Italian hydro stocks at surplus
Italian hydropower stocks last week edged up to their highest in January, flipping to a year-on-year surplus for the first time in nine months, but hydro generation declined amid poor rainfall in the northern regions.
Hydropower reserves stood at 2.24TWh last week, edging up by just 0.3 percentage points, or 7.1GWh, from the previous week, according to statistics from European grid operators' association Entso-E. These are the highest stocks to have been recorded in January, although rainfall in the northern provinces of Malpensa and Paganella fell to a cumulative 0.4mm and 3mm, respectively, from 5mm and 5.6mm across the previous week.
But hydro reservoirs in week 4 shifted from a year-on-year deficit of 5.5pc, or 155.3GWh, to a surplus of 2pc, equivalent to 44.5GWh. This is the first time that Italian hydropower stocks have reached a year-on-year surplus since the week ending 29 May 2022.
Hydro reservoirs at this time last year fell to a five-year minimum of 2.19TWh, Argus data show, owing largely to a year-long drought that depleted the large natural basins of northern Italy (see graph).
And the deficit to the five-year average narrowed to 16pc, or 425.8GWh, from 19.5pc, or 541.5GWh, across the previous week. Hydro stocks at this time of year averaged 2.67TWh over the 2018-22 period.
Output from hydropower plants declined for the first time in two weeks, by 367MW to 3.1GW. Hydro generation in week 4 stood at 4GW last year and at 5GW in 2021. And hydropower output has averaged 3.0GW in the first four weeks of January 2023, down from 3.3GW during the same period last year and from 5.1GW in 2021.
The Po river's flow rate remains at minimum lows last seen in 2021, according to Italian hydrological association Anbi, and below-average water volumes persist in the great northern lakes. Filling rates at the Sebino and Lario lakes sit at 20pc and 22.4pc of their filling capacity, respectively.
Forecasts indicate cumulative rainfall in Malpensa next week will rise to 2.7mm, while Paganella is expected to receive just 1.5mm. And Enel's 1.1GW Entracque hydro pumped-storage plant in the north zone will be curtailed by 266MW on 4-21 February for maintenance, further weighing on hydro generation during the period.
Related news posts
La deuda de Pemex sobresale en el panorama electoral
La deuda de Pemex sobresale en el panorama electoral
Mexico City, 15 April (Argus) — La campaña presidencial de México termina en menos de dos meses, pero aunque ambas candidatas proponen una revolución verde en el sector de la energía, ninguna de ellas ha propuesto un plan viable para evitar la implosión financiera de la empresa estatal Pemex. Claudia Sheinbaum, candidata de continuidad para la política energética nacionalista del Presidente Andrés Manuel López Obrador, anunció el mes pasado su estrategia energética, comprometiéndose a aumentar la producción de petróleo y gas de Pemex, aumentar el rendimiento de las refinerías y la producción petroquímica, desarrollar una industria nacional de litio y buscar un nuevo enfoque en la generación de energía renovable. La antigua jefa de gobierno de la Ciudad de México no ha proporcionado detalles sobre ninguna de estas políticas, pero es difícil conciliar su compromiso con una ampliación de las energías renovables con un límite en la inversión del sector privado sin depender en gran medida del aumento de la financiación de la estatal de electricidad CFE. La política de Sheinbaum en materia de energías renovables es la única desviación de la agenda energética de López Obrador, aunque las agencias de calificación, los inversores y los analistas coinciden en que es probable que Pemex incurra en impago sin una amplia reforma estructural. Pemex tenía una deuda total de $106,100 millones a finales de 2023 y se enfrenta a $10,000 millones en vencimientos de deuda este año. El impulso del gobierno para aumentar el rendimiento de las refinerías ha generado pérdidas de miles de millones de dólares para Pemex. Solo en 2023, la división de refinación de Pemex reportó una pérdida de $4,400 millones, una mejora con respecto a una pérdida de $11,000 millones el año anterior. De 2019 a 2023, la división de refinación de la empresa registró más de $46,000 millones en pérdidas. López Obrador puso el rescate de Pemex y sus refinerías en el centro de su administración. Pero a pesar de no detener la espiral de deuda de la empresa, la disminución de la producción de crudo, el empeoramiento del récord de seguridad y el aumento de las emisiones de gases de efecto invernadero, sus políticas han tenido un coste que Sheinbaum no ha querido refutar públicamente. En su lugar, se compromete a lanzar el proyecto de la refinería Olmeca de 340,000 b/d de la empresa, que ya tiene dos años de retraso y ha costado al menos el doble del presupuesto original de $8,000 millones, dinero que las agencias de calificación afirman que debería haberse dirigido al negocio principal de Pemex en la exploración y producción. El apoyo gubernamental a Pemex, por un total de más de $52,000 millones entre 2019 y 2023, ha sido incapaz de mover la aguja en sus métricas financieras u operativas, y ahora amenaza la calificación crediticia soberana de México. Sheinbaum ha evitado abordar públicamente la carga de la enorme deuda de Pemex, proponiendo únicamente "niveles de deuda aceptables en el sector de la energía". Pero dada la importancia de Pemex para el proyecto político del partido Morena, además los cientos de miles de puestos de trabajo que dependen de Pemex, no se puede permitir que la empresa incumpla. Por otro lado, la candidata de oposición Xóchitl Gálvez pide poner fin al "caos financiero" en Pemex, diversificar su negocio hacia iniciativas de bajas emisiones de carbono, políticas rigurosas de emisiones, el cierre de sus refinerías más contaminantes, un nuevo enfoque en renovables y una reapertura de la industria energética a la inversión del sector privado. Sin embargo, a pesar de su perspectiva más favorable para la inversión privada, Gálvez aún no ha ofrecido una solución detallada para la situación financiera de Pemex. Sus planes para Pemex pueden ser demasiado radicales para los votantes, especialmente dentro del importante sindicato de trabajadores del petróleo, que repudió rápidamente sus llamados el mes pasado para cerrar dos refinerías. Incluso si ganara, la oposición que representa podría tener dificultades para acordar un camino a seguir para Pemex. Si la próxima administración vuelve a abrir la puerta a la inversión del sector privado, el nuevo gobierno se enfrentará a un esfuerzo lento para reconstruir los reguladores de la energía que han sufrido de baja inversión en los últimos seis años. Pero será el tamaño de la posible victoria de Sheinbaum lo que determinará el futuro del sector de la energía mexicano. Una mayoría convincente podría permitirle aprobar las grandes reformas energéticas que eludieron a López Obrador y seguir limitando la participación del sector privado en el sector energético, justo cuando la inversión directa extranjera en México está en auge en otras industrias. Por Rebecca Conan Producción de crudo en México Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
German power spot index to deliver above expectations
German power spot index to deliver above expectations
London, 15 April (Argus) — The German power spot index has delivered below over-the-counter (OTC) expectations in April as wind and solar output have averaged above seasonal norms. But forward prices suggest that the spot index is on track to deliver above OTC expectations on declining wind generation in the second half of the month. The German spot index averaged €50.49/MWh over 1-16 April, below the April OTC contract's expiry of €54.90/MWh. But the index is on track to deliver at around €58.46/MWh across the month, based on the weighted-average of the expiry of week 16 at €65.70/MWh and the latest assessments of weeks 17 and 18 at €71.20/MWh and €59.50/MWh, respectively, and the spot index in April. Combined onshore and offshore wind generation has climbed to 19.65GW this month, well above the 13.4GW average for April 2019-23. And solar output has averaged above 8.6GW, a new high for April. Rising renewable output has weighed on thermal generation, with combined gas, coal and lignite-fired output down to 10.5GW, the lowest of any month in over seven years. Working day-ahead clean dark spreads for 40pc-efficient plants have averaged minus €28.46/MWh for delivery on 1-15 April from minus €13.88/MWh in March. Clean spark spreads for plants with 55pc efficiency have fallen by €14.68/MWh on the month and into negative territory at minus €11.17/MWh. And clean lignite spreads for 36pc-efficient plants have averaged minus €13.51/MWh from €0.29/MWh last month. The seasonal rise in temperatures has also lowered demand by 1.6GW on the month to 50.35GW in April, outpacing the month-on-month decline in generation by over 300MW. And Germany has been a net exporter on six days this month, compared with seven days in all of March . But wind output is forecast to remain below the 2019-23 average on most days in the second half of the month, data from analytics platform Kpler show, while peak-load solar output is expected to remain below a load factor of 30pc — or 16GW — over 16-21 April, which could support the spot index and imports. And the May contract rose to its highest in almost three months on its latest assessment on 12 April at €64.60/MWh, up from under €50/MWh on its first assessment as the front month. Thermal generating margins for base and peak-load delivery in May have averaged well below zero in April, with even higher-efficiency coal, lignite and gas-fired plants priced out of the mix. Germany is likely to continue importing from its Swiss and French neighbours in May. Swiss hydropower stocks widened their surplus to the long-term average in week 14, while precipitation in Sion is forecast well above seasonal norms next month and Alpine snowpack is well above average, which could boost inflows when snowmelt picks up in May. And French nuclear unavailability is forecast to drop by 4GW on the month to 15.6GW in May, well below the 25.4GW in May last year. By Adrien Seewald German April power generation GW Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s Origin buys 1.5GW wind, battery project
Australia’s Origin buys 1.5GW wind, battery project
Sydney, 15 April (Argus) — Australian upstream and utility firm Origin Energy has entered an agreement with renewables developer Virya Energy to acquire the 1.5GW wind, 800MWh battery Yanco Delta project in New South Wales (NSW). Origin will pay up to A$300mn ($194mn) for the project, starting with an upfront payment of A$125mn and an additional payment of up to A$175mn dependent on Yanco Delta achieving some development milestones. Yanco Delta — one of the largest and most advanced wind and energy storage projects in NSW — will allow Origin to bring a "material volume of renewable energy supply into the market relatively quickly", chief executive officer Frank Calabria said. Yanco Delta received development approval from the NSW government last December and federal approval under the Environment Protection and Biodiversity Conservation (EPBC) Act in February, with grid connection rights expected to be the next major milestone for the project. "Securing transmission access rights is a key near term priority for the project, which subject to the timing of the access rights tender process, we anticipate occurring before the end of the 2024," an Origin spokesperson told Argus on 15 April. "Timing for development will ultimately be confirmed once we have all aspects of the project finalised, EPC contractors engaged, and a final investment decision is taken." The Australian Energy Market Operator (Aemo) manages access rights via a competitive tender process. Virya Energy previously said it expected the final investment decision and the start of construction for 2025-26, with completion between 2027-29. Yanco Delta will be located some 10km northwest of Jerilderie in the Riverina district, in NSW's South West Renewable Energy Zone (REZ). It could be one of the biggest renewable plants helping to replace ageing coal-fired plants in NSW, with three of the four remaining facilities in the state — Origin's 2,880MW Eraring, utility AGL's 2,640MW Bayswater and utility Delta Electricity's 1,320MW Vales Point — expected to close over the next decade. Virya Energy estimates Yanco Delta could avoid between 3.3mn-4.5mn t/yr of greenhouse gas (GHG) emissions. Origin was the fourth largest GHG emitter in the 2022-23 fiscal year to 30 June, according to the Clean Energy Regulator (CER). The utility has been in talks with the NSW government to extend Eraring's operations beyond its planned August 2025 closure , while stepping up renewable investments in recent months. It in February acquired developer Walcha Energy, which is developing the Ruby Hills wind and Salisbury solar projects with more than 1.3GW of combined capacity. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Gunvor set for buying spree after windfall: CEO
Gunvor set for buying spree after windfall: CEO
London, 12 April (Argus) — Trading firm Gunvor plans to use part of a massive earnings windfall over the past two years to build out its asset base, its chief executive Torbjörn Törnqvist told Argus . "Today, we are under-invested in assets so we will change that," Törnqvist said, adding that investments would be broad based and to some extent opportunistic. "We will employ quite a lot of capital in investments." Independent commodity trading companies are sitting on unprecedented piles of cash after two years of bumper earnings arising from supply chain disruptions and market volatility. While Geneva-based Gunvor is smaller than its peers Vitol, Trafigura and Mercuria, it is still a huge company by most metrics. It reported revenues of $127bn in 2023 and a profit of $1.25bn, following a record $2.36bn in 2022. It has kept most of its earnings in house and had an equity position of almost $6.16bn by the end of 2023 — its highest ever. Törnqvist is eyeing further growth. "We will definitely be a much bigger company, that I can say," he replied when asked where he saw Gunvor in 10 years' time. "I think we will grow in tune with the [energy] transition." Trading firms are looking for ways to keep their competitive advantage, particularly given the uncertainties associated with the energy transition. One emerging trend is an appetite for infrastructure. Vitol is in the process of buying a controlling stake in Italian refiner Saras, which operates the 300,000 b/d Sarroch refinery in Sardinia. Trafigura said this week that it is in talks to buy ExxonMobil's 133,000 b/d Fos refinery on the French Mediterranean coast. Part of the rationale behind these moves is to increase optionality and take advantage of the loss of Russian products to the European market, as well the closure of large chunks of local refining capacity. Gunvor owns the landlocked 100,000 b/d Ingolstadt refinery in Germany and a 75,000 b/d refinery in Rotterdam, where it plans to shift away from fossil fuel use. "Many oil refineries have been up for sale and still are," Törnqvist said. Asked if Gunvor was looking for something similar, he said the company is interested in the "right opportunity" whether in upstream, downstream, midstream or shipping. "It all feeds into what we are doing and all supports our underlying trading," he said. But Törnqvist suspects a lot of Gunvor's growth will come from gas and power — areas where trading companies are already seeing rising profits. The company made its first investment in a power generation asset late in 2023, when it agreed to buy BP's 75pc stake in the 785MW Bahia de Bizkaia combined-cycle gas turbine plant in Bilbao, Spain. It has signed a slew of LNG offtake agreements in the past year and continues to grow its LNG tanker fleet . "We're building logistical capabilities in LNG," Törnqvist said. "Oil is here to stay" Törnqvist said Gunvor is well placed to navigate the energy transition, and is stepping up investments in renewables and biofuels and expanding into carbon and metals trading. "There will be disruptions, there will be different paths to the transition in different parts of the world which go at different paces and have different priorities and ways to deal with it," he said. "This will create opportunities." But Törnqvist is clear that oil and gas will remain an integral part of Gunvor's business. "We feel that oil is here to stay," he said. "And it will grow for several years." By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more