Regulation & Policy

Power shortages in South Australia’s heavily wind-reliant electricity market have highlighted the urgency of developing backup capacity, the grid operator warned. Prices had surged tenfold to hit $14,000/MWh amid severe supply shortages, prompting policy makers to plea for the restart of a mothballed gas power station.

ACEEE’s 2016 International Energy Efficiency Scorecard has ranked Germany as the frontrunner for energy efficiency, followed by Italy and Japan (tied for second place), France and the UK. Though Germany scored highest for ‘national efforts’, ‘buildings’ and ‘industry’, it was overtaken by India, Italy and Japan in the ‘transport’ category. 

Importing cheap hydropower from Norway and Denmark is deemed a ‘quick fix’ for Britain’s capacity shortage as investment in new large power projects is hard to come by. Yet, Britain’s vote to leave the EU is jeopardizing the future use of interconnectors in the UK capacity market scheme. Demand-side response and power storage are some of the options left.

Uncertainty over the future operation of Britain’s energy market, rising financing costs and post-Brexit challenges to include interconnectors in the UK’s capacity market are expected to “add a risk premium into all forward capacity auctions,” Cornwall Energy says. Higher clearing prices at auction could add over £360 million to consumers’ energy bills.

Theresa May, the new UK Prime Minister, has shut down the Department of Energy and Climate Change (DECC) and moved responsibilities to the newly created Department for Business, Energy and Industrial Strategy, led by Greg Clarke. Critics in Whitehall voiced concerns that the new government places less importance on closing Britain's power gen capacity gap as main attention lies on Brexit.

US consumer watchdog has warned the California Independent System Operator (CASIO) against introducing a ‘Western Power Grid’ that would strengthen links between eight states and facilitate more electricity exports to Mexico. Critics warn this would be “burdening consumers with higher costs [of generation] to benefit investors,” while proponents say an interregional grid would help save nearly $1 billion over the next decade.

Over two-thirds of households in Myanmar still lack access to electricity, so new centralised gas power plants – like the Sembcorp’s 225 MW Myingyan combined-cycle gas power project – are deemed “vital” to supply much-needed electricity to the grid.

A flurry of power plant closures this spring has spurred the UK government to buy more electricity generation capacity and buy it earlier. Up to 53.8 GW of capacity for delivery in 2017/18 will be procured in an ‘early auction’ next January, while the volume of the T-4 auction in December for 2020/21 delivery was raised by around 6 GW to now 52 GW.

An $18 million program to install a state-wide micro grid, powered by distributed gas-fired turbines, is underway in the US costal state of Connecticut. Deployment is fast-tracked in response to hurricane Sandy, with $18 million in funding made available through the ‘DEEP Microgrid Pilot Program’.

Daily electricity generation in Nigeria has reached another low point, plummeting to just over 2,520 MW on Friday – a far cry from estimated peak demand of 17,720 MW. Yet in the face of a domestic gas supply crisis, flaring of associated gas continues and foreign private investment in domestic power & gas projects is hard to come by.

Following the abrupt withdrawal of £1 billion CCS funding by the UK treasury, Whitehall now has to set out its ‘Carbon Plan’ to explain how it will meet targets set in the Paris Agreement without capturing carbon from fossil power plants. Today, CSSA detailed ‘36 lessons-learned’ from UK CCS programmes – a retrospective.  Scotland’s SCCS warned any alternative climate action might cost even more dearly.

Uncertainty abounds after Britain voted for Brexit amid concerns over implications on foreign direct investment, not least in the UK energy sector. The very future of the Hinkley Point nuclear power project is up in the air, as observers warn that the departure of UK prime minister David Cameron might give EDF a pretext to pull the plug on financing.

Cross-border electricity flows need better TSO coordination, as do capacity measures set by national policymakers, if Europe wants to achieve its energy security policy objectives. As Fabien Roque, senior vice president for Compass Lexecon Energy put it: “We will only be able to address issues of coordination in capacity markets if we can deal with simultaneous scarcity situations.”

Unsubsidized renewable spot prices in many markets are now equal to or below gas power prices, prompting substantial changes in generation requirements. “We are in the midst of transition to a new energy paradigm and this implies consequences for traditional generation. The first need is a much higher efficiency for all plants along with greater flexibility,” Enrico Viale, Enel Group’s head of global thermal generation said at the opening of Power-Gen Europe in Milan today.

Implementation of the EPA’s Clean Power Plan will accelerate the growth of renewable generation and the phase out of coal power plants throughout the United States. Wind and solar power is set to will overtake coal-fired generation by 2029, while gas power capacity will exceed coal-fired plants by 2022, according to EIA projections.

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