the World Bank Group, said the Vorotan Cascade was expected to generate around 1,150 gigawatt hours of electricity annually after the upgrade.

"The financing is expected to boost electricity reliability, providing a steady supply of clean power to an additional 60,000 residential customers," ," Tomasz Telma, the IFC's Europe and Central Asia department director, told Reuters.

The Vorotan Cascade includes three hydropower plants and provides 15 percent of Armenia's electricity.

"Increasing its capacity is key for Armenia, a country that imports fuel to cover around 90 percent of its energy needs," the IFC said in a statement.

CEZ, Skoda and GE to build 254 MW coal power plant

February 8th, 2017

Skoda Praha and CEZ have agreed a partnership with GE to build a new coal-fired power plant in the Balkans.

The TPP Pljevlja II power plant in Montenegro will be developed by the trio with investor EPCG securing financing.

Skoda expects to present a final proposal of the financial structure and financing conditions for the project by the end of this month.

CEZ signed deal to build the 254 MW coal-fired plant in September 2016.

France announces 3 GW tender for onshore wind

February 7th, 2017

France's energy minister Segolene Royal has announced competitive tendering for 3GW of onshore wind power to be allocated in a rolling programme over the next three years.

The first auction slated to take place in November 2017 with two each in 2018 and 2019, and another single window in 2020. It applies to arrays of more than six wind turbines and will comprise six bidding windows of 500 MW apiece.
Segolene Royal
Competitive tenders are being introduced as part of the transition to a market mechanism in place of the guaranteed premium purchase price, as required under EU guidelines on state aid.

The government has proposed a reference price of €72/MWh for turbines with rotor diameters over 100 metres, and €74/MW for those with under 80 metres, with a sliding scale, and over a period of 20 years, instead of 15 years previously. 

According to Wind Power Monthly, after a certain number of production hours, depending on the rotor size and wind resource, the rate will fall to €40/MWh for the remainder of the contract period. This is to allow for development of less windy sites and those where the air force imposes height restrictions. In addition, producers will receive a "management premium" of €2.8/MWh to compensate for the additional market-access costs.

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