COMPETITION AMONG FUELS FOR POWER GENERATION DRIVEN BY CHANGES IN FUEL PRICES

The following information was released by the Energy Information Administration (EIA): The mix of fuels used to generate electricity has varied over time. Several factors, especially changes in relative fossil fuel prices, have influenced the mix of energy sources used. EIA recently released a study on the competition between coal, natural gas, and petroleum used for electricity generation, which estimates what economists refer to as the elasticity of substitution among the fuels. The 'elasticity of substitution' concept measures how the use of these fuels varies as their relative prices change. The structure of the power industry varies from region to region. Generation dispatch decisions are made by an individual utility operating multiple plants in its service area or by a Regional Transmission Organization as part of a centralized wholesale power market. In either case, generation costs are a primary driver determining the mix of fuels used to supply a region's power load. As fuel costs and technology change over time, some energy sources become more economical to use than others. Historically, coal and nuclear generation units supplied most of the baseload power demand in the United States partly because of their low fuel-related operating costs. Generation fueled by natural gas and petroleum supplemented the baseload generators during peak and intermediate periods of demand. In some areas of the country, abundant hydropower capacity has supplied both baseload and peaking generation. Fossil fuelscoal, natural gas, and petroleumsupplied 70% of total electric power generation in 1950, with that share rising to 82% in 1970, and falling back to 70% in 2010. Although coal has been the predominant fuel used in power generation in the U.S. over the last 60 years, its share of the fossil fuel mix has varied in response to changes in the cost and availability of competing fuels. There have been some periods when volatility in fuel costs have had especially strong impacts on the mix of fuels used for generation: During the late 1960s, concerns about emissions from coal-fired power plants drove an increase in petroleum-fired generation capacity. Low and stable crude oil prices during the 1960s provided further stimulus to the shift from coal- to petroleum-fired generation. Two oil price shocks during the 1970s, the Powerplant and Industrial Fuel Use Act of 1978, (PIFUA) and a large build-out of new coal capacity in the 1970s and 1980s contributed to a shift away from petroleum and back to coal for baseload power generation. By 1990, PIFUA had been repealed and the natural gas markets had been deregulated, allowing more opportunities for substitution between petroleum and natural gas as a fuel for peaking generation. Petroleum-fired plants in particular were limited by environmental regulations on emissions. Most recently, a number of factors have led to a continuing electric power industry trend of substituting coal-fired generation with natural gas-fired generation: During the 1990s and 2000s, the cost of natural gas generation decreased with the increased use of efficient combined cycle technology for power generation. Expansion of the natural gas pipeline network decreased uncertainties around natural gas availability. Natural gas production gains from domestic shale gas formations began to rapidly increase starting in 2005. Rising shale natural gas production outpaced natural gas demand growth and contributed to falling natural gas prices, while coal prices rose. Starting in 2009, these trends began to alter the relative economics affecting the dispatch of generators relying on Appalachian coal and natural gas, in the eastern half of the country. Factors other than fuel prices played important roles in determining which power plants are run to meet electricity demand. One important factor is the availability of generating capacity. Between 2000 and 2012, natural gas generating capacity grew by 96%. In contrast, additions to coal capacity were relatively minor during that period, and petroleum-fired capacity declined by 12%. Other factors include: generators' nonfuel variable operating costs, startup/shut down costs, emission rates and allowance costs, transmission constraints on the electricity grid, and reliability requirements. Electricity system operators evaluate all of these factors when determining which plants and fuels to use. Earlier academic studies analyzed fossil fuel substitution, largely between natural gas and petroleum, during the period of the 1980s and 1990s. EIA's recent report updates these earlier elasticity studies to reflect recent dispatching patterns during a period of increasing competition between natural gas and coal (2005-2010). EIA's study indicates that for the United States as a whole, a 10% increase in the ratio of the delivered fuel price of coal to the delivered price of natural gas leads to a 1.4% increase in the use of natural gas relative to coal. The elasticity estimates are most robust for the southeastern United States, while results for the Midwest and Texas are relatively insignificant. For more analysis and complete results, see the full report. http://www.power-eng.com/news/2012/07/13/competition-among-fuels-for-power-generation-driven-by-changes-in-fuel-prices.html

Natural gas power generation matches coal's for first time

It is reported that coal stocks like Alpha Natural, Peabody Energy. James River Coal, Walter Energy and Arch Coal have been beaten up of late as Patriot Coal's bankruptcy cast a cloud over the sector. But a long term trend that reached an historic inflection point recently is adding to coal's recent stock market woe is for the first time since the agency was set up decades ago.

According to data from April 2012 that was recently released by the US Energy Information Administration, natural gas fired plants equaled the power output from coal. Monthly coal and natural gas generation both provided about 32% of total generation for the US.

The trend has been encouraged by much lower natural gas prices and more stringent regulations on emissions from coal-fired plants. A chart accompanying the release shows a sharp drop in coal generation starting late last year, just as natural gas took a leap upward.

Analysts at the Energy Information Administration pointed out that the weather played a factor in the trend, since overall power demand was low in April due to a mild spring. At the same time, the price of natural gas to power plants touched a 10 year low.

Since then, natural gas prices have moved up now that a hot summer has kicked in.

The EIA said that "With warmer summer weather and increased electric demand for air conditioning, demand will increase, requiring increased output from both coal and natural gas fired generators."

So while coal will continue to provide power this summer, it may no longer be King Coal for the time being, as energy companies continue to produce ample natural gas in the US and government regulations on air pollution encourage new plants that burn natural gas.
http://www.steelguru.com/raw_material_news/Natural_gas_power_generation_matches_coals_for_first_time/273502.html

Multiquip unveils new hydrogen powered generator

Hydrogen-powered generator could be a boon for various industries

Multiquip, a manufacturer of power generators and lighting solutions, has unveiled a prototype for its latest hydrogen fuel cell-powered generator, called the MQ H2G EarthSmart. Hydrogen fuel cells have been gaining popularity in various industries recently. The energy systems are acclaimed for their ability to produce clean electricity on par with conventional methods but without the harmful emissions. Fuel cells have been used in numerous applications, such as in new vehicles and as power for light sources. Multiquip believes that the energy systems can be useful for electric generators that can be used to provide power for various projects.

Multiquip touts system’s environmental friendliness

The company believes that the EarthSmart will be a popular option for clients that have a need for large amounts of electricity. The EarthSmart has also been designed with the environment in mind. According to Multiquip, one EarthSmart unit can displace more than 900 gallons of diesel fuel every year and eradicate 9 metric tons of CO2. The company notes that it has managed to achieve a 73% reduction in emissions from using hydrogen fuel instead of oil, coal or diesel.

Generator capable of operating for 26 hours non-stop

The EarthSmart is capable of operating for 26 hours before needing to be refueled with hydrogen gas. The generator can produce enough electricity to soundly power most electronic equipment. Multiquip notes that the system can be used as a backup power source in the event of a blackout or other emergency or as a primary source of power for various purposes.

Prototype unveiled at Cine Gear Expo 2012

Multiquip unveiled the prototype at the Cine Gear Expo 2012, a major film and digital media event that showcases the latest developments of technology in the entertainment industry. Hydrogen fuel cells have seen limited use in this industry, but are quite popular with industrial companies and car manufacturers. Multiquip believes that its MQ H2G EarthSmart generator will find a home in the world of film.


http://www.hydrogenfuelnews.com/multiquip-unveils-new-hydrogen-powered-generator/854043/

UPDATE 1-Nigeria needs $15-$20 bln for power over 3 yrs -BPE

Nigeria economy could grow at 10 pct with power - BPE
* Population of over 160 mln major investment opportunity
* Corruption, vested interests stunt privatisation progress (Adds details, quote, background)
By Chijioke Ohuocha
LAGOS, April 27 (Reuters) - Nigeria needs $15-$20 billion of investment over the next three years to buy and develop electricity assets, the Bureau of Public Enterprises (BPE) said on Friday, underlining the need to push forward with delayed power privatisation plans.
Nigeria plans to sell off 11 distribution and 6 generation companies by October as part of plans to privatise a power sector rife with inefficiency and corruption, the ministry of power told Reuters on Thursday.
Africa's second biggest economy could be growing three percent faster if it solved chronic power shortages, Friday's BPE statement said. Nigeria's GDP grew 7.68 percent in the fourth quarter last year.
"The country cannot allow power outages to stifle economic growth," Bolanle Onagoruwa, the director general of the privatisation agency, said in the statement.
"New and replacement generation capacity will need to be financed by both domestic and international financial markets," the statement said.
Nigeria holds the world's seventh largest natural gas reserves but decades of corrupt governments have chosen to cash in on crude oil rather than investing for domestic power needs.
Nigeria only provides its 167 million inhabitants with around a quarter of the amount of electricity used by New York city, leaving those who can afford it to use expensive diesel generators and those who can't to live without any power.
President Goodluck Jonathan laid out plans in 2010 to break up inefficient Power Holding Co of Nigeria (PHCN) and sell off generation and distribution units. But powerful vested interests, such as diesel generator and fuel importers, unions and power contractors, have delayed the sale.
The power ministry says it is confident privatisation will be complete by October and current power output of under 4,000 megawatts can be boosted to 6,000 by the end of the year and 10,000 by the end of 2013. Industry experts think this is optimistic based on the previous delays to plans.
The mobile phone sector provides an example of the potential returns that can be made from Nigeria's growing consumer market. South Africa's MTN and India's Bharti Airtel are two firms that have benefited from rapid growth in Nigeria.
http://www.reuters.com/article/2012/04/27/nigeria-power-idUSL6E8FR5SV20120427

Canadian Natural Gas Gains as Power Generators Switch Fuels

Canadian natural gas rose as low prices encouraged power producers to use more of the fuel.

Alberta gas for April delivery gained 1.5 cents after falling 37 percent this year, making it more competitive with coal for generating electricity. Nuclear output slipped to a four-month low yesterday, raising demand for other fuels.

“If gas stays down it’s going to start displacing some coal,” said Gordy Elliott, a risk-management specialist at INTL FCStone in St. Louis Park, Minnesota.

Alberta gas for April delivery was at C$1.81 a gigajoule ($1.74 per million British thermal units) as of 5 p.m. New York time on NGX, a Canadian Internet market.

Gas traded on the exchange is shipped to users in Canada and the U.S. and priced on TransCanada Corp. (TRP)’s Alberta system.

Natural gas for April delivery on the New York Mercantile Exchange rose 2.1 cents to settle at $2.484 per million Btu.

Spot gas at the Alliance delivery point near Chicago fell 4.59 cents to $2.4942 per million Btu on the Intercontinental Exchange. Alliance is an express line that can carry 1.5 billion cubic feet a day from western Canada.

At the Kingsgate point on the border of Idaho and British Columbia, gas dropped 6.58 cents, or 2.9 percent, to $2.2145. At Malin, Oregon, where Canadian gas is traded for California markets, gas was down 14.08 cents, or 5.8 percent, at $2.2855.
Alberta System

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.3 billion cubic feet, 496 million below target.

Gas was flowing at a daily rate of 2.62 billion cubic feet at Empress, Alberta, where the fuel is transferred to TransCanada’s main line.

At McNeil, Saskatchewan, where gas is transferred to the Northern Border Pipeline for shipment to the Chicago area, the daily flow rate was 2.16 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 484 million cubic feet. The system was forecast to carry 2.17 billion cubic feet today, or 87 percent of its capacity of 2.65 billion.

The volume on Spectra Energy’s British Columbia system, which gathers the fuel in northeastern British Columbia for delivery to Vancouver and the Pacific Northwest, totaled 3.02 billion cubic feet at 3.20 p.m.
http://www.bloomberg.com/news/2012-03-02/canadian-natural-gas-gains-as-power-generators-switch-fuels.html

Generator Sales Surge After Big Storms

FAIRFIELD COUNTY, Conn. – Sales of backup generators are surging across Fairfield County. 
After the twin power-outage fiascos that followed Hurricane Irene and the historic October nor’easter set records for power outages, fewer homeowners completely trust their electric companies. 
In fact, homeowners are rushing to their Town Halls to apply for backup generator permits and to stores that sell the units for $3,000 to $15,000. Permit and application fees can also cost hundreds of dollars, depending on the town and the cost of the units.               
“I’ve been doing this a long time, and I’ve never seen anything like it,” said Jim Gilleran, chief building official for the town of Fairfield. “Since Irene and the October snowstorm, people have been flocking in here every day for backup generator permits.”
During an average year, about 20 backup generator permits are issued in Fairfield. But a whopping 115 applications have been filed after the August and October storms, Gilleran said. 
“A lot of people are coming in and saying they’ve had it, they don’t want to be without power for a week or longer again, especially during winter,” he said. “They’re afraid to be without heat and hot water.”
Getting a permit can be a complicated, monthlong process that involves gaining approval from the town’s Planning and Zoning Department, Wetlands Commission, building inspectors and electricians, Gilleran said.
Next door in Westport, there have been 155 applications for generator permits, with several dozen more still being processed, said Building Department clerk Tricia Harty, who processes the permits.
“It’s off the charts, we’re busy every day working on these applications,” Harty said. 
In 2009, just nine applications were filed for backup generators in Westport. But in 2010, after numerous residents lost power from a wind storm and nor’easter, nearly 130 permits were issued, Harty said. 
“People have been coming in nonstop. We’ve been swamped with applications for months, and it doesn’t look like it’s going to stop any time soon,” she said.
Norwalk’s chief building official, William Ireland, said his department is also being deluged with backup generator applications. “In a typical year we have about 10. This year, we’ve had more than 75 applications,” Ireland said. “After Irene and the October storm, it’s been especially crazy.”
All that adds up to big sales for companies that sell and install the generators, which are generally about twice the size of a central air-conditioning unit and are installed on the side or rear of a home.
Mark Holzner, owner of Northeast Generator in Bridgeport — one of the largest distributors of backup generators in Connecticut — said sales have doubled over the past few months.
“There was a huge surge in sales after Irene and another one following the second storm,” said Holzner. “For months, sales for the (backup) generators rose dramatically and even now we’re still up between 15 (percent) to 20 percent over our usual sales.”
Prices for automatic generators that go on within a minute of losing power range from $5,000 to $15,000, with units that have to be turned on starting at about $600, Holzner said.
“We’ve been in business for 40 years, and this has been one of the busiest periods for generator sales,” he said. “Everybody’s pretty sick and tired of losing power, and during winter people get worried. As soon as we get the first big snow storm we expect to get another big rush.”
http://www.thedailywilton.com/news/generator-sales-surge-after-big-storms

SON To Rid Markets Of Substandard Power Generators

The Standards Organisation of Nigeria (SON) expressed its readiness to rid the nation’s markets of substandard   power generating sets.

Dr Joseph Odumodu, the SON Director-General, said this on Monday in an interview with the News Agency of Nigeria in Lagos.

Odumodu said that SON would meet with both the local manufacturers and importers on Dec. 7, today in Lagos to find a lasting solution to the problems.

According to him, it has been established that the life span of those generators in the nation’s markets are below what was inscribed on them.   

Odumodu said that about 50 per cent of the generating sets in the market were rated above their actual capacity while over 30 per cent were of low capacity.
He also said that the breakers installed to the generators had failed short circuit test and have very high noise level, in spite of the fact that they were soundproofed.

Odumodu said that there was a very high level of counterfeiting of the approved generators which had low quality winding wire.

``All importers and assemblers of the generating sets must meet the required standard parameters, especially the Nigeria Industrial Standard (NIS),’’ he said.

The director-general, however, advised the importers to assist SON in identifying individuals or organisations behind the importation of substandard products. (NAN)

http://leadership.ng/nga/articles/9793/2011/12/07/son_rid_markets_substandard_power_generators.html