POWER Digest [April 2021]

European Commission Probing Germany Lignite Power Compensation. The European Commission on March 2 opened an “in-depth investigation” to assess whether Germany’s plans to compensate its lignite-fired power plants for early closure is in line with the European Union’s (EU’s) state aid rules. Germany, which has announced a coal phaseout by 2038, has entered into agreements with lignite power generators, RWE and LEAG, for compensation of “foregone profits,” and “additional mine rehabilitation costs.” According to the commission, of the total €4.35 billion, €2.6 billion are earmarked for the RWE lignite installations located in the Rheinland area and €1.75 billion for the LEAG installations in the Lausitz region. In November 2020, the European Commission found that the competitive tender mechanism introduced by Germany to compensate its hard coal-fired power plants and lignite plants below 150 MW for early phaseout promotes EU climate objectives.

J-POWER Mulls Generation Profile Shakeup. Japan’s Electric Power Development Co. Ltd., which operates under the brand name J-POWER, on Feb. 26 unveiled a “Blue Mission 2050” plan that seeks to realize a carbon-neutral and hydrogen society by 2050. The company will target a carbon dioxide emissions reduction of 40% by 2030 by replacing coal-fired power plants with hydrogen power. Thermal power currently makes up about 36.9% of J-POWER’s portfolio. Transformational projects will include Osaki’s CoolGen Project, which is conducting a demonstration of a system that produces hydrogen from coal and could be ready for commercialization as early as 2025. J-POWER is also participating in a pilot test project to gasify brown coal in Australia and transport it to Japan. J-POWER’s plan also entails expanding its renewable energy capacity, mostly hydro, by 1 GW by March 2026. It also plans to start up the Ohma nuclear power plant in April 2028. Construction is continuing on the ABWR despite a series of delays.

French Regulator Approves Operation of 900-MWe Reactors Beyond 40 Years. French Nuclear Safety Authority (ASN) on Feb. 23 set the conditions for the continued operation of EDF’s 900-MWe reactors beyond 40 years and highlighted an “open prospect” of keeping them open for 50 years. EDF’s 32 900-MWe reactors, which came online between 1977 and 1988, are the oldest reactors in France, and their fourth periodic safety review “is of particular importance because the service life hypothesis adopted at the design stage was 40 years,” explained ASN. Continued operation beyond 40 years required design study updates and equipment replacements, as well as major safety improvements.

IEA: Global Carbon Emissions Rebounded Above Pre-Pandemic Levels. Global energy-related carbon dioxide emissions were 2% higher in December 2020 than in the same month a year earlier, data released by the International Energy Agency (IEA) in March suggests. After hitting a low in April, global emissions rebounded strongly and rose above 2019 levels in December, the agency said. Major economies led the resurgence as a pick-up in economic activity pushed energy demand higher and significant policy measures to boost clean energy were lacking. Many economies are now seeing emissions climbing above pre-crisis levels. The 2020 trends played out as more countries made pledges to reach net-zero emissions by mid-century. However, the trends underscore the challenge of curbing emissions while ensuring economic growth and energy security, the IEA said.

Reliance, JERA Reach Financial Close for Bangladesh Gas Plant. Indian firm Reliance Power and Japan’s JERA have achieved financial closure of their jointly developed 745-MW natural gas combined cycle power project in Meghnaghat, Bangladesh—the first phase of a total 3 GW of gas-fired generation planned for the South Asian country. The project’s announcement follows closely on news that the country will scrap nine new coal projects, owing in part to higher costs for imported coal and a distaste for coal by project lenders. But gas plants in the region have proven risky, too. In 2019, Reliance reached a debt-restructuring deal with the U.S. Exim Bank for its Samalkot project in the Indian state of Andhra Pradesh, which was ultimately shuttered owing to a lack of gas supplies. The company decided to relocate the equipment from that project to Bangladesh, under a partnership with JERA. The project’s engineering, procurement, and construction contractor is Samsung C&T Corp. of South Korea.

KenGen Expanding Geothermal Know-How in East Africa. Kenyan power company KenGen has snagged a $6 million contract to drill three geothermal wells in Djibouti, marking the third geothermal contract with other African nations in recent years. Kenya, which is Africa’s biggest geothermal producer, has so far drilled more than 300 wells within the Olkaria field in the Rift Valley. “As a country, we have a geothermal energy potential of 10,000 MW along the Rift Valley with the resource being harnessed in 23 sites,” said Kenya’s Energy Cabinet Secretary Charles Keter. In 2019, the company won a $52.9 million contract to drill 12 geothermal wells in Ethiopia, and another contract, worth $76 million, for consultancy services and drilling wells. The nation has also developed partnerships with Rwanda. In a November 2020 report, the International Renewable Energy Agency highlighted East Africa’s substantial geothermal potential in the Rift System. But only about 900 MW of installed geothermal electricity capacity exists in the region, with power plants in Ethiopia and Kenya while other countries are either at the surface exploration stage or exploration drilling stage, it noted.

Sonal Patel is POWER’s senior associate editor.

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