UK unveils $320bn power market reform plan

Chris Huhne, the UK’s energy minister, has unveiled radical electricity market reforms intended to bring £200bn ($320bn) of investment in generation infrastructure by 2020.

The White Paper published in mid-July featured three key policies. A “contract for difference” fixed tariff for electricity from nuclear and renewable sources. A “capacity mechanism” will ensure power stations are kept on standby to cope with demand surges and intermittent wind generation. Power station environmental standards have also been raised.

A “renewable energy roadmap” was also introduced alongside the White Paper. This sets a target of 18 GW in offshore wind capacity by 2020, a rise from 13 GW recommended by the government’s Committee on Climate Change.

But the roll-out of offshore wind capacity depends on cutting the cost of wind generation to £100 ($164)/MWh, down from £190.

UK consumers and companies, are expected to face substantial rises in bills as a consequence of the plan, although Huhne said the rise should be limited to 20 per cent.

Submarine cable shortage threatens offshore wind expansion

Demand for high voltage submarine power cables is set to skyrocket over the next ten years, placing a significant strain on supply in Europe, the location of almost three-quarters of offshore wind projects to 2020, finds a report from Pike Research.

Submarine transmission cable projects will increase from just over 60 worldwide in 2011 to more than 350 by 2020, said Pike Research.

“Only a handful of manufacturers in the world are capable of producing and installing high-voltage subsea power cables,” said Clint Wheelock, president of Pike Research.

Hitachi-GE JV picked for 1.3 GW Lithuanian nuclear plant

Hitachi and GE Hitachi Nuclear Energy (GEH), its joint venture with GE, have been selected to build the 1.3 GW Visaginas nuclear power plant project in Lithuania.

Lithuania picked Hitachi over Westinghouse, its rival for the bid, as offering “the most economically attractive proposal”, said the country’s deputy energy minister Romas Svedas.

GEH is expected to supply an ABWR design reactor. A contract is scheduled to be signed by the year-end to enable the plant to be online by 2020.

EDF, Dong and Alstom form $14bn wind alliance

EDF, Dong Energy and Alstom agreed to join in a €10bn ($14bn) offshore wind plan aimed at boosting France’s clean energy sources and domestic industry.

The companies will pool expertise and investment alongside Nass&Wind Offshore, the French offshore wind developer, Poweo ENR, a unit of renewables company Poweo and Wpd Offshore, an arm of the German wind company, the firms said in a statement.

France aims to install 6 GW in offshore wind – about 1200 turbines – by 2020. The government began accepting proposals on 11 July for building five projects with a combined capacity of 3 GW.

Areva, which makes wind turbines, also signed an accord to bid together for as much as 1750 MW of offshore wind farms with the French energy producer GDF Suez and Vinci. France will open a second round in April 2012.

RWE and Gazprom plan joint gas and coal plants

German utility group RWE has signed a memorandum of understanding with Russia’s Gazprom aimed at establishing a strategic partnership to construct gas and coal power plants in Europe.

RWE and Gazprom will now negotiate on forming a joint venture to combine existing or new gas and power plants in Germany, the UK and the Benelux countries, said RWE.

Gazprom’s CEO Alexei Miller, said Germany’s nuclear pullout opened prospects for constructing gas fired plants. RWE said the agreement could secure for it “a safe and competitive natural gas supply”.

Russian pipeline breaks free of EU rules

Both the European Union favoured Nabucco pipeline and its Gazprom sponsored competitor South Stream will “most probably” gain exemption from elements of the EU’s Third Energy Package for offering competitors free access to pipeline networks, said Bulgarian energy minister Traycho Traykov.

He added that no gas pipeline project could yet work according to the rules of the fully liberalized market, reported the Euractiv news service.

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Belgium: Vattenfall has agreed to sell its Belgian operations for about $227m to Italian energy company Eni. The transaction, in tune with Vattenfall’s strategy to focus on its core markets, covers Nuon Belgium, as well as its subsidiary Nuon Wind Belgium and Nuon Power Generation Walloon.

Cyprus: Cyprus authorities have requested assistance through the European Civil Protection Mechanism after the 641.5 MW Vasilikos power station, the island’s largest power plant, was destroyed in a munitions blast in July.

EU: In the first half of 2011, offshore wind installations in the EU rose by 4.5 per cent from the same period of last year, according to the European Wind Energy Association (EWEA), with 108 new offshore turbines with a total capacity of 348 MW connected to grids.

Netherlands: Gas turbines at Essent’s Moerdijk 2 and Claus C CCGT units have been put into operation for the first time.

Poland: GE Hitachi Nuclear Energy (GEH) has signed a memorandum of understanding with Polish engineering firm Energoprojekt Warszawa to discuss the feasibility of partnering on future reactor projects. GEH has announced it will bid aggressively to build Poland’s first nuclear power plant.

Spain: Gemasolar, a 19.9 MW CSP plant in southern Spain, has achieved 24 hours of uninterrupted electricity supply to the grid through molten salt energy storage that lets it continue generating for 15 hours without solar radiation, according to Torresol Energy.

Spain: Utility Ente Vasco de la Energía (EVE) has switched on a 300 kW wave power plant at Mutriku in the Basque country, featuring 16 Voith Hydro power units, that its makers describe as the country’s first commercial wave energy plant.

UK: EDF has submitted applications to build its first nuclear power plant in Britain at Hinkley in Somerset, where it already has council planning permission for preparatory work.

UK: The Energy Technologies Institute is to invest £23.5m ($38.5) to work with Costain to get a pre-combustion carbon capture pilot plant tested and operating by 2015.

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