Japanese firms to develop Sendai biomass power plant

Spanish Market: Biomass, Electricity
26/10/20

Japanese renewable power developer Renova and four other companies are planning to develop the 74.95MW Sendai Gamo biomass power plant in northeast Japan.

Construction of the plant in Japan's northeastern prefecture of Miyagi is scheduled to start by February next year, with commercial operations targeted by November 2023. The plant will consume 310,000 t/yr of wood pellets mainly from North America and palm kernel shells (PKS) from Indonesia and Malaysia to generate around 553,300MWh.

Renova, forestry firm Sumitomo Forestry, construction company United Keikaku, financial company Mizuho Leasing and investment firm Daiwa Securities' joint venture RenoDa Partners have established a joint venture, Morino Miyako Biomass Energy, to build and operate the plant. Renova owns 29pc of the venture, while Sumitomo Forestry and United Keikaku hold 15pc and 25pc respectively. Mizuho Leasing and RenoDa Partners have 17pc and 14pc stakes.

Renova may acquire some of the shares held by the other firms to raise its stake to 60pc once the plant starts operations.

The plant was registered under Japan's country's feed-in-tariff (FiT) scheme in 2017 as part of Sendai city's plan to redevelop port areas that were hard hit by the March 2011 earthquake and tsunami. All the electricity will be sold at a fixed price of ¥24/kWh ($228.8/MWh) for 20 years after commissioning.

Renova is involved in multiple biomass power projects including the 74.95MW Ishinomaki Hibarino and 75MW Omaezaki plants, as it takes advantage of the FiT scheme.

Japan imported 1.3mn t of wood pellets during January-August, up by 30.2pc from the same period last year, according to finance ministry data. PKS purchases increased by 59.1pc to 1.4mn t over the same period.

By Nanami Oki

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27/12/24

Viewpoint: Wood chip supply may tighten in 2025

London, 27 December (Argus) — Wood chip raw material availability has grown tighter in Europe in the past couple of years and is expected to remain so in 2025, but its impact on the spot market has been limited by lower-than-typical overall demand in the period. A stronger consumption outlook by energy and other industrial segments at existing and new plants may put the market to test in 2025. In the Nordics, wood chip supply availability was tight this year in the wake of a cut-off in Russian and Belarus supply following sanctions in 2022 and harvesting restrictions imposed by national and EU regulations. A slowdown in sawmilling also contributed to a steady tightening of wood chip supply, particularly in Finland, who's imports rose year on year in 2024 as companies struggled with increased domestic wood chip prices as raw material prices held high. Swedish hardwood chip imports over the first nine months of 2024 held considerably higher than long term averages but were lower when compared with a year prior ( see chart ). This was mainly owing to a year-on-year a drop in receipts from Uruguay, Germany and Portugal. Swedish end-users struggled to meet demand from local sources that at most times were uncompetitive with chips from abroad. Swedish forest industry group Sodra, located in southern Sweden, raised the prices of its wood to historical highs earlier in the year and also expects 2025 to be a "challenging" year. Wood chip supply in the Baltics also was tightened by a slowdown in sawmilling that weighed on sawmill residue supply and is not expected to improve in the near term. But forestry feedstock was available, and prices of fuel wood harvested in Estonia's state and private-owned forests edged down on the year in January-October, following record-high prices in 2022, data from Estonian state forestry agency RMK and private forestry centre Eramets show, although prices were still well above long-term averages ( see graph ). This scarcity has yet to have a market impact as end-users still are well supplied with near capacity stocks. End-users delayed deliveries where they could or put deliveries into storage over October-November 2024. Most northern European utilities switched on their wood chip-fired boilers later than usual as warmer weather pared heating demand. Outages further pressured on the demand side, with Swedish utility Stockholm Exergi's 190MW Vartan 1 having undergone an outage of nearly six months that is scheduled to end on 27 January 2025. Although consumption picked up from late November as temperatures dropped, the delay in wood chip burn for heat generation has left end-users with ample stocks. But a structural lack of raw materials probably will tighten wood chip supply once consumption picks up in the first half of next year on forecast colder weather. Lower temperatures forecast over the next month should result in quicker stock withdrawals and encourage spot demand. For example, overnight temperatures in Oslo, Norway, are forecast to average minus 5.5°C, about 0.5°C below seasonal norms in the 45 days to 9 February, Speedwell Weather data show. Elsewhere, in Poland, supply availability of biomass may tighten, if the draft regulation on requirements for domestic energy wood put forward by the government in July is approved. But it is likely that the restrictions will be softened in the final draft by the ministry, following public consultation in the preceding months, market sources said. Looking forward, new projects across northwest Europe probably will support import demand. While a 13-month outage that began on 12 December 2023 at Gazel Energie's 150MW wood chip-fired Provence 4 power plant weakened wood chip consumption this year, it is scheduled to resume operations on 5 January 2025. Gazel Energie reached a deal with the French government to supply power from the plant over the coming eight years, which may bolster imports. French hardwood imports more than halved in January-September this year compared with a year earlier. Elsewhere, in Finland, energy company Joensuu Biocoal is set to begin commercial operations at the 60,000 t/yr heat-treated biomass production plant in the first quarter of next year. Paired with fresh demand from new projects planned for the first quarter of 2025, the deficit of supply seen in the woody feedstock market this year probably will continue into 2025, tightening wood chip availability once consumption picks up. By Hannah Adler Swedish imports of hardwood chips '000t Estonia raw material prices €/m3 Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Pellet boiler sales to drop in 2025

27/12/24

Viewpoint: Pellet boiler sales to drop in 2025

London, 27 December (Argus) — Sales of pellet-fired boilers and stoves for residential consumption are set to fall in 2025, after reaching record highs in 2024, partly because of government subsidies in Austria and Germany. The Austrian government has offered subsidies of up to €18,000 ($18,800) towards the price of a pellet stove or boiler — around 75pc of the cost of the appliance. The subsidies have been in place for the past two years, with the aim of incentivising households to switch away from fossil fuels. Low-income consumers are able to qualify for a subsidy of up to 100pc of the cost of a stove or boiler. This pushed up Austrian new boiler purchases to a record high of 19,181 in January-November, leading to expectations that full-year sales will surpass 2022 full-year sales of 21,629, figures from industry association ProPellets Austria show. Austrian pellet consumption is expected to reach 1.4mn t in 2024, well above the 1.2 mn t sold a year earlier. But Austrian elections earlier this year have resulted in a new and more conservative coalition government taking office, which will likely alter the subsidy scheme and reduce the subsidies' value. Coalition negotiations are currently ongoing. Several customer registrations for the subsidy scheme are still being finalised, so these buyers will likely purchase their boilers using the subsidies in the new year, according to ProPellets Austria data. This means boiler sales will probably be above the long-term average next year but below 2024 sales. Germany has launched a similar subsidy scheme, covering up to 70pc of the cost of a boiler. Wood pellet exports out of the country decreased by 139,705t on the year to 512,980t in January-September, customs data show, suggesting increased local demand. Wood pellet consumption in Switzerland is also expected to be stronger year on year, at 470,000t this year compared with 416,197t in 2023, according to wood pellet association ProPellets Switzerland data and projections. Meanwhile, pellet demand from the Italian and French markets has decreased on the year as the consumer base in those countries has declined. Italian and French households are not using pellet-fired stoves or boilers for their heating needs as much as they did in the past. And several buyers in Italy and France were still relying on stocks carried over from the previous year, as mild weather reduced consumption that year. Italian household pellet consumption fell to an estimated 2.2mn-2.4mn t in 2024 from around 3mn t/yr a year earlier, and this has weighed on pellet trading activity with pellet producers in the Baltic region — one of the main suppliers to the Italian market. Higher transport costs made it unprofitable to import pellets from the Baltic — which is over 700-800km away from Italy. And the cost of raw materials in the Baltic region increased this year, meaning pellets from the region were outpriced by pellets from other markets. Italian buyers are now heavily reliant on cheaper Brazilian pellets, which has also weighed on imports from other countries. Italy imported 262,245t from Brazil in January-September, up from 186,770t over the same period in 2023, the latest customs data show. This trend could continue well into 2025, with Brazil becoming an increasingly influential sourcing country for Europe. Danish imports from Brazil rose to 77,375t in January-November 2024 from just 1,110t a year earlier, customs data show. By Marta Imarisio Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japanese firms to develop 1.07GW offshore wind power

27/12/24

Japanese firms to develop 1.07GW offshore wind power

Tokyo, 27 December (Argus) — Japanese firms will develop wind power farms with a total capacity of 1.07GW in Aomori and Yamagata prefectures, to raise domestic renewable power capacity as part of efforts to achieve the 2050 decarbonisation goal. Japan's largest power producer by capacity Jera, renewable energy firm Green Power Investment (GPI), and power utility Tohoku Electric Power will build a 615MW offshore wind farm off the coast of Aomori. The offshore wind farm will be the country's largest wind power project, according to Jera, and plans to start commercial operations in June 2030. Fellow utility Kansai Electric Power, trading house Marubeni, BP's subsidiary BP IOTA, Japanese gas distributor Tokyo Gas and local construction firm Marutaka separately plan to develop a 450MW offshore wind farm in Yuza city, Yamagata prefecture. The five companies set up a joint venture called Yamagata Yuza wind power ahead of the project. It plans to start commercial operations in June 2030, same as the other offshore wind project. The two projects are selected by the trade and industry ministry Meti's public offering which closed in July. The only way to build a large-scale offshore wind power plant is to apply for Meti's open call for proposals, Jera said. By Reina Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: US gas market poised for more volatility

26/12/24

Viewpoint: US gas market poised for more volatility

New York, 26 December (Argus) — US natural gas markets may be subjected to more dramatic price swings in 2025 as growing LNG exports and increasingly price-sensitive producers place greater pressure on the US' stagnant gas storage capacity. Those price swings could pose challenges for consumers without ample access to gas supplies, as well as producers interested in keeping some output unhedged to capture potentially higher prices without taking on excessive financial risk. But volatility may also present opportunities for traders looking to exploit unstable price spreads, and for producers that can adapt their operations to fit a more unpredictable pricing environment. Calm before the storm High storage levels and low spot prices this year — averaging $2.11/mmBtu through November this year at the US benchmark Henry Hub — triggered by an unusually warm 2023-24 winter, may have obscured some of the structural factors pushing the US gas market into a more volatile future. But those structural factors remain and loom increasingly large for prices. The US has moved from a roughly 60 Bcf/d (1.7bn m³/d) market eight years ago to a more than 100 Bcf/d market today, "and we haven't grown our storage capacity at all", Rich Brockmeyer, head of North American gas and power at commodity trading house Gunvor, said earlier this year. As supply and demand for US gas grow, the country's roughly 4.7-Tcf storage capacity becomes ever less effective in stemming demand shocks, such as extreme winter weather events, which can more rapidly draw down inventories than in years past. Additionally, a growing share of US gas is being consumed by LNG export terminals being built and expanded on the US Gulf coast. When those facilities encounter unexpected problems and cease operations — as has happened numerous times at the 2 Bcf/d Freeport LNG terminal in Texas in recent years — volumes that were previously being liquefied and sent overseas were instead backed up into the domestic market, crushing prices. More LNG exports may mean more opportunities for such supply shocks. US LNG exports are expected to increase by 15pc to almost 14 Bcf/d in 2025 as operations begin at Venture Global's planned 27.2mn t/yr Plaquemines facility in Louisiana and Cheniere's 11.5mn t/yr Corpus Christi, Texas, stage 3 expansion, US Energy Information Administration data show. Spot price volatility will be most acutely felt in regions like New England that lack underground gas storage. "In areas like the Gulf coast, where you have a lot of storage, it won't be a problem," Alan Armstrong, chief executive of Williams, the largest US gas pipeline company, told Argus in an interview. Producers' trade-off Volatile gas markets are a mixed bag for producers, many of whom profit from volatility while also struggling to plan and budget based on uncertain revenues for unhedged volumes. Though insufficient gas storage deprives the market of stability, "from the standpoint of a marketing and trading guy that's trying to manage my gas supply to customers and my trading book, I love volatility",said Dennis Price, vice president of marketing and trading at Expand Energy, the largest US gas producer by volume. BP chief financial officer Sinead Gorman in November 2023 specifically named Freeport LNG's eight-month-long shutdown in 2022-23 from a fire as a driver of volatility in the global gas market. The supermajor was able to exploit the "incredibly fragile" gas market, she said, which was a key factor driving the success of its integrated gas business. "Those opportunities are what we typically seek and enjoy," Gorman said. Increasingly, producers have also been adapting to a more volatile market by switching production on and off in response to prices, but often without revealing the price at which a supply response will occur. Expand Energy, for instance, told investors in October that it was amassing drilled but uncompleted wells and wells that had yet to be brought on line, which it could activate relatively quickly when prices rise. It declined to name the price at which that would occur. Market participants, attempting to price in this phenomenon by anticipating producers' next moves may respond more dramatically to supply signals than in the past, when production was steadier. Producers' increased responsiveness to prices could help to balance the market somewhat, though more aggressive intervention into operations could take a toll on well performance and pipelines, FactSet senior energy analyst Connor McLean said. Producers are "treating the reservoir itself like a storage facility", Price said. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japan’s Chugoku restarts Shimane nuclear reactor early

23/12/24

Japan’s Chugoku restarts Shimane nuclear reactor early

Osaka, 23 December (Argus) — Japanese utility Chugoku Electric Power restarted the 820MW Shimane No.2 nuclear reactor for test operations on 23 December, two days earlier than originally planned. The No.2 reactor at Shimane in west Japan's Shimane prefecture was reconnected to the country's power grids for the first time in nearly 13 years, after the reactor shut down in January 2012 for stricter safety inspections following the 2011 Fukushima nuclear meltdown disaster. Chugoku reactivated the Shimane No.2 reactor on 7 December, aiming to resume power generation on 25 December. But the target date for commercial operations remained unchanged on 10 January, despite the earlier than expected restart. The Shimane No.2 reactor will be a vital power source as the sole nuclear fleet in the Chugoku area, to help enhance the resilience of the power supply structure, stabilise retail electricity prices and reduce CO2 emissions, said Japan Atomic Industrial Forum's president Hideki Masui on 23 December. The Shimane No.2 reactor is the second boiling water reactor (BWR) to be restarted after the Fukushima disaster, following the 825MW Onagawa No.2 BWR unit that resumed test generation on 15 November, with normal operations scheduled to restart on 26 December. The BWR is the same type as that involved in the meltdown at the Fukushima Daiichi plant. The restart of the two BWRs would pave the way for Japan's nuclear restoration, as 15 BWRs — including advanced BWRs — are still closed in the wake of the Fukushima disaster. Japan has restored 14 reactors as of 23 December, including the Shimane and Onagaw reactors, of which 12 are installed with a pressurised water reactor (PWR) design. Nuclear power's share The Japanese government last week set a target of 20pc for nuclear power's share in the country's draft power mix for the April 2040-March 2041 fiscal year, under the triennial review for the country's Strategic Energy Plan (SEP). Tokyo is seeking to restart all existing reactors to achieve the 20pc goal, adding that replacement reactors would also be possible. The draft SEP allows nuclear power operators that had decommissioned reactors to build next-generation reactors at their nuclear sites, not limited to the same site. The previous SEP did not mention building new reactors or replacements. Japan's Federation of Electric Power Companies (FEPC) has applauded this progress, but FEPC chairman Kingo Hayashi noted that it was disappointing the SEP did not mention a nuclear capacity target which the FEPC had requested. It also did not include building new reactors or the expansion of existing nuclear plants, Hayashi added. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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