Regulation & Policy

The UK government needs to come up with another option to avert a looming electricity shortfall, after EDF pushed back a final investment decision on its Hinkley Point C nuclear project from May to the autumn. The reactor was meant to start up in 2017 but is now unlikely to produce any electricity before 2025.

The Turkish President Recep Tayyip Erdoğan has announced investment of $110 billion in the energy sector over the next ten years, stressing the goal of satisfying Turkey’s energy demand by tapping domestic resources such as coal, hydropower and renewables in order to minimise import dependence.

State subsidies to encourage the construction of gas-fired power plants in New Jersey are likely to be banned by the Supreme Court – similar to this week’s ruling against a Maryland scheme. Both state programs had been challenged by the power producer PPL and other generators.

Ongoing repairs at the sabotaged Forcados Export Plant not only restrict Nigeria’s oil exports but also affect about 40% of the country’s domestic gas supply, causing major fuel shortages for power generators.

By 2020, Mexico is tipped to turn into a ‘Global Top 10’ market for stationary gas engines used for distributed power. This trend comes as implementation of a historic energy bill is bringing about market deregulation and ended the quasi monopoly of state-owned CFE.

National Grid, the British transmission system operator, forecasts that utilities will make more use of their combined-cycle gas turbine (CCGT) generation this summer, propelling gas demand up to 35.5 Bcm from 1 April to 30 September – a 1.3 Bcm rise from last year’s summer season.

Forecasts over the past decades have consistently overestimated gas demand in the European Union. Hence, analysts at Chatham House warn that a further expansion of Europe’s gas infrastructure at a time of softening demand could result in investment being locked into ‘stranded assets’.

The Nigerian Electricity Regulatory Commission (NERC) has issued a generation licence to the Ondo state government and its partner Kingline Development Company of South Korea to generate 550 MW of electricity in state’s first Independent Power Project (IPP).

Up to nine gas-fired power plants are likely to restart operations from April after India’s third e-auction process for subsidy to buy costly imported gas, regasified LNG. Yet during the bidding process, power producers placed near zero bids to procure RLNG but rather preferred to buy gas at a guaranteed floor price.

The British energy regulator Ofgem is gearing up to address the issue of how much decentralised generators need to pay for grid services. “Embedded generation is perceived to be getting a free ride in terms of network charges. We are looking into that,” said Ofgem’s CEO Dermot Nolan.

Gas shortages, pipeline sabotage and vandalism of power grids were cited by the Nigerian government when it apologised to its citizens for the latest serious of blackouts. Information minister Alhaji Lai Mohammed, promised there would be a “decent improvement in the power situation from this weekend,” as he referred to “ongoing remedial efforts” that should double electricity supply to 4,000 MW.

Judicial risk is posing a threat to plans of the Japanese government to restart the country’s nuclear fleet in a bid to rekindle nuclear baseload power and reign in gas generation. A regional court this week restricted Kansai Electric from operating two reactors in western Japan.

Demand flexibility, power storage and interconnection are meant to help the UK meet its 2050 carbon targets, strengthen security of supply and allow consumers save up to £8 billion a year by 2030. 
The National Infrastructure Commission (NIC) advocates more power cables to import cheap hydropower from Norway and Iceland, incentivising industries to curtail power use in peakload hours as well as storing excess energy produced by renewables.

To ensure “peace of mind” for industrial and household electricity customers in Britain, the UK government plans to start its capacity trading market one year earlier than planned. This move is meant to avert blackouts in the coming winter as closure of major coal power stations is adding supply-side risk. Now, an early capacity auction has been pencilled in for January 2017, for delivery in winter 2017/18.

The scope for gas in Britain’s power mix without carbon capture and store (CCS) is “very limited”, the UK Energy Research Centre finds. The role of gas as a ‘bridge’ fuel will be questioned way before 2025, by when the UK energy minister wants to phase out all unabated coal capacity. UKERC analysts warn that a gap in capacity, caused by the coal exit, cannot simply be covered by new gas generation.

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