Monday, August 8, 2016

Germany's coal imports expected to fall in 2016

Germany will likely import the same amount of hard coal in 2016 as last year, lobby group VDKi said on Thursday, citing rising demand from steelmakers but lower usage in power stations due to rival renewable energy.

Coal is still the backbone of power generation in Europe’s biggest economy, which is seeking to move away from nuclear and fossil power to renewable energy. Two thirds of German coal imports go to power utilities, just under a third to the steel sector, and the remainder to heating providers.

“Imports so far this year are still weak because weather patterns have driven higher renewable generation, but steelmakers are seeing a recovery to normal production levels after a trough,” VDKi’s managing director Franz-Josef Wodopia told a news conference.

germany gross electricity generation by source

“We expect stagnant coal imports for the full year.”

German imports monitored by VDKi’s 70 member companies in 2015 rose to 57.5 million tonnes, up 2.3 percent from 2014, as coal’s relatively low price vis-a-vis gas, due to an industry downturn, raised its uses in the electricity sector.

Germany used hard coal for 18 percent of its 2015 electricity generation, of which 90 percent was imported, while 25 percent of power generation came from domestic brown coal.

Turning to 2016, VDKi chairman Wolfgang Cieslik said that steel manufacturers had reported a 4-percent gain in year-on-year output in May after six months of lower production.

“This shows first signs of a stabilisation,” he said.

But coal-to-power plants struggle increasingly against competition from renewables, which are given priority access to power grids, he said.

Around 30 percent of power already comes from energy that is subsidised at fixed tariffs, although latest reforms will usher in an auction-based system to create market-based prices as from next year.

Still, as a result of the old system an increasing number of coal-fired plants cannot produce at full stretch and keep losing market share.

Germany has legislated to become virtually carbon-free by 2050, through a steady replacement of thermal power with that from wind and solar energy.

Cieslik said that more coal plant closures were on their way, reducing VDKi’s customer base.

Power network operators calculate that by 2030, German hard coal-to-power station capacity will fall by between 12 and 52 percent from 2014’s 26 gigawatt (GW) level, to 11-23 GW.

Germany’s top coal suppliers are Russia, Colombia, the United States and Australia

Saturday, August 6, 2016

Employment in oil and natural gas extraction and support activities continued declining

Monthly oil and natural gas rig count and brent price

Despite increases in crude oil prices since the start of the year, employment in oil and natural gas extraction and support activities continued declining from levels reached in the fall of 2014, just before the onset of falling oil prices. The total rig count (including both oil-directed and natural gas-directed rigs) has declined even more sharply, from nearly 1,800 rigs in the fall of 2014 to a weekly low of 404 rigs in May 2016. Crude oil production has also declined, but to a much lesser extent than either employment or rig counts, while natural gas production has leveled off.

Employment in oil and natural gas production reached a high of 538,000 jobs in October 2014. Since then, oil and natural gas production employment declined 26%, a loss of more than 142,000 jobs through May 2016, based on the latest jobs data available. The total decrease in production jobs is nearly three times the 51,000 jobs lost over a 13-month period during the 2008–09 recession. Not all production jobs are directly related to drilling—the majority of the jobs are actually for extraction or support activities, which include the operations of drilled wells, exploration, excavation, well surveying, casing work, and well construction. This also includes the maintenance of already producing wells.

The effects of the reduction in drilling and employment in crude oil and natural gas production have been relatively modest, with production levels in May down 6% and 1%, respectively, relative to their level in May 2015. Compared to October 2014, the peak month for employment in the sector, May 2016 crude oil production was 2% lower, while natural gas production was flat.

The divergence between trends in rig counts and employment on the one hand and oil and the trends of natural gas production on the other are attributable to increases in production per new well in key regions, driven in part by advances in siting and drilling technology. For instance, new-well oil production per rig so far in 2016 has been more than twice its 2013 level in areas such as the Bakken, Eagle Ford, and Permian. Growing offshore crude oil production in the Gulf of Mexico has also helped to offset declines in Lower 48 onshore production.

Monthly U.S crude oil rig count and production

Monthly U.S natural rig count and production

Friday, August 5, 2016

North American electricity from renewable and nuclear will grow 45% in 2025.

North America electricity generation mix

Based on results from EIA's Annual Energy Outlook 2016 (AEO2016) Reference case and International Energy Outlook 2016, EIA projects that the North American share of energy generation from renewable and nuclear energy sources will grow from 38% in 2015 to 45% in 2025. This projection assumes the Clean Power Plan (CPP) is upheld and takes effect in the United States. A recent agreement among Canada, Mexico, and the United States established a goal of 50% of electricity generation from clean energy sources by 2025.

The trilateral agreement goal includes nuclear, renewables, and energy efficiency as eligible sources of clean energy, but it does not specify a baseline for assessing energy efficiency, which has been improving over time. The EIA projections discussed here focus solely on electricity generation from nuclear and renewable sources as a share of total generation. Substantial increases in demand-side energy efficiency are included in EIA's projection for overall electricity demand, but explicit accounting of energy efficiency contributions are not projected. Moreover, these values reflect the Reference case projections; other assumptions for fuel prices, technology costs, and policies could affect the electricity generation mix.

Electricity generation in the United States currently represents more than 80% of total generation in North America. EIA's AEO2016 Reference case assumes that implentation of the CPP will begin in 2022. The extension of certain tax credits, significant cost reductions, and recognition of future CPP requirements result in a large increase in renewable generation between 2015 and 2025. U.S. coal-fired generation is expected to decline by 13% between 2015 and 2025 in the AEO Reference case, while natural gas-fired generation increases by 4%.

Tuesday, August 2, 2016

Germany eeg surcharge will rise to 7.1-7-3 cents in 2017

EEG surcharge rises 2017 about seven cents per kilowatt hour

The main cause decline in electricity prices on the stock market, for consumers, therefore, needs to change anything. This shows the EEG computer Agora energy revolution

Berlin, July 23, 2017. The allocation to the Renewable Energies Act ( EEG -Umlage) will rise to power calculations for Agora energy transition in 2017 to 7.1 to 7.3 cents per kilowatt hour.Currently stands at 6.35 cents. The essential information for current customers purchase costs for electricity sales hardly change: The sum of market price of electricity and EEG -Umlage is projected to continue to forecast just below 10 cents per kilowatt hour.

The reason for this lies in the many years declining market electricity prices. Because the EEG -Umlage compensates the difference between the market price of electricity and the feed- out, get the operator of wind, solar, biomass, hydropower and geothermal plants. So the price of electricity in the 1st half 2016 at an average of 2.5 cents per kilowatt hour, while he still was about 3.2 cents per kilowatt hour per year, 2015. "The cost of electricity consumers remain relatively constant when the power distributors expect honest and pass on their lower purchase prices," says Dr. Patrick Graichen, director of Agora energy transition. "At the same time, consumers get more green electricity for their money. We expect that the share of renewable energy in 2017 increased to more than 35 percent, this year it will probably be 34 percent. "In 2015, the share of renewables in was gross electricity consumption 32.6 percent.

The calculations were performed with the EEG made ​​machines, the Agora energy revolution free on offering. He is continuously developed by Öko-Institut and has been provided for the allocation forecast 2017 current scenarios for the development of electricity prices, electricity consumption and electricity production from renewable energy sources.

Tuesday, March 15, 2016

The world oil market March 2016

The world oil market is complex. Governments and private companies play various roles in moving oil from producers to consumers. Government-owned national oil companies (NOCs) control most of the world's proved oil reserves (75% in 2014) and oil production (58% in 2014). International oil companies (IOCs), which are often stockholder-owned corporations, make up the balance of global oil reserves and production. Proved oil reserves consist of the amount of oil in a given area, known with reasonable certainty, that current technology can recover cost effectively. Worldwide proved oil reserves in 2014 were almost 1.7 trillion barrels, and global oil production averaged roughly 93.2 million barrels a day.

World Proved Crude Oil Reserves

There are different types of oil companies

There are three types of companies that supply crude oil to the global market. Each type of company has different operational strategies and production-related goals:
International oil companies (IOCs): These companies, which include ExxonMobil, BP, and Royal Dutch Shell, are entirely investor owned and primarily seek to increase their shareholder value. As a result, IOCs tend to make investment decisions based on economic factors. These companies typically move quickly to develop and produce the oil resources available to them and sell their output in the global market. Although these producers are affected by the laws of the countries in which they produce oil, all decisions are ultimately made in the interest of the company and its shareholders, not in the interest of a government.
National oil companies (NOCs): These companies operate as an extension of a government or a government agency, and they include Saudi Aramco (Saudi Arabia), Pemex (Mexico), the China National Petroleum Corporation (CNPC), and Petróleos de Venezuela S.A. (PdVSA). These companies support government programs financially and sometimes strategically. These companies often provide fuels to domestic consumers at a lower price than the fuels they provide to the international market. These companies do not always have the incentive, means, or intention to develop their reserves at the same pace as investor owned international oil companies. Because of the diverse objectives of their supporting governments, these NOCs pursue goals that are not necessarily market oriented. The goals of these companies often include employing citizens, furthering a government's domestic or foreign policies, generating long-term revenue to pay for government programs, and supplying inexpensive domestic energy. All NOCs belonging to members of the Organization of the Petroleum Exporting Countries (OPEC) fall into this category.
NOCs with strategic and operational autonomy: The NOCs in this category function as corporate entities and do not operate as an extension of the government of their country. This category includes Petrobras (Brazil) and Statoil (Norway). These companies often balance profit-oriented concerns and the objectives of their country with the development of their corporate strategy. Although these companies are driven by commercial concerns, they may also take into account their nation's goals when making investment or other strategic decisions.

In 2014, 100 companies produced 82% of the world's oil. NOCs accounted for 58% of global oil production.

Share of world oil production by type of company

OPEC members seek to work together to influence world oil supplies

OPEC is a group that includes some of the world's most oil-rich countries (see OPEC member countries in the Did you know? box). Together, these countries controlled approximately 73% of the world's total proved oil reserves in 2014, and they produced 39% of the world's total oil supply that year. Each OPEC country has at least one NOC, but most also allow international oil companies to operate within their borders.

OPEC seeks to manage the oil production of its member countries by setting crude oil output targets for each member except for Iraq, for which there is no current target. The track record of compliance with OPEC quotas is mixed because production decisions are ultimately in the hands of the individual member countries.

In general, there are three main factors that determine OPEC's market power, or how effectively the organization can influence oil prices:
How unwilling or unable consumers are to move away from using oil
How competitive non-OPEC producers become as the price of oil increases
How efficiently OPEC producers can supply oil compared with non-OPEC producers

OPEC's oil exports represented about 56% of the total seaborne crude oil traded internationally in 2014, according to data from Lloyd's List Intelligence tanker tracking service. The difference between market demand and oil supplied by non-OPEC sources is often referred to as the call on OPEC. Saudi Arabia, the largest oil producer within OPEC and the world's largest oil exporter, historically has had the largest share of the world's spare production capacity. As a whole, OPEC maintains the world's entire spare capacity for oil production. It is generally not cost-effective for international oil companies to develop and maintain idle spare production capacity, because the IOC business model maximizes revenue by continuing to produce oil as long as the price of selling that commodity is higher than the cost of getting an additional barrel of oil to market.

world Oil Market Spare Capacity

EIA defines spare capacity as the volume of oil production that can be brought online within 30 days and sustained for at least 90 days. Spare capacity can also be thought of as the difference between a country's current oil production and its maximum oil production capacity. Should a supply disruption occur, oil producers can use spare capacity to moderate increases in world oil prices by boosting production to offset lost oil supplies.

Friday, March 4, 2016

Crescent Dunes Solar Energy begins producing electricity


Crescent Dunes Solar Energy, a 110 megawatt (MW) concentrating solar power (CSP) electricity plant, began full operation in February, according to its press release. Crescent Dunes uses an energy storage system that developers expect will be able to store enough thermal energy to generate electricity for up to 10 hours after sunset or on cloudy days when direct sunlight is unavailable.

Through December 2015, CSP made up 8% of total U.S. solar electric generating capacity, while utility-scale solar photovoltaic (PV) made up 53%, and distributed solar PV made up 38%. Solar thermal electricity power plants differ from PV technology, which uses solar cells to convert direct and diffuse sunlight directly into electricity. Solar thermal plants rely on direct sunlight to focus the sun's heat energy onto collectors. Most of the earlier utility-scale CSP projects use parabolic trough technology, where curved mirrors focus sunlight onto receiver tubes of water or some intermediary fluid. EIA data now show 1,777 MW of operating CSP capacity in three states: California, Arizona, and Nevada. Concentrated solar power technologies use mirrors that direct sunlight to heat an intermediary fluid, which then heats water into steam to drive a turbine. Crescent Dunes is the second CSP plant, after California's 400 MW Ivanpah plant, to use thousands of sun-tracking mirrors called heliostats to capture and focus sunlight onto a receiver in a tall central tower.

us cumulative total solar thermal electricity generation

Unlike most other CSP plants that use synthetic oil as the intermediary fluid, Crescent Dunes uses molten salt, which has more advantageous thermal properties. Liquid salt in a 640-foot central tower is heated by concentrated sunlight. When electricity is needed, the molten salt is pumped through a heat exchanger to turn water into steam that spins a turbine to generate electricity. Cooler salt flows back to a storage tank and the cycle repeats. Unlike the Ivanpah CSP plant, Crescent Dunes will not use natural gas as a secondary fuel. Crescent Dunes developers expect it to generate more than 500,000 megawatthours annually, equivalent to 1.3% of Nevada's 2015 utility scale net generation from all sources.

Large renewable projects like Crescent Dunes rely on many forms of financing. Developer and owner SolarReserve LLC received a $737 million loan guarantee from the U.S. Department of Energy. Ivanpah, the earlier power tower project, received $1.6 billion. Crescent Dunes is also eligible for the 30% federal investment tax credit. Two more CSP projects could come online by the end of 2017, but neither has received regulatory approval or begun construction.

Although individual CSP projects can be large, total installations of CSP systems have been small compared with PV systems, as 2,950 MW of utility-scale solar photovoltaic plants began operating in 2015 alone. Given its significant cost advantage, PV technology is expected to provide nearly all further growth in U.S. solar power in the foreseeable future.

Monday, February 29, 2016

Saudi Aramco sets March propane to $290/T, up $5 from the February Level

State-run Saudi Aramco has increased its March contract price for propane to $290 a tonne, up $5 from the February level, an industry source said on Monday. Butane prices for March 2016 were set to $320 a tonne, up $5 from February level of $315. The prices provide a benchmark against which Middle East sales of liquefied petroleum gas (LPG) to Asia are priced. Following is a table of Saudi Aramco's contract prices of propane and butane per tonne in U.S. dollars. 

Product   March 2016  - 
February 2016    Change 
Propane   $290                   $285                +5
Butane     $320                  $315                +5

Friday, January 22, 2016

Natural gas-fired power plants in Europe are earning money again.

Natural gas-fired power plants in Europe’s two biggest electricity users are earning utilities money again.

German gas-fired plant profitability at times of peak demand turned positive on Dec. 7, rising to the highest since February 2012 on Thursday, while gas units that generate around the clock in France have been profitable for seven weeks, the longest stretch in four years, according to data compiled by Bloomberg. That came after benchmark European gas prices fell 12 percent in 2016, extending last year’s 31 percent drop.

“More gas plants are in the money at current power and gas prices,” said Omar Ramdani, head of analysis at RheinEnergie Trading GmbH in Cologne. “If it pays off for a gas plant to produce several hours and not a whole day, it is looking positive right now.”

month-ahead German clean spark spread

While gas produces about half the emissions of coal when used to generate electricity, making it a greener option to back up intermittent wind and solar output, the fuel has struggled to compete against more profitable coal, forcing utilities from EON SE to Statkraft AS to close gas units. The price of the cleaner fuel in Europe will probably fall further as cold weather ends and oil’s slump feeds into long-term contracts, Societe Generale SA said last week.

“We’re now in a situation where the most efficient gas is replacing the least efficient coal plants,” Marcus Bokermann, director of market strategy at Vattenfall AB’s asset optimization and trading business, said Jan. 17. “There’s still a long way to go until least efficient gas pushes out most efficient coal but we have started. This has impact on overall emissions in Europe.”

The month-ahead German clean spark spread, a measure of gas plant profitability that takes account of fuel, power and emission costs, for the peak hours of 8 a.m. to 8 p.m. fell 3.5 percent to 6.07 euros ($6.58) a megawatt-hour on Friday, after reaching 8.45 euros on Thursday. In France, the measure for baseload plants that operate 24 hours a day rose to 5.72 euros a megawatt-hour on Friday.
Nuclear Competition

Engie SA doubled the output of four of its French gas-fired plants in 2015 from a year earlier, including a unit in Fos-sur-Mer brought back after being idled, Le Figaro reported Jan. 21. Gas prices are low enough that stations in France will compete with nuclear to provide the lowest cost generation, according to Bruno Brunetti, senior director of electricity at Pira Energy. France gets about 75 percent of its power from reactors.

“It is starting to be ugly as we head towards nuclear reactors ramping down in the short term” as gas gets cheaper, he said by phone from New York.

So far this winter, Europe’s gas consumption has been about 6 percent below normal, said Meredith Annex, an analyst for Bloomberg New Energy Finance in London. Rising spark spreads may change that, she said.

“If there’s a driver for gas demand in Europe, it will come from the power market,” Klaus Schaefer, chief executive officer of EON SE’s Uniper unit, said Jan. 20.

Monday, January 18, 2016

Oil Prices Fall Below $30 a Barrel

Oil resumed its seemingly inexorable slide on Friday with prices on both sides of the Atlantic slipping below $30 a barrel as investors braced for the full return of Iranian barrels to the market.

Amid expectations that sanctions linked to Iran’s nuclear programme could be lifted as soon as this weekend, Brent, the international oil marker, dropped $1.40, or more than 4.5 per cent, to a fresh 12-year low of $29.46 barrel.

Although Iranian officials had signalled towards the end of 2015 that sanctions could be lifted as early as January, oil market observers and western diplomats had said it would take months longer.Meanwhile, West Texas Intermediate, the US oil benchmark, fell $1.77 — almost 6 per cent — to $29.41. Both prices rallied on Thursday as speculators betting against oil closed some of their positions. Brent has had one of its worst starts to a year on record, falling 21 per cent.

“Signals now point to Iran reaching ‘Implementation Day’ at least two to four months sooner than we and the market initially expected,” said analysts at Barclays in a report.

Iran claims it will be able to increase production by 500,000 barrels a day immediately after the lifting of sanctions and within seven months reach its pre-sanctions level of at least 3.4m b/d.

While oil analysts believe these targets are hugely ambitious, any extra Iranian barrels hitting the market will add to a global supply glut that has pushed prices down more than 70 per cent since mid-2014. It could also delay the rebalancing of the market.

“Global macroeconomic concerns are mounting . . . Opec supplies are rising . . . and non-Opec supply is not adjusting fast enough, meaning that there is still further downside risk to prices this quarter,” the Barclays analysts said.

Demand was one of the few positives in the oil market last year as motorists enjoyed the benefit of lower prices at the pump. It is also one of the factors Saudi Arabia and its Gulf allies in Opec are banking on to rebalance a market that is oversupplied by at least 1m barrels day. The other is slowing output from high-cost suppliers such as US shale companies.In recent weeks further signs of a slowdown in China, whose growth led the rise in global oil demand over the past decade, have added fears of slowing consumption to massive oversupply.

On Friday BHP Billiton, the world’s biggest resources company, wrote down the value of its US shale assets by $7.2bn and placed its development plans on hold.

The extent of the oil market glut was also highlighted on Friday by Euronav, a leading operator of very large crude carriers (VLCC). These are vessels that are capable of hauling more than 2m barrels of crude around the world.“Oil and gas markets have been significantly weaker than the industry expected,” said BHP chief executive Andrew Mackenzie. “We responded quickly by dramatically cutting our operating and capital costs, and reducing the number of operated rigs in the onshore US business from 26 a year ago to five by the end of the current quarter.”

The company and its rivals have enjoyed a sharp increase in rates as producing countries have been forced to ship their crude longer distances to find customers.

Euronav said charter rates for VLCCs had averaged $62,000 a day in the fourth quarter, more than double the level of a year ago.

“Demand has been and continues to be solid,” the company said. “Vessel supply remains moderate with only a handful of confirmed additional newbuilding orders placed since the end of the third quarter 2015 and for delivery scheduled in 2018.”