Blowout week 51

UK: UK energy news is dominated by the EU calling for an enquiry into Hinkley Point nuclear deal. Ofgem, the UK electricity and gas regulator lays out plans for blackouts [ASTONISHING!]

World: Mexico passes law enabling foreign companies to explore for oil and gas; BP announces plan for new gas pipeline from Azerbaijan – Statoil reduces stake; Russia does deal with Ukraine on gas prices – protestors are suspicious; Warren Buffet orders $1 billion of wind turbines. 23 stories below the fold.

UK: Hundreds of businesses to be paid to switch off to prevent blackouts

Hundreds of businesses could be paid to switch off their power between 4pm and 8pm on winter weekdays as soon as next winter to prevent blackouts, under plans approved by regulator Ofgem.

Mothballed old gas-fired power stations will also be paid to come back to stand-by so they can be fired up to prevent the lights going out when demand is high.

World: Statoil makes final investment decision on Shah Deniz stage 2 and announces 10% divestment

Statoil also enters an agreement to divest a 10% share of its 25.5% holdings in Shah Deniz and the South Caucasus Pipeline.

The BP-operated Shah Deniz consortium today announces the final investment decision for the stage 2 development of the Shah Deniz gas field in the Caspian Sea offshore Azerbaijan. This decision triggers plans to expand the South Caucasus Pipeline (SCPX) through Azerbaijan and Georgia, to construct the Trans Anatolian Gas Pipeline (TANAP) across Turkey and to construct the Trans Adriatic Pipeline (TAP) across Greece, Albania and into Italy. Together these projects will create a new Southern Gas Corridor to Europe. The total cost of the Shah Deniz stage 2 and SCP Expansion projects will be around USD 28 billion.

World: Australia ‘to be an energy superpower’ by mid 2017

Australia is to become a global gas superpower by the middle of the decade and eliminate its current account deficit for the first time in almost 40 years, according to Morgan Stanley.

World: Mexico: Energy reform clears final hurdle of state approval

Mexico’s sweeping energy reform cleared its final legal hurdle Monday when San Luis Potosi became the 17th state legislature to give rapid-fire approval to constitutional changes that will allow foreign investment into what has been a 75-year-old state monopoly.

Norway: Statkraft pours £1.2bn into hydro

Statkraft is pumping NOK12bn (£1.2bn) into a drive to upgrade its ageing hydro plants in Sweden and its native Norway.

The company’s schemes have an average age of 45 years and a hydro plant is technically considered ready for retirement when it hits 50.

The refurbishment scheme is kicking off with a NOK1.7bn extension to the Nedre Røssåga facility in Norway’s Nordland County, where a 1600-tonne boring machine has started digging into the rocks to create new tunnels.

World: Nobel winner declares boycott of top science journals

Leading academic journals are distorting the scientific process and represent a “tyranny” that must be broken, according to a Nobel prize winner who has declared a boycott on the publications.

UK: Meddling politicians make energy investment in Britain high risk, says Aggreko boss

Rupert Soames tells politicians to stop playing games with investors when country needs £200bn energy spend.
Britain has become a high-risk destination for energy investment thanks to the continual interference of game-playing politicians, the chief executive of temporary power supplier Aggreko has said.

UK: Europe launches probe into Hinkley Point nuclear plan

European Union regulators are to investigate whether UK support for a plan to build a new nuclear power plant breaks state aid rules.

French energy giant EDF is leading a consortium building a £16bn plant at Hinkley Point in Somerset.

The UK government has guaranteed power prices from the plant for 35 years.

UK: Subsidies for UK nuclear plant could reach £17bn and ‘may be unnecessary’

British consumers could pay £17bn in potentially unnecessary subsidies to fund construction of the country’s first new nuclear plant in a generation, the European Commission has said.

UK: Electricity generation and supply figures for Scotland, Wales, Northern Ireland and England, 2009 to 2012

This article shows how generation and consumption of electricity varies across the four countries of the United Kingdom. It updates and extends that published in December 2012. The UK figures shown in the tables in this article are taken from the Digest of United Kingdom Energy Statistics (DUKES) 2013, Chapters 5 and 6 and so the definitions used are identical to those in the Digest.

UK: Publication of Electricity Market Reform Delivery Plan

I wish to inform the House that today the Government are publishing the Electricity Market Reform (EMR) Delivery Plan. As laid out in my 18 July statement, Official Report, column, 112WS, it was our intention to publish the final EMR Delivery Plan before the end of the year, subject to Royal Assent of the Energy Bill.

UK: New tools available for National Grid to manage tight Electricity Supplies from Winter 2014/15

Ofgem Chief Executive, Andrew Wright, said: “Our latest assessment on security of electricity supplies published this summer showed that electricity margins are set to tighten more quickly than previously expected in the middle of the decade. This is mainly because older coal power stations will close sooner.

UK: Ofgem: Old power plants plan for energy crisis

“Mothballed” gas-fired power plants could be used as a “last resort” in the event of a power shortage, under new rules.

New regulations, approved by regulator Ofgem will also allow the National Grid to ask more businesses to cut back on energy use during peak times in winter.

UK: Renewable energy use at record high in Scotland

A record two fifths of electricity used in Scotland came from renewables last year, official figures have revealed.

World: Argentina in nationalisation threat after blackouts

Argentina on Thursday threatened to nationalise utility companies Edenor and Edesur after power outages blanketed large swaths of the capital and surrounding suburbs just ahead of the South American summer, according to reports.

Germany: New ‘super minister’ to redefine Germany’s energy transition

Sigmar Gabriel will head a combined economy and energy ministry in Germany’s new coalition government with a focus on lowering energy prices and boosting industrial output while rebooting the energy transition.

A few of the stories from Tethra Energy

World: Ukraine Protesters Want Answers on $15 Billion Russia Aid

Ukrainian anti-government protesters demanded to know what President Viktor Yanukovych had ceded to seal $15 billion of Russian financial aid and a one-third discount on energy imports.

Russia will buy Ukrainian state debt this year and next and will cut the price it charges for natural gas to $268.50 per 1,000 cubic meters, President Vladimir Putin said after meeting Yanukovych in Moscow yesterday.

World: Chevron Sets 2014 Budget At $39.8B

Chevron Corp plans to spend $39.8 billion on projects and exploration in 2014, the second-largest U.S. oil company said on Wednesday, as it finishes work on huge developments in Australia and the Gulf of Mexico.

World: BP signs $16 billion tight gas project deal in Oman

BP will drill some 300 wells to flush gas trapped deep under the Omani desert over the next 15 years in a $16-billion (£9.8 billion) project that Oman is relying on to keep its economy growing.

World: Natural Gas to become world’s second main fuel

According to a new research made by ExxonMobil, the world’s largest oil and gas firm, in about eleven years gas will be the world’s second main fuel on an energy-equivalent basis, only behind oil. Natural gas will surpass coal as a global energy source in part because of the green benefits it offers.

It expects that natural gas consumption will register an increase of about 65% by 2040, as new reserves had been discovered by technical progress enabling extraction from previously inaccessible rocks ( shale gas), and worry about pollution, including greenhouse gas emissions, which are encouraging the use of cleaner options to coal.

My Selection At The Edge of Time

World: U.S. Crude Output to Climb Toward Record by 2016, EIA Says

U.S. crude oil production will approach a record by 2016, climbing to the highest level in 46 years as rising output from shale formations lifts domestic supplies, reducing the nation’s need for foreign oil.

World: North America to Drown in Oil as Mexico Ends Monopoly

The flood of North American crude oil is set to become a deluge as Mexico dismantles a 75-year-old barrier to foreign investment in its oil fields.

World: Warren Buffett Orders $1 Billion Of Wind Turbines, As Wind Rivals Coal

Utility company MidAmerican Energy Holdings Co., a subsidiary of Warren Buffett’s Berkshire Hathaway Inc., has announced it’s ordering around $1 billion of wind turbines for wind power projects in Iowa, Bloomberg has reported.

World: Utilities face “perfect storm” from renewables, storage

A new report from leading utilities analysts at investment bank UBS suggests that energy utilities in Europe, north America and Australia are facing a “perfect storm” from the falling costs of renewables, energy efficiency and falling demand, and may not be able to sustain their business models.

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6 Responses to Blowout week 51

  1. Clive Best says:

    According to Maria van der Hoeven of the IEA last week in Paris, coal will surpass oil to become the world’s primary energy source by 2015! This is being driven by huge growth in ASEAN countries independent of whatever climate policies Europe or US adopt.

    • Euan Mearns says:

      Clive, if Dave Rutledge calls by he may disagree with you on coal. A lot of this comes down to resources versus reserves. UK is a case in point. Mines with coal left in em get closed down because they are uneconomic – a mine shaft is sunk at the optimum point – thick seam, no geological faulting. The further you get away from the shaft, seams get thinner, geologically more complex and you by this time have a huge mine to maintain. China is simply struggling with the logistics of getting at new coal resources and transporting them to market.

  2. G. Watkins says:

    Thanks for your informative and interesting posts.
    Nadolig Llawen a Blwyddyn Newydd Dda from South Wales (but Scottish wife).

  3. Kit P says:

    The responsibility of a utility is to provide power when and where it is needed not to pay customers ‘to switch off’. Yes, I am old school. Good utilities do it on very hot and cold days with a mix of power plants and adequate reserve margin. They are well manged and provide power at lower cost than those not as well managed. The best job in the world is working for a well managed power company and it is very frustrating to work for one than is not. When I worked at a nuke plant in California, the PUD offered a discount to turn off AC units at houses. On a very hot day, I got a call from a lady friend that her AC was turned off. The AC was not turned off at any PUD faclity
    If you have to put the word ‘smart’ in front of grid or meter, then it is because of stupidity. The first customers in line to have power shut off is the CEO of the power company and the governor.

    • Euan Mearns says:

      The responsibility of a utility is to provide power when and where it is needed not to pay customers ‘to switch off’.

      Kit, this is very quaint idea, outdated in Europe where we have a Brave Green World. In the UK we have a coalition government between Conservatives (pseudo pussy like Republicans) and Liberal Democrats. The latter love everything Green. They are convinced that CO2 is going to cause climatic Armageddon, they're really not that keen on nuclear and so are gung ho on renewables – and currently have a disproportionate say in our energy policy. None of our politicians are actually that capable of thinking their way through the energy and climate mine field and there has been a long tradition of them following advice from the Civil Service which has somewhat worryingly been infiltrated by Greens to the highest level. The most famous example is David MacKay who once wrote a popular book. He is Chief Scientific advisor to the UK government on energy. He understands the physics and engineering, is actually pro-nuclear, but cannot escape his Greenthinking legacy and attachment to renewable energy. The self appointed experts tell everyone that CO2 is going to destroy the planet and a large overlapping group of self interested experts tell everyone that it is simple to transition to renewable energy that is a cheap, clean, reliable alternative. None of this of course is true. Who in their right minds, faced with this barrage of miss information would support anything other than the Green Dream?

      But it doesn't stop there. We also get dictated to by the European Union where they are ultra bright Green, and they are unaffected by orders to close down power stations in Britain. The plan is to phase out coal fired power in Britain by 2020. The sooner the public and Conservative politicians waken up to the consequences of that the better. Greens have infiltrated the board rooms of utilities who now, rather than voice concern about the integrity of our power generation infrastructure simply say:

      that’s fine, let’s have power cuts instead

  4. Kit P says:

    Euan, take a deep breath, it will turn out ok. I am a liberal Republican from a family of liberal Republicans. Many of the things I was passionate about in my youth are now conservative things because they work so well. I guess that make me a ‘neo conservative’.
    On matters of effective environmental policies, the first great environmental president was Teddy Roosevelt who thought we should not imitate Spain by cutting down all of our forests. Then came Nixon who thought our rivers should not catch fire. So did my father and was more than a little angry about it. It was his boyhood river that caught fire. Twenty years later he calls me after visiting where he grew up. His boyhood swimming hole is now a national recreation area.
    George Bush implemented some very good environmental polices especially for AGW and forest health. This is ironic when you consider how ineffective Clinton/Gore/Obama have been. There is no reason that we can not build new nukes, more efficient coal plants at the same time time we build wind farms.
    Just for the record, the greens who engineered the California blackouts got recalled (aka fired).

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