• Combustion Industry News

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      Patrick Lavery

      Combustion Industry News Editor

Business Trends

Norway and the UK have signed an energy pact aimed at exploiting the Arctic and North Sea’s oil and gas reserves and at co-operating on carbon capture and storage initiatives, Reuters reports. Norway is Britain’s second largest energy supplier behind Russia, providing a third of Britain’s gas needs. The UK hopes that the pact will mean more affordable energy in the long-term, while both countries see the pact as helping to create jobs in the energy industry.

The International Energy Agency has predicted that shale gas could deliver cheaper, cleaner, more secure power for years to come if environmental concerns do not destroy its credentials. Already established in the US, where it has resulted in a natural gas price reduction of 45%, the IEA believes that the shale gas industry is at a global tipping point. Expansion could be rapid if enough work was done to investigate and resolve environmental concerns, but failure to do this would mean the industry would struggle to spread, as public opposition would be too strong. The IEA has developed a set of ‘golden rules’ for the industry to follow to address the concerns.

The Wall Street Journal has reported that the US state of Texas is facing possible blackouts over its coming summer, with a power generation shortfall of 2,500 MW. Electricity prices are currently seen as too low to spur investment in new generation capacity. Texas has a regulated price ceiling of $3000 per megawatt-hour at peak times, the highest in the US, but consultants The Brattle Group recommend it being increased to $9000. The state’s transmission links with surrounding states are not good, meaning that importing power is difficult.

Legislation and Regulation

Eurofer, the European steel industry trade body, has announced that the European Court of Justice has declared inadmissible a case that Eurofer had brought in relation to carbon permits under the EU Emission Trading Scheme (ETS). The case was launched in July 2011, arguing that the benchmark the European Commission had set for steelmakers to be given free carbon permits from 1 January 2013, when the next phase of the ETS begins, was too onerous. In the next phase, steelmakers will be given permits according to an efficiency index based on the emissions performance of the top ten per cent of performers in the EU. Better performers will be given more free permits. The industry argues that an overly onerous system will force industry away from the EU to emit higher emissions in foreign lands, producing an outcome unwanted by the Commission; the Commission says that it will assist industry such that this will not happen.

Indian steelmakers are routinely in breach of Indian environmental laws, according to a report by New Delhi-based research and advocacy group Centre for Science and Environment. It says that laws in relation to air pollution, solid waste, carbon emissions and water pollution were not being met by most steel companies, and that in general the mills consumed 50% more electricity than the global average. The occupational health and safety record of the companies was also described as being poor, with 17 deaths over the period 2008-2010. However, while the environmental record of existing plants is substandard, it appears that environmental considerations are limiting the expansion of the industry, with iron ore mining banned in some areas of the state of Karnataka, and some proposed steel mills not gaining regulatory approval for construction. Amongst the worst performers environmentally was the state-run Steel Authority of India, while amongst the best was Tata Steel.

The Malaysian Minister for Energy, Green Technology and Water has announced it will be opening up a competitive bidding process for the commissioning of a 1,000 MW power plant by 2017. The tender is expected to come out by the end of the year, according to the Malaysian Business Times. Depending on the outcome of the process, there might also be 2,000 MW of capacity commissioned in 2018 and 2019 under separate tendering processes. Sixty per cent of power generation in Malaysia is gas-fired, but the country expects coal to play an increasing role in the future.

Company News

The Financial Times has reported on the uncertain future of EDF’s CEO, Henri Proglio, who has led the company for the last two years. Mr Proglio has a five-year term at EDF, but was seen as a supporter of Nicolas Sarkozy, the former president. With the election of Francois Hollande as the new French president, there is a question mark over if the new government will act to replace Mr Proglio. The case to dismiss Mr Proglio is strengthened by the EDF share price having dropped 43% since the Fukushima nuclear disaster, but according to the report, many see Hollande as a pragmatist who would not like to unsettle the company as it aims to secure international contracts.

Alstom has announced the winning of a contract to supply one of its GT13E2 gas turbines, as well as a generator, to Harbin Turbine Company for a combined cycle power plant in Shenzen, China. It will be the second turbine of that type at the plant, the first being installed in 1995. A long-term service contract was also signed for both gas turbines.

Fuel Tech has announced it has been awarded air pollution control contracts totalling $US 4 million/€3.2 million. They include an order for a NOx reducing selective catalytic reduction (SCR) system to a carbon black facility in China, urea-to-ammonia conversion units to a coal-fired power plant in China and to a US industrial unit, and a selective non-catalytic reduction (SNCR) unit to a coal-fired power plant in the US. Fuel Tech stated their satisfaction with the increase in business dealings in China.

Poland’s largest electricity utility, PGE, has announced that it has shelved plans to construct a €600 million/$US 748 million pilot carbon capture and storage plant due to the poor financial circumstances surrounding the project, the Financial Times has reported. The plant, which was to be constructed in Belchatow in central Poland, next to one of PGE’s existing brown coal-fired power plants, will be shelved until the financial picture improves, either through government subsidy or a significantly better outlook for the price of carbon in Europe, or both. According to the report, it would cost around €60-65/$US 75-81 to sequester each tonne of carbon, while the price of carbon in the EU Emission Trading Scheme currently sits at just over €6. Meanwhile, another carbon capture project in Poland, by Zaklady Azotowe Kedzierzyn (a chemical company) and Tauron (a utility) has also stalled.

And Finally…

The Chinese government has hit out at foreign embassies releasing air quality monitoring data over the internet. The US embassy in Beijing, which releases hourly Twitter updates of data it collects using its in-house monitoring equipment, appears to be the target of the criticism, though it was not named. China says that release of air quality information is an internal matter, and in accordance with the Vienna Convention on Diplomatic Relations, foreign embassies should not interfere in internal affairs. The discrepancies between official Chinese air quality reports, which according to Reuters often use terms such as ‘slight’, and those of the US embassy seem to be the chief cause of the criticism.