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06 April 2013

Press review 06-04-2013

This week's review is again dominated by Natural Gas, but the highlight goes to this chart:

It seems the market dynamics I described in Europe a few weeks back may not be far from starting in United States. As the article notes, no one is really prepared for it and by its very nature, the American grid is far more vulnerable.
IEEE Spectrum
Residential Solar Power Heads Toward Grid Parity
Peter Fairley, April 2013

Photovoltaics are still, on average, a pricey, subsidy-dependent source of electricity. However, rooftop panels are beginning to beat the grid in a number of jurisdictions with high retail power rates—and their ranks are projected to swell over this decade. A growing number of economists say that rapidly shrinking costs have turned distributed solar generation into a disruptive technology that’s set for runaway growth. In fact, they say, it could ultimately upend the power distribution market. 

“We’re completely unprepared for the opportunity that’s going to present itself,” says John Farrell, an economist and senior researcher at the Institute for Local Self-Reliance, a Minneapolis-based economic think tank. 

The results, presented since January as an online map, suggest that rooftop PV already delivers power more cheaply than the U.S. grid for more than 10 percent of residential demand in five states—California, Connecticut, Hawaii, New Hampshire, and New Jersey. By 2022, home panels are predicted to be the economic winner for at least 10 percent of residential demand in 49 states; the grid holds its edge only in the state of Washington, thanks to notoriously gray skies and cheap local hydropower. PV installed by businesses, meanwhile, will be competitive with at least 10 percent of total U.S. commercial power consumption in 2022.

These low PV prices are opening a host of new business oportunities. In rural America, where population density is about one fourth of what it is Europe, totally off the grid electrical system seem now a profitable option. Also of note the rooftop leasing schemes that already exist in Europe, if in a slightly different way.
NRG Skirts Utilities Taking Solar Panels to U.S. Rooftop
Christopher Martin and Naureen S. Malik, 25-03-2013

NRG Energy Inc. (NRG), the biggest power provider to U.S. utilities, has become a renegade in the $370 billion energy-distribution industry by providing electricity directly to consumers.

Bypassing its utility clients, NRG is installing solar panels on rooftops of homes and businesses and in the future will offer natural gas-fired generators to customers to kick in when the sun goes down, Chief Executive Officer David Crane said in an interview.

NRG is the first operator of traditional, large-scale power plants to branch into running mini-generation systems that run a single building. The endeavor strikes at the core business of utilities that have earned money from making and delivering electricity ever since Thomas Edison flipped the switch on the first investor-owned power plant in Manhattan in 1882.

Consumers are realizing “they don’t need the power industry at all,” Crane, 54, said in an interview at this year’s MIT Energy Conference in Cambridge, Massachusetts. “That is ultimately where big parts of the country go.”
There is finally an agreement between Russia and China to pipe natural gas to the Middle Empire, but it stands far from initial expectations. China seems unwilling, or unable, to pay prices at par with those contracted in Europe. For now the umbilical relationship between Europe and Russia remains intact.
India Times
Russia, China find compromise on gas deal after 15 year standoff
Reuters, 25-03-2013

MOSCOW: China has accepted an olive branch from Russia's Gazprom after years of tough talks which had failed to yield a deal on gas supplies, though the main point of conflict - price - remains.

Gazprom and China National Petroleum Corp (CNPC) agreed on Friday night that 38 billion cubic metres per year of Russian gas would flow to China starting in 2018 and come only from Russia's East Siberian fields, rather than the West Siberian fields which also supply Europe.

In signing the memorandum of understanding, Gazprom gave up its a dream of using its core fields in West Siberia to supply both Europe and China to become a "swing supplier" capable of sending the same gas east or west, depending on the most lucrative price option.
In the Mediterranean gas reserves are coming on-line. Let's hope this eventually helps stabilising the political situation in the Near East. And of course, help the EU member states over there caught in the Austerity trap.
Deutsche Wella
Israel begins natural gas line in Tamar field

Israel has begun receiving gas from a large off-shore reservoir, four years after drilling initially started. The project is designed to reduce the country’s energy dependence and boost the economy.

Natural gas from the Tamar field off Israel's Mediterranean shores began flowing on Saturday at 4 p.m. local time (1400 GMT), the Israeli Energy and Water Ministry said.

"Today we are really in a new era," Energy Minister Silvan Shalom said.

The Tamar field, discovered in 2009, is located 90 kilometers (56 miles) off Israel's northern coast and has an estimated 10 trillion cubic feet of gas - enough to meet the country's gas needs for decades.
Europe's thirst for gas is slowly creping towards Azerbaijan. The final bids for the hypothetical pipelines linking Azeri gas fields directly to mainland Europe where submitted last week. It all seems yet far away in time; once the selection processes is finished the wining consortium will have to develop appropriate contracts with multiple transit countries. This story is just beginning.
Communication crossfire signals high tension in pipeline race

Nabucco West and the Trans Adriatic Pipeline (TAP), the two companies competing for Azerbaijani gas projects, have issued simultaneous statements today (29 March) that they have submitted the final package supporting their bids. The Shah Deniz consortium will chose between the two in June.

TAP was the first to release its statement, saying it had submitted a comprehensive transportation bid, known as a decision support package or DSP, to the Shah Deniz consortium.

TAP said the submission responded directly to the eight selection criteria defined by Shah Deniz: commerciality, project deliverability, scalability, operability, financial deliverability, engineering design, alignment and transparency, and public policy considerations. The proposal included hundreds of documents.

A few hours later Nabucco published its own statement announcing that it had submitted a DSP to the Shah Deniz Consortium.
The buzz over LNG trains linking America's shale resources to Europe's thirsty pipelines continues. How decadal contracts can be made on wells that last 3 years remains a mystery, but the shale gas rush never made much economical sense anyway. The following article also hints at a serious stop in drilling activity, that should eventually force a reality check on some rosy forecasts out there.
CBS Philadelphia
Natural Gas Drilling Could Pick Up If Marcellus Shale Export Plans Are Approved
David Madden, 03-04-2013

Dominion Resources has filed paperwork to convert a plant on the Chesapeake Bay that now imports gas into an export facility. They’re just one of several companies seeking federal permission to deal with non-free trade countries like India and Japan.

Dominion spokesman Dan Donovan says the plan would jump-start drilling in parts of the Keystone state.

“They had a kind of a boom. Drillers were in there. They were staying at the motels. They were eating at restaurants. They were hiring local people to do things to help. And now they’ve kind of gone to other places.”
Closing an interesting example of how important energy policy is. And how important is to plan it well in advance.
Heating oil in Northern Ireland 'up by 60% in three years'

The Consumer Council has said the cost of home heating oil in Northern Ireland has risen by 60% in the last three years.

It is calling for the executive to take action and help families struggling to make ends meet.

The council's Antoinette McKeown said there are eight ministers at Stormont with responsibility for energy costs.

"If we had energy in the responsibility of one government department we may see some changes," she said.

"Home heating oil has risen 60% in the last three years and 68% of homes in Northern Ireland are reliant on it.
Before I go a note on Portugal. The second in line in the Portuguese government, minister Miguel Relvas, resigned this week in consequence of a prosecution over a fraudulent University degree. He was the government's soul and ideological leader. The government presently waits the approval of the 2013 budget by the Constitutional Court, which most expect to be rejected. After this blow the government cannot possibly survive the rejection of the budget. Turmoil is granted for the following months in the Land of Austerity.

Enjoy the weekend, this one is 23 hours shorter than the last.

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