Power producers, water utilities and distribution grid operators nevertheless are taking precautions to slow the virus's spread and minimise the infection risk for their employees.

Utilities are allowing employees to work from home if possible, urging them to avoid external contacts and seeking to establish separate teams that can maintain services independently. Moreover, the utilities are trying to identify possible bottlenecks in advance to ensure power supply is not interrupted if some workers are infected and must stay home.

VKU head Michael Wübbels welcomed the decision by several German states to include energy company employees in the list of systemically relevant occupations, which also covers police, firefighters and medical staff. Parents from these occupational groups will be provided with public childcare options even though schools and kindergartens across the country are gradually being closed over the course of this week.

The association VKU represents more than 1,500 local utilities with nearly 270,000 staff who work in energy, water and waste management in Germany's municipalities.

In its response to the global coronavirus pandemic, Germany's federal government and its state governments decided at the end of last week on substantial measures to reduce social interaction and thereby prevent infections across the population, such as prohibiting mass events, limiting international travel, shutting down clubs, bars and other venues, and reducing schooling and childcare.

Pipeline capacity into New England from both Canada and New York was 5,200 MMcf/d at the turn of the year 2019/20, according to U.S. government estimates. During days of peak demand in the winter, most of this capacity is fully utilized, which can lead to spikes in spot natural gas prices and, in turn, wholesale electricity prices.

Winter utilization on the Algonquin Gas Transmission pipeline near the New York and Connecticut border, for example, has averaged about 89% so far this winter (Nov 1, 2019 -- March 6, 2020), according to EIA's New England Dashboard reports on daily pipeline utilization. The four new pipeline projects are hence hoped to ease the pipeline constraints and ease gas deliveries.

The largest pipeline upgrades, proposed to the Federal Energy Regulatory Commission (FERC) in February, is the Iroquois Enhancement by Compression Project. By increasing the horsepower at three compression stations in New York and Connecticut, the capacity of the Iroquois pipeline will increase by 125 MMcf/d. If approved, the project is expected to start construction in spring 2023 and be placed in service by November of that year.

Two upgrades are in planning on the Portland Natural Gas Transmission System, designed to increase gas imports from Canada received from the TransQuébec and Martimes pipelines at Pittsburg, New Hampshire. These projects are the Portland Xpress Project Phase III, which will add 24 MMcf/d of capacity in 2020, and the Westbrook Xpress Project Phase II, which will add 63 MMcf/d of capacity after its expected completion in 2021.

Better onward gas flows from New England to New York will be facilitated by the 92.7 MMcf/d Algonquin's Atlantic Bridge Phase II project which is expected to enter service either later in 2020 or in 2021. Moreover, the Tennessee Gas Pipeline's Station 261 Upgrade Projects will provide an additional 72 MMcf/d of capacity, if put into service as planned in the autumn of 2020.

Deutsche Bank analysts pointed out that unlike in 2009, when the recession mainly impacted manufacturers, the services sector is severely hit this time, too. The Leibniz Institute for Economic Research (RWI) in Essen, meanwhile, cut its forecast less drastically, predicting a decline in GDP by 0.8 percent in 2020.

Lockdown helps curb emissions

The pandemic's economic impact will likely be more profound than during the financial crisis, as all regions of the world are affected, and because it is both a supply and demand crisis. Energy use is faltering as many European states are in a state of lockdown to contain the spread of the virus, but it is difficult to extrapolate the effect on emission.

“The CO2 intensity of electricity is lower today than it was in 2009, meaning that a decline in power consumption might have a smaller impact than it did then," said Martin Cames head of energy at the German Öko-Institute. "On the other hand, the oil price collapse, falling prices for coal and cheaper emissions certificates could boost demand for fossil fuels – for example coal demand in power stations at the expense of gas."

In China, emissions plunged 25% below normal levels as a consequence of the pandemic and analysts expect this trend will replicate around the globe. Germany could see emissions fall between 50 and 120 million tons in 2020 depending on the depth of the economic slump.

Re-energizing after the crisis?

Though the virus-induced standstill helps curb energy consumption and emissions, analysis of earlier crisis shows that such a temporary drop in emissions does not help in the long run.

"If you look at the economic crisis, the slump with low emissions was followed by an even stronger economic upturn and higher emissions. Consumption was partly reversed and then caught up," Germany's Environment Agency said, adding that a sustainable restructuring of the economy was needed.

"Financial support to bolster the economy should hence be aligned with climate targets and the EU Green Deal,” analysts urged. For example, a blast furnace that has to close should come back as a [low-emission] plant when demand rises again. Or the car factory for combustion engines, which has now come to a standstill, should start up again as an electric vehicle factory.

Citigroup pegs the amount of gas demand lost in China due to Covid-19 at around 8 billion cubic meters (Bcm), down by nearly one-third of an average month’s consumption.

Early signs of China’s economic recovery were overrated by analysts in the hope of a quick rebound in oil and gas demand of the world’s largest commodities buyer. However, the Shanghai Petroleum & Natural Gas Exchange cautioned that the oversupply situation remains relatively unchanged, hence LNG imports are expected to remain sluggish through April.

Power generation in China notched up in April, after falling by a staggering 8.2% in January and February when the country was on lockdown to contain the coronavirus pandemic. Factory output in the first two month of 2020 turned out 13.5% lower from the pre-year period, while retail sales plunged by 20.5%, according to government data.

Invokes force majeure amid demand destruction

Fuel demand has faltered, with state-owned energy major CNPC indicating it has fallen by as much as 26% during the first quarter of the year. Hence, PetroChina on March 5 suspended gas imports - both LNG and pipeline gas, citing force majeure.

CNOCC in early February had already sent force majeure notices to its key suppliers, notably Shell and Total which both disputed the legal grounds of this instrument and have since called for compensation. "We have received one force majeure that we have rejected," said Philippe Sauquet, head of Total's gas, renewables and power unit.

Gazprom had been taken by surprise by PetroChina’s halt in gas import but has since closed the $55 billion Power of Siberia Pipeline, allegedly for maintenance. The shutdown started in mid-March and is expected to last for a good two weeks.

Invoking force majeure to put off LNG deliveries is "contractually complex," cautioned Wood Mackenzies’s research director Robert Sims. "Contract wording will need to specifically include epidemics as force majeure events," he said. "Demand reduction on its own or a notice by a relevant Chinese government authority will likely be insufficient."

Accommodating measures, including suspensions of power cuts, are also being granted by Ameren, Evergy, FirstEnergy, Georgia Power, NV Energy, PECO, Southern California Edison, Xcel Energy and others, according to the Edison Electric Institute.

Government bodies have mandated a suspension of power and gas supply cuts to non-paying customers statewide California, Connecticut, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Virginia and Wisconsin. Meanwhile, West Virginia regulators are merely “urging” utilities to suspend such disconnections.

Covid-19 relief package

The relief measures came into force after 16 Democratic U.S. Senators urged the Senate leaders to adopt a third Covid-19 relief package that includes the nationwide suspension of all utility disconnections as well as a waiver for late fees.

These suspensions are advocated to cover all homeowners and businesses, and should remain “in place at least until the pandemic threat has passed and the country’s economy has stabilized.”

However, not all utilities have been clear as to how they handle customer relief policies. NRG Energy, with service territory across multiple states, issued a statement saying that it extended its “ongoing support to those who may need us,” but offered no comments on updates to its disconnection policies.

In Michigan, Consumers Energy is helping only certain customer classes. “We are suspending shutoffs for non-pay for low-income and senior customers beginning March 16 through April 5, 2020,” said Director of Media Relations Katie Carey. “Senior citizens and qualified low-income customers already enrolled in our Winter Protection Program have already had their end dates extended through April 30, 2020, without any additional actions required on their part.”

Ship-tracking data from Refinitiv Eikon shows that India imported some 2.36 million tonnes of LNG in February, which surpassed an earlier record of 2.3 million tons set in October.

The low spot prices are creating some downstream demand in India, especially from the city-gas sector and for power generation. Some cargoes headed for China have been diverted to India, and a few bargain-hunting Indian buyers have issued tenders for spot cargoes - some even for several months.

Reliance Industries is understood to have issued a tender for five cargoes for April to June delivery, while Gujarat State Petroleum Corp (GSPC) sought nine cargoes for February to April.

However, demand-side growth in some opportunistic buying markets like India is threatened by the spread of the virus, analysts at Energy Aspects cautioned. India has just declared 114 cases, which is up from three at the start of the month.

Infrastructure bottlenecks

Though power producers are eager to switch fuel and take advantage of cheap LNG imports, there are some infrastructure constraints that hamper a quick and substantial shift to gas generation. The start-up of Mundra LNG terminal and H-Energy’s Jaigarh terminal as well as the timing of the completion of GAIL’s Kochi-Mangaluru pipeline are expected to greatly determine Indian LNG demand growth in 2020.

According to our LNG Market Tracker, H-Energy is preparing to start commercial operations at its FSRU-based LNG terminal at Jaigarh Port in the second quarter this year. Movements of the chartered FSRU GDF Suez Cape Ann have been tracked off the Maharashtrian coast, and the vessel is about to approach the port of Jaigad, where it will nominal LNG capacity 4 million tonnes per annum (mtpa).

H-Energy, through its subsidiary H-Energy Gas Marketing, will source LNG from Malaysia to supply regasified methane to downstream customers via a 60km feeder pipeline to the national gas grid at Dabhol. The developer is also building a 635km pipeline connecting Jaigarh to energy-hungry Mangalore – dubbed India’s ‘Silicon Valley’ – which is scheduled for completion by 2023.

The Indian government is backing power plant conversions from coal to cleaner-burning natural gas as well as renewables, in a bid to improve air quality in the country’s big cities and reign in respiratory health problems.

The Saudi-Russia oil price war and the coronavirus-induced slump in demand have hit the oil and gas companies hard. However, large numbers of U.S. shale fracking firms were already distressed before that latest double-whammy.

Total long-term debt rose to $106 billion at the end of 2019, an increase of $1.5 billion from the prior year, and the highest level since 2015, according to figures by the Institute for Energy Economics and Financial Analysis (IEEFA).

Revenues fall despite rising production

Despite higher production levels, total 2019 revenues among this cross-section of companies fell by $5.6 billion year-over-year. Collectively, these companies reported net losses of $6.7 billion in 2019, according to IEEFA findings, largely due to accounting impairments and write-downs of oil and gas assets.

Looking at quarterly results, IEEFA’s cross-section of fracking-focused enterprises achieved modest positive free cash flows in the second and fourth quarters of 2019. But those gains were outweighed by the losses in the first and third quarters.

Fracking – a money loser?

Exploration & Production (E&P) companies have created an oil and gas glut that has not been rewarded by anticipated earnings, analysts noted. The shale revolution has, in fact, propelled the U.S. into becoming the world’s most prolific oil producer.

“In financial terms, however, fracking has been an unrelenting money loser for at least a decade, and investors are taking notice,” said IEEFA analyst Clark Williams-Derry. “It is getting harder and harder for these companies to raise the capital they need to stay afloat.”

As the coronavirus pandemic deepens and a global recession looms large, the oil and gas sector’s financial distress will likely accelerate.

The utilities sector is the only one of the Stoxx Europe 600 subgroups to have gained value, up about 11 percent so far this year as investors are buying ‘defensive stocks’ to shore up their portfolios for a looming recession. Regulated utilities tend to generate fairly stable returns even at times of economic weakness.

Shares in Italy’s Enel have consequently gained 14% since January, the UK’s National Grid also added 10% this year, while EDF shares surged 34.7% in the same period, including a 17% jump in February.

In the United States, several utilities stocks gained well over 10% over the past week notably American Water Works, Southern Company and NextEra Energy.

Lockdowns slash industrial energy demand

France imposed a near-total lockdown and Spain announced its quarantine will last more than 15 days, significantly impacting electricity demand from industries and the commercial sector. Domestic energy consumption might, however, help offset the steep drop in energy use from industry and commerce whose activities have ground to a halt amid the coronavirus lockdown.

In Spain, the power transmission operator REE said electricity demand had already fallen 2.7 percent in 2019 compared to 2018, the first year-on-year drop in the past five years. Industrial energy demand has fallen off a cliff. Turbine maker Siemens Gamesa, for example, reportedly closed its San Fernando de Henares plant in Madrid after an employee tested positive for the coronavirus.

Corona-struck Italy has seen demand for natural gas plunge 8% from the previous week, with similar declines likely in other EU countries as national government impose lockdowns to contain the virus. Industrial demand is “particularly volatile,” while gas generators will “bear the brunt of demand loss,” Wood Mackenzie says, as a carbon price decline is bolstering coal.

Such hybrid power systems help reduce operational costs as they make the best possible use of Hawaii’s sun-soaked and windy weather, while storing excess energy for later. In addition, battery storage is used for peak shaving, frequency regulation, reducing curtailments, and ramping/spinning reserves.

Peak shaving — when storage is used to lower peaks in demand — is the second most common application for such systems on Hawaii. Shifting portions of electricity demand from peak hours to other times of day also reduces the need for higher-cost, seldom-used generation capacity to be dispatched, which helps reduce wholesale electricity prices.

Averting costly HFP peaking plants

Without battery storage, Hawaiian utilities would have to rely on fast-ramp fossil power sources to back up renewables. Traditionally utilities used petroleum-, heavy fuel oil (HFO)- and coal-fired peaking power units, despite their high emissions intensity. Energy storage is virtually emissions free, helping to lower Hawaii’s carbon footprint.

Batteries are characterized by two metrics: power capacity and energy capacity. Power capacity is the maximum instantaneous amount of power that can be produced on a continuous basis. Energy capacity is the total amount of energy that can be stored or discharged by the battery.

The Spanish economy is underpinned by some of highest shares of wind and solar electricity generation in the world. As demand plunged amid the coronavirus lockdown, the share of variable wind and solar power in-feed to the grid can become higher than normal.

“This is an important moment for our understanding of cleaner electricity systems, including some of the operational challenges,” said the IEA’s executive director, Dr Fatih Birol.

Staying flexible

With weaker electricity demand, power generation capacity is abundant but TSOs still need to maintain the balance on the grid in real time. In fact, some of the most high-profile blackouts in recent times took place during periods of low demand.

“The abrupt slowdown in industrial and business activity across much of Europe has reduced electricity demand, but it is also depriving power systems of a key source of flexibility,” Birol explained. “Under normal circumstances, large-scale electricity consumers such as factories can adjust their usage to help balance the system,” he added, “but that option is hardly open today.”

When electricity from wind and solar is covering the majority of demand, systems need to maintain flexibility through fast-ramp fossil gensets in order to mitigate a sudden shift in supply. A very high share of wind and solar in-feed in a given moment makes maintaining grid stability more challenging.

Technical advancements allow renewables to also provide some degree of flexibility Wind power can be gradually ramped down when demand drops late at night. Some solar power can be shut off at noon when there is more than needed. The IEA indicated that “in time, electricity generation from renewables may no longer simply follow the weather but will have to be managed in an intelligent way in order to reduce costs and improve electricity security.”

Storing excess energy

Though new forms of short-term flexibility such as battery storage are on the rise, most electricity systems rely on fast-ramp gas peaking plants to provide flexibility.

“Today, most gas power plants lose money if they are used only from time to time to help the system adjust to shifts in demand. The lower levels of electricity demand during the current crisis are adding to these pressures,” IEA analysts warned. Hydropower hence remains an essential source of flexibility.

The concept of developing a small-scale LNG import terminal and adjacent power station could be replicated elsewhere in Japan. Osaka Gas said it is “working toward winning orders for LNG terminal construction and consulting services outside our territory and overseas, by effectively applying the know-how acquired through our extensive experience.”

The business model is striving to take advantage of low-cost LNG, as Osaka Gas is advancing its strategy of shale investments abroad. Venturing into the U.S. upstream sector, the Japanese utility is expanding its East Texas shale-gas project through the Sabine Oil & Gas Corp to ensure a stable fuel supply for power generation projects at home. In addition, Osaka Gas receives cargoes from Freeport LNG in Texas.

On Kyushu, Japan’s third-largest island, the LNG-to-Power project consists of a terminal jetty, one LNG tank and LNG vaporizers to enable supplies to the 35 MW gas-fired power plant.

Projects put forward in FY2021 business plan

Daigas Group’ financial year 2021 business plan focuses on the development of competitive energy infrastructure, notable high-efficiency gas power plants and renewables. By expanding LNG sales within Japan, Daigas seeks to accelerate the replacement of coal and heavy fuel oil with cleaner-burning natural gas for power generation.

Launch of gas value chains are planned for the Greater Tokyo area, including gas supply in Ogishima. An array of gas-fired power projects are under construction or in planning: The 1,180 MW Fukushima Gas Power Plant is being fast-tracked for a start up this April, while the just under 50 MW Ichihara biomass power plant is due to start operation in October 2020.

By 2022, the integrate Hikumka LNG-to-Power plant is slated to start up while the large-scale 1,245 MW Himeji Gas Power Plant is due to commence commercial operations in 2026.

Without these two hydro-power megaprojects, the 19 projects currently under construction total just 4.5 GW, compared to 24 projects totalling 5 GW in the IEA’s 2016 report.

Zambia is currently the largest investor in Chinese-added capacity, followed by Nigeria, Angola, Uganda and Côte d’Ivoire. These five countries make up around half of the capacity added or being added by Chinese contractors. In terms of fuel type, 11% of the projects run on natural gas, 9% on coal, and 4% on oil. In the last five years, Chinese contractors completed five thermal power plants in Nigeria, Rwanda, Zambia, and Botswana for a total of 811 MW.

A greener mix

When the IEA first analyzed China’s involvement in the sub-Saharan Africa power sector in 2016, Chinese companies operating as the main contractor were responsible for almost 30% of capacity additions in the region. Since then, capacity additions by Chinese companies have fallen somewhat, although low-carbon projects represent a larger share.

Of all the newly Chinese-built power plants in the region, 52% are fully-integrated with both a Chinese contractor and a Chinese turbine manufacturer. In total, Chinese equipment manufacturers between 2014 and 2024 are seen supplying more than 9 GW of power generation equipment: approximately 7 GW in hydro, 1 GW in wind and solar PV, and 1 GW in coal and oil.

If Chinese energy infrastructure need to source equipment from overseas, these are mostly gas turbines, a piece of equipment for which Chinese contractors currently rely entirely on foreign manufacturers.

Project finance, combined with EPC

Chinese energy companies in Africa focus mainly on supplying construction services and equipment with engineering, procurement and construction (EPC) being the most common type of project contracting arrangement for construction services. Host country governments issue bids and award projects, and Chinese energy infrastructure companies deliver construction services without having any stake in the project.

Additional electricity capacities fall under public sector spending from a country’s national budget. “This means that project financing remains challenging and tends to shift progressively away from public lending towards more equity financing,” IEA analysts commented.

“However, this remains challenging in the absence of reliable power purchase agreements and adequate, stable local regulation,” analysts said, suggesting “ultimately, the success of a power project depends on the ability of African governments to negotiate, implement and maintain the project.”

Turkmenistan, home to the world’s fourth-largest natural gas reserves, enjoys steady economic growth based on exports of natural gas, cotton and agricultural products. To help rebuild its war-torn neighbour Afghanistan, the Turkmen government agreed a 10-year electricity supply deal that commenced in 2018.

Going forward, the main source of this electricity will be the Zerger open-cycle power plant, which generates power using locally-sourced natural gas. The OCGT, under construction in the Serdarabat region, some 600 kilometers northeast of the Turkmen capital Ashgabat, will be powered by three gas turbines with combined capacity of approximately 400 MW.

Sumitomo Corp is the prime engineering, procurement and construction (EPC) contractor for this project, next to Renaissance Heavy Industries, and the power plant’s turbines and generators are being supplied by Mitsubishi Hitachi Power Systems (MHPS).

Yokogawa Turkey will be in charge of providing engineering and support services for the OCGT installation. To monitor and fine-tune turbine operations, Yokogawa will provide its CENTUM control system as well as DPharp EJA series differential pressure transmitters, and YTA610 temperature transmitters.

Completion of EPC works and commissioning of the fast-start gas peaking plant is scheduled for September, just before electricity demand is bound to increase in winter 2020/21.

By summer, some new installations that will come online and some of the units undergoing service work will be ready for grid-connection as well, Joseph Anis, CEO of GE gas power services in the Middle East and Africa said, specifying “it is in the range of about 3 GW of power.”

Orders from a $14 billion scheme to rebuild Iraq’s electricity infrastructure under a have been fought over by GE and Siemens. The German manufacturer earlier secured contracts €700 million ($785m) for the construction of a 500 MW gas-fired power plant, the upgrade of 40 gas turbines and the installation of 13 substations and 34 transformers across Iraq.

Rival GE, meanwhile, in September won a contract to develop Besmaya phase-3. The mega project will add 1.500 MW of capacity to the grid by 2021, raising total capacity to 4,500 MW. During the construction phase, up to 1,200 people will be employed and GE will provide four 9F gas turbines and four generators for the project. 

According to Mr. Anis, some of the gas turbines being installed at Besmaya may be “available for the summer,” with full combined-cycle operation of the phase-3 unit slated to start in 12 to 14 months.

GE is mourning the death of Jack Welch, who transformed the company between 1981 and 2001 by implementing efficiencies. Under his tenure, GE’s grew from $12 billion to a staggering $410 billion. Since then, the U.S. engineering giant’s fortunes fell in the 2008 financial crisis and due to the overly expensive Alstom takeover. Today, GE’s market capitalisation is valued at just under $100 billion.

Built at a cost of $1 billion near Johnstown, Pennsylvania, the 1,050 MW Fairview Energy Center is “the first and only facility of its scale in the world to possess high content ethane blending with natural gas capabilities,” the operator stressed.

Through GE’s DLN2.6+ AFS combustion system, CPV Fairview can switch to using ethane when the cost of natural gas increases. This fuel flexibility helps reduce operating costs without compromising emissions or efficiency.

Gary Lambert, CPV chief executive, said “completion of commissioning with 25 percent ethane mixed with natural gas at our Fairview Energy Center, making it the first plant of its kind as well as one of the most efficient combined-cycle power plants in the world.”

Blending local gas and ethane

CVP and Osaka Gas, the co-developers of the Fairview Energy Center, pronounced the CCGT in December 2019 to be “fully operational on budget and significantly ahead of schedule.” The peaking power plant is driven by GE's 7HA.02 gas turbines, capable to deliver full power to the grid in 60 minutes or less.

“By utilizing blends of locally sourced natural gas and ethane, CPV Fairview will be unique in the industry for efficient performance, enhanced economics, and operational flexibility,” said Tom Dreisbach, 60 Hertz Product Line Leader for GE Gas Power. The CCGT uses GE Digital’s Operations Performance Management (OPM) software to run more efficiently and increase fuel flexibility.

Situated an 86-acre former brownfield site, CPV Fairview uses regionally sourced natural gas and ethane. It also uses industrial raw water for cooling purposes, which can be reused, to boost its green energy credentials.

Headquartered in Silver Spring, Maryland, CPV has ownership interest in 4.2 GW of clean generation across the United States. In addition the company manages more than 9,300 MW of fossil and renewable energy assets.

Each MEGAMIE unit uses a cell stack – a cylindrical substrate tube designed to trigger reactions for power generation. Cell stacks are made entirely of ceramics and take about a year of development.

The pressurizing system MHPS uses in MEGAMIE combines the delicate ceramics with a gas turbine that must withstand extreme temperature and pressure conditions. These different components had conflicting properties but they had to be integrated into a single complex system. “Many industry-leading players and research institutes have tried to commercialize similar fuel cells,” Kobayashi noted, “but combining these technologies proved to be too difficult.”

Two-stage power gen process

Power generation takes place in two stages within the MEGAMIE system: within the solid oxide fuel cell (SOFC) itself and within the micro gas turbine. Heat is removed from the high-temperature turbine exhaust gases to produce steam or hot water.

Versatile in fuel use, MEGAMIE can run on multiple types of fuel gases – from city gas and LPG in local infrastructure to methane gas from sludge, food waste and agricultural waste. The system can also leverage pressurized gas, as in conventional power systems which use gas turbines.

 "Pressurized gas produces more power,” Kobayashi explained. “When you look at the shape of the cell, you notice it needs to be sealed only at two locations at both ends of the cylinder. That is sufficient to shield the fuel flowing inside the cell from the air outside. With fewer sealing locations, the cell could be more readily combined with gas turbines.”

Cost barriers and quality challenges

Cost is one of the barriers to greater market penetration. The first commercial 250 kW class MEGAMIE started operation in 2019 at the large Marunouchi Building, but going forward, “MEGAMIE must be offered at a much more reasonable price to increase adoption across the globe,” MHPS noted. To that end, preparations for mass production of the cell stack have been underway with NGK Spark Plug, a top ceramic manufacturer.

Increasing production yield and ensuring quality control throughout the supply chain were other big challenges. The “balance of plant” (BOP) was of particular concern, and for MEGAMIE, this term applies to micro gas turbines, heat exchangers, piping, valves, and electrical components.

Kobayashi needed to ascertain that the suppliers of BOP components would be willing to provide the parts in good condition even as the fuel cell had yet to go to market. “To ensure the quality of all raw materials, you have to deploy your people to the manufacturers’ factories,” he said. “Project members also kept talking to the partners. They negotiated costing of the BOP components and made improvements to boost the performance of the SOFC.”

Another issue is how to ensure safe and efficient operations. Polymer electrolyte fuel cells used for automobiles work within a relatively low-temperature range of 60-100°C; thus, start/stop functions would not pose major difficulties. However, SOFCs work in temperatures as high as 900°C, and take much longer to start or stop.

The Atinkou project is being built under a Public-Private Partnership (PPP) arrangement, whereby Eranove was granted a 20-year concession to develop and operate a 390 MW power plant some 40 kilometers west of Abidjan. Once fully operational, the new CCGT will substantially improve electrification levels in the Ivory Coast, where just 66% of the population has access to electricity.

The project is similar to an earlier one, developed by Ciprel, a subsidiary of Eranove. The Atinkou CCGT is hence often referred to as Ciprel V, as it adds to the plant’s four units that are in cooperation since 1994 and have a combined capacity of 544 MW

First F-class gas turbine in sub-Saharan Africa

The new Atinkou unit, however, will take a technical leap forward as it will be driven by the first F-class gas turbine installed in sub-Saharan Africa.  “Atinkou builds on the expertise and experience acquired by the Eranove Group with the Ciprel power plant. It thus shows the strength of Eranove industrial model based on African expertise and skills,” said Marc Albérola, general manager of the Eranove.

As for project finance, the International Finance Corporation (IFC) arranged the the full debt financing package of €303 million, which was provided together with the African Development Bank (AfDB), the Dutch development bank FMO, Germany’s DEG, the Emerging Africa Infrastructure Fund and the OPEC Fund. In addition to mobilizing the debt, IFC is providing a 91 million Euros loan for its own account, as well as interest rate swaps to hedge the project’s interest rate risk.

Together with the World Bank, the IFC has been supporting the Ivory Coast in developing its power sector. The bank stressed this new round of financing builds on the success of Ciprel - the operational since 1995 and still the largest power plant in the Ivory Coast.

The Atinkou project mirrors the government’s ambition to double Ivory Coast’s installed capacity to 4,000 MW by early 2021.

Bail-outs of distressed carmakers and component suppliers could cost the German taxpayer a two-digit billion Euros amount, analysts warned. But given the sector's importance for Germany’s entire economy, supporting the car industry's transition to sustainable mobility has become a top priority for the government.

Volkswagen, Daimler, BMW and others are likely to be among those calling for help the loudest, given that these carmakers are need to invest quickly into developing electric vehicle technology at a time when they still need hold back billions of Euros for looming lawsuits and fines over the dieselgate emissions fraud scandal.

"The industry won't have time to heal its wounds once the corona crisis is over," analysts said, suggesting some companies may well have to contemplate mergers to have revenue to invest into novel propulsion systems that comply with more stringent EU emission limits.

Production halts slash energy demand

The suspension of Germany’s industrial production in a bid to slow the spread of coronavirus has slashed the country’s energy demand.

Industry accounts for up to 45% of Germany’s electricity and natural gas consumption, according to the industry association BDEW, but measures to contain the virus, collapsing supply chains, and withering demand at home and abroad lead to a sharp decline in power consumption. Year-on-year power demand t declined by 3.5 percent on Thursday, March 19, and kept falling ever since.

Falling demand will likely cause a drop in wholesale power prices, with price projections for April ranging about 30% lower than one week ago. Likewise, lower power demand caused the EU's emissions trading price to drop from about €25 per tonne of CO2 at the beginning of the year to €15 last week.

However, shutdowns in Asia are not over, as the Philippines, Malaysia, India and Thailand just announced more lockdown measures that will impact on domestic energy demand as well as global technology supply chains.

In the US, ports are likely to remain open and site construction could continue but impacts from smaller bill-of-materials equipment and project permitting delays. The time-lag in the coronavirus pandemic and Asia’s early recovery ultimately could give e-car makers in Japan, Korea and China a competitive edge over rival manufacturers elsewhere.

Already today, the Asia Pacific region has the largest share of battery electric vehicle (EV) sales worldwide and sees the highest growth in terms of EV sales, topping 979,000 units in 2019.

In a survey among Southeast Asian consumers, respondents stated that the most motivating and important factors to buy an electric vehicles include better safety standards and the availability of (fast) charging points. In China, the number of publicly accessible fast chargers for electric vehicles now tops 111,000 units while in South Korea, the number of charging stations will reach about 90 thousand by the end of 2020.

Use of e-cars helps reduce air pollution, which is especially relevant in megacities of China and India, where the animal level of particulate matter tops 145 micrograms per cubic meter in Delhi and 75 microgram per cbm in Beijing.

Back in January, Brent crude oil peaked at $69.75 per barrel, but demand destruction due to coronavirus lockdowns and a dispute between Saudi Arabia over price and production levels have made Brent prices hit a 17-year low of $26.33 per barrel on 19 March.

GB gas and power contracts continue to be correlated to Brent crude oil prices, although it had been assumed that this correlation has loosened as the UK gas mix has become less dependent on oil-indexed gas imports from Norway, Russia and the Netherlands.

Most LNG imports still oil-indexed

“However, 2020 so far shows this is not necessarily the case. This is partly due to the resurgence of LNG imports into the UK over the past couple of years,” said James Brabben wholesale manager at Cornwall Insight. While the European and Norwegian share of the gas mix has declined, LNG has increased to average roughly a third of all gas in the UK,” he explained.

Though Britain now relies more on regasified LNG, it has maintained a similar share of oil-linked gas contracts impacting upon the National Balancing Point (NBP) gas market price.

“With gas still the marginal fuel in the power market, the correlation of oil to gas, therefore, continues to feed into the power sector,” Braben underlined. Power producers tend to use flexible gas-fired plant to meet peakload demand, hence the gas price impacts greatly on peakload power prices.

Looking ahead, uncertainty looms large making the pricing picture look rather murky. “As the impact of Covid-19 on the energy markets shifts daily, the trends in global oil markets will likely continue to impact Britain's energy markets both on the producer and consumer side,” he said without specifying.