Archive for the ‘electric power’ Category

What is India’s BJP thinking about the country’s energy policy?

India’s oil and gas sector saw some unprecedented decisions taken last year under the Congress Party-led government.

These ranged from a partial deregulation of diesel prices to a new gas pricing mechanism that would have seen the wellhead price of gas double to over $8/MMBtu. However, the hike — which was ratified twice by the Cabinet — was never implemented as scheduled on April 1 due to India’s upcoming elections.

The Congress-led government last year also started revamping and streamlining upstream policy to incentivise exploration and production.

All in all, 2013 was a busy year for journalists as we struggled to keep pace with and understand all that was going on in India’s energy sector.

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The continuing demise of US fuel oil consumption

When commentators talk about the US cutting its oil consumption, they often cite the reductions in usage that were spurred by the first oil shock in 1973-1974. “See,” they say. “We did it back then, and we can do it again!”

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What they often fail to note is that one of the ways in which the US did dial back on its oil consumption is by drastically changing over its use of fuel oil for electricity generation to lots of other things: coal, natural gas, nuclear, alternatives. In 40 years, there have been plenty of things.

But the fact is if you’ve all but zeroed out your consumption of fuel oil, you can only do that once. That’s why the whole “we can do it again!” comes up short.

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Jordan follows rocky road to oil shale development

After many years of incubation, Jordan’s dream of producing oil from its large near-surface shale deposits is showing signs of transforming from desert mirage into hydrocarbon oasis, set to yield the Hashemite kingdom’s first domestically produced crude within five years.

That is because a Saudi enterprise appears to have advanced an eight-year-old preliminary agreement to develop a commercial project using Russian technology. Appearances, however, can sometimes be deceiving. Read the rest of this entry »

The changing world of energy commodity trading

The world of energy commodity trading has gone through a rather extensive reshuffling over the past few months. The key thing to note is that banks involved in energy have pulled back from the sector while merchant traders known largely for their secrecy are strengthening their position.

The most notable deal came last week when Swiss-based merchant firm Mercuria agreed to buy the entire physical commodity trading business of JPMorgan Chase for $3.5 billion. Mercuria, which is headquartered in Geneva and is predominantly a crude and refined products trading shop, has a team of approximately 1,200 people working in some 37 offices around the globe and has annual “turnover,” or essentially gross annual revenues of around $100 billion.

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Energy Economist: The battered state of EU-Russia energy relations

In this month’s submission from Platts Energy Economist, Ross McCracken looks at the relationship on energy links between Russia and the European Union, post-Crimea. It isn’t pretty.

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Russia’s annexation of Crimea presents the EU with a terrible dilemma. It cannot let the flouting of international borders and use of military force go unanswered, nor does it want war. That leaves it with political and economic sanctions. But it remains hamstrung by its dependence on Russian gas.

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Japan eyes new business opportunity from Fukushima experience

On a sunny morning last Sunday, a large group of people gathered in Tokyo in a park near the parliament and other government buildings to hear musicians stage performances powered only by solar energy. That was not, however, the main aim.

The people, numbering thousands according to media reports, were protesting against nuclear power plants in Japan in the wake of the Fukushima disaster triggered by an earthquake and tsunami on March 11 three years ago.

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Europe still needs Russian gas: CERA speakers

Let’s try to avoid “the U word.”

That was the polite suggestion of an IHS consultant Wednesday in ironically opening a panel discussion on Russian gas exports at the IHS CERAWeek conference in Houston, ongoing while the U word–Ukraine–continues to simmer.

“Diplomatic crisis come and go,” Thane Gustafson, senior director of IHS’ Russian and Caspian energy group said and a man who has been commenting on Soviet and Russian energy affairs for many years.

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Energy Economist: Trying to get to a single European electricity market

In this month’s selection from Platts Energy Economist, Ross McCracken looks at why a single European electricity market has a lot of advantages, but why getting to it will be so difficult.

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Big numbers for New England electricity auction might not be enough to bring new capacity

Many generators cheered the recent results of ISO New England’s forward capacity auction.  The market cleared at what one analyst called an “astonishing” price of $15/kW-month. That is five times the clearing price in the last year’s auction.

The high price, prompted by a sudden swing from surplus capacity to a deficit, should be enough to encourage developers to build new power plants, which is what capacity markets are designed to do.

The auction establishes the price at which generators or other source of electricity are paid for capacity. In other words, they get paid for being there, and they get paid for it all the time, not just during generation or peak demand. That ensures there will be capacity available during those peak periods.

That, at least, is the theory, but in the looking glass world of capacity markets, that might not be the outcome.

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Energy Economist: The burden that Japan is facing in its higher energy costs

Energy costs in Japan are reaching a critical point. The economy is growing too slowly to offset the burden of increased commodity energy imports. Renewables will add further costs. Bringing the country’s nuclear capacity back on-line appears to be the only option, but the process is proving slow. As it progresses, Japanese oil imports will fall, but LNG and coal usage in fiscal 2014 are still expected to reach historic highs. Ross McCracken looks at the issue in this month’s entry to The Barrel from Platts Energy Economist.

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