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UK gets fourth energy minister in as many years

July 15th, 2014

The UK has two new energy ministers following Prime Minister David Cameron’s most extensive Cabinet reshuffle yesterday.

While Secretary of State for Energy Ed Davey keeps his job – there was never any doubt that he would not – his twMatthew Hancocko ministers have changed.

Former Energy Minister Michael Fallon – who also served as minister for Business, Innovation and Skills – has been promoted  to Defence Secretary, while Greg Barker, who as Minister for Energy and Climate since the government came to power in 2010 was the longest serving energy minister – has resigned from the government.

In his resignation letter to Cameron, Barker said that “on the basis of what we have already delivered, this is genuinely the greenest government ever”. He cited several initiatives as successes, including the formation of the Green Investment Bank, an expansion of decentralised energy and the establishment of marine energy parks.

Barker was well-regarded by many in the power industry, particularly those in the renewables sector.

David Taylor, Business Development Manager at UK-based Flogas Renewables, said Barker had been a “well-respected advocate of growth for the UK solar market”.

“There is no doubt that representatives across the industry will miss Greg Barker’s commitment and enthusiasm to delivering renewable solutions.”

However he added that “the overhaul of the department presented a very real opportunity to channel renewed energy into renewables”.

Dr Nina Skorupska, chief executive of the UK's Renewable Energy Association, said: “Greg Barker was the only DECC minister to have been in post since the last election. Not only did he bring stability to the department, he also brought passion and enthusiasm. Although during his stewardship he had to make tough decisions we didn’t agree with, there is no doubt that Greg was a champion for green business. I hope he continues to be an advocate for a low carbon economy, ensuring the UK’s energy is sustainable and secure."

Maria McCaffery, RenewableUK chief executive, added: “RenewableUK is also grateful to Mr Barker who, during his long time as Energy and Climate Change Minister, was a consistent advocate for renewable energy in government. Mr Barker devoted considerable energy and enthusiasm into advancing our world-leading wave and tidal sector, and we look forward to working with his successor on marine and small wind issues”.

Barker is being replaced by Amber Rudd (pictured right), who was previously not in the Cabinet, while Fallon’s successor is Matthew Hancock (pictured above). Both have a background in banking and economics and both have worked for UK Chancellor George Osborne. Indeed, some industry observers see their appointments as a means of the Treasury keeping a grip on the purse-strings on the Department of Energy and Climate Change.Amber Rudd

Hancock becomes the fourth energy minister since May 2010, following Charles Hendry, John Hayes, and Michael Fallon.

Ed Davey said of the new appointments: “I’m looking forward to welcoming Matthew Hancock and Amber Rudd to DECC. They join us as we are increasingly demonstrating the success of our policies to meet Britain’s energy and climate change challenge. I know their combined experience and abilities will be an enormous asset as we complete this Government’s work.

“I want to thank Michael Fallon and Greg Barker for their immense contributions to turning around the legacy of energy underinvestment we inherited. I was particularly grateful to Greg for his support on my battles on climate and to Michael, for his backing for my pro-competition approach to the Big Six.”

For more European power generation news

MHI in coal-fired technology milestone

July 15th, 2014

Mitsubishi Heavy Industries, Ltd (MHI) has received an order for the world's largest post-combustion CO2 capture system for an enhanced oil recovery (EOR) project in Texas, US.

The project is primarily promoted by NRG Energy, an independent power producer (IPP), and JX Nippon Oil & Gas Exploration Corporation (JX Nippon), a JX Group company headquartered in Japan.

The system will capture CO2 from flue gas from an existing coal-fired power generation plant and will have a CO2 capture capacity of 4776 metric tons per day (mtpd). The system is slated for completion in the fourth quarter of 2016.

MHI received the CO2 capture system order from Petra Nova CCS I LLC, a special purpose company (SPC) of NRG and one of the companies implementing the project, through Mitsubishi Heavy Industries America.

The EOR project involves the separation and capture of CO2 from flue gas emitted from Unit 8 of NRG's WA Parish generation station, a coal-fired plant located approximately 60 km southwest of Houston, Texas, and injection of the CO2 into the nearby West Ranch oil field to boost crude oil production.

The CO2 capture system will consist of a flue gas quencher, absorber and regeneration system, CO2 compression unit, and utility facilities. It will have a CO2 capture efficiency of 90 per cent. MHI will license CO2 capture technology to Petra Nova CCS I through MHIA. The MHIA/TIC consortium will undertake engineering, procurement and construction (EPC) of the CO2 capture system and its ancillary facilities.

MHI's CO2 capture technology is the KM CDR Process, which uses a proprietary KS-1 high-performance solvent for CO2 absorption and desorption that was jointly developed by MHI and Kansai Electric Power Co. Compared with other CO2 capture technologies, the KM CDR Process uses significantly less energy, the companies claim.

For more coal-fired power generation news

Drax wins court appeal over biomass conversion decision

July 15th, 2014

A court has found in favour of one of the UK’s biggest power generators, Drax Group, which had appealed against a decision by the government’s Department for Energy and Climate Change (DECC) not to accept the eligibility of two of the company’s units for an incentive scheme.

However, a Drax spokesperson told Power Engineering International that the decision does not automatically mean an investment contract will be granted.

Drax had seen the units excluded from a £1.3bn ($2.2bn) investment to fund conversion of its coal-fired generation units to biomass.

DECC had reversed a decision to provisionally accept two of Drax’s six power generating units as eligible for new incentives to switch from coal to more environmentally friendly energy sources, granting permission for just one unit.

Mrs Justice Andrews upheld Drax’s appeal and ordered the department to quash the exclusion of the contested unit from applying for subsidies. She described the competition to qualify for the scheme as part of a “stick and carrot” approach of taxes and incentives to make coal burning increasingly unattractive, compared with renewable energy sources.
The judge said both units put forward by Drax should have been considered as qualifying for the programme as the scheme offered more stable support for biomass conversion than the existing renewables obligation regime.

Drax spokesperson Melanie Wedgbury told Power Engineering International that the company is committed to biomass conversion regardless of how the decision might have gone.

"When we learnt in April that our second unit conversion was deemed ineligible for an investment contract, we stated that we remain fully committed to our strategy of transforming Drax into a predominantly biomass fuelled generator, initially through the conversion of three of our six generating units, with a fourth unit conversion under evaluation. We also stated that support for [the second unit] conversion instead is available under the existing Renewables Obligation regime, where eligibility has been confirmed.  Support may also be available under the enduring Contract for Difference (CfD) mechanism." 

She added, "This does not mean that our second unit will now automatically receive an investment contract. There are still steps to go through. Until the legal process has been concluded we are not able to offer any further comment."

Shares in Drax rose 4 per cent to 707p on Monday, recovering some of the ground lost since DECC’s decision in April, when the company’s shares dropped 13 per cent.

Drax is spending £700m on a plan to generate half its power output from imported wood pellets rather than coal. But the dispute with DECC had threatened its ability to invest in guaranteeing supplies of imported wood pellets, it argued.

DECC said: “We believe that we ran a fair and robust bidding process for renewable generators seeking early contracts for difference. We have been granted permission to appeal, and will now consider the decision carefully.”

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July 14th, 2014

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Dip recorded in European offshore wind installations

July 14th, 2014

The European Wind Energy Association (EWEA) has reported a substantial dip in the number of offshore wind energy installations this year.

While 4.9 GW of new offshore wind capacity is under construction in Europe, installations are down by a quarter on the same period last year. Sixteen commercial offshore wind farms are currently under construction. 

Siemens Helwin
While 224 new offshore wind turbines, totalling 781 MW, were fully grid-connected in Europe during the first six months of 2014, that figure represents 25 per cent less than during the same period in 2013 (1045 MW).

Installed but not connected during this period were 282 wind turbines, making a total of 310 offshore turbines awaiting grid connection. Once connected they will add a further 1200 MW of offshore wind energy capacity.

"Despite offshore wind power installations being lower than in the first six months of last year, it remains the fastest growing power sector in Europe," said Justin Wilkes, Deputy CEO at EWEA. 

"However, despite significant financing activity in the first half of the year, the contraction in installations we have witnessed in these first six months may well continue into 2015 and 2016," warned Wilkes.

Wilkes called for more clarity in the shape of an ambitious deal on the 2030 Climate and Energy package by the EU's heads of state in October, which he said “would send the right signal, making their decision particularly important for the offshore wind sector.”

Total installed offshore wind capacity in Europe is now 7343 MW in 73 wind farms across 11 countries, capable of producing 27 TWh of electricity, enough to meet the needs of over 7m households - or the entire population of the Netherlands.

Click here to view the full report.

For more wind energy news

Enel aims to raise $6bn through Eastern European asset sale

July 11th, 2014

Italy’s largest utility is looking to offload assets in Slovakia and Romania in an attempt to strengthen its balancing sheet.

Enel SpA aims to raise around $6bn from the sale of Slovakia’s largest utility, Slovenske Elektrarne AS.

The firm also wishes to sell its interests in Romania, where it holds power distribution and retail assets, according to a statement issued yesterday.

The company, headed by Francesco Starace, began the process of reducing its debt in 2013 in an endeavour to respond to the challenges posed by Italy’s depressed economy.
“In the last few days, Enel has formally notified the subsidiaries in both Slovakia and Romania, as well as their minority shareholders, of the start of the sale process and has appointed financial advisers,” Enel said in its statement.

Enel is being advised by BNP Paribas SA (BNP) and Deutsche Bank AG in Slovakia, and Citigroup Inc (C) and UniCredit SpA (UCG) in Romania.

Daniel Benes, CEO of the Czech Republic’s largest utility, CEZ AS, said in April that he would be open to bidding for Enel’s stake in Slovenske if it came up for sale.

“The biggest failure in CEZ’s history was that we didn’t buy Slovenske Elektrarne,” Benes said in an interview. “So if that asset is up for sale, we will gladly enter into negotiations about it.”

For more power business news

German bank behind financing of 414 MW gas plant

July 11th, 2014

KfW IPEX–Bank of Germany is providing an export credit facility aimed at financing a 414 MW gas-fired power project in the Philippines, supplied by Siemens.

The facility will be used to partly finance the gas-fired power plant at San Gabriel, Batangas City.

Proceeds of the loan will be used primarily to finance the eligible German and non-German goods and services under the San Gabriel power plant equipment supply contract with Siemens AG, the equipment supplier.
San Gabriel plant
Siemens had informed First Gen that by the time the San Gabriel plant turns commercial in March 2016, it will be the most efficient gas-fired power plant in Southeast Asia, with an efficiency of more than 60 per cent. It will utilize the SGT6-8000H technology turbine.

The San Gabriel project is one of three power facilities that First Gen is developing in Batangas City, with a total capacity of 1350 MW.

Auditor advises more cost effectiveness for renewables

July 10th, 2014

The European Union needs to do more to provide value for money as it continues to work towards its 2020 renewable energy targets.

That advice comes from the European Court of Auditors (ECA), which investigated the performance of €4.7 billion of EU cohesion funds that had been allocated to renewables projects between 2007 and 2013, the EU's last budgetary period.
European Court of Auditors
The ECA found that the funds could have been used more efficiently, as many projects did not measure their cost-effectiveness or energy production results. There were no serious cost overruns or delays in projects.

"We found that the audited projects were mostly good, in that they delivered their outputs as planned," Kurt Baumgartz, the lead auditor for the report, told European policy news site Euractiv.

"But the energy production results were not always achieved or measured, and as the projects failed to make their full contribution to the Union's energy objectives, whereby not always the most cost-effective projects were financially supported, the European taxpayer's money has only had a limited added value," he said.

The auditors issued recommendations for the European Commission for its relations with EU countries over renewables, such as encouraging them to set stable and predictable laws for such energy production and to work on smoother ways of integrating it into the grid.

The auditors also recommended the carrying out of needs assessments and setting of cost-effectiveness criteria in the selection of renewables projects.

New lease on life for UK nuclear plant

July 10th, 2014

Amended safety regulations could mean a 10-year operational life extension for a nuclear power plant in the UK.

The 1040 MW Dungeness B power station (pictured) in Kent, England came online in 1983 and is currently scheduled for decommissioning in 2018. It consists of two advanced gas-cooled reactors.

The plant’s owner, EDF Energy, announced in 2012 that it hopes to extend the power station’s operating life by up to 10 years. A decision will be made by the end of this year, the company said.

That goal may be closer since the national Office for Nuclear Regulation has approved raising the amount of weight the plant’s graphite core can lose to 8 per cent, from its previous safety limit of 6.2 per cent, per EDF’s request.

The graphite bricks in the plant’s core degrade over time due to radiation exposure, losing weight and developing cracks. According to reports, the plant would have breached the 6.2 per cent safety limit this year. EDF applied to have the limit extended when the weight loss stood at 5.7 per cent.

The new safety limit will allow the plant to run until 2020, less than the full 10-year life extension EDF would like to see.

Juliette Sanders, an EDF media officer, said: “EDF Energy remains focused on achieving a 10-year life extension for Dungeness B which we hope to confirm by the end of the year. To ensure that safety margins continue to be sufficient, we have developed a programme of modifications which will feed in to the plant lifetime extension proposals and enable safe operation to 2028.”

Martin Pearson, station director at Dungeness B, said: “The increase in weight loss limits has been based on an extensive programme of modelling and sampling. The limits are set at conservative levels and still include wide safety margins. This gives us the knowledge and confidence that the reactors are well within safe limits of operation.”

Professor Paul Mummery of Manchester University said in a BBC interview that while the original limits were “conservative”, it may prove uneconomic for EDF to keep the reactors online in the long term as the regulator could require additional safety inspections. 

Smart city technology revenue to hit $27bn

July 9th, 2014

Worldwide revenue from smart city technology is forecast to grow from the current $8.8bn to $27.5bn by 2023.

A new report from Navigant Research states that “the rapid urbanization of Asia and Africa is driving strong growth in the market for smart city technologies that can connect and modernize power grids”.

Navigant says that a major driver for innovation in smart city projects around the world “is the opportunity to capture and make use of big data. The ability to harness real-time, highly granular data across a wide range of city operations and services is changing the way the urban environment is managed and experienced”. 

Eric Woods, research director with Navigant, said: “New infrastructure for rapidly expanding cities is being underpinned by information and communications technologies that are deeply embedded in the urban fabric and are profoundly changing the way cities operate and how people live and work in these environments.”

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