New Russian power plant opens for Winter Olympic Games

Russia’s state-run utility Inter RAO has opened a new power plant to provide 25% of the electricity required for the Winter Olympic Games, which are to be held in February 2014 in Sochi, on the Black Sea. The Dzhubginsky plant consists of two 90 MW gas-fired units employing General Electric turbine technology, and came in at a cost of $US 310 million (€231 million). Inter RAO stated that the plant has a high resistance to seismic events, enhanced protection against other natural disasters, and a high level of environmental performance. The plant will be a big step towards ending blackouts reported by athletes who have already begun training at the Games site.

EC looking at renewable energy surcharge exemptions for German steel and cement makers

In Germany, heavy industry is worried that the European Commission may investigate the exemptions it enjoys for the renewable energy it purchases. There are around 2300 companies, including some in the steel and cement sectors, that do not have to pay surcharges for renewable energy as other consumers within Germany do, and there is a suggestion that this subsidisation is anti-competition in the EU context. German government and industry representatives were to travel to Brussels in early November to discuss the issue with the EU Competition Commissioner, the position of the German government appearing to be that it may be acceptable to reduce the number of companies that are exempt from the surcharges. The EC is torn between maintaining fair competition amongst member states and wanting to maintain the strength of German industry. German steel and cement manufacturers will be watching carefully.

Voestalpine optimistic about profits despite mixed picture for European steelmakers

In other news relating to the steel industry, Austrian steelmaker Voestalpine has said that it is relying on an improving economy to help it reach its yearly profit goals, after a worse than expected second quarter earnings. Both its Steel and Special Steel divisions did worse than expected, while its higher-tech Metal Engineering and Metal Forming divisions performed well. After a long period of stagnation in the sector, and despite the recent disappointing results, Voestalpine maintains that “the prospects of growing global economic momentum in the course of 2014 seem to be sound.” It expects growing demand for its products in Europe, North America and China.  Elsewhere in the steel industry, both ArcelorMittal and Salzgitter have lowered their yearly profit projections already this year, though the former was expected to report higher earnings for the most recent quarter in early November. European steelmaking overcapacity is still estimated to be at around 30-40 million tonnes, according to Voestalpine.

Gaza’s sole power plant shut down from lack of fuel

The sole power plant in the Palestinian territory of Gaza was forced to shut down in early November following a shortage of fuel. Supplies were being imported from Egypt via secret tunnels linking the Gaza to Egypt, but their increasing closure in recent months has meant a dwindling of supply. An alternative supply had seemed to present itself when the Palestinian Authority (which has partial control of the West Bank) had offered to sell the Gaza Energy Authority 400,000 litres of fuel per day without tax, but the offer was then changed to include tax, which was considered unaffordable by the Gaza Energy Authority. Without the 65 MW Gazan power plant operating, Gaza will now rely only on existing imports from Israel (120 MW) and Egypt (27 MW). Power outages, which were formerly at eight hours per day, are expected to climb to 12. Power supply per person in Gaza will now be at a level around 1/20th of that in Israel.

Israel-Turkey gas supply prospects hanging on political situation

Israel’s longer-term energy future is looking bright, meanwhile, and it may also indirectly benefit Gaza. With the recent discovery of enough gas in its waters to last generations, Israel is expected to become a gas exporter by 2020. One major potential customer is Turkey, a former ally but now more distant politically. Turkey’s Zorlu Energy is in discussions with Israeli companies about the prospect of a $US 3.5 billion (€2.6 billion) gas pipeline linking the two countries, which appeals to Turkey as it would weaken its dependence on Russian gas. The pipeline would be partially undersea, and run to central Turkey. However, the Turkish government has a clear (though perhaps not entirely firm) condition that closer political ties require Israel lifting its embargo on Gaza, and compensating relatives for the killing of nine Turks by Israeli forces in 2010 during the Mavi Marmara affair. Compensation has been promised but not yet paid, and there has been no promise yet on the lifting of the embargo. Relations have also been strained by Turkish Prime Minister Tayyip Erdogan’s description of Zionism as a crime against humanity.

Iran-Pakistan gas pipeline looking unlikely

Keeping with geo-political energy supply matters, Iran’s Oil Minister, Bijan Namdar Zanganeh recently stated that the country is unlikely to export gas to Pakistan because of the Pakistani government’s request for Iran to finance the building of a pipeline on Pakistani soil. Iran, which possesses the world’s second largest gas reserves after Russia, does however plan to export gas to Iraq, the United Arab Emirates, and Oman. The United States has threatened Pakistan with economic sanctions if an Iran-Pakistan pipeline goes ahead, which may explain Pakistan’s stance.

Doosan Power Systems to work with Groupe ADF on biomass conversion of French E.ON unit

Doosan Power Systems has entered into an 18-month partnership with French maintenance specialists Groupe ADF, after Doosan was earlier awarded a project by E.ON to develop a biomass conversion facility and turbine upgrade of the third unit at the coal-fired Provence power plant in Gardanne, France. The project will make the biomass-fired unit France’s largest, fitting with E.ON’s “cleaner, higher performance energy” strategy. The feedstocks are expected to be forest chips, green residues and recovered wood, and the unit will run at 150 MW. Doosan will have to covert the circulating fluidised bed as part of the work, which is to stretch into 2015. Doosan’s subsidiary Doosan Lentjes, which installed the original CFB in 1992, will be undertaking the conversion work, while Doosan Škoda Power will replace the inner steam path of the existing steam turbine. Doosan Babcock will work on other equipment, and Groupe ADF will assemble the equipment.

General Electric to supply equipment for gas-fired plant and repair coal-fired unit

General Electric has been chosen to supply around $US 200 million (€148 million) of equipment for a new 674 MW gas-fired combined-cycle power plant to be built at Salem Harbour, Massachusetts, USA. The plant, being built for Footprint Power, is to enter service in June 2016, and will replace the coal- and oil-fired units currently at the site, which are 60 and 40 years old, respectively. General Electric is also involved in repair work at the 428 MW coal-fired Unit 1 at the Craig power plant in Colorado, which is co-owned by the Tri-State Generation & Transmission Association. The unit was damaged by water, and the repair work involved rewinding the generator and rebuilding the high pressure/intermediate pressure steam path components.

Sri Lankan government requests speedy completion of Norochcholai plant after scheduled date is missed

The Sri Lankan government has requested the Chinese developers of the Norochcholai power plant, being built on the country’s west coast, to complete the project more speedily. The first stage of the project, a 300 MW coal-fired unit, is already complete, but the second stage, consisting of two 300 MW units, is not yet complete. The first of the stage two units was to be complete in October this year, while the second was due to be complete in May next year. With the October milestone not being met by China Machinery Engineering Corporation (CMEC), the Sri Lankan Power and Energy Ministry made the request for completion as soon as possible. The $US 1.35 billion (€1.01 billion) project is being financed mostly by the EXIM Bank of China.