S&P Global Commodity Insights Weekly ET News Highlights – Apr 2, 2024

Japan's largest power producer tests ammonia as new fuel

Energy transition highlights: Our editors and analysts bring together everything you need to know about the industry this week, from renewables to storage to carbon prices.

JERA -- Japan's largest power generation company and one of the world’s largest power utilities --started testing ammonia cofiring at one of its largest thermal power plants this week.

The project paves the way for the use of ammonia in the power sector on a commercial scale that has never been done before. Currently, ammonia is a largely a feedstock for fertilizer production with some of it going into chemicals.

However, ammonia can be combusted with zero carbon emissions and it is one of the pathways being explored for the transportation of hydrogen as it has existing trade flows that can be expanded. These factors allow ammonia to become as an energy transition fuel.

JERA started testing ammonia cofiring at its 1 GW No. 4 coal-fired unit at Hekinan thermal power plant in central Japan from April 1, to be carried out through June using about 40,000 mt of ammonia.

The 20% cofiring of ammonia is expected to be the world's first at a large commercial coal-fired power plant and is part of a four-year long pilot project. JERA has pledged to commercialize its ammonia cofiring power generation by 2030 and use 100% ammonia as fuel in the 2040s for its 2050 carbon neutrality target.

Japan sees great potential in ammonia as a CO2 zero-emission fuel as the country targets to cut its greenhouse gas emissions by 46% by FY 2030-31 from FY 2013-14 levels and achieve carbon neutrality by 2050.

Price of the week: Meanwhile, the price of emission allowances in China’s national compliance carbon market hit a new record on March 29 of Yuan 90.66/mtCO2e ($12.78/mtCO2e), increasing 8.1% week on week, according to Shanghai Environment and Energy Exchange. The steady increase in Chinese carbon prices has been attributed to bullish sentiment and looming deadlines for meeting emissions obligations.

Editor’s pick: Premium and free content

SPGlobal.com

Germany’s SHS launches green hydrogen tender for Saarland steel plants

German steel producer Stahl-Holding-Saar has launched a tender to buy up to 50,000 mt of locally produced renewable hydrogen for its Dillinger and Saarstahl plants in Saarland, the company said March 26. SHS and its subsidiaries are due to produce up to 3.5 million mt/year of green steel from 2027/28. The move follows a tender from Thyssenkrupp for large volumes of clean hydrogen for its Duisburg plant in Germany from 2028.

Platts Connect

New open-source tool aims to inform on environmental impact of hydrogen

The Open Hydrogen Initiative released March 25 an open-source tool for determining the carbon intensity of hydrogen as some industry members work to harmonize measurement methodologies. This new tool allows for the calculation of the carbon intensity of hydrogen production at the facility level based on the operational parameters of the facility and its supply chains, "capturing the nuances" of a project’s emissions, OHI Executive Director Zane McDonald

Manchin, oil and gas groups urge flexibility, better coordination on methane fee

Delays in implementing a fee on oil and gas system methane emissions and new greenhouse gas reporting rules are unfair to regulated companies and run counter to congressional intent, Senate Energy and Natural Resources Chairman Joe Manchin, Democrat-West Virginia, told the Environmental Protection Agency March 26.

TES gets tariff, third-party exemption for German LNG, e-natural gas terminal

Tree Energy Solutions has secured an exemption from tariff and third-party access regulation for its planned "e-LNG" import terminal at the Green Energy Hub in Wilhelmshaven from the German network regulator BNetzA. BNetzA has exempted the 15-Bcm/year terminal, which will import LNG before switching to green hydrogen-based "electric natural gas" (e-NG), for 20 years from the start of the operations.

Tags

  • Gas & Power

  • Energy Transition

  • LNG

Related content

News

S&P Global Commodity Insights Weekly ET News Highlights – Apr 30, 2024

'Time to reorganize': Tesla reboots after EV sales, profits sputter in Q1 Energy transition highlights: Our editors and analysts bring you the biggest stories from the industry this week, from renewables to storage to carbon prices. Electric-vehicle maker Tesla is accelerating its new production line of cheaper EVs amid slowed sales growth and a US EV market shakeup. Tesla plans to debut a new generation of "more affordable" EVs in late 2024 or early 2025, accelerating original plans to launch the models in the second half of 2025. The company will also unveil an autonomous "Cybercab" in August and continue scaling up its energy storage business, CEO Elon Musk told investors and analysts. "We've updated our future vehicle lineup to accelerate the launch of new models ahead of [our] previously mentioned start of production," the CEO said. "These new vehicles, including more affordable models, will use aspects of the next-generation platform as well as aspects of our current platforms, and we'll be able to produce on the same manufacturing lines as our current vehicle lineup." Accelerating the launch of the new EVs may lead to "achieving less cost reduction than previously expected," a company statement reads. Tesla added that it “remains committed” to a company-wide cost reduction. Musk declined to comment on whether Tesla's rollout of new EVs would be more "tweaks on existing models," given the planned repurposing of existing factory lines. Price of the week Platts assessed both battery grade lithium carbonate and hydroxide at $14,500/mt CIF Europe on April 26, down 8.2% and 8.8% respectively since the start of 2024. Some major EV producers, such as General Motors and Ford, cite high material costs as a cause for losses in their respective EV segments. SPGlobal.com Costly Australian renewable hydrogen may lose upcoming supply deals to Middle East, US Australia's renewable hydrogen projects could miss out on large offtake deals due to high production costs and a greater focus on renewable hydrogen in a crucial year when Asian buyers are set to launch tenders for their future needs for environment-friendly fuels. Enagas to present Spanish hydrogen grid plan as regulatory talks advance Spain's Enagas expects to present its proposal for a national hydrogen network in the coming days, following confirmation of its inclusion as a European Project of Common Interest. Total Spanish investment in the grid, including underground storage and the H2Med undersea link joining France, is estimated at Eur5.9 billion ($6.29 billion), Enagas CEO Arturo Gonzalo said. Platts Connect CHINA DATA: Compliance emission allowance prices hit new high of $13.55/mtCO2e on April 22 Weighted average prices of China's compliance emission allowances, or CEAs, hit a record high of Yuan 96.26/mtCO2e ($13.55/mtCO2e) on April 22, up 4.3% on the week, data from Shanghai Environment and Energy Exchange showed. Everfuel further delays startup of 20-MW Danish electrolyzer to H2 2024 Danish green hydrogen developer Everfuel has further delayed the start of its 20-MW HySynergy electrolyzer project in Fredericia to the second half of 2024, from a previous planned start date of the second quarter. The electrolyzer itself is ready, but the company is still resolving issues with some sub-systems following commissioning tests, including a leakage identified during verification test of a gas holder, it said.

News

S&P Global Commodity Insights Weekly ET News Highlights – Apr 15, 2024

Moment of truth looms for European green hydrogen investments Energy transition highlights: Our editors and analysts bring you the biggest stories from the industry this week, from renewables to storage to carbon prices. Time is running out to get on track with Europe's ambitious 2030 hydrogen production targets as developers due to take final investment decisions battle macroeconomic headwinds, industry representatives said at the Reuters Hydrogen conference in Amsterdam. Recent years have seen a multitude of project announcements, pre-front end engineering design studies, FEED studies and preliminary investments, though FIDs have been scarce. “There are some board rooms that are getting a little bit impatient by now,” Rabobank Executive Director Hyung-ja de Zeeuw said April 9. “If you think that we’ve only got six years left until 2030, I guess 2024 is going to be a key year for clean hydrogen projects here in Europe.” Around 4% of announced clean hydrogen projects in Europe have taken FIDs, according to Hydrogen Council Director Policy and Partnerships Daria Nochevnik. Price of the week: Eur4.50/kg The price ceiling for the first pilot auction under the European Hydrogen Bank mechanism. Results will be announced April 30, with the fund expected to clear well below the cap. Editor’s pick: Premium and free content SPGlobal.com Biden's carbon capture plans inch closer to reality amid uptick in well permits The Biden administration's ambition to capture carbon dioxide on a large scale and inject it back into the ground may have seemed daunting one year ago with only two CO2 storage facilities in the US. But a boost in federal spending on the technology in 2021 and 2022 may finally be bearing fruit after a sudden uptick in permits, according to industry watchers. Australia to unveil new plan for clean energy, green manufacturing: PM Australia will unveil a new plan in 2024 to support clean energy and green manufacturing projects to compete better against other nations’ subsidy schemes such as the US’ Inflation Reduction Act to draw investments in clean fuels, Prime Minister Anthony Albanese said, in what is being seeing as a pointer to big new fund allocations coming up. Escalating geopolitical tensions may give carbon market a key role to play: GenZero Carbon markets will be most critical in a scenario where global climate action is fragmented and geopolitical tensions are at their highest, as opposed to a scenario of full climate cooperation where carbon markets are least needed, Singapore’s state-owned decarbonization investment platform GenZero said. Platts Connect European Hydrogen Bank pilot auction to clear well below Eur4.50/kg price ceiling The first pilot auction for green hydrogen production under the EU’s European Hydrogen Bank facility will clear comfortably below the price ceiling of Eur4.50/kg ($4.89/kg), Innovation Fund policy officer Johanna Schiele said April 10. The results of the first Eur800 million auction will be released on April 30, Schiele said. Hydrogen market developing in New York; regulatory, power market challenges remain Using hydrogen to generate power in New York does not currently add up economically, but there is reason for optimism as the technology to do so will likely be needed in some capacity to help meet state decarbonization goals, experts said. China’s CEIC starts construction of 100,000 mt/year capacity green ammonia project China Energy Investment Corporation, one of the country’s largest state-owned energy companies, has started construction of its renewable ammonia project in Cangzhou in the eastern province of Hebei with a planned annual production capacity of 100,000 mt, likely to be completed by Q4 2025.

News

S&P Global Commodity Insights Weekly ET News Highlights – Apr 23, 2024

JERA signs deal with CF Industries to develop 1.4 mil mt/year US ammonia project by 2028 Energy transition highlights: Our editors and analysts bring you the biggest stories from the industry this week, from renewables to storage to carbon prices. Japan's largest power generation company, JERA has agreed with US-based CF Industries to explore the development of a 1.4 million mt/year low-carbon ammonia project at the latter's Blue Point Complex in Louisiana, with the plan to start production in 2028. Under a joint development agreement, JERA is considering taking a 48% stake in the project as well as procuring more than 500,000 mt/year of ammonia to meet low carbon fuel demand in Japan. JERA and CF Industries aim to make a final investment decision "within a year" for the project, which will capture CO2 from production and use it for carbon capture and storage, according to a JERA spokesperson. JERA has pledged to commercialize its ammonia co-firing power generation by 2030 as part of its aim to start using 100% ammonia as fuel in the 2040s for its 2050 carbon neutrality target. Platts, a part of S&P Global Commodity Insights, assessed NSW hydrogen produced via alkaline electrolysis at $3.08/kg on April 19, up 33% on the month. It assessed Japan hydrogen produced via alkaline electrolysis at $2.56/kg on April 19, down 42% on the month. SPGlobal.com Uniper delays Rotterdam hydrogen plant amid high grid fees, lack of offtake certainty Uniper has pushed back the startup of the first 100-MW phase of its planned H2Maasvlakte green hydrogen plant in Rotterdam, the Netherlands, after failing to secure a power purchase agreement for the facility, and amid high grid fees and uncertainty over sufficient offtake interest. China kicks off consultation for compliance emission trading rules in 2024-2025 China, the world's largest compliance carbon market by emission volumes covered, has kicked off an internal consultation for the compliance emission trading rules to be implemented in 2024-2025 among power companies, according to a consultation document seen by S&P Global Commodity Insights. Platts Connect Woodside aims for renewable hydrogen supply in Western Australia in 2025 Woodside Energy, that is developing clean hydrogen/ammonia projects in Australia and the US, is targeting supply of renewable hydrogen in Western Australia for industrial and transport customers from its H2Perth refueling project in 2025. Detailed engineering, construction, commissioning and start-up work scopes have been awarded. Twenty-five US states launch legal challenge to Biden tailpipe emissions rule Twenty-five Republican-led states sued the United States Environmental Protection Agency April 18, hoping to block a new EPA rule designed to limit car tailpipe emissions and advance the Biden administration's push for electric vehicle adoption.

News

S&P Global Commodity Insights Weekly ET News Highlights – Apr 8, 2024

US Solar eclipse expected to significantly reduce solar power output in several markets Energy transition highlights: Our editors and analysts bring together everything you need to know about the industry this week, from renewables to storage to carbon prices. A total solar eclipse will cross North America on April 8, passing over Mexico, the US and Canada, causing significant reductions in solar power plant output with the greatest impacts occurring in the Electric Reliability Council of Texas and PJM Interconnection power markets. An annular eclipse obscures most of the sun except for a halo of sunlight around the edge of the moon’s dark disc, while during a total eclipse the entirety of the sun will be blocked by the moon. In Dallas, the partial eclipse will begin at 12:23 pm CT, with maximum totality occurring at 1:42 pm and the partial eclipse will end at 3:02 pm, according to the National Aeronautics and Space Administration. Maximum totality will reach Cleveland at 3:15 pm ET, Buffalo at 3:20 pm, and Caribou, Maine at 3:33 pm. Solar power production in ERCOT is expected to drop to 3 GW generated during the hour of totality versus the roughly 18 GW that is usually generated during that same time of day on a clear sky day in April, according to Maxar Technologies, an advanced forecasting company that provides data to US power grid operators. As the moon’s shadow moves north through the PJM footprint, solar power output is expected to drop to around 1.6 GW during the hour of totality compared with roughly 7GW on a clear sky day in April, a Maxar spokesperson said in an email. Even under cloudy skies, PJM is preparing for temporary losses of at least 80% to 85% of the production from the approximately 8.2 GW of grid-connected solar or metered solar resources that are part of the PJM solar generation fleet in early April, the grid operator said in a media release. Price of the week: On the Intercontinental Exchange during April 5 trading, ERCOT North Hub day-ahead on-peak rose about $17.50 from its previous settlement to $27/MWh and its corresponding real-time peak contract jumped about $19 to around $29.50/MWh for April 8 delivery. Editor’s pick: Premium and free content SPGlobal.com INTERVIEW: Building a credible carbon market takes time; 'bear with us', says ICVCM A step-by-step approach to informing the market about which project methodologies meet high-quality carbon credit thresholds is considered the best way forward given the high number of methodologies involved, the Integrity Council for the Voluntary Carbon Market said. The ICVCM confirmed that carbon credit programs from American Carbon Registry, Climate Action Reserve and Gold Standard had met its high-quality Core Carbon Principle labels. China kicks off consultation on expanding compliance carbon market to cement sector China has kicked off public consultation on drafting guidelines around emissions accounting and verification for the country's cement sector, laying the foundation for its inclusion in the national compliance carbon market, the Ministry of Ecology and Environment said in a notice late April 3. Thailand's Bangchak, Japan's Sumitomo join forces for green UCO-to-SAF supply chain Thailand-based energy firm Bangchak and Japan's Sumitomo Corp. have signed a cooperative framework agreement for the procurement of used cooking oil and the sale of sustainable aviation fuel, the companies said in an April 3 joint release. Platts Connect Denmark paves way for hydrogen pipeline exporting surplus wind to Germany Denmark is paving the way for state financing for the Jutland hydrogen backbone pipeline to export surplus wind power to Germany, the energy ministry said. Political parties agreed five framework conditions that need to be met for grid operator Energinet to go-ahead with the project including a 1.4-GW or 44% of total capacity booking requirement by private companies. China’s domestic renewable energy certificate trade volume up tenfold in 2023 The annual trading volume of China’s domestic renewable energy certificates, called Green Electricity Certificates, increased almost tenfold to 96 million certificates in 2023, a record high for a year, from 9.69 million certificates in 2022, data from the country’s GEC trading platform showed. Fortescue misses FID date for key renewable hydrogen project under Genex PPA Fortescue Future Industry has missed the deadline for final investment decision (FID) for a key renewable hydrogen/ammonia project in Australia, thus failing to meet a buyer’s condition in a Power Purchase Agreement (PPA) with Genex Power, Genex said April 2.