FT Energy News 6 January

January 6, 2011

US pins blame for BP spill (Page 1)

Systematic failures by the management of BP and other companies led to the Macondo well blow-out in the Gulf of Mexico last year, the official US inquiry has concluded, warning that industry complacency could cause a similar accident again. The report will be published on Tuesday and delivers a scathing verdict on the procedures followed by BP and its contractors on the project, Halliburton and Transocean.

Spill fears fail to bring curb on deepwater oil drilling (Page 2)

MPs will today rule out a moratorium on deepwater drilling in the North Sea but urge oil and gas companies to address shortcomings in their response plans to spills. A report by the Commons energy and climate change committee calls on the government to ensure that standardised response plans are replaced by site-specific guidelines that take into account local conditions.

China keeps turbines turning as European cuts affect demand (Page 23)

Government budget cuts will slow growth in the European wind power industry this year, but surging demand from China is helping advance the global push behind green energy according to Vestas Wind Systems, the world’s biggest wind turbine maker. Growth in new wind energy installations in Europe is forecast to shrink from 14% in 2010 to 1% this year, according to analysts at Citigroup.

FT Energy News 7 December

December 7, 2010

Nuclear plants’ subsidies attacked (Page 2)

New nuclear power plants should not receive government subsidies because they are financially viable but a proposed feed-in tariff for low-carbon energy , which would include renewable and nuclear, would be acceptable because it would not represent a direct subsidy, said David Kennedy, chief executive of the Committee on Climate Change, a statutory body set up to advise the government on how to meet its emissions-cutting targets.

France nears $9bn deal to build two reactors in India (Page 8)

France has taken a lead over rivals including the US and Russia for a €7bn deal to build two nuclear power plants in India.

Brussels to target energy trading abuses (Page 10)

The European Union plans to crack down on insider trading and price manipulation in the natural gas and electricity markets. Gunther Oettinger, the energy commissioner, is expected to release legislation proposals on Wednesday requiring traders and generators to give regulators details of their trading and production activities.

ÈDF says that overseas strategy is unchanged after EnBW sale (Page 23)

EDF insisted its international strategy was unchanged after announcing its withdrawal from Germany through the surprise sale of its politically controversial stake in the German utility EnBW. The state of Baden-Wurttemberg is buying EDF’s 45% stake for €4.7bn in cash.

FT Energy News 3rd November

November 3, 2010

Oil spill costs to cut into BP pay-out (Page 1)

BP will adopt a far less generous dividend policy when it reinstates its payout to investors in an effort to restore growth at BP.

Minister seeks to calm wind farm fears (Page 4)

The government has sought to allay concerns that North Sea wind farm operators might lose their leases to make way for oil and gas exploration, saying they could receive financial compensation in such circumstances.

BP sees rays of hope after darkest hour (Page 19)

On Tuesday BP was able to show evidence of a tentative recovery at the oil group as BP announced that underlying profits for the third quarter were up 18% from a year ago, helped by stronger oil and natural gas prices, as well as a strong performance from its refining business. BP also announced progress on its asset disposal programme, planned at $30bn by the end of 2011, with sales agreements totalling about $14bn.

BG raises Brazilian reserve estimate (Page 19)

BG Group has added 2.7bn barrels of oil equivalent to its reserves estimate for three of its fields offshore Brazil.

FT Energy News 26th October

October 26, 2010

Green bank plan to make spring debut (Page 2)

Full details of the coalition’s plan for a green investment bank will be set out in the spring of next year. Additional funds to the £1bn will be made available to the bank from asset sales.

Go-ahead for wind energy to generate 70,000 jobs (Page 2)

David Cameron has said £60m of spending earmarked for upgrading British ports to make them suitable for handling large offshore turbines would go ahead, resulting in 70,000 ‘green jobs’.

BP to sell four Gulf of Mexico fields (Page 20)

BP has agreed to sell its interests in four deepwater fields in the Gulf of Mexico to Japan’s Marubeni Oil for $650m as part of a move to cut its capital spending and rebalance its portfolio of assets in the wake of the Macondo oil spill disaster.

FT Energy News 20th October

October 20, 2010

Cooling ambitions (Page 11)

Delays, cost over-runs and foreign competition have dimmed French hopes for its new-generation nuclear reactor as a significant source of diplomatic and economic power.

China: The world’s biggest market but in need of nuclear know-how (Page 11)

The Chinese government plans to build 70GW-100GW of nuclear capacity by 2020, 23 reactors are under construction and another 120 have been proposed.

Market bulls set target of $100 a barrel for crude oil (Page 33)

Goldman-Sachs forecast oil will reach $100 a barrel by the end of next year, helped by a weak dollar and a stronger than expected growth in oil demand.

Financial Times Energy News 19th October

October 19, 2010

BP fourth-quarter bonus tied to safety (Page 1)

Health and safety will be the sole measure used to judge all 80,000 staff for their bonuses in the fourth quarter according to Bob Dudley, new chief executive.

Green investment divides ministers (Page 4)

Details of a green investment bank are likely to be left out of Wednesday’s comprehensive spending review as ministers cannot agree whether to grant the bank power to raise finance from the private sector, for instance by issuing bonds, green Isas, raising loans and other measures.

Subsidy for eight nuclear reactors rejected (Page 4)

“There will be no levy, direct payment or market support for electricity supplied or capacity provided by a private sector new nuclear operator, unless similar support is also made available more widely to other types of generation” said Chris Huhne, secretary of state for energy and climate change.

China feels the strain in rush to save energy (Page 7)

China is rushing to meet its energy saving target of 20% reduction in energy use per unit of gross domestic product. China’s energy intensity fell by 15.6% from 2005-2009, but rose 3.2% in the first quarter of this year.

Wave of closures set to hit US coal stations (Page 8)

Closures ot US coal fired power plants are set to accelerate sharply during the coming decade as a wave of environmental regulations hits the industry. Ageing plants are threatened by the cost of investment needed to cut pollution, as well as by competition from cheap gas supplies created by the boom in US production from previously uneconomic shale rocks.

Rockhopper seeks to extend Falklands drilling (Page 21)

Rockhopper, the Falklands Islands-focused oil explorer, is hoping to raise £200m through an accelerated bookbuilding to extend its drilling programme just days after cutting its resource estimates.

TNK-BP looks abroad with Venezuela and Vietnam deal (Page 21)

TNK-BP, the Russian venture half-owned by BP, will pay $1.8bn to buy BP’s production and pipeline assets in Venezuela and Vietnam, in a move that marks its most significant diversification outside Russia. The move puts TNK-BP on the path of international expansion as opportunities for growth in Russia diminish due to increasing resource nationalism and a burdensome tax regime.

Financial Times Energy News 18th October

October 18, 2010

Huhne backs nuclear power surge (Page 2)

The way will be cleared for the next generation of nuclear power stations on Monday with the publication of a revised list of suitable sites and clearer guidelines on how they can be used. The proposed new plants are not expected to be operational before 2018. Funding is expected to be cut for a 10-mile barrage across the SDevern that could have generated about 5% of the UK’s electricity.

Low gas prices to reshape industry (Page 24)

Low US natural gas prices intensify pressure on producers, with analysts expecting many to form joint ventures and to sell off assets to raise cash. Prices have been trading at about $3-$4/mBtu down from the record $13.69/mBtu reached in 2008.

IPO for Enel’s renewables unit to test investor appetite (Page 24)

Enel, the partially privatised Italian utility, plans to sell as much as €3.4bn worth of shares in its diversified renewables business, which is present in 16 countries and includes geothermal, hydro, solar and photovoltaic, biomass and wind energy. Enel Green Power (EGP) hopes to reverse the trend of falling renewables prices by offering a more diversified portfolio.

Big subsidies for wind lead to four-year investment plan (Page 24)

EGP plans to invest 90% of its projected capital expenditure in wind over the next four years. UBS expects subsidies for wind and solar across Europe could surge from €11bn in 2010 to €13bn in 2015.

Financial Times Energy News 14th October

October 14, 2010

Topland expands into green energy (Page 22)

Topland, the investment company managed by property entrepreneurs Sol and Eddie Zakay, has invested in a solar energy technology business that will use its retail estate portfolio to generate and trade power. The company has taken an undisclosed financial stake in Esco NRG, a renewable energy service company, and has agreed to open certain properties for use as future sites for PV arrays. Esco NRG was established in February 2010 and will this week launch the UK’s largest solar PV array, 745 sq m.

Sale of Cairn unit to be test case for India (Page 23)

Vedanta, the Indian-focused mining company, who have become a global mining group, mainly by buying under performing state-owned Indian mining firms and strengthening their operations, is now launching into oil and gas productions and wants to buy a $9.6bn controlling stake in Cairn Energy’s Indian subsidiary.

Financial Times Energy News 13th October

October 13, 2010

Curbs on deepwater drilling lifted early (Page 6)

The Obama administration lifted its moratorium on deepwater drilling ahead of schedule, saying new environmental and safety regulations had significantly reduced the risks of a big accident; however some cautioned it was a meaningless gesture, oil groups still faced a long process before oil production could be ramped up as they wait for drilling permits.

Soco shares hit Vietnam setback (Page 19)

Shares in Soco International, the Asia-focused oil and gas explorer, fell sharply yesterday after it said it would abandon an appraisal well off the coast of Vietnam. Although drilling tests had showed oil and gas in commercial quantities, a lack of reservoir pressure meant it flowed at “sub-commercial” rates.

Google heads the search for offbeat tech investments (Page 25)

Google have invested hundreds of millions of dollars behind companies working on driverless cars, wind turbines, lunar robots, genetic profiling and human-powered monorails. Google this week annou8nced it was joining a multibillion-dollar venture in wind power off the US east coast. Google said this midatlantic “backbone transmission” project offers “a solid financial return while helping to accelerate offshore wind development – so it’s both good business and good for the environment”.

Reply to Consultation on Domestic Export Tariff

January 7, 2009

Hey Folks,

The CER and ESB Customer Supply are coming together to offer an export tariff to domestic home owners. So the idea is that if you install a Wind turbine, a Solar PV panel, or a Micro-CHP, you will be in a position to sell electricity to back to the grid for profit. The drawback is that the rate they propose to pay you will be far less than what you currently the pay for electricity. (this is explained by the difference between retail and wholesale prices. Anyway, you can find their proposal here. I’m responding to the consultation and am blogging it here. Sorry for all the acronyms, but hey… thats what google is for…


Dear Sir/Madam,

I am delighted to have this opportunity to comment on your proposal to develop an export tariff for Domestic customers and hope that my comments are helpful and useful. Congratulations to both yourselves and to ESB Customer Supply (ESBCS) on taking this initiative.

My comments on the ESBCS proposal

Financial approach – The proposal set out by ESBCS appears to be a largely based on a simple financial calculation. This does not take into account subtle softer benefits of such generators which tend to encourage their owners to be more aware of energy use, and so reduce consumption, particularly at peak times. This will act to help Ireland Inc. reduce our National GHG emissions and improve security of supply.

Benefits of embedded generation – The proposal does not seem to recognise the benefits of such embedded generation in reducing system losses and generally strengthening the grid.

Need for increased dispatchable capacity on the grid – As identified in Eirgrid’s report on Generation Adequacy report 08, Ireland requires more installed generation plant. This initiative could act to provide some or all of that capacity.

Danger of channelling funding through ESBCS – While I understand the attractiveness of using ESBCS to provide this scheme, doing so is to create a further barrier to other suppliers entering the residential market. Could a system similar to the WPDRS be used to allow all suppliers to provide such a tariff with your support.

Though the proposal suggested that the approximate price comparison between wholesale and retail electricity is two thirds, the price of 9c/kWh is not two thirds of the published domestic kWh tariff, of 16.4c/kWh.


General  comments

Environmental approach – The proposal does not focus on the environmental benefits of many of the likely technologies to be included in the scheme.

Capacity/Reserve/AER/Wind/REFIT/WPDRS tariff structures – In the past financial structures have been created to facilitate generators which bring benefits to the system which are not simply kWh based. I propose that a similar pragmatic approach be taken here.

Licence to build/generate – Using the current structure, registration of such a large number of generators by yourselves will create great challenges for both the generator owners and yourselves. Is a simpler solution being developed?

The existing Grid Code is not suitable for consumption of domestic generator owners, though the risk their generators will create is potentially greater than all the existing capacity on the grid. Is a more suitable guide/code on the way for their benefit?

Of all the benefits I have mentioned here, greater benefits could be exploited by introducing a similar scheme for small and medium businesses. Could such a scheme be fast-tracked for their benefit.


In conclusion

I believe that the potential scale, environment and security of supply benefits of this scheme are being severely underestimated by this proposal. Furthermore I disagree with asking ESBCS to act as the main agent for the scheme. Provision of funding could be provided by the CER to be paid to any supplier who offers such a tariff. Finally I believe that the administrative burdens this will create are significant, and should not be underestimated.

While I congratulate you greatly on the proposal, I do believe that a larger tariff should be introduced considering the benefits the scheme will bring. A simple net metering structure would provide a far greater incentive and a greater benefit to us all.