Texas power sector struggles against winter storm
A severe winter storm that spread into Texas continues to disrupt the state's electricity generation with shut-in wells, stunted natural gas distribution and frozen wind turbines.
Freezing temperatures spread through the state over the holiday weekend, leading to curtailed Permian basin oil production in the form wellhead freeze-offs. The weather curtailed associated gas production and stretched the limit of gas transmission networks already taxed by high demand reflected in spot markets. Prices at the Waha hub in west Texas — a key indicator for the value of Permian gas — averaged $158.20/mmBtu on 12 February, a single-day record high for the index.
The Electric Reliability Council of Texas (ERCOT) estimated that peak demand on 14 February hit a record 69,150 MW, topping the prior record set in 2018 by 3,200 MW.
Power generation in Texas began going offline in the early hours yesterday, and ERCOT began rotating outages through its control area in the state. Approximately 34,000 MW was taken off the grid yesterday, ERCOT said.
While ERCOT noted that by 14 February it was already dealing with frozen wind turbines and limited gas supplies, additional generating units tripped offline overnight when the weather worsened. ERCOT said losses were across all fuel types.
South Texas nuclear reactor 1 went offline yesterday, according to the US Nuclear Regulatory Commission. Replacing that 1,250MW of power generation with gas would add 347mn cf/d to demand.
ERCOT said it expected some generators to return to service today, and it also forecast higher renewables output. Wind generation was below 3,000 MW at the start of today, but was expected to peak at 7,500 MW. ERCOT said it also expected solar and traditional thermal generation sources to increase output today.
Capacity shortfalls, loss of power, and other challenges have spread through most Texas gas pipeline companies, both from supply zones and into delivery areas, despite efforts to reduce the weather-driven issues. The Texas Railroad Commission (RRC) issued emergency orders on 12 February to curtail natural gas transportation, delivery or sale for purposes other than serving "human needs" customers.
Kinder Morgan's El Paso Natural Gas (EPNG) said late yesterday it was concerned that overnight recovery would not be enough for today's demand loads due to the severe supply losses in the Permian basin. The pipeline shut in 29 separate receipt points in west Texas today, and reduced capacity at eight others. EPNG system linepack levels ended yesterday at 7.7bn cf, a drop of 11pc from the previous day.
The Houston pipeline meter with Valley Crossing pipeline in south Texas will be scheduled down to 300,000 mmBtu/d starting today's gas day because of underperformance. Valley Crossing will allow quantities at the KM Tejas pipeline meter to reach their scheduled amounts on an intraday basis.
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Spanish spot to deliver above expectations in August
Spanish spot to deliver above expectations in August
London, 15 August (Argus) — The Spanish spot index is on track to deliver above expectations in the over-the-counter (OTC) market over August, based on the average spot index over 1-16 August and assessments and trades for weeks 34 and 35. The Spanish spot index delivered at €90.29/MWh over 1-16 August, up from €72.31/MWh over the month of July. Based on the average spot index and the latest assessments and trades for weeks 34 and 35, the spot could deliver at an average of €89.76/MWh across the month, more than €9/MWh above the August contract's expiry. Lower renewable output has supported the spot index. Renewable generation over 1-14 August fell on the month, with hydropower output declining by 150MW from 2.9GW in July. And wind power was down by around 400MW from 5.5GW last month, while solar output has remained flat on the month at 7.8GW. But renewables output has risen on the year, with hydropower generation almost doubling to 2.8GW. Near-decade high hydropower reservoir levels this year have supported generation . Solar photovoltaic (PV) output has also risen by around 1.7GW on the year, and gas-fired generation has fallen to 3.7GW from 4.6GW last year. But wind output has fallen by 1.3GW on the year to 5GW. Maximum temperatures in Madrid have remained at an average of 2.8ºC above the norm over 1-15 August, reaching a high of 40.4ºC. The typical drop in demand from July to August has been tempered by the hot weather, with demand falling by just 200MW compared with an average of almost 1GW over 2019-23. Temperature forecasts point to maximum temperatures remaining above long-term averages for the rest of August, but dropping to an average of 2.6ºC above norms and remaining below 37.8ºC. And as temperatures decline wind output is expected to rise, with generation forecast to average around 5.6GW in the second half of the month, according to data from trade and analytics platform Kpler. Falling temperatures are likely to weigh on demand, with current expectations pointing to demand dropping to 26.3GW in week 34 from a forecast 26.5GW in week 33. And wind output for the second half of the month is expected to average around 5.6GW, according to data from Kpler, while no nuclear unavailability is scheduled for the rest of the month. Increased wind output and falling temperatures could outweigh a decline in solar generation, with output expected to drop from 7.4GW on 15 August to 6.4GW by 21 August. And generation could continue its downward trend across the remainder of the month as daylight hours continue to shorten. Spanish net imports from France have increased so far in August to 2GW from 1.4GW in July, and from 524MW over August 2023. French nuclear unavailability has been lower so far this summer, averaging 17.2GW during the first half of August compared with 29.2GW over the same period last year. Spanish net exports to Portugal have increased on the year to 1.9GW from 1.6GW in August 2023, but they were below the 2.2GW in July. Despite the increase in net exports, the two spot indexes have cleared at parity every day in August aside from 7 August, when Portugal cleared at a €0.03/MWh premium. Portuguese renewables output in the first half of August has fallen by around 1.1GW on the month and 1GW on the year. The decrease has largely been the result of lower wind output, which averaged 1.9GW over 1-15 August, compared with 4.5GW in July and 4GW in August 2023. By Thess Mostoles Evolution of renewable output and Spanish spot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
S Korea should meet power demand with renewables: IEEFA
S Korea should meet power demand with renewables: IEEFA
Singapore, 15 August (Argus) — South Korea should prioritise deploying renewables instead of fossil fuels to meet increasing power demand, said the Institute for Energy Economics and Financial Analysis (IEEFA) on 14 August. The IEEFA suggests that the country meet its UN Cop 28 climate summit pledge of tripling its renewable power capacity by 2030, as this would generate an additional 113,434GWh from 2023 levels, outstripping the projected power demand increase of 53,186GWh over the same period, according to IEEFA calculations based on data from South Korea's trade, industry and energy ministry (Motie), state-owned utility Kepco and government-affiliated Korea Energy Economics Institute. Doing this would also help the country fully meet increased demand from emerging semiconductor clusters and AI-driven data centers. Renewable energy — which does not include nuclear power — comprises 9.64pc of South Korea's power generation mix in 2023, which is far below the world average of 30.25pc and the average of 26.73pc in Asia, according to IEEFA, citing OECD data. The country's share of clean energy rises to 40.32pc when including nuclear power, but this is still below the OECD average of 49.96pc. Under the scenario where renewables are tripled, the share of renewables in the power mix would rise to 25.08pc by 2030, above the aim of 21.6pc in South Korea's latest 11th long-term electricity plan. Gas-fired power generation would rise by 3,008GWh to a 23.7pc share, in line with a target to cut the share to 25.1pc by 2030 and 11.1pc by 2038. This contrasts with IEEFA's second scenario — where new LNG power plants requested by various industrial sectors, including semiconductor clusters, are built — which would result in an excess of 55,706GWh in gas-fired capacity by 2030. This means LNG would account for 30.53pc of the power mix in 2030, while renewables would make up just 19.79pc. "Building more LNG plants contradicts the country's net-zero goal and increases the risk of stranded assets," said IEEFA. South Korea released its latest 11th long-term electricity draft in early June, which continues to prioritise gas-fired and nuclear generation, over that from renewable sources. The plan raises the share of gas-fired output to 25.1pc in 2030 and 11.1pc in 2038, up from 22.9pc and 9.3pc in the previous plan. "South Korea's historical reliance on fossil fuels to provide energy security has hampered its renewable energy deployment," the report said. "The belief that fossil fuels guarantee stable and affordable energy has stunted the development of renewables, which are perceived as expensive and unreliable." Economic competitiveness South Korea's lagging renewable energy deployment could have "significant financial consequences", given international decarbonisation initiatives such as the RE100, carbon border adjustment mechanism, as well as Scope 1, 2, and 3 regulations, the report warns. South Korea also risks missing out on potential cost reductions by delaying its transition, which may make its exports less competitive, especially with grid parity for renewables expected by 2027. The IEEFA also asserts that embracing renewable energy is "critical to safeguard [the South Korean semiconductor industry's] economic competitiveness", as well as securing future suppliers and customers. The EU, Japan, and China are already outpacing South Korea in renewable energy adoption, and stricter regulations could lead to environmentally conscious customers reducing the market share for South Korean chipmakers, IEEFA added. Companies across various sectors that participate in decarbonisation initiatives may also increasingly require their supply chain partners to adopt similar climate commitments. By Tng Yong Li Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s JAPC to extend Tokai Daini reactor safety work
Japan’s JAPC to extend Tokai Daini reactor safety work
Tokyo, 15 August (Argus) — Japanese nuclear power operator Japan Atomic Power (JAPC) is likely to face a delay in completion of safety reinforcement work at the Tokai Daini reactor to an unspecified date. JAPC was required by Japan's Nuclear Regulation Authority (NRA) to modify reinforcement work of the 1,100MW Tokai Dani reactor's seawall in east Japan's Ibaraki prefecture, as its foundations were identified to have technical issues. JAPC explained to NRA its plan to fix the issues on 7 August but said it will be difficult to complete the reinforcement work by September, as previously targeted. It is also unsure when it can resume operations at Tokai Daini. The reactor, which was built in 1978, has been closed since March 2011 when a devastating earthquake and tsunami and several subsequent nuclear meltdowns hit northeast Japan's Fukushima. JAPC has previously postponed completion of safety reinforcement work at Tokai Daini, previously aiming for a December 2022 completion . Japanese utility Tohoku Electric Power has also delayed a planned restart of the 825MW Onagawa No.2 nuclear reactor from September to November. It revised the fuel loading schedule for the Onagawa reactor in northeast Japan's Miyagi prefecture to September from a previously targeted July. It said it will need more time to ensure the smooth transportation of portable equipment such as water trucks needed to cool down the reactor, in case of emergencies such as earthquakes. Delays in nuclear reactor restarts are expected to maintain demand for thermal fuels like LNG and coal. Japan's LNG consumption for power generation totalled 10.5mn t during January-March, according to trade and industry ministry data. Coal use for power generation was 27.4mn t during the period. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU June manufacturing output down on year, up on month
EU June manufacturing output down on year, up on month
London, 14 August (Argus) — EU manufacturing output was much lower in June compared with a year earlier but edged higher from the previous month, preliminary data from Eurostat show. Seasonally and calendar-adjusted EU manufacturing output dropped to 99.6 against a 2021 baseline of 100, down by a significant 4.2 basis points on the year but up by 0.1 points compared with May. In more absolute terms, EU manufacturing output was down by 3.8pc from June 2023. Manufacturing production has dropped on the year for every month since July 2023 except for December. Output fell in four of the bloc's five largest economies — Germany, the Netherlands, Spain, Italy and France. Production was 4.6pc lower than a year earlier in Germany, the EU's largest economy, while only Spanish output increased ( see year-on-year graph ). Spain's economy has proved more resilient than that of any other major EU country over the past two years. Irish manufacturing data has become declassified, having previously been kept private. Ireland has a disproportionate effect on total EU data, with a weighting of 8.9pc in the 2021 baseline year. A large part of Ireland's manufacturing is performed outside the EU but counted as Irish production, with non gas-intensive sectors such as pharmaceuticals and electronics dominating. Because Irish manufacturing is based on large foreign orders performed overseas, it swings significantly from month to month, and in June was down by nearly 18pc on the year. But while Irish data are now declassified, Slovenian manufacturing data appear to be unavailable, having previously been viewable. Output was mixed across gas-intensive industries. Production in the most gas-intensive of all industries, the chemicals and chemical products sector, climbed by 5.7pc on the year, albeit from a low point of comparison. This was a fifth consecutive month of increase, as European production slowly recovers from the lows of late last year. Output in the food products and beverages, coke and refined petroleum products, and paper and paper products sectors was also up, while basic metals returned to year-on-year growth for just the second time since February 2022. The non-metallic minerals sector continued to struggle, with output down by 1.9pc on the year ( see table ). But this was the smallest decrease since August 2022, which could suggest that production is nearing the point of bottoming out. Non-metallic minerals output last grew on the year in May 2022. In the motor vehicles sector — crucial for demand of other gas-intensive goods such as glass, steel and chemicals — output was down by 3.4pc on the year, falling for a sixth consecutive month. This contrasts with 2023, when output was up on the year in every month as chip shortages eased from early 2022. In construction, a similarly important tertiary sector, the most recent data for May put EU production at 102.3 compared with a 2021 baseline, the lowest for any month since December 2022. High interest rates across the EU have increased the cost of borrowing for consumers, consequently weakening demand for large investments such as cars and houses. Eurozone manufacturing production contracted again in July, according to data compiled earlier this month . "The widely held belief that the eurozone's recovery would pick up speed in the second half of the year is taking a hit," Hamburg Commercial Bank chief economist Cyrus de la Rubia said. "We'll probably need to lower our GDP growth forecast for the year from 0.8pc." GDP growth in the eurozone was just 0.3pc in both the first and second quarters of this year, according to Eurostat. By Brendan A'Hearn EU June manufacturing output by sector Sector ±% Jun 23 ±% May 24 All manufacturing -3.8 0.1 Chemicals and chemical products 5.7 1.2 Non-metallic minerals -1.9 1.1 Food products and beverages 1.3 -1.3 Paper and paper products 5.4 -0.3 Basic metals 2.4 1.9 Coke and refined petroleum products 1.8 2.8 Motor vehicles and other transport -3.4 4.3 — Eurostat data seasonally and calendar-adjusted Percentage change in manufacturing by country, M-o-M Percentage change in manufacturing by country, Y-o-Y Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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