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Japan eyes potential of summer power demand: Correction

  • Market: Coal, Electricity, Natural gas
  • 27/02/24

Corrects nuclear generation forecasts in paragraph 3

Japan faces potential similar consumption of thermal power generation fuels this summer with nuclear availability and forecast temperatures mostly in line with a year earlier.

The Japan Meteorological Agency forecasts a 50-70pc probability of temperatures during June-August 2024 rising above the 30-year average in all parts of Japan. Average temperatures in Japan's major cities, such as Tokyo, Osaka and Nagoya, during June-August 2023 were higher than the long-term average. This implies that the country is likely to face similar summer temperatures as last year.

Nuclear power output is projected to rise slightly in summer from a year earlier. The operating capacity of nuclear power plants is forecast at an average of 9,595MW during June-August, while average actual operating capacity was 9,563MW in the same period in 2023, according to Argus calculations based on data from Japan's Agency for Natural Resources and Energy and notices on the Japan Electric Power Exchange website.

Hotter weather across the country in 2023 failed to lift thermal fuel demand, with power demand in Japan's 10 service areas averaging 104.3GW for June-August, down by 1.2pc from the same period a year earlier, according to nationwide transmission system operator the Organisation for Cross-regional Co-ordination of Transmission Operators. The rainy season normally cuts solar output. But sunlight hours were unusually longer in 2023 compared with 2022, which increased solar output and helped curb thermal generation. Continued energy saving efforts also helped to cut electricity use.

Japan's LNG consumption for power generation totalled 9.8mn t during June-August 2023, according to the trade and industry ministry. Coal use totalled 26.5mn t, while oil consumption — including fuel oil, diesel and crude — was 57,651 b/d. LPG use was 6,014t.


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21/02/25

Republicans target US energy rules for disapproval

Republicans target US energy rules for disapproval

Washington, 21 February (Argus) — Republican leaders in the US House of Representatives hope to disapprove at least seven energy-related measures issued under former president Joe Biden using a filibuster-proof process created under the Congressional Review Act. House majority leader Steve Scalise (R-Louisiana) on Thursday released a list of 10 rules that his party has prioritized as "potential targets" for disapproval votes, which require only a simple majority to pass in each chamber. Republicans previously used the law in 2017 to successfully unwind more than a dozen rules, and they hope to do so again to repeal Biden-era rules they say will unnecessarily raise costs on businesses and consumers. A US Environmental Protection Agency (EPA) regulation that implements a $900/t charge on oil and gas sector methane leaks is among the rules that Republicans want to disapprove. If those implementing rules are scrapped, it would provide a temporary reprieve from a 31 August deadline for operators having to pay billions of dollars in potential fees on methane emitted in 2024. Republicans hope to vote later this year to permanently end the methane charge, which was created by the Inflation Reduction Act. House Republicans also hope to disapprove an offshore oil and gas safety rule for drilling in deepwater "high pressure, high temperature" environments that Scalise's office says will increase "burdens on energy operations". Other rules that Republicans will target for disapproval are energy conservation for gas water heaters, energy efficiency labeling standards and air pollution restrictions on rubber tire manufactures. Two of the energy measures House Republicans say they plan to target might not qualify for disapproval under the Congressional Review Act, which can only be used on a "rule". The first is a waiver that would allow California to boost in-state sales of electric vehicles and plug-in hybrids, and that President Donald Trump's administration has tried to make eligible for repeal. The second is the US Commodity Futures Trading Commission's decision to release voluntary guidance for exchanges that allow trading of carbon offset futures. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Freeze cuts Oklahoma oil and gas output


21/02/25
News
21/02/25

Freeze cuts Oklahoma oil and gas output

New York, 21 February (Argus) — Frigid weather in Oklahoma this week has shut in about a third of state oil and natural gas production, according to analysts and pipeline flow data. About 35-40pc of daily oil and gas output in Oklahoma have been lost to freeze-offs from 19-21 February, Energy Aspects analyst David Seduski told Argus . That amounts to cuts of about 150,000 b/d of crude and 2.5 Bcf/d (71mn m³/d) of gas over the period relative to average daily production in the state, US Energy Information Administration data show. The drop was observable in publicly available data for most interstate pipelines across the state, including Kinder Morgan's Natural Gas Pipeline Company, Howard Energy Partner's Midship Pipeline and Energy Transfer's Panhandle Eastern Pipe Line Company and Enable Gas Transmission pipelines, FactSet energy analyst Bailey McLaughlin said. Production will probably continue to be lost through the weekend as cold weather lingers in the state. Freeze-offs occur when temperatures drop low enough to prevent oil and gas production from reaching the wellhead by causing the water contained in the oil and gas stream to freeze. Freeze-offs in Oklahoma typically occur when temperatures fall below 22°F (-6°C), McLaughlin said. This is a higher threshold than the temperature required to curtail output in colder producing regions such as North Dakota, which has also lost production to freeze-offs in recent weeks. The spot gas price at ANR Oklahoma, a regional trading hub on TC Energy's ANR Pipeline, on Thursday surged to $7.715/mmBtu, double the week-earlier price and the highest since 17 January. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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German power industry split on capacity market design


21/02/25
News
21/02/25

German power industry split on capacity market design

London, 21 February (Argus) — Stakeholders in the German power market are divided on how best to implement a capacity market in Germany, or whether it is needed at all, Argus heard on the sidelines of the E-World conference in Essen last week. Instead of entertaining the "misleading" debate over centralised versus decentralised mechanisms, in which the government tries to "delegate accountability for security of supply", what is really needed is "centralised accountability with decentralised assets", Stefan Joerg-Goebel, senior vice-president for Germany at utility Statkraft, said. "The market should be centrally organised but technologies bidding into the market should include, for example, decentralised demand-side response and batteries," he said. But "only the state can really secure supply". Transmission system operator Amprion prefers a centralised capacity segment with a "local component" over the combined capacity market proposal, according to Peter Lopion, consultant in the firm's international regulation management and market development team. He emphasised the importance of knowing "when and where" power plants will come on line. Amprion also stressed that "incentives for grid-serving behaviour" are needed for batteries in particular . In contrast, a decentralised capacity market — not too dissimilar to that of France — is the "best solution" for Germany, although it would first need to adapt to the "German reality", Davide Orifici, director of public and regulatory affairs at energy exchange Epex, said. Such a system would "better help to integrate flexibility" and "further develop demand response", he said, adding that the impression that a centralised system would be simpler is "false". And a decentralised element is "crucial" to "fully leveraging the potential of the demand side", according to Jan Bruebach, managing director at utility MVV. Nevertheless, the addition of the centralised element would add "long-term security" and thus the German energy ministry BMWK's combined proposal is "fine". And while not specifying a particular design, "something at least similar to a capacity market" is important for security of supply and to "provide incentives to hold capacity on stand-by" during periods of low renewable generation, said Andre Jaeger, senior vice-president of product management at trading and risk management firm Ion Commodities. Kerstin Andreae of energy and water association BDEW agreed at a press conference that Germany "needs" the transition to a capacity market. But Peter Reitz, chief executive of energy exchange EEX, does not see the introduction of a capacity market in Germany as being essential. "The same effect can be achieved much more cheaply by introducing the obligation to deliver into the energy-only market," he said, although a decentralised market would "interfere the least with liquidity". And the introduction of a capacity market in Germany would be "costly", Andy Sommer, head of fundamental analysis and modelling at utility Axpo, said. The costs would probably be absorbed by grid operators and the state, and eventually offloaded on to end-consumers, he said. Energy ministry BMWK in August opened a consultation on the country's future power market system, with four options to finance controllable power capacities: a capacity-hedging mechanism through peak price hedging, a decentralised capacity market, a centralised capacity market, and finally, the ministry's preferred option of a "combined capacity market". Despite the deadline for member states to incorporate the EU-mandated electricity market design having passed on 17 January, the design will "probably" be implemented by the next government, BMWK deputy director Andre Poschmann said at an industry event last month . The capacity market question is likely to draw the most political attention after the federal election on 23 February, Joerg-Goebel said, adding that the successful continuation of the coal phase-out — which is currently an "uncomfortable issue" for market participants — can be "fixed" only with new capacity. And without a capacity mechanism, it will be "very difficult" to invest in new peak generation plants, Bruebach said, with Lopion adding that the coal phase-out is "dependent on" new capacity mechanisms. A bidding zone split would harm liquidity And the decision over whether to split Germany into multiple bidding zones remains a concern, with Argus having heard a general consensus that a bidding zone split would negatively affect liquidity in power trading. Larger price zones acting as a "larger mass" are better for liquidity, according to Reitz, citing the German-Austrian bidding zone split and subsequent reduction in Austrian power liquidity. A split would cause "disruption" to the entire market, owing to regulatory changes and the loss in liquidity, agreed Joachim Bertsch, senior business development manager at utility RWE, while Bruebach said it would "crush" liquidity, disadvantage smaller market participants and drive up costs for industries in the south of the country. While BMWK in August rejected the "reconfiguration" of the single German-Luxembourg bidding zone , the "pressure" to introduce multiple bidding zones will intensify if grid expansion does not, according to Joerg-Goebel, while Parasram said he believes "some form of split" will happen. By Bea Leverett Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Uruguay eyes oil, gas E&P within energy transition


21/02/25
News
21/02/25

Uruguay eyes oil, gas E&P within energy transition

Montevideo, 21 February (Argus) — Uruguay's state-run Ancap has hopes for an offshore oil or gas discovery, even as the country gears up for its second energy transition. Uruguay has had only three exploratory wells drilled in its history, two in 1976 and one in 2017, and they all came up dry. Companies have completed 13,000 km² of 2D and 41,000 km² of 3D seismic testing this century. Today, its seven offshore blocks have contracts, plans are underway for a new round of seismic testing and one company, US-based APA, wants to spud an exploratory well in its wholly operated block 6 in late 2026 or early 2027. "For the first time in history, we have contracts in place for all the blocks and there is a great deal of interest that resources can be found" in Uruguay, Santiago Ferro, Ancap's energy transition manager, told Argus . A public hearing on seismic testing was held 13 February and the environment ministry is reviewing proposals for permits. Ferro said seismic testing will only be done in areas lacking data. "We want to take advantage of existing information and complement it with new data to encourage drilling," he said. The plan is for approximately 5,000 km² (1,930 mi²) of new seismic testing on two areas — block 1, operated by Chevron and UK-based Challenger Energy Group, and block 4, operated by Shell and APA. The work will likely happen in the final quarter of this year. Ancap's plans will unfold under the new left-wing government of president-elect Yamandu Orsi, who takes office on 1 March. The Oris administration is committed to deepening Uruguay's energy transition. It already has one of the greenest power grids, with 99pc of power coming from renewables, and the Orsi government wants to guarantee electrification of the transportation sector. He will arrive at his inauguration in an elective vehicle as a sign of the government's commitment. The administration wants to decarbonize transportation in 10 years, which will require incentives for vehicles and investment in additional renewable power, principally solar energy. It has not taken a public stand on oil and gas exploration or what it would do if recoverable resources were discovered. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US cites 'energy emergency' to expedite water permits


20/02/25
News
20/02/25

US cites 'energy emergency' to expedite water permits

Washington, 20 February (Argus) — President Donald Trump's administration is citing an "energy emergency" as the basis to fast-track nearly 700 water permits, including those tied to a tunnel for Enbridge's Line 5 pipeline, LNG infrastructure projects, solar farms and electric transmission lines. Trump declared a national energy emergency on his first day in office, unlocking permitting powers that are typically used in response to natural disasters. The US Army Corps of Engineers has subsequently reclassified hundreds of permit applications for review under expedited emergency procedures, in a move that environmentalists say they plan to challenge in court based on violations of the Clean Water Act and Endangered Species Act. "The Trump administration is planning to skirt legally-required review processes in order to fast-track permits for dirty energy projects under the guise of an energy ‘emergency'", Sierra Club policy director Mahyar Sorour said. The Corps is responsible for issuing water permits for projects that cross streams, rivers, wetlands and other water bodies. Issuing permits sometimes requires the agency to prepare a detailed environmental review that is open to comment and can take years to finish. The water permits classified for emergency treatment include a repair project for Sabine Pass LNG in Louisiana, dredging for Elba Island LNG in Georgia, temporary construction related to Port Arthur LNG in Texas, solar projects in dozens of states, and pipeline projects ExxonMobil is pursuing in Texas. Enbridge delayed construction of a protective tunnel for its Line 5 pipeline to 2026 because of water permitting delays . But environmentalists say the administration cannot cite an energy emergency — which they say does not exist — as justification to bypass permitting rules prescribed by the US Congress. The Corps has also provided emergency treatment to projects with no apparent connection to energy production, such as a housing project in southern California and a gold mine in Idaho, according to an online database. The Corps did not respond to detailed questions but said it was "in the process of reviewing active permit applications relative to the executive order." Congress is continuing to lay groundwork for a bipartisan permitting bill that supporters say could make it faster and cheaper to build pipelines, power plants, electric transmission lines, renewable energy projects and transportation infrastructure. But Democratic leaders are threatening to vote against such a bill so long as Trump continues to "pause" billions of dollars in funding for clean energy projects provided by the Inflation Reduction Act and other laws. "Until the administration shows it will honor its oath to faithfully and impartially execute the laws, we can have zero confidence that any legislative compromise on permitting reform will be executed lawfully," US senator Sheldon Whitehouse (D-Rhode Island) said at a permitting hearing on 19 February. Oil industry and renewable groups are continuing to push for a comprehensive permitting bill, which they say would bring down project costs and help the US meet surging electricity demand from data centers and manufacturers. Permitting changes are "needed for all technologies, and they are needed to meet our energy demand in the future," Business Council for Sustainable Energy president Lisa Jacobson said. "You can't walk away from those facts or that imperative." By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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