Greece to tax power generators’ windfall profits

Spanish Market: Electricity
11/05/22

The Greek government will tax the windfall profits of domestic power producers, created by the exceptionally steep increases in power prices since October, the Greek energy ministry has announced.

The Greek government will impose a 90pc tax on large power producers' windfall profits generated in October 2021-March 2022, which totalled €591mn ($623mn), Greek energy regulator RAE has calculated. The government will use the revenue generated by the tax to further support consumers, the energy ministry said.

The legislation also includes a new compensation mechanism for power plants that is based on their operating costs and is disconnected from wholesale power prices. The new mechanism will come into effect in July and will prevent power producers from generating windfall profits, the ministry announced.

The European Commission permitted EU member states to tax energy firms' windfall profits from March.

The Greek Henex spot averaged €235.55/MWh in the first quarter of 2022, up by €181.94/MWh from the same period last year. The spot cleared at a record high of €426.90/MWh on 8 March.

By Apostolos Tsarikas

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13/08/24

China seeks to achieve climate goals with new framework

Singapore, 13 August (Argus) — China has announced new guidelines to accelerate the country's energy transition and achieve its decarbonisation goals. Under the guidelines, China expects the scale of its energy conservation and environmental protection industry to reach about 15 trillion yuan ($2.1 trillion) by 2030, according to a statement by the Central Committee of the Communist Party of China (CPC) and the State Council. The country aims to accelerate progress in carbon emission reduction, resource utilisation and green development by 2030. It targets installed capacity of pumped-storage hydropower to exceed 120mn kW by then, and the carbon emission intensity of commercial transport for each unit of turnover to drop by about 9.5pc compared with 2020. China targets to establish a green, low-carbon circular economy by 2035, with carbon emissions declining after reaching their peak. China aims to hit peak CO2 emissions by 2030 and net zero emissions by 2060. China's installed renewable capacity reached 1.653bn kW as of the end of June, accounting for 53.8pc of total installed capacity, according to the National Development and Reform Commission (NDRC). The country achieved almost double its target for non-fossil power generation additions last year at 300GW, compared with a goal of 160GW, according to state-linked China Renewable Energy Engineering Institute. In the new framework, the target for non-fossil fuels in the country's primary energy consumption remains at 25pc by 2030, unchanged from its 2021 nationally determined contribution (NDC), and up from 15.3pc in 2019. China's 2021 NDC also states that it will lower its CO2 emissions per unit of GDP by over 65pc from the 2005 level, and that it will bring its total installed capacity of wind and solar power to over 1.2bn kW. The country is expected to submit its 2035 climate targets to the UN early next year, including updates to its pre-existing 2030 targets. The framework targets five main areas. It aims to optimise land space planning for green and low-carbon developments and seeks to accelerate the low-carbon transformation of the industrial sector. This includes the steel, non-ferrous metals and petrochemical industries. It also targets to advance the low-carbon transformation of the energy sector and develop non-fossil fuel energy and promotes the green transformation of the transportation sector. Lastly it aims to advance the green transformation of urban and rural construction, including agricultural developments. Challenges ahead China's green transformation faces significant challenges despite progress, the NDRC said. The country's energy and industrial sectors remain heavily dependent on coal, straining environmental goals, the commission said. Under the latest framework, the country still aims to promote the clean and efficient use of coal and reasonably control the growth of coal consumption during the 14th five-year plan period, but to gradually reduce it in the subsequent five years. The National Energy Administration (NEA), China's energy regulator, expects the percentage of thermal generation capacity to fall to 45pc by the end of 2024, from 47.6pc by the end of 2023. China in July announced plans to explore co-firing renewable ammonia and biomass at its coal-fired plants , as well as carbon capture, utilisation and storage. These measures will be applied to a number of projects by 2025. The government also plans to develop a fiscal and taxation policy to promote low-carbon developments under the new guidelines, and aims to implement relevant tax incentives, as well as improve the green tax system. It also aims to bolster financial instruments such as green equity financing, green financial leasing, as well as central budgetary investment to provide support for key projects. The new guidelines did not provide any details on methane cuts. The country has yet to set firm methane-reduction targets although it agreed in November to set goals to cover all greenhouse gases. China, dubbed by the Paris-based IEA as the "clean energy powerhouse," is projected to spend $675bn on clean energy this year alone. Its renewable energy power generation deployment has progressed rapidly , but it remains unclear if this will prompt Beijing to raise its decarbonisation ambitions. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Genesis secures more gas to curb New Zealand shortages

13/08/24

Genesis secures more gas to curb New Zealand shortages

Sydney, 13 August (Argus) — New Zealand upstream firm and utility Genesis Energy has secured emergency gas supplies for its dual gas- and coal-fired Huntly power station on the North Island. Genesis has secured 3.2PJ (86mn m³) of gas to allow the 400MW No.5 unit at Huntly to reach full capacity for the first time this winter, it said on 13 August, describing the electricity grid as facing "unprecedented pressure". An agreement has been reached with Canadian methanol manufacturer Methanex, which will shut its Motunui plants in the North Island's Taranaki province until the end of October to allow for more gas-fired power generation, Genesis said. The commercial arrangements regarding the gas transfer are structured to provide Methanex with a base price for each unit of gas delivered, with further incremental value shared between the parties depending on electricity pricing over the period, it said on 12 August. Methanex's 1.72mn t/yr plant in Motunui has paused production in the past, also diverting feedstock natural gas to support electricity generation in the winter of 2021 . The 953MW Huntly — New Zealand's largest power station by capacity and the country's only coal-fired unit, has been under significant strain as dry, cold conditions have led to increased demand during winter as hydroelectricity inflows remain low. New Zealand has also experienced light winds cutting expected wind-powered generation this winter, with Genesis planning coal imports for the first time since 2022 in response to lower domestic gas output and rapidly falling coal stocks. LNG imports investigated New Zealand energy minister Simeon Brown told parliament on 7 August his administration was investigating two separate options to ease the gas shortfall in the short to medium term. Industry body the Gas Industry Company (GIC) is studying the feasibility of importing LNG, while also considering policies to increase investment in flexible gas-fired generation, Brown said. Data from upstream firms released earlier this year show a significant drop in proven plus probable reserves, falling from 1,635PJ to 1,300PJ, he added. Gas production into open access pipelines was 58.8PJ during January-June, GIC said in its April-June quarterly report, 20pc down on 73.7PJ a year earlier, while gas-fired power demand grew by 10pc against April-June 2023. New Zealand's National Party-led government is aiming to overturn a 2018 ban on new oil and gas exploration with legislation to be introduced to parliament later this year. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Finnish, Baltic gas demand up by 13pc on year in July

09/08/24

Finnish, Baltic gas demand up by 13pc on year in July

London, 9 August (Argus) — Combined Finnish and Baltic gas consumption increased on the year in July, but remained firmly below pre-2022 levels. Combined demand in Finland, Estonia, Latvia and Lithuania last month rose to 2.37TWh from 2.1TWh in July 2023, although it was still well below the 2018-21 average of roughly 3.7TWh ( see graph, data and download ). This was a second consecutive month-on-month increase following demand at a near two-year low in May. Demand increasing between May and July is an unusual pattern, as pre-2022 consumption in the region tended to decline over the course of the summer before reaching a nadir in July or August. The power sector was probably the main contributing factor to higher overall gas demand, as year-on-year increases in Latvian and Lithuanian gas-fired output more than offset lower Finnish generation ( see table ). In Latvia in particular, gas-fired generation jumped more than seven times compared with a year earlier, despite power demand remaining stable and hydropower output nearly doubling. Instead, Latvian gas-fired production displaced some net imports, which fell to 258GWh from 372GWh in July last year. Latvian gas demand peaked over the month at 27 GWh/d on 22-26 July, drastically above the average for other days of just 8 GWh/d. These were the same days that Latvia produced the majority of July's gas-fired power. Prices on the regional GET Baltic exchange averaged €37.84/MWh in July, down by 5pc on the month but up by 3pc on the year. July broke the three-month trend of consecutive month-on-month increases, with prices having fallen in all four markets. Firms traded 500GWh on the exchange, up from 358GWh in July last year. Lithuania accounted for 40pc of trades, followed by the joint Latvian-Estonian market at 35pc and Finland with the remaining quarter. Maintenance to change flows Maintenance at the pivotal Kiemenai interconnection point on the Latvia-Lithuania border for most of August will change regional flow dynamics. No capacity will be available in either direction at Kiemenai on the 3-25 August gas days, making it impossible to send regasified LNG from Lithuania's Klaipeda LNG terminal northward to Latvia for storage at the Incukalns facility. Klaipeda sendout consequently has dropped since 3 August, averaging 29 GWh/d on 3-8 August, compared with 101 GWh/d in July. Despite the maintenance and demand remaining stable, an additional LNG delivery for 10 August was added to Klaipeda's schedule . This half-cargo may be mostly destined for reloads, as four small-scale reloads are planned at Klaipeda after the 10 August delivery. Some of these reloads could potentially go to Finland's off-grid terminals at Tornio and Pori, which are no longer supplied with Russian LNG after Gasum halted its purchases in late July because of sanctions . But while maintenance at Kiemenai has started, restrictions further north on the Balticconnector have ended, enabling sendout from the Inkoo terminal to step up significantly to 85 GWh/d on 1-8 August from a much lower 32 GWh/d in July. Planned maintenance reduced capacity from Finland to Estonia on the Balticconnector to just 5 GWh/d for all of July, limiting sendout from Inkoo only to what could be absorbed by the domestic market and the small amount that could be sent southward. Maintenance also will reduce Finnish exit capacity to Estonia to zero on 14-27 October and 4-17 November. By Brendan A'Hearn Finnish + Baltic July gas-fired power generation GWh Jul-24 Jul-23 Jun-24 ± Jul 23 ± Jun 24 Estonia 2 2 2 0 0 Latvia 79 11 3 68 76 Lithuania 74 31 53 43 21 Finland 28 117 40 -89 -12 Total 183 161 98 22 85 — Fraunhofer ISE July consumption by country GWh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Brazil's Bndes to finance state power distributor

08/08/24

Brazil's Bndes to finance state power distributor

Sao Paulo, 8 August (Argus) — Brazil's Bndes development bank approved R1.394bn ($247mn) in financing for Rio Grande do Sul state's largest power distributor, in yet another effort to aid the flood-hit state. The bank will award the money to power distributor RGE Sul to "adapt to climate change and mitigate its effects from the extreme weather events that affected Rio Grande do Sul in May," it said, referring to the devastating floods that hit the state earlier this year. RGE Sul is responsible for around 65pc of the power in Rio Grande do Sul, with approximately 7.1mn clients. The financing will also allow the state to maintain power prices stable until 2026, Bndes said. "This Bndes support will be essential to ensure that Rio Grande do Sul's population does not suffer from any adjustments to their electricity tariffs," mines and energy minister Alexandre Silveira said. That is the latest in a series of government measures to aid the flood-ravaged state. In early May, President Luiz Inacio Lula da Silva signed a decree to ease relief spending . The country also launched a R50.9bn multi-step program to aid victims. Bndes created a R15bn fund — dubbed the Bndes emergency program for Rio Grande do Sul — of which it has approved R4.8bn, it said. The heavy rains in late April and early May left around 150 dead and more than 500,000 displaced, according to Rio Grande do Sul's civil defense. By Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Australia’s 1H large-scale renewable approvals rise

08/08/24

Australia’s 1H large-scale renewable approvals rise

Sydney, 8 August (Argus) — Australia's Clean Energy Regulator (CER) approved 24pc more large-scale renewable energy capacity in this year's first half compared with a year earlier, while large-scale generation certificates (LGCs) held in the local registry also increased. The CER approved 1,175MW under the Large-scale Renewable Energy Target (LRET) scheme over January-June, up from 949MW in the same period of 2023 and the highest for a first half since 2020 when 2,146MW was accredited, CER data show. Total approved capacity in 2023 reached 2,206MW , slightly above 2022 but almost half of the record highs of 4,110MW in 2019 and 4,070MW in 2020. LRET-accredited plants can issue LGCs and sell them to liable entities under Australia's Renewable Energy Target, mainly electricity retailers that need to surrender the certificates to the CER on an annual basis. LGCs can also be sold to companies and individuals looking to support their emissions reduction claims. Total LGCs in the local renewable energy certificate registry reached 28.45mn at the end of June this year, or the equivalent of 28.45TWh, with each certificate representing 1MWh of renewable power. This is up from 24.66TWh in the same period of 2023, according to CER data. Accounts held by major utilities including Origin Energy, Alinta Energy, AGL and EnergyAustralia were among the largest LGC holders at the end of the first half of the year ( see table ). Total operational accredited capacity under the LRET reached 20,971MW in June. The CER also reported 7,853MW of committed capacity from large-scale renewable projects that received all development approvals and reached a final investment decision by the end of the first half. There was also 4,391MW of "probable" projects, or those that have announced power purchase agreements with strong counterparties or provided other evidence of funding. By Juan Weik Australia top 10 LGC account holdings* Origin Energy 4,247,730 AquaSure 1,772,066 Alinta Energy - GreenPower account 970,732 AGL HP2 933,377 EnergyAustralia 916,174 Synergy 843,747 Stanwell 719,831 Alinta Energy 652,988 Origin Energy - GreenPower account 635,489 Snowy Hydro - GreenPower account 628,376 Source: CER * as of 30 June 2024 Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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