Latest news with #gasfiredpower
Telegraph
16-07-2025
- Business
- Telegraph
Miliband to unleash new gas plants to back up patchy wind and solar
Ed Miliband has opened the way for a fleet of new gas-fired power stations to back up Britain's wind and solar farms. He has told the National Energy System Operator (Neso) – the UK's grid operator – that by the end of the decade it must keep 40 gigawatts (GW) of spare generating capacity on standby for days when wind and solar cannot keep the nation's lights on. The request is part of a system known as the capacity market, where companies are paid to keep generating capacity on standby for days when renewables output plummets or demand surges. The capacity market already costs British consumers about £1.3bn a year – but this will surge to £4bn by 2030 as reliance on renewables increases, the Office for Budget Responsibility (OBR) has said. Mr Miliband's letter to Neso has told it to ensure it has 40GW-worth of back-up generating capacity on the system, roughly equating to the output of 35-40 large gas-fired power stations. About two thirds is expected to come from gas and the rest from batteries, interconnectors and other sources. The riches available to power companies via the capacity market has caused a mini-boom in construction of gas fired power plants. Neso's list of projects seeking grid connections has more than 100 new gas-fired power stations planned around the UK. Most are smaller than the large power plants built in the past but designed to be more flexible, meaning they can ramp their output up and down according to demand and the price of power. They make their profits partly from being paid to be on standby and partly from operating only when power prices surge to unusually high levels – as often happens when low winds reduce windfarm output. Driving up costs Adam Bell of Stonehaven, an energy consultancy, said the system drove up costs for consumers. 'The capacity market is driving a boom in construction of gas fired power stations but these plants push up prices for everyone in the wholesale market. That's why subsidy costs are rising. 'We know that they are able to make excessive returns and they are also given 15 year capacity market agreements which locks in these effects for too long.' John Constable, director of the Renewable Energy Foundation, said that the mix of subsidies supporting renewables were collectively costing the UK £25.8bn a year. 'Renewables are intrinsically unreliable,' he said. 'Under the capacity market consumers are forced to provide an indirect subsidy to wind and solar to pay for a shadow fleet of gas turbines and batteries to guarantee security of supply. This results in two parallel electricity systems and so reduces grid productivity and increases costs.' The move coincides with a separate announcement from Mr Miliband regarding contracts for difference (CfDs) – a different subsidy mechanism. These support construction of renewables such as wind and solar farms by guaranteeing a minimum price for the power they generate. Mr Miliband said that future projects would now be able to apply for CfDs before even getting planning consent – and could then claim subsidies for 20 years instead of the previous 15 years. He said such changes would help deliver more clean power and support thousands of jobs. However, CfDs added £1.8bn to bills last year – equating to about £100 on the average household bill according to parliamentary reports. This too is set to surge, in line with the planned increase in wind and solar farms. Energy UK, trade body for power suppliers, has backed the changes to the CfD scheme. A Department for Energy Security and Net Zero spokesperson confirmed the capacity market system would add £21 to the average household bill this year and said future power plants would be built so that they could eventually be converted to run on green hydrogen or fitted with carbon capture technology. 'The Capacity Market mechanism ensures our electricity supply is secure and meets demand. From this auction onwards, unabated gas plants must have a credible plan to decarbonise to be eligible.' Doug Parr, policy director at Greenpeace UK, said the Capacity Market was a 'rip-off' for consumers and urgently needed reform. He said: 'Our energy market is rigged in favour of gas. It sets the price of electricity 98pc of the time, while only providing around 30pc of our electricity. It's a complete rip off for consumers.'
News.com.au
03-07-2025
- Business
- News.com.au
Queensland's plans for new gas-fired power is an exercise in pragmatism
Queensland's Energy Roadmap includes provision for investment in new gas-fired power plants Gas-fired generation required to stabilise an electricity grid that has increasing variable renewable energy generation QPM Energy CEO David Wrench said the policy is a pragmatic move in the right direction Queensland's Energy Roadmap has caused no end of grief to green groups dismayed by its commitment to maintain coal-fired power plants and invest in new gas-fired plants. In its April 8 announcement, Minister for Energy David Janetzki said Queensland's five-year plan had to ease pressure on the state's balance sheet, de-risk its energy future and add significant generation capacity. 'We're delivering effective asset maintenance so Queensland's power plants can remain in the system and support our grid with affordable and reliable generation,' he said. 'Queensland's coal-fired fleet is the youngest in the country and coal generation will continue to play a central role in our grid.' In the latest state budget, it set aside $479.2 million in 2025–26 for the development of the 400-megawatt Brigalow Gas Peaker Project at Kogan Creek Government-owned Stanwell Corporation will continue to work with Quinbrook Infrastructure Partners on the proposed 114MW Lockyer energy project, which combines batteries and hydrogen-ready, high efficiency aero-derivative gas turbines to provide firming power while CleanCo will investigate a new gas turbine at Swanbank. And the policy has drawn support from some players in the gas supply industry. Speaking to Stockhead, QPM Energy (ASX:QPM) chief executive officer David Wrench said that while the State Government still had targets around emissions from the grid, the Energy Roadmap is a great policy. 'I think they're moving pragmatically in the right direction. Clearly the Queensland grid needs more gas-fired firming generation to support the transition to renewables and a lower carbon emission grid,' he said. Why gas-fired generation? So just why is gas-fired generation still important even as the world chases net zero? Wrench pointed out the challenge was in managing the performance of the electricity grid as more variable renewable energy generation is added to the network. 'Solar generation is very strong, particularly in Queensland during the day. But it tails off in the evening at sunset and doesn't contribute any generation during the evening,' he said. 'Wind is more variable. It may or may not be generating at the right time, it just depends on the weather conditions. 'So you've got a very substantial portion of generation already added to the grid and continuing to be added to the Queensland grid every year, which is very variable.' Where the problems lies is that peak demand on the grid typically occurs in the late afternoon and early evening when there might be insufficient renewable generation capacity, creating an unstable mismatch between demand and supply. 'Of course, that's when gas-fired power stations are ideal because they can turn on very quickly and start generating and supplying power right at the time when the market desperately needs it,' Wrench said. He added that gas-fired plants could also fill baseload demand requirements at night once the coal-fired stations are retired as they reach the end of their operating lives. Wrench noted that while batteries and pumped hydro could also help support the grid during times of high demand, the gap between the renewable supply and the actual load in the system could be so great that it needed very substantial new generation coming in. Supply and demand concerns in other Eastern states could also put pressure on the grid as it is all interconnected. 'You need more gas-fired generation as a backup. If you had another 100MW new variable renewable you almost need another 1000MW of gas-fired generation, batteries or pumped hydro,' he added. 'It's an interesting dilemma, but QPM's view is that, particularly in Queensland, this type of flexible, dispatchable generation support to the grid is absolutely essential and we're pleased the government has recognised that and is absolutely supportive of it. "But we need to do more.' Hurdles for gas-fired generation While Wrench believes the Queensland Government is heading the right way in backing gas-fired generation, he warned of challenges ahead. Any new plants will need to secure gas turbines at a time when they are in high demand. 'One of the things that we've done is secure two gas turbines (for the company's proposed 112MW Issac Power Station) and if we hadn't gone ahead with those two units there would be a very little chance of getting anything before 2030 in the current market,' Wrench said. The second challenge is securing long-term gas supply at competitive prices to run a gas-fired peaking power station effectively, an issue that QPM has already managed thanks to the large, uncontracted, gas reserves of 315 petajoules available at its Moranbah gas project. 'We can deliver on the Government's objectives but I think it's going to be very difficult for others to do so,' Wrench said. That gives a strategic advantage to companies, like QPM, who have planned for the future. Pushing ahead The Queensland policy dovetails well with QPM's plans but does not change what the company has been doing. 'It's good that they're supportive, it's better than them saying no more gas, which would have been a problem and clearly a negative,' he added. 'But it's great that the Government is being positive towards the development of gas-fired power stations. I think it's a great initiative and we're looking forward to the Government's ongoing support as we develop our part of that solution. 'We think we can meet the Government's objectives by building the power station using our own assets and infrastructure, but clearly we need government support for approvals. "So we're hopeful that government will support us to the extent that they can help us get the project running quickly. "It's entirely consistent with their policies.' QPM's planned 112MW Issac Power Station represents the first phase of its Issac Energy Hub that seeks to leverage its significant gas reserves. It will increase the company's portfolio of dispatchable generation to 284MW and provide the platform for further expansion towards its target of 500MW. Capex has been estimated at $215m including contingency and commissioning is targeted for as soon as mid-2027 if a final investment decision is reached before the end of 2025. The plant will consume an estimated 11 terajoules of gas per day (4 petajoules per year) at a gas supply cost of $4.50 per gigajoule ($4500/TJ) based on internal supply costs from the Moranbah gas project. Importantly, it is expected to substantially increase QPM's revenue and earnings with over 75% of its revenue coming from electricity sales.
Reuters
18-06-2025
- Business
- Reuters
Malaysia to build 50% more gas-fired power capacity to meet data centre demand, official says
KUALA LUMPUR, June 18 (Reuters) - Malaysia is expected to add 6-8 gigawatts of gas-fired power by 2030 to address growing electricity consumption driven by demand from data centres, an industry official said. The country is expected to see the fastest surge in data centre power demand in southeast Asia, with its share of electricity consumed by data centres in the region to triple to 21% by 2027 from 7% in 2022, a joint report in May by Bain & Co with others including Google and Temasek showed. Rising gas demand could see Malaysia, the fifth-largest exporter of liquefied natural gas (LNG), start importing the super-chilled fuel in four to five years, the head of state energy firm Petronas told the Energy Asia conference this week. Megat Jalaluddin, CEO of state utility Tenaga Nasional Berhad ( opens new tab, said he expects Malaysia to add 6-8 gigawatts of gas-fired power by building new plants and extending the life of existing ones as it looks to cut dependence on coal. That represents a 40-54% increase from the current 15 GW of gas-fired capacity. Total power consumption in Malaysia is on track to increase 30% by 2030, and Malaysia has already invited industry proposals for supply, he said. "We want to phase out coal responsibly. Then the next best option that can basically take the place of coal is gas," he told Reuters on the sidelines of the Energy Asia event. Malaysia could also add as much as 10 GW of renewable capacity by 2030, more than doubling the 9 GW currently, as data centres push for access to cleaner sources of power, he said. In the last two years, Malaysia has turned to its coal-fired power plants to address surging demand which grew at the fastest pace in 14 years in 2024, according to energy think-tank Ember. Data centres are expected to require 19.5 GW of power generation capacity by 2035, accounting for 52% of Peninsular Malaysia's electricity use, from about 2% now, Deputy Prime Minister Fadillah Yusof told Reuters. Technology giants including Microsoft, Nvidia, Alphabet's Google and ByteDance have announced billions of dollars in investments in Malaysia since the beginning of last year, powering an infrastructure boom. Malaysia's southern state of Johor has emerged as Southeast Asia's hottest data centre hub due to its proximity to Singapore, relatively cheap land and power and faster approvals, real estate consultancy Knight Frank said in a report.
ABC News
17-06-2025
- Business
- ABC News
Claims WA's main power grid 'slowly collapsing' as its biggest gas plant teeters on edge
One of Western Australia's biggest gas-fired power plants has been teetering on the edge of bankruptcy, fuelling worries its failure could spark a wider crisis in the state's electricity system. It is understood former WA energy minister Reece Whitby last year sought a bailout of more than $30 million for the Newgen power station in Kwinana, south of Perth, as the generator battled to keep its head above water. With a capacity of more than 310 megawatts, Newgen is one of the most important units in WA's main power grid and supplies a significant share of the energy contracted by state-owned utility Synergy. Ian Porter, a 50-year veteran of the energy industry who now runs his own consultancy, said the importance of a plant such as Newgen should not be underestimated. He said it represented anything up to 15 per cent of the production in the state's main grid, which covers the south-western corner of the continent. The Newgen plant is owned by Japanese conglomerate Sumitomo and UK infrastructure group Foresight. Sumitomo is also the owner and operator of another troubled WA plant — the coal-fired Bluewaters near Collie, 180 kilometres south of Perth. Amid the pleas for a bailout, it is believed Mr Whitby argued that a failure by Newgen would directly expose Synergy to the wholesale electricity market, where prices have been soaring in recent times. Such an exposure would come as a further blow to Synergy, which sought its own billion-dollar bailout last year as its financial position continued to deteriorate. But the government is believed to have rebuffed the request, instead saying Synergy should fund any lifeline out of its own pocket. Mr Porter backed the government's decision to reject the bailout proposal, saying it should not be up to taxpayers to rescue privately owned companies. What's more, he said even if the plant became insolvent, that did not necessarily mean it would stop operating. "The company may go, but the assets remain," he said. Central to Newgen's troubles was a big shake-up in late 2023 of WA's biggest electricity market. The revamp was aimed at helping the grid cope with the transition towards renewable energy, which now accounts for about 40 per cent of WA's power. Mr Porter said the rise and rise of renewable energy in the west had been successful in many ways but he noted it had not been without its challenges. Chief among them, he said, was the way in which renewable energy could force out virtually all other generators when the sun was shining and the wind was blowing. Mr Porter said this presented a major problem for thermal generators such as coal and gas plants, which still provided most of the so-called essential system services that kept the grid stable and reliable. To maintain those services, he said the market had been redesigned to ensure market players were better paid for providing them. The problem was, he said, payments only benefited some generators and not others such as Newgen, even though the costs were spread across all market players. "I'm surprised that this would affect a gas generator," he said. "It would certainly affect renewables generators and how they're affected by that. I'm rather puzzled." On top of these problems, it is understood Newgen has also been affected by hurried moves to buttress the grid through back-up services such as large-scale batteries. Financial disclosures by Newgen show the plant has been losing money for some time. According to filings with the Australian Securities and Investments Commission, the generator was underwater to the tune of $1.67 million in the 12 months to June 30 last year. This followed on the heels of a $2.9 million reverse the previous financial year. Its financial health for the current period — the year in which Mr Whitby made his pitch for a bailout — will not be revealed for months yet. Summit Kwinana Power, the operating company behind Newgen, declined to comment. WA Energy Minister Amber-Jade Sanderson also declined a request to be interviewed about Newgen's predicament. Instead, the new minister provided a statement in which she said Newgen's finances were a matter between it and Synergy. "Synergy's contractual arrangements are commercial in confidence," Ms Sanderson said. Shadow Energy Minister Steve Thomas was more forthcoming, saying the problems at Newgen were just the latest sign of distress in the state's main electricity market. Dr Thomas said Newgen was a vital cog in what was arguably the state's most important machine — the grid — and letting the generator fail was a dangerous option. "I'm worried about Newgen, but I'm worried about the entire energy system," Dr Thomas said. "I'm worried about all of the generators who seem to be struggling. "I'm worried that the lights will not stay on in the fullness of time. "And I'm worried that the price for consumers, business and families will be beyond their capacity to pay." Critically, Dr Thomas said the government was facing a reckoning over its plans to get out of coal by 2029. He noted the government was already falling way behind in its efforts to build the new capacity needed to replace its giant Muja and Collie coal plants. If critical gas plants such as Newgen started falling over, too, he said, the state's plans and the broader energy system would end up in tatters. "We're going to see more of this," he said. "As the pressure comes on the government to provide the energy that's required at a cost that business and families can afford, the government is going to be under enormous pressure. "And this may well be just the first step. "The result will be prices through the roof as the system slowly collapses."
Arab News
05-06-2025
- Business
- Arab News
UAE's power capacity set to reach 79.1GW by 2035: GlobalData
RIYADH: The power capacity of the UAE is expected to reach 79.1 gigawatts by 2035, registering a compound annual growth rate of 3.4 percent from 2024, according to a report. Findings from data analytics and consulting company GlobalData stated that annual power generation in the Emirates is expected to increase at a CAGR of 3.8 percent from 2024 to 2035, reaching 281.3 terawatt-hours. Boosting power capacity is essential for the UAE as energy demand rises alongside a rapidly growing population, which is expected to reach 11.9 million by the end of the decade, up from 11 million today. A significant factor contributing to this increased energy consumption is the high expatriate population, which accounts for around 88 percent of the total and drives the growth in residential and commercial energy needs. 'The power sector in the UAE offers abundant opportunities for investors, with the government poised to make significant investments in the expansion and modernization of its generation and supply infrastructure,' said Attaurrahman Ojindaram Saibasan, power analyst at GlobalData. He added: 'The anticipated increase in capacity is projected to occur predominantly in gas-based thermal power, as opposed to oil, where capacity is expected to remain stable. Manufacturers of gas turbines stand to benefit from this surge in gas-fired power capacity.' GlobalData further said that the climate conditions in the UAE are exceptionally conducive to solar power generation, prompting the government to allocate extensive tracts of undeveloped land for solar parks, including both photovoltaic and concentrated solar power installations. The report added that the UAE has the capability to not only meet local demand using solar energy but also cater to export needs. The country is taking significant steps to bolster its renewable energy capacity, especially solar power, as a core strategy to address climate change. It is targeting a clean energy capacity of 14.2GW by the end of this decade and is planning to invest between $40.84 billion and $54.45 billion to triple renewable energy contribution by 2030. 'Over the past decade, the UAE has experienced a marked increase in electricity demand, necessitating the importation of natural gas from Qatar,' said Saibasan. He added: 'In response to this growing demand and to diversify its energy portfolio, the UAE has strategically shifted away from exclusive dependence on natural gas, expanding into renewable and nuclear energy sectors.' GlobalData further stated that the development of mega urban projects, such as Masdar City and Expo City Dubai, also highlights the need for sustainable energy solutions. 'These smart cities are at the forefront of innovation, yet they also contribute to higher electricity consumption. Consequently, this trend necessitates the expansion of the electrical grid and investment in smart infrastructure to meet the evolving demands,' Saibasan concluded.
