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Energy Report 
Energy Related News & Comment
- Forgemasters_places_UK_at_forefront_of _nuclear_power_manufacturing__
- Agreement_with_Ballast_Nedam_Sustainablity _Services
- Global_Upstream_M&A_Transaction_Value_ Increased_40_Percent
- Climate_change_and_human_influence
- Wintershall_provides_Landau_with_geothermal _power_from_a_former_crude_oil_reservoir_
- Scottish_&_Southern_Gas_Price_Cut
- UK_Consumers_Set_To_Benefit_From_New_Technology
- ERGEG_Call_For_Evidence_on_EU_Electricity_Markets
17 March 2010
Forgemasters places UK at forefront of nuclear power manufacturing
Sheffield Forgemasters International Ltd (SFIL) has secured £140m of funding to place the UK at the forefront of global nuclear power production.
SFIL, which is a key supplier to the UK defence industry, has secured the final part of the funding package by way of a Government loan, enabling it to install the country’s first 15,000 tonne forging press to make ultra-large nuclear components.
The announcement to agree the £80m funding, was made by Business Secretary Lord Mandelson at the Sheffield company’s site, attended by industry experts and dignitaries and formed part of the Government’s commitment to backing British manufacturing in growth market sectors.
The Government’s package complements other contributions by key partners of SFIL, including leading nuclear power-plant manufacturer Westinghouse and the Sheffield office of Lloyds Banking Group.
The funding agreement places the world’s only independently-owned forgemaster in pole-position to capitalise on huge international demand for safety critical forgings as it joins a group of only five companies capable of producing the largest components for nuclear power reactors.
Graham Honeyman, chief executive at SFIL, said: “The Government loan forms the final piece of a two-year project to finance the installation of a 15,000 tonne forging press which will place the UK at the peak of a global supply chain for civil nuclear manufacturing.
“This is a massive coup for UK manufacturing and firmly underpins the country’s place at the leading edge of engineering technology.
“There are other companies in the world looking to enter the market for these large-scale components, but none will be able to achieve production in the same timescales as SFIL, partly due to the lengthy time it takes to gain international accreditation to manufacture for the nuclear industry.”
The demand for heavy nuclear forgings is set to more than triple by 2020, reaching 70,000 tonnes with worldwide capacity only able to supply 59,000 tonnes over the same timescale.
Graham added: “The world’s capability to make large and ultra large forgings for the nuclear industry is currently restricted to the equivalent of five to seven reactor supply systems a year.
“However the average nuclear construction rate between 2010 and 2030 is expected to be 13 new reactors a year.
“In order to place Britain in a position to capitalise on this deficit, SFIL will push through its plans, within the next three years, to make major castings and forgings for the power generation industry.”
A report in 2009 by business analyst, Frost & Sullivan, highlighted the issues that such disparity between supply and demand demonstrates.
It stated that the main downside of an increase in nuclear projects concerned the availability of heavy equipment and long lead times. The majority of equipment for new generation plants currently comes from international suppliers and nuclear-related entities which have been working at full capacity.
SFIL is the only UK company carrying ASME certification to manufacture civil nuclear castings and forgings and is already providing many components to the civil nuclear industry and the defence industry, enabling it to roll out production of the largest forgings within as little three years from the 15k tonne press’ installation.
In securing the funding, Forgemasters will create hundreds more jobs at its Brightside Lane site. The knock-on effect of having these facilities within UK shores will be many more jobs nationally as suppliers and customers increase their involvement with the company.
The development follows SFIL’s signing of a £30m pound trade agreement to oversee the development of power generation forgings with Indian state run power equipment maker Bharat Heavy Electricals Limited (BHEL).
The 10 year agreement, which helps see the protection of future SFIL markets in the sub-continent, will mainly serve India’s rapidly growing domestic market for turbine and power generation products.
Today’s announcement is subject to final due diligence which will be carried out over the coming weeks.
Agreement with Ballast Nedam Sustainablity Services
ITM Power (AIM: ITM), the energy storage and clean fuel company, is delighted to announce that it has signed a Memorandun of Understanding with Ballast Nedam Sustainability Services B.V. (“B-N”) part of the Ballast Nedam Group, a Dutch construction and infrastructure development company, of Ringwade 71, 3439 LM Nieuwegein, Netherlands, for the exclusive provision of hydrogen energy systems for the the “Autarc”(autonomous floating office). ITM will contribute its design and technology expertise to the Autarc project to produce a self contained clean energy system. Ballast Nedam and ITM will seek to apply such solutions in the domestic built environment and Ballast Nedam will have exclusive rights to do so in the Benelux group of countries.
Dr Graham Cooley, CEO ITM Power commented; “The agreement with Ballast Nedam Sustainability Services provides ITM with an excellent opportunity to show case its energy storage and clean fuel technology in an “off-grid” situation.
The Autarc, will be sited at various locations around the world, to demonstrate the virtues of a green office or green home environment based on hydrogen technology. ITM Power and Ballast Nedam will in addition be addressing the application of zero-carbon sustainable domestic buildings within the Benelux group of countries”. “Ballast Nedam is a major player in infrastructure and construction projects in the Netherlands and we look forward to providing expertise to add value to the sustainable proposition of their projects.”
Mr Ron Von Wilk, Director of Ballast Nedam Sustainability Services, stated “We are very pleased to be working with ITM Power and their unique energy storage, clean fuel technology that enables renewable sources of energy, such as solar or wind, to be used for power, heating or cooking using green hydrogen, whenever needed. Ron added, “ITM’s technology, combined with Ballast Nedam’s building design and construction expertise in deploying state of the art energy conservation methods, is just what is needed in order to enable buildings to become zero carbon for energy. We believe the Autarc project will mark the beginning of a very rewarding partnership for both companies in delivering truly world beating sustainable, zero carbon building solutions.”
Please click on the following link to see The Autarc
The Autarc is an architecturally highly advanced houseboat / floating office that is a hundred percent self-sustaining in both its water and electrical requirements. This highly ambitious pilot project sets both an example and a new standard in the field of environmental care (our aim: an “outstanding” Breeam-score). Not a single compromise is made in aesthetics or user comfort, quite the contrary! The Autarc proves that living and working on the water in exceeding style and comfort is possible even without being connected to external water, electricity and sewage systems.
For further information please visit www.itm-power.com or contact:
ITM Power plc, Graham Cooley, CEO 0114 244 5111
Panmure Gordon & Co. Andrew Godber / Ashton Clanfield 020 7459 3600
Tavistock Communications Simon Hudson / Andrew Dunn 020 7920 3150
Global Upstream M&A Transaction Value Increased 40 Percent
in 2009, Ending Two Years of Decline, Says IHS Herold Study
Large Corporate Transactions in North America and International Oil Deals
Represented Majority of Worldwide Deal Value
NORWALK, Conn. (March 8, 2010) – After two consecutive years of decline, global upstream merger and acquisition (M&A) transaction value increased 40 percent in 2009 to just under $150 billion, according to the annual Global Upstream M&A Review issued by energy research firm IHS Herold, which is part of IHS (NYSE: IHS). Deals in North America accounted for a record high two-thirds of the $150 billion.
The dramatic increase in value was propelled by the two largest corporate takeovers since 2006: ExxonMobil’s $41 billion acquisition of XTO Energy and Suncor Energy’s $21 billion merger with Petro-Canada. A rash of deals by national oil companies (NOCs) and international oil companies (IOCs) jockeying over vast resources in Africa and other international regions also drove the increase.
North American transactions represented 65 percent of the global total, up from 50 percent in 2008. Six of the 10 largest deals in 2009 were North American reserve acquisitions as buyers sought access to massive volumes of long-lived North American unconventional gas and oil sands resources in politically stable areas with minimal exploratory risk. The number of deals outside North America increased for the third consecutive year to an all-time high as companies sought to build oil reserves by accessing world-class discoveries and acquiring small companies exploring in frontier regions.
“Spending on unconventional resources in North America topped $50 billion in 2009, including U.S. onshore shale plays and the Canadian oil sands,” said Chris Sheehan,IHS Herold director of M&A Research. “National oil companies spent record sums on oil based deals outside of North America, including more than $15 billion by Chinese state owned entities. Africa fueled international M&A deal growth last year as the region represented nearly 10 percent of global deal value and more than 25 percent of transaction value outside North America in 2009, both record highs,” he added.
Corporate acquisitions comprised 70 percent of worldwide deal value in 2009 and accounted for the five largest transactions, although total corporate deal count held flat near a five-year low. North American corporate transaction value in 2009 quadrupled over the prior year. Unconventional resources, including shale gas and oil sands, were the focus of the two largest deals and four of the top 10 in North America. National oil companies were buyers in four of the 10 largest deals, led by Asian NOCs expanding global upstream holdings in Africa, Canada and the former Soviet Union.
In 2009, acquired proved reserves (90 percent chance of recovery) were approximately 60 percent oil (nearly 80 percent oil excluding the ExxonMobil/XTO transaction) while proved plus probable reserves (50 percent chance of recovery) transacted volumes were more than 50 percent oil. Outside North America, acquired proved reserves were more than 95 percent oil, significantly higher than historical norms of around 70 percent.
Natural gas accounted for 65 percent of acquired North American proven reserves, in line with the five-year average.
Outlook for 2010
According to the study, IHS Herold expects that relatively robust crude prices and a continued thawing of the credit markets will positively affect global deal activity in 2010, with more than $20 billion assets on the market and a pool of well-capitalized international buyers seeking to secure supply and grow reserves.
“Despite current soft gas prices, the massive volumes of long-lived North American unconventional gas resources with minimal exploratory risk are extremely enticing for IOCs that seek to replace declining production from mature, conventional basins,”Sheehan noted. “Internationally, we believe strategically driven Asian NOCs will continue their quest to secure global energy supply through the M&A market, with IOCs and independents battling for the same world-class assets.”
Regional Transaction Activity in 2009
U.S.
Major oil companies and European IOCs invested heavily in U.S. onshore shale gas through both asset and corporate acquisitions in 2009, lifting the percentage of global spending for the U.S. to more than 40 percent of worldwide transaction value. U.S. deal count tumbled to a 10-year-low, primarily due to weak gas prices and tight equity, and credit markets for the small and mid-size exploration and production companies that traditionally fuel market liquidity.
Canada
In Canada, deal activity was sluggish for the second year in a row. The Suncor/Petro-Canada merger comprised more than half of 2009 Canadian transaction value. Asian NOCs were buyers in two of the largest deals. Implied reserve values for oil weighted transactions and the percentage of transacted crude reserves increased, while pricing for gas-weighted assets fell sharply.
Europe
The number of transactions in Europe dipped slightly from the record total in 2008, but was the second highest in 10 years. European utilities and diversified energy companies continued to be active buyers in the North Sea, targeting regional gas supply.
Africa and Middle East
Transaction value for Africa and the Middle East almost doubled year over year to a record high in 2009 as intense competition continued between NOCs and international integrated majors for the region’s world-class oil discoveries. Host governments in Libya and Angola pre-empted high-profile corporate bids and asset bids by Chinese NOCs.
Asia-Pacific
Asia-Pacific accounted for less than five percent of worldwide deal value in 2009, down sharply from 17 percent in 2008. Coal-seam gas transactions accounted for nearly $1.5 billion, or some 30 percent, of total transaction value in the region.
Latin America
Colombia and Argentina accounted for more than half the regional deals last year with substantial investment also focused in Peru. Deal count soared to a 10-year high despite a slight drop in total transaction value.
Former Soviet Union
Acquisition spending in the former Soviet Union accounted for almost 15 percent of worldwide deal value in 2009. Host government NOCs were the acquirers in half of the 10 largest deals while Asian NOCs made significant investments. Deal count rebounded from the previous year’s five-year low, while asset transaction value doubled year-overyear to almost $13 billion.
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Climate change and human influence
5 March 2010
A Met Office review of the latest climate research confirms our planet is changing rapidly and man-made greenhouse gas emissions are very likely to be the cause. Long-term changes in our climate system have been observed across the globe, from shifts in rainfall patterns to a decline in Arctic sea-ice. The changes follow the pattern of expected climate change and bear the ‘fingerprint’ of human influence, providing the clearest evidence yet that human activity is impacting our climate.
The review studies developments in climate science since the last IPCC report (AR4) was published in 2007. Sophisticated ‘detection and attribution’ methods have been used to identify long-term changes in our climate and then consider:
- whether they are being caused by natural variability — such as changes in energy from the sun, volcanic eruptions, or natural cycles such as El Niño?
- and, if not, is there evidence that human activity could be to blame?
Conclusions show the climate system is changing in a number of ways which follow the pattern of climate change predicted by computer models. The only plausible explanation is that changes are happening as a result of human activity, including man-made greenhouse gas emissions.
Peter Stott, Head of Climate Monitoring and Attribution at the Met Office, said: “Recent advances in observational data and the way it is analysed give us a better insight into the climate system than ever before. This has allowed us to identify changes in our climate and disentangle natural variability from the results.
“The science reveals a consistent picture of global change that clearly bears the fingerprint of man-made greenhouse gas emissions. This shows the evidence of climate change has gone beyond temperature increases — it is now visible across our climate system and all regions of the planet. Our climate is changing now and it’s very likely human activity is to blame.”
There is also some evidence that changes in rainfall patterns could be happening faster than expected. More work is needed to understand why and whether this implies future changes in rainfall could be greater than models predict.
Some of the observed changes covered in the review of climate science
- Temperature increase — global temperatures have increased by about 0.75 °C over the past century and 2000-2009 was the warmest decade on record. Human influence has been detected on every continent.
- Changes in rainfall patterns — wetter regions of the world (mid to high latitudes in the northern hemisphere and tropical regions) are generally getting increasing rainfall, and drier regions less rainfall.
- Humidity — surface and satellite observations show moisture in the atmosphere has increased over the last 20-30 years. This increases the amount of water that can fall in extreme rainfall, posing flooding risks.
- Warming oceans — temperature increases have been observed over the last 50 years in the Atlantic, Pacific and Indian Ocean basins. These cannot be attributed to changes in solar activity, volcanic eruptions or variations in ocean currents, such as El Niño.
- Salinity — the Atlantic Ocean is becoming saltier in sub-tropical latitudes. This is because of increasing ocean evaporation due to increased temperatures. In the long-term, ocean regions at higher latitudes are expected to become less salty due to melting of glaciers, ice sheets and increased rainfall.
- Sea-ice — summer minimum of Arctic sea-ice is declining at a rate of 600,000 km² per decade, an area approximately the size of Madagascar. While there has been variation from year to year, a long-term trend has been observed that can only be explained by human influences.
- Antarctic — there has been a small increase in Antarctic sea ice extent since the satellite record began in 1978. This small change is consistent with the combined effects of greenhouse gas increases and reductions in the ozone layer which cause increases in some regions, such as the Ross Sea, and decreases in others, such as the Amundsen-Bellingshausen Sea.
Wintershall provides Landau with geothermal power from a former crude oil reservoir
Landau. From the summer of this year, Germany’s largest producer of crude oil and natural gas, Wintershall, will be providing the municipal water park “La Ola” in Landau in the Pfalz region with warm water and heating generated by geothermal power. An agreement to this effect has just been concluded. The energy comes from a former crude oil reservoir 1,100 meters underground in which 22,000 liters of water per hour circulate within a closed loop. “The decommissioned production site “La44” is one of 75 wells operated by our company here in the Landau region,” Dr. Thomas Ruttmann, Head of Wintershall’s operations at Landau, explains. However, technical modifications will have to be made before the crude oil well can be used for geothermal power: in future the heated water will be pumped to the surface via the tubing string at “well La44”. A heat pump and four heat exchangers will then supply the leisure pool, which is just 500 meters away, via a district heating pipe. “This cooperation will provide us with over a million kilowatt hours of environmentally friendly energy a year,” Thomas Hirsch, Managing Director of Stadtholding Landau in der Pfalz GmbH, the operating and holding company of the town, explained.Since Landau is situated in the Upper Rhine Plain, it offers ideal conditions for generating geothermal energy. “With deep drilling, the temperature increases by an average of 4.7 degrees every 100 meters”, Dr. Ruttmann explains. He points out that this is considerably higher than the average increase in temperature of three degrees per 100 meters elsewhere. “That’s why there are a relatively high number of geothermal projects in the Landau region compared to other regions.” In order to develop former crude oil well La44, the three shareholders of the current concession, ExxonMobil Production Deutsch¬land GmbH (EMPG), Internationale Tiefbohr GmbH & Co. KG (ITAG) and the wholly owned BASF subsidiary Wintershall, have joined forces with Lan Tec GmbH, a subsidiary of EnergieSüdwest AG. The company specializes in the use of renewable energies and already operates several district heating networks in Landau in the Pfalz region.
Landau is home to the biggest crude oil field on the Upper Rhine Plain. The crude oil field is made up of eight blocks in which almost 200 wells in total have been drilled. The field was discovered in 1955 with the well “Landau 2”. Production of crude oil started in the same year. Overall more than 4.3 million tons of crude oil have been produced in Landau since then. The BASF subsidiary Wintershall holds a 50 percent share in the concession and also took over as operator. In addition to supplying the water park, the production operations in Landau currently use more than 13 million kWh of geothermal heat energy by treating the reservoir water. The energy generated this way is equivalent to the average consumption of over 350 households. With each household in Germany responsible for CO2 emissions of around 13 tons per year, this means a reduction of more than 4,500 tons of CO2 per year.
Wintershall, based in Kassel, Germany, is a wholly-owned subsidiary of BASF in Ludwigshafen. The company has been active in the exploration and production of crude oil and natural gas for over 75 years. Wintershall focuses on selected core regions where the company has built up a high level of regional and technological expertise. These are Europe, North Afri-ca, South America, as well as Russia and the Caspian Sea region. Today, the company is Germany’s largest crude oil and natural gas producer and with its subsidiary, WINGAS, it is also an important gas supplier on the German and European market.
Stadtholding Landau in der Pfalz GmbH is the operating and holding company of the town Landau in the Pfalz region. It is responsible for the Landau Art Nouveau Festival Hall, the Altes Kaufhaus Arts Center, the LA OLA water park, the exhibition park and the municipal industrial track. The company is also responsible for operating the recently renovated "Freibad am Prießnitzweg" open-air swimming complex, which opened its doors on time for the 2008 season. In addition, the company also owns SH-Service GmbH and holds a stake in EnergieSüdwest AG.
5 March 2009
Scottish & Southern Gas Price Cut
Comment by McKinnon & Clarke
'A token gesture' is how energy consultancy, McKinnon & Clarke, described SSE's decision to cut gas bills by 4% from the end of March.
The consultancy, which is one of the largest purchasers of energy in the UK, believes that 10% on both gas and electricity would be a fair cut based on significant drops in the wholesale market over the last twelve months.
David Hunter, energy analyst from McKinnon & Clarke said: "This 4% on gas alone is well short of a fair deal for customers. Even after this small cut, SSE's gas prices are 37% higher than at the start of 2008 - and electricity is almost a quarter dearer. We are very disappointed, but not slightly surprised, that the cut comes in from the end of March once the peak heating season is over - demonstrating once again the priority of shareholder dividends over customers struggling to pay heating bills. The Big six' energy companies need to make a profit, but this is losing perspective".
| Energy Conscious UK Consumers Set To Benefit From New Smart Technology 04 Mar 10 |
| Energy conscious UK consumers set to benefit from new smart technology - Coolpower launches industry’s first energy and micro-generator controller, EMMA - New technology has potential to quadruple value of energy otherwise exported which can now be deployed in the home from a micro-generator Coolpower Products Ltd., a dynamic energy demand management technology business, has launched a technology solution for the UK market, that will, for the first time, provide a smart energy management device for both domestic and commercial buildings, that more effectively manages the energy output of grid-connected micro-generators (e.g. solar panels, micro wind and hydro turbines). The new Energy and Micro-generator Manager, called 'EMMA' is being unveiled at this week’s Ecobuild show in Earls Court, London, the biggest event in the world for sustainable design, construction and the built environment, expected to attract over 34,500 visitors. To date, an average of 50 per cent of what is generated by a micro-generator is uncontrollably exported to the grid due to the unavailability of a smart energy management device that can manage and match energy supply and demand in any household. Coolpower is confident that its new EMMA controller device meets this inherent need and will optimise the performance of micro-generators, effectively quadrupling the value of electricity from a micro-generator, otherwise exported uncontrollably to the grid. Following many years of intense research and development work and with over 50 satisfied initial customers now installed, the patented EMMA controller device is thoroughly tested and proven and is now commercially available. Effectively, EMMA is designed to monitor and control what energy is being produced by micro-generators and what is being used in the building, second by second. Where excess energy is available, EMMA can divert this surplus supply to additional energy storage devices in the building such as hot water tanks, electric underfloor heating and storage heaters, for later use. In the near future, there will also be a G83 compliant product which will limit export to the grid to 12amps facilitating micro-generation projects in rural areas with network constraints. Research work is underway to facilitate the use of the technology with heat-pumps, batteries and chillers. Commenting on the launch of EMMA into the UK, Richard Linger, director, Coolpower Products Ltd. said: "We are very excited about today’s announcement and our entry into the UK market. EMMA represents a step changing innovation for the management of energy in our homes, providing a unique, cost effective and sustainable energy management system for grid-connected micro-generators. Our overall product proposition meets a very identifiable need in the market and supports the government’s stated policy of encouraging the use of renewable energy in the home and reducing carbon emissions by using green energy at the point of use." Linger added: "Our existing installations have provided us with very positive feedback and have indicated that EMMA can provide an impressive return on investment, where the average payback period is less than five years, depending on site specific details. Over the coming months, we will be actively working to promote awareness of EMMA among the green energy and construction trade sectors, along with potential domestic and business users, ensuring that this new smart controller device becomes a core element of any grid-connected micro-generator technology system." Coolpower is also developing the platform technology for use on a broader scale. It can be used to underpin the effective implementation of Smart Grids by managing storage of energy in various forms in the home. This technology can help facilitate the use of renewables on the grid and underpin efficient use of fossil fuel facilities. Research figures produced by Coolpower estimate that the EMMA technology could reduce the cost of supply of electricity by between 10-15 per cent, representing savings in the UK of up to STG 1.7billion per annum. The launch of EMMA is very timely, coming a month in advance of the FIT (Feed in Tariff) for renewables being introduced in the UK on 1st April, 2010, which is likely to see a substantial increase in the number of micro-generators to be installed across the country. Studies by DECC (Department of Energy and Climate Change) have indicated that demand for micro-generators may be in the region of 200,000 installations per annum up to 2030. The EMMA units vary in price depending on volumes ordered and size of the micro-generator. The entry level unit is under STG 990 increasing to STG 4,500 for units installed with 30kW micro-generators. The company states that EMMA can be easily installed by a qualified electrician within three hours. |
ERGEG Call For Evidence on the Factors that Affect the EU Electricity Markets
ERGEG would like to announce the launch, on 3 March 2010, of a call for evidence on "generation adequacy treatment in electricity."
By examining what it hopes is a full picture of the factors and impact of generation adequacy treatment in electricity markets in Europe, CEER seeks to further the discussion on finding solutions and improving certainty for investors, generators, network planners and electricity market participants generally.
Interested parties are invited to submit comments by 27 April 2010 and these should be sent by e-mail to: generation_adequacy@ceer.eu.
Following the end of the public consultation period, ERGEG will publish all comments and replies to questions received from stakeholders. If a respondent would like ERGEG to treat their contribution with confidentiality then this must be explicitly mentioned in their reply. If possible, confidential information should be provided as a separate annex, so that the main document may be published. Unless marked as confidential, all responses will be published by placing them on the ERGEG website: http://www.energy-regulators.eu.
Any questions relating to this document should in the first instance be directed to:
Mrs. Fay GeitonaCEER Secretary General
Email: fay.geitona@ceer.eu
Fax +32 2 788 73 50
Tel. +32 2 788 73 30
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