The regulation of the hydrogen plants would be done through E.ON’s virtual power plant that links a total of 150 plants in Germany and the United Kingdom. A total of around 600 MW of this VPP capacity is being marketed.

The principle is that if there is a high demand in the power grid, the plant will shut down hydrogen production so that the energy required for electrolysis is available on the grid instead for public power supply. Conversely, hydrogen production is ramped up if more energy from wind and solar power sources is fed into the grid than can be distributed.

thyssenkrupp and E.ON successfully tested the system at the Carbon2Chem pilot plant with a capacity of up to 2 MW in Duisburg. E.ON has also checked that the plant meets all the requirements for participation in the balancing power market.

“Previous tests had already shown that our electrolysis plants produce green hydrogen with high efficiencies. At the same time the plants are responsive and flexible enough to participate in the balancing energy market,” said Christoph Noeres, head of energy storage & hydrogen at thyssenkrupp.

“Our plants thus make a decisive contribution to a stable power supply and at the same time make a significant contribution to the economic efficiency of green hydrogen,” he concluded.

Paul Browning, President and CEO of MHPS Americas pointed out the company’s dedicated team of engineers, procurement and construction personnel has managed to commission and start up T-Point 2’s on schedule, on budget, and exceeding output and efficiency expectations.

Turbine validation at 8,000 operating hours

T-Point 2, built as a demonstration plant at Takasago Works in Hyogo Prefecture, Japan, has been designed to replace MHPS’ original T-Point plant. Here, MHPS can validate its new gas turbines for a minimum of 8,000 operating hours. This is equivalent to nearly one year of normal operation and a key insurance industry criterion for fleet reliability.

“Unlike other manufacturers, MHPS demonstrates new gas turbine capabilities at our own combined cycle power plant before shipping to our customers. This enables us to provide unmatched performance, such as the 99.5% reliability of our J-Series gas turbines,” Browning said, adding: “This project positions us years ahead of any manufacturer in putting the latest generation of 1650°C gas turbine technology into commercial operation.”

Aim for 100% hydrogen firing

The JAC turbine can be converted from natural gas to a blend natural gas with 30% renewable hydrogen. MHPS aims to eventually run the turbine on 100% renewable hydrogen to completely eliminate carbon emissions.

The digital building blocks being validated at T-Point 2 also include an advanced Automatic Plant Startup package that is closely linked to the MHPS’ advanced analytics and diagnostics. Operations will hereby transferred from the local control room to the Takasago Remote Monitoring Center to MHPS’ central and remote control center.

At T-Point 2, MHPS is also evaluating the first ever Netmation 4S Digital Control System to be used on an advanced class gas turbine combined cycle plant. Netmation 4S is said to add further reliability, redundancy, and enhanced operator experience to MHPS’ family of control systems.

Works started earlier this month and are expected to be completed by December 2020. It is part of Penn Power's second phase Long Term Infrastructure Improvement Plan (LTIIP II), approved by the Pennsylvania Public Utility Commission (PUC) to help enhance electric services and ensure supply security.

Projects underway in Lawrence County include the installation of roughly 300 new poles and the replacement of more than 50,000 feet of power lines with thicker, more durable wire. Additional circuit ties are being created so that the power flow can be re-routed to customers from another source if a line is damaged.

A dozen of automated reclosing devices is also being installed that can help restore electricity to customers within seconds in the event of a power outage. The new, automated technology is safer and saves time and money as utility workers can restore the service remotely.

Penn Power’s service area includes more than 160,000 customers in all or parts of Allegheny, Beaver, Butler, Crawford, Lawrence and Mercer counties in western Pennsylvania. The utility’s transmission arm operates about 24,500 miles of power lines that connect the Midwest and Mid-Atlantic regions.

Analysts noted the residential sector is sensitive to temperature changes and tends to use more electricity over the summer period than the commercial and industrial sectors.

Across all sectors, April U.S. electricity sales declined 4% year-on-year, largely due to lockdown measures to reduce the spread of the coronavirus.

 Starting with California on March 19, states began to issue stay-at-home orders in response to the pandemic which made most office workers transition to stay home and work from there, pushing up residential gas and electricity demand.

Commercial electricity demand, in contrast, fell by more than 10% during the lockdown period and industrial electricity demand was 9% lower. Lockdowns had a severe impact on energy-intensive industries and manufacturing whose demand fell to about 2.6 million MWh/day, down from usually about 3.4 million MWh/day.

Keeping a close watch on electricity use during the health crisis, the U.S. Energy Information Administration’s (EIA) is monitoring sectoral demand in its Hourly Electric Grid Monitor.

Electricity use in the United States is typically lowest in the spring and fall months and generally increases as temperatures either become much colder or much warmer than about 55 degrees to 65 degrees Fahrenheit. In each of the past 10 years, either April or October was the month with the lowest electricity demand.

The adoption of the law follows two years of intense debate among energy industry, trade unions, regional governments and environmentalists about the speed and intensity of Germany’s green energy transition.

Coal utilities, federal states get compensation

A compromise was reached on the basis that the Government agreed a 40 billion Euros support program that compensates both coal plant operators and supports the economic transition of coal region such as Rhine-Ruhr region and the Lusatia, situated at Germany’s eastern border with Poland.

In view of Germany’s 2021 election year, the adoption of the coal exit law allows the current coalition government to implement long-delayed measures though this topic will keep influencing election campaigns. How to best manage the costs of decarbonisation conjures up much controversy among Angela Merkel's conservative CDU/CSU alliance, the Social Democrats (SPD) as their current coalition partner, the Liberals (FDF) and the Green Party.

RWE’s earning from lignite, nuclear may vanish by 2023

In an analysts’ call, RWE chief executive Rolf Martin Schmitz stressed the company “bears the main burden of the lignite phase-out, which will stretch it to its limits.” Earnings from RWE 2.9 GW lignite and nuclear portfolio may fall to €200 million, or even net zero from 2023 due to mandatory plant closures.

Schmitz stressed, however, the Essen-based utility will implement the required capacity reduction by 2023, as mandated by the German coal exit, “nearly entirely on its own account.”

The first lignite power plant to be shut down by RWE is Niederaussem. The massive 3,641 MW facility will be taken offline this year, and RWE also agreed to close its Inden and Hambach opencast mines much earlier than originally planned. For complying with the coal exit timeline, RWE will get some 2.6 billion in compensation from the German taxpayer.

Critics had dismissed the compensation payments as too high and unjustified given that most of the plants, scheduled for closure, are amortized and are getting close to the end of the technical life-time.

Going forward, RWE is keen to get rid of its dirty coal image and has hence lined up a substantial share of green energy investment. A total of 2.7 GW in renewables capacity is currently under construction,” CEO Schmitz said, adding, the group has a sizeable project pipeline of over 20 GW, which will add to RWE’s current 9 GW of wind and solar power assets. New capacities will be predominantly added in the onshore wind and solar segment, with RWE saying these projects are hoped to achieve an adjusted EBITDA of between €500 million and €600 million.

Lockdown accelerates Energiewende

Looking at the German wholesale power market, there has been a sharp decline in coal-burn during the Covid-19 lockdown period. Demand for coal-fired energy fell to less than 16% of the energy mix in April due to ample wind and solar energy supply with near-zero operating costs.

Some analysts argue this shows Germany’s 2038 coal exit date has been “overtaken by reality.”

In fact, nearly 90% of Germany's coal plants were not profitable last year, according to E3G, an independent climate change think tank. The lockdowns to contain the virus have exacerbated the speed of the green energy transition, whereby he share of coal power dropped to a record low of 16% in April.

Renewables energy supply rose 6% in the first quarter of 2020, compared to Q1-2019, while the contribution of oil fell by-3.2%, natural gas by 5.5% and the share of nuclear power plunged by -17%.

Power prices turn negative, grid remains resilient

During April and May, electricity from wind and solar power sources covered a very large share of Germany’s overall electricity demand. On some days, an actual oversupply of wind and solar energy resulted in negative wholesale power prices at the European Energy Exchange (EEX) in Leipzig.

Plentiful sunshine and mild weather in April and May provided good conditions for solar PV generation, and when combined with high levels of wind power, led to overall supply outstrip demand. Already in March, the German wholesale power market logged about 130 hours of negative prices, mostly during periods of high wind production; that was up from 90 hours in March 2019.

“The hours are now increasing in which a high feed-in of renewable energies, especially from wind energy, meets low demand for electricity and leads to negative spot prices,” enervis analyst Tim Steinert said. The consultancy expects the number of hours with negative prices to increase by 80% to 150%.

On a positive note, the surge in renewable energy supply has put much strain on grid operators’ balancing capability, especially during times of low demand. But it has proven the resilience of the German power grid, exemplifying that the system could run with much higher levels of green energy than anticipated earlier. An encouraging sign that system stability does not hinge on lignite, though the Germany’s simultaneous exit of coal and nuclear energy will pose some challenges along the way.

The assets include over 7,700 miles of natural gas transmission lines, with approximately 20.8 billion cubic feet per day of transportation capacity and 900 billion cubic feet of operated natural gas storage with 364 billion cubic feet of company-owned working storage capacity, and partial ownership of a liquefied natural gas export, import and storage facility.

Berkshire Hathaway to operate Cove Point LNG

The sale includes a 25% stake in Cove Point LNG while Dominion Energy will continue to own 50%of the liquefaction terminal and Brookfield Asset Management the remaining 25% share.

Berkshire Hathaway said it operate the Cove Point facility once the transaction closes. The Cove Point export terminal is one of only six LNG export facilities in the U.S.

Commenting on the deal, Warren Buffet voiced his admiration for Tom Farrell, President and CEO of Dominion Energy for his “exceptional leadership” across the energy industry as well as within the company. “We are very proud to be adding such a great portfolio of natural gas assets to our already strong energy business,” Buffet said.

LNG project deal in Quebec halted

Market observers say the acquisition Dominion Energy and particularly the operatorship of Cove Point LNG is a triumph for Buffet, who founded his investment company in the state of Nebraska.

Earlier this year, Buffett made a move for an LNG and pipeline natural gas project in Canada. However, at the last minute he pulled out of the $6.7 billion LNG project deal in Quebec over concerns about railway blockades going on at the time and infrastructure challenges.

“There is a high degree of uncertainty for the projects currently being planned for the period after 2020 due to the current political and economic conditions,” BDEW head Kerstin Andreae said, forecasting planned investments by power suppliers this year and next are set to fall to levels not seen since 2013.

Key energy policy legislation has been held up in government and parliament for months, undermining planning security for companies and investors in the sector. While the nuclear phase-out by 2022 is regulated, the coal exit act and law amendments for wind and solar power development have yet to be approved.

Coronavirus response could accelerate energy transition

For months, policy makers have been focussed on how to contain the coronavirus while limiting the economic impact of the crisis. But the German Economic Institute (IW) stressed this mean key energy policy measures have to now be delayed.

“Instead, some should even be accelerated,” said IW’s Thilo Schaefer, head of environment, energy and infrastructure. “For some time there has been a lack of clear and reliable perspectives for climate-friendly investments, such as in decarbonising the industry sector.” In this context, he called for an early reduction of the renewable energy levy (EEG levy) to reduce the cost of electricity for households and industry.

Tax credits for green energy investment

The German finance minister Olaf Scholz said a stimulus package oriented toward international climate targets and Germany’s goal of becoming carbon neutral by 2050 would "make sense," as soon as the most pressing phase of the pandemic has ended.

Proposals include clean energy tax credits, requirements that bailed-out industries like airlines commit to emissions cuts, and investments in green infrastructure. This approach could both ensure that climate action is not neglected during the crisis, and help Germany stay competitive in energy transition technologies, a sector that could be worth about 23 trillion dollars by 2030, according to the World Bank.

The cooperation with Galileo Technologies will allow Golar to develop a decentralized LNG and power generation business, based on biomethane. Such projects are encouraged by a new regulatory framework for sanitation, approved by the Brazilian Congress in late June this year. The new law encourages private sector management of landfill sites and associated waste-to-biofuel initiatives.

Bio-LNG projects in Bahia and Sao Paolo

The first order, stipulated by Galileo, will see Golar supply two micro-LNG plants to produce about 30 tonnes per day of LNG in a mature gas field in Bahia state. The second order is for equipment to capture and liquefy biomethane from landfills in Sao Paulo state, with capacity to produce up to 15 tonnes per day of bio-LNG.

According to Golar Power, these projects are designed to take fill gaps in Brazil's gas pipeline network and take natural gas to remote regions that lack connections, often to both the gas and electricity grid.

Fuel for small-scale LNG-based power plants used to be distributed by trucks to the remote locations via the road network. Galileo’s gas treatment and liquefaction technologies, in contrast, are adaptable for the use of scattered methane sources, which “frequently are those closest to consumers,” underlined Galileo’s Brazil vice president, Horacio Andrés.

Need for decentralized energy supply

Considering Brazil’s large geographical size of 8,516,000 square-kilometres, the country has a low ratio of natural gas pipelines that span only 9,409 kilometres compared to 30,000km in neighbouring Argentina.

“Only 5 percent of Brazilian municipalities are served by gas pipelines,” said Golar Power vice-president in Brazil, Marcelo Rodrigues. “Our challenge is to take natural gas to those places.”

Brazil’s natural gas market is being liberalizes after Petrobras, the state oil and gas company, agreed to end its dominating position in the sector. The federal government is now moving ahead with the Novo Mercado de Gás (new gas market) programme to open up the market to private investors.

“Our current financial position and liquidity remain strong,” Rolls-Royce stressed without elaborating, adding it will “make a further announcement if and when appropriate.”

The British government has a ‘golden share’ in Rolls-Royce and would hence need to consent to any takeover. Market observers note it is “highly unlikely” that Prime Minister Boris Johnson would rubber stamp such a deal given Rolls-Royce’s history and strategic importance to the British economy.

Drawdown on £2.5bn credit line

CEO Warren East already proposed a “major reorganisation” saying the impact of COVID-19 on Rolls-Royce and the whole of the aviation industry is “unprecedented.” Since then the company has taken action to strengthen the financial resilience of our business and reduce cash expenditure in 2020.

In April, Rolls-Royce decided to draw fully on a £2.5 billion revolving credit facility to “ensure cash headroom” in the event of a prolonged reduction in trading activity due to the Covid-19 outbreak. The company’s gross cash balance is now £5.2 billion, the company said at the time, and an additional credit has been lined up to bring overall liquidity to £6.7 billion.

Cutting jobs and capital spending

In May, Rolls-Royce announced the restructuring that will see the loss of at least 9,000 roles from our global workforce of 52,000. “This is not a crisis of our making. But it is the crisis that we face and we must deal with it,” Mr. East commented. “Being told that there is no longer a job for you is a terrible prospect and it is especially hard when all of us take so much pride in working for Rolls-Royce,” he added.

The proposed reorganisation is hoped to generate annualised savings of more than £1.3 billion, of which the reduced headcount will contribute around £700 million. The cash restructuring costs related to these actions are likely to be around £800 million, the company specified with outflows incurred across 2020 to 2022.

Turing to clean energy business

Remaining positive, the Rolls-Royce CEO said the strategic choices made over the last few years leave the company well placed to capitalise on the long-term potential of the markets it is active in - aviation and power generation.

“The world on the other side of this pandemic will need the power that we generate to fuel economic recovery. I absolutely believe the call for that power to be more sustainable will be stronger than ever,” Mr. East said, stressing the company’s need to innovate as the industry moves to net-zero carbon emissions.

Deliveries for the above orders are due completed by Q3-2020. In Europe, another order came in for a NO_x reduction system at a biomass-fired industrial unit which will utilize Fuel Tech’s SCR technology and an aqueous ammonia feed system.  Equipment deliveries are scheduled for Q4-2020.

In the United States, FuelTech was contracted to retrofit a primarily coal-fired power plant with FUEL CHEM TIFI Targeted In-Furnace Injection technology. The equipment will be installed at three coal-fired units and will help the operator to burn lower-quality fuels more cleanly and efficiently. Delivery and in-service date of the equipment is in Q3-2020.

“These units are not base-loaded units,” the operator pointed out, explaining the revenue potential of the Targeted In-Furnace Injection (TIFI) program chemical sales will largely come from balancing variable power demand and flexible unit dispatch.

Fuel Tech’s nitrogen oxide (NO_x) reduction and particulate control solution have been in installed on over 1,200 utility, industrial and municipal units worldwide. The company’s FUEL CHEM technology improves the fuel flexibility, boiler heat rate, and environmental status of combustion units by controlling slagging, fouling, corrosion and opacity.

Vincent J. Arnone, President and CEO said Fuel Tech’s broad portfolio of emissions control solutions would help customers “address their emissions control requirements regardless of fuel source.”

Utilization of the Wahalajara system is ramping up quickly which boosts U.S. gas exports to Mexico out western Texas, and there is also additional takeaway capacity out of the Permian Basin. Texas is home to the Eagle Ford play, one of the most actively drilled targets for unconventional oil and gas.

US gas exports to Mexico reached a record 5.5 billion cubic feet per day (Bcf/d) in October 2019, largely due to the completion and startup of the Sur-de-Texas-Tuxpan pipeline in September. Gas flows via the US border at Brownsville, Texas, to the south-eastern state of Veracruz in Mexico averaged 0.6 Bcf/d during the last quarter of 2019, or about 20% of the pipeline’s capacity.

US pipeline gas exports to displace LNG

Analysts say US gas deliveries via the Wahalajara network will displace higher-cost LNG imports into Mexico’s Manzanillo terminal, which serves markets in Guadalajara and Mexico City.

Mexico’s gas demand keeps rising, spurred by the recent start-up of several combined-cycle power stations and booking for the scheduled 2020 completion of the 0.89 Bcf/d Tula-Villa de Reyes pipeline which will stretch to central Mexico.

However, most of the demand centers are in southern Mexico, waiting to be connected to the VAG pipeline. Three of the project’s four pipelines in Mexico that are currently in-service include the 1.4 Bcf/d Ojinga-El Encino pipeline (in service since June 2017), the 1.5 Bcf/d El Encino-La Laguna pipeline (in service since January 2018) as well as the 1.2 Bcf/d La Laguna-Aguascalientes: 1.2 Bcf/d (operational since December 2019).

Waha Hub gas prices set to strengthen

Permian gas prices at the Waha Hub have been steeply discounted to Henry Hub, the US national gas benchmark. However, analysts expect Waha gas prices to strengthen as more and more of the surplus shale production from the Permian gets exported to Mexico.

Currently, the Comanche Trail pipeline keeps delivering an average of 0.1 Bcf/d of natural gas to Mexico since the San Isidro-Samalayuca pipeline entered service in June 2017. Flows are not expected to rise further until the 0.47 Bcf/d Samalayuca-Sásabe pipeline will be completed on the Mexican side in either late 2020, or early 2021.

The Trans-Pecos pipeline, the U.S. segment of the Wahalajara system, did not transport significant volumes of natural gas until October 2018; it is currently only operating at 10% to 15% of its total capacity.

Mexico has been expanding its natural gas pipeline system since 2016 which supported the continuous growth in US gas exports. Most of these volumes originate from southern Texas, notably since the regional US gas network was extended and the Los Ramones Phase II pipeline in central Mexico completed.

The intention of the Chinese major is to buy 66.4% of K-Electric’s shares through an agreement and 16.8% of shares through a public offer.

The board of K-Electric has not yet decided whether to accept the bid. It confirmed receipt of the fresh Public Announcement of Intention (PAI), filed via the Securities and Exchange Commission of Pakistan, whereby Shanghai Electric intends to acquire 18,335,542,678 of KE’s ordinary shares.

Venturing abroad

Shanghai Electric, a leading manufacturer and supplier of power generation and industrial equipment, in April posted a 26% rise in its fiscal 2019 revenues to 127.509 billion Remimbi (US$ 18,180 billion) as well as a 24.83% rise in profits to 3.72 billion Remimbi (US$0.53bn).

New orders, billed in fiscal 2019, have increased by 30.6% to 170.79 billion Remimbi or approximately US$24.35 billion.

Sales rose by 12.1% to 45,944 million Remimbi, mainly due to the “steady performance” of the company energy equipment business which includes coal- and gas-fired turbines as well as related equipment for power transmission, wind turbine components and energy storage, as well as chemical equipment.

SEunicloud Platform

In 2019, Shanghai Electric also launched the "Industrial Internet SEunicloud Platform" – a one-stop solution for wind power intelligent operation, thermal power remote operation and machine tool maintenance.

Users of the SEunicloud platform can users can remotely run equipment diagnostics prior to placing any order. They can procure and manage supply chains and monitor supplier contracts, source bidding, online-purchasing and order coordination.

The intelligent supply chain platform also helps match sellers and buyers through historical data analysis in the procurement pricing process and automatically tracks and documents suppliers' historical performance. This facilitates the overall supply chain management process for due diligence.

The GRI Standard identifies reporting across the 22 most critical sustainability topics, covering climate change, the environment, health and safety, employment, communities, and governance. Comments are invited from industry stakeholders worldwide.

The Oil and Gas Sector Standard has been developed by an export working group that includes international oil and gas companies, state-owned national oil firms, electric power and water utilities, regulators, environmental groups and experts from technical universities.

Framework to disclose sustainability risks

Judy Kuszewski, chair of the Global Sustainability Standards Board (GSSB) said the GRI oil and gas sector standards would “provide a framework for any organization in the sector to disclose their sustainability risks in line with global best practice.”

She called on all parties to help by “reviewing the exposure draft and providing feedback.”

Sasol of South Africa is part of the GSSB project working group, and Alexandra Russell, Sasol’s Vice President of Strategy, Policy and Sustainability underlined the urgency for oil and gas firms to “expand their focus beyond short-term issues.”The GRI Oil and Gas Sector Standard, in her view, will “encourage firms to developing opportunities and a business case for change.”

“Responsible businesses should be a powerful force for change in the world. Holding business to account relies on accurate measurement and transparent reporting, using clear and consistent indicators,” said Matt Jones, head of business and biodiversity at the UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC)

“Every sector is different,” he stressed, “so this new GRI Sector Standard aims to make sure oil and gas companies can communicate the right information on the right issues to their stakeholders.”

PwC head of energy & utilities, Steve Jennings, said the £2bn committed to green homes grants will accelerate home insulations, particularly because 60% of UK consumers said they are keener to curb their energy used than before the lockdown.

Jennings believes the stimuli are “critical” to any widespread energy efficiency programme, it will also “quickly create jobs, which is hugely important to the economic recovery following the Covid-19 crisis.” Britain’s current job retention scheme will not be extended by the Treasury, but firms will be offered £1,000 for each furloughed worker they allow to return.

Quest for sharper focus on ‘green recovery’

The energy consultancy Delta-EE said they welcomed the “direction of travel” but added the Chanceller has “missed a trick on the environment.” The fossil fuel industry remains supported to the tune of millions of pounds annually, with analysts urging the Government to divert some of this to renewables.

“We understand the need for a focus on jobs, but a £3bn grant in support of energy efficiency installations can’t be the only step,” said Charmaine Coutinho, head of consulting at Delta-EE. While welcome to see support and interest in energy efficiency (...) we should be creating more jobs through support for renewable energy, EVs and decarbonising heat.”

Calls for E-vehicle funding grow louder

The industry is also calling for support for electric vehicles and charging infrastructure. “The Chancellor has shown he can cut VAT in some sectors, so we’d welcome the same move for clean technology,” Ms Coutinho said.

Banks, however, are hesitant and question whether the Chancellors measures will be enough to quickly rekindle the crisis-struck economy. Not least because the International Monetary Fund (IMF) had warned the UK’s gross domestic product (GDP) could drop by 10.2%.

Hence, some market observers have repeatedly urged the Chancellor to poor at least £200 billion into the economy to “secure” Britain’s swift economic recovery.

Lockdowns and the economic slowdown have hit industrial customers hardest, Rolls-Royce noted, “particularly those with exposure to oil & gas and mining. Power Generation activity also slowed down markedly in the second quarter, especially in the U.S.

“We experienced a reduction in demand for smaller yacht engines,” Rolls-Royce said, though “long-term demand growth for reliable power solutions is expected to remain intact with demand in data centre mission critical applications increasing above pre-COVID levels. “

In developing markets Rolls-Royce manage to grow market share despite the global health pandemic. Demand rebounds “particularly in China,” the company noted, “where we continue to expect growth in our revenues in 2020.”

Mitigation measures to brace against shortfall in cash

In Rolls-Royce larger aviation business, there has been a free cash outflow of approximately £3 billion due to a £1.1 billion slump in invoices related to engine flying hours (EFH) and a £1.1 billion one-time impact as the company ceased invoice factoring.

“Due to the deterioration in the medium-term outlook caused by COVID-19, absent mitigating actions, we forecast a shortfall of US$ denominated cash receipts over the next seven years compared to our hedged position,” said Rolls-Royce CEO Warren East.

“We have therefore reduced the hedge book from $37 billion to approximately $27 billion. This will result in cash settlement costs totalling approximately £1.45 billion comprising approximately £100 million of cash costs in 2020 (incurred in the first half), £300 million in each of 2021 and 2022, and £750 million spread over 2023 to 2026,” he explained.

Pro-forma liquidity currently stands at £8.1 billion which includes an undrawn revolving credit facility of £1.9 billion and commitments for a new 5-year term-loan facility of £2.0 billion, underwritten by a syndicate of banks.

Cost mitigation measures of £1.0 billion are “on track,” the CEO stressed, with approximately £300 million achieved in the first half of this year. The aim is to deliver at least £1.3 billion in annual pre-tax cash savings by the end of 2022, which will involve a 17% reduction of the company’s workforce, equivalent to more than 9,000 roles worldwide, mostly in the civil aerospace segment.

Apart from the turbines, Ansaldo Energia will also supply the related generators, auxiliary systems and on-site support activities for the construction and commissioning of the plant.

Consortium leader Shanghai Electric will be responsible for the local construction activities and will also produce and install the power plant’s steam turbine generator.

Commissioning and start-up due by mid-2023

The Rupsha CCGT, expected to be operational after three years of construction, has been designed to achieve the highest level of efficiency and meet the latest environmental standards. Once operational, it will be the largest power plant in Bangladesh to date.

Its owner and operator, North-West Power Generation Company is an affiliated company of the Bangladesh Power Development Board (BPDB) – is one of the country’s major energy utilities, with a generation mix of gas and oil.

Ahmad Kaikaus, secretary of the Bangladesh ministry of energy expressed confidence that the consortium partners will deliver the project on time, in good quality and with the highest health and safety standards.

Large-scale deployment of clean hydrogen at a fast pace is vital if the EU wants to succeed in reducing emissions by 50-55% by 2030, in a cost-effective way. The Commissions’ new hydrogen strategy, unveiled on Wednesday, focuses on green hydrogen derived from wind and solar power.

Aiming for 6 GW of clean hydrogen by 2024

In the first phase (2020-24), the plan is to decarbonise existing hydrogen production, e.g. in the chemical sector, and promote it for new application. The aim is to install at least 6 Gigawatt (GW) of renewable hydrogen electrolysers in the EU by 2024, compared to approximately 1 GW of electrolysers installed today.

Starting from 2024, hydrogen is meant to become an “intrinsic part” of an integrated energy system based on the addition of least 40 GW of renewable hydrogen electrolysers by 2030, capable to produce of up to ten million tonnes of renewable hydrogen in the EU.

Shell’s embraces hydrogen, forges ahead with REFHYNE

Shell sees potential in hydrogen. “We know the enormous contribution it can make to decarbonising hard-to-abate sectors, such as heavy-duty transport and industry,” said Elisabeth Brinton, executive Vice President, New Energies at Shell. “That is why we are working to develop hydrogen as a storage vector for renewables and as a net-zero energy carrier for commercial and industrial customers. We are also exploring ways of delivering green hydrogen produced from offshore wind,” she explained.

The REFHYNE project at the Shell Rhineland refinery in Wesseling, near Cologne in Germany, is designed to become the world’s largest hydrogen electrolyser. The plant, funded by the European Commission’s Fuel Cells and Hydrogen Joint Undertaking (FCH JU), will be jointly operated by Shell and manufactured by ITM Power.

Once operational, ITM Power’s 10MW PEM (proton exchange membrane) electrolyser will produce around 1300 tonnes of green hydrogen per year. This decarbonised hydrogen can be fully integrated into refinery processes, e.g. for desulphurisation of conventional fuels.

Works at the REFHYNE project began in January 2018, and the project is designed to run for 5 years to December 2022. Start of commercial operations is targeted for early 2021.

NortH2 project to harvest wind energy

Shell is also involved in other European hydrogen projects, notably a large electrolyser in Rotterdam, Netherlands, which aims to transform offshore wind energy into green hydrogen for use as a transport fuel.

The Anglo-Dutch oil major company is part of a consortium aiming to build the largest European green hydrogen project in the Netherlands by 2040.

This project is still subject to a feasibility study, but if given the go-ahead, NortH2 will be capable of producing 800,000 tonnes of green hydrogen by electricity generated from an offshore wind farm in the North Sea.

Completion of Nord Stream-2 will almost double Gazprom’s existing export capacity. Currently, 55 billion cubic meters per year (bcm/year) are being transported through the original Nord Stream-1 pipeline, running from Vyborg in Russia to Greifswald in eastern Germany. Start-up of the second pipeline leg will increase the overall transport capacity to nearly 99 bcm/y.

Construction of the 1,230-kilometre pipeline is nearly complete, except for a final stretch of about 120-kilometers in Danish waters. The project was halted in December when the Swiss-Dutch pipe-laying company Allseas suspended works over threats of U.S. sanctions.

‘Akademik Czersky’ vessel to build final stretch

The Russian pipe-laying vessel Akademik Czersky, designated to build the final stretch of the pipeline is already in nearby waters in the Baltic Sea. The vessel is currently owned by the Samara Thermal Energy Property Fund (STIF), operated as part of the Gazprom Fleet.

Though Gazprom is includes in some less stringent sanctions, analysts expects this will not hamper the Russian state gas exporter to forge ahead with a project as strategic as Nord Stream-2. Apart from Gazprom, Nord Stream’s lead developer, the European utilities Uniper, Winterhall, Engie, OMW and Shell are also invested in the project.

U.S. Congress mulls fresh sanctions

Determined to stop the completion of the controversial Russian-German gas interconnector, the U.S. Congress had threatened to levy sanctions against construction and pipe-laying companies involved in the project. Allseas, a Swiss pipelay firm, consequently suspended works.

"Denmark's decision makes it definitely much easier and cheaper for Russia to complete Nord Stream 2," said Anna Mikulska from Rice University in Texas. "Now the question is whether the already existing US sanctions would then apply to Gazprom." In her view, further U.S. sanctions would harm the country’s relations with its European allies. Germany quietly disagrees with the US sanctions package, in particular after German policy makers worked hard behind the scenes to secure Russian gas transits through Ukraine.

"There is bipartisan U.S. support to stop the pipeline and some very harsh anti-Germany rhetoric from Trump," commented Kirsten Westphal, energy expert at the German Institute for International and Security Affairs. Political posturing from the President Trump, seen as barely disguised support for US LNG sales into north-eastern Europe, is coming at an inopportune time.

Industry stakeholders and the wider German public increasingly take the view that further U.S. sanctions against Gazprom would have a serious impact on the European economy. Berlin would rather have global leaders work together to rekindle national economies in the aftermath of the coronavirus crisis.

The idea, set out in a position paper by dena with the Institute for Public Economics at the University of Cologne (FiFo), build on the Government’s earlier announcement to cap the renewables levy to 6.5 ct/KWh in 2021, and further to 6 ct/kWh in 2022.

This measure would be worth 11 billion Euros and would be part of Germany’s wider 130 billion Euro coronavirus stimulus package.

A slower reduction of the EEG levy down to zero in the years until 2030, combined with a rise of the electricity tax to 4.1 cent, would led to an overall power price reduction of 4.5 ct/kWh.

“Only this fundamental restructuring of the renewables levy and the electricity tax will make it possible to achieve considerable simplifications in energy law, relieve companies and authorities of the burden of enforcement and processing and thus achieve further economic benefits,” economist at dena and FiFo conclude.

The German end-customer power price is subject to taxes and levies that make electricity expensive despite a steady decline in wholesale power prices over recent years. However, as electrification progresses and the share of green energy sources are set to replace fossil fuels not only for power generation but also in heating and transport, dena says the “the electricity price has become an essential lever to steer the development” and help achieve Germany’s net zero emission targets.

Though the pandemic has sharply reduced growth in most industries, some energy sub-sectors like decentralized power, flexible and smaller-scale gas turbines and power storage prove to be less affected.

“Enhanced efficiency and robustness of gas turbines have been instrumental in driving the growth of the market,” Technavio’s latest custom research report reads.

Ansaldo Energia, Bharat Heavy Electricals, Capstone Turbine, Caterpillar, General Electric, IHI Corp, Kawasaki Heavy Industries, Mitsubishi Heavy Industries, OPRA Turbines, and Siemens are singled out as main market participants. Technavio’s latest industry research looks at these companies’ sales, revenues, technological innovations and growth prospects.

Siemens Energy turns is back on coal

Market vendors are advised to focus more on the growth prospects in the fast-growing segments, while maintaining or scaling down their exposure to slow-growing segments like fossil fuels.

Newly-formed Siemens Energy, to be listed at the German stock exchange on September 28, just committed to phasing out any operations and technology to related to coal-fired power generation. Siemens CEO Joe Kaeser said he had asked the board will draw up a “stakeholder-friendly” plan for the phase-out, without giving a specific timeline. Siemens Group had been harshly criticised earlier this year for participating in the Adani coal mine project in Australia.

Sources close to the supervisory board warned in April that profits in the power plant division, which were already small before the pandemic, have now collapsed which threatens to undermine Siemens Energy's "stock market story."