monthly world energy review-march-2019 · global energy review –asia/pac markets • australia:...
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International Pricing Information
US Current price M/M (%) Y/Y (%)
Power (MWh)
Avg. price ind users $67.6 - 2.90 % - 2.20 %
PJM region weekday $37.08 + 2.90 % + 8.50 %
Palo Verde weekday $18.82 - 31.40 % - 10.70 %
Natural Gas (Dth) per Dth.
Henry Hub $2.884 + 8.30 % + 4.90 %
WTI (US$/bbl)C: $56.56
M/M: +5.7 %Y/Y: - 8.60 %
Venezuela Oil Basket(US$/bbl)C: $64.98
M/M + 4.30 %Y/Y + 2.70 %
Brazil CEPEA Hydrous Ethanol (US$/l)
C: $0.479M/M: + 21.10 %Y/Y: - 14.10 %
Europe Current price M/M (%) Y/Y (%)
Baseload Power (MWh) – Month Ahead
Germany € 35.81 - 14.00 % - 23.70 %
France € 41.60 - 12.20 % - 13.20 %
Spain € 48.35 - 7.90 % - 0.50 %
Swiss € 34.82 - 34.40 % - 29.00 %
UK £ 48.10 - 10.40 % + 1.20 %
Italy € 52.15 - 10.70 % + 2.00 %
Natural Gas (MWh)
NL (TTF) € 17.18 - 9.20 % - 2.80 %
UK (NBP) £ 14.71 - 14.50 % - 10.60 %
Rotterdam Coal (US$/t)
C: $73.50M/M: - 3.50 %Y/Y: - 9.30 %
Singapore Fuel Oil (US$/ Ton)C: $ 423.14
M/M: + 4.70%Y/Y: + 17.40 %
Japan LNG(US$/ Dth.)C: $ 6.045
M/M - 17.20 %Y/Y: - 28.80 %
Australia Current price M/M (%) Y/Y (%)
Baseload Power (MWh)
Queensland $78.05 + 0.30 % + 12.30 %
Global Energy Review – International Markets
• Israel’s navy could take action against Iranian oil smuggling urging world powers to foil any effort by Tehran to evade U.S.
sanctions. The Israeli leader Netanyahu told naval officers that Iran was still resorting to clandestine measures to ship fuel that
it first used prior to a 2015 nuclear deal easing Western sanctions on its oil sector.
• Libyan state oil firm NOC and its foreign partners operating the El Sharara oilfield will launch a development fund worth $20 million to
support local communities. The 315,000-barrels-a-day field got reopened after tribesmen and state guards asking for payments and
development funds had seized it in December, forcing a closure. The agreement signed by NOC, Spain’s Repsol, Austria’s OMV,
France’s Total and Norway’s Equinor will set up a fund to “support a series of sustainable development projects. The field has been
repeatedly closed by locals and guards demanding payments. Southern Libya is less developed than the rest of the country with state
services often absent.
• Alaska Gasline Development Corp (AGDC) received the last major federal permit needed before it can decide on its proposed $10
billion Alaska Stand Alone Pipeline (ASAP) to supply natural gas to in-state consumers. That permit came from the U.S. Army Corps of
Engineers and the Bureau of Land Management (BLM) in a joint record of decision for the ASAP project. ASAP is a 733-mile (1,180-
kilometer) project designed to deliver gas from Alaska’s North Slope to customers in Fairbanks, Anchorage and other parts of the
state. It is also part of state-owned AGDC’s proposed $43.4 billion Alaska liquefied natural gas (LNG) project. The proposed $43.4
billion Alaska LNG is designed to liquefy 3.5 billion cubic feet per day of gas for sale to customers in the Asia-Pacific region from a
facility to be built in Nikiski on the Kenai Peninsula south of Anchorage. It includes an 807-mile pipeline. AGDC, meanwhile, is
continuing negotiations with several parties interested in the project, including a joint development agreement with Chinese oil and gas
company Sinopec, China’s sovereign wealth fund China Investment Corp’s CIC Capital Corp and the state-owned Bank of China.
International Energy Markets - Review
Global Energy Review – US Markets
• Net withdrawals from storage totaled 177 Bcf for the week ending February 15, compared with the five-year (2014–18) average net
withdrawals of 148 Bcf and last year's net withdrawals of 73 Bcf during the same week. Working gas stocks totaled 1,705 Bcf, which is 362
Bcf lower than the five-year average and 73 Bcf lower than last year at this time. The median estimate from analysts called for a withdrawal
of 173 Bcf. The initial market reaction was somewhat muted following the release of the report. March NYMEX futures were already up 3
cents prior to the release of the report. More buying ensued after the runs of the midday weather models and the March contract eventually
settled up 6.1 cents at $2.697. Weather outlooks start to show some below normal cold creeping back into the picture this weekend in the
Rockies and Plaines. However, there is disagreement from the major weather forecasting models as to how severe and how far stretching
this cold weather will be. As the March contracts heads into expiration next week on 2/26 the market should have a better idea of which
forecast model will be more of a reality. Since bottoming out very close to the major support level of $2.53 back on 2/15, March NYMEX
futures have been in a steady uptrend this week as the contract now is testing resistance at $2.70 and the 20 day moving average of $2.718.
The weekly fluctuations between cold and warm weather in the major consuming regions will have a pretty significant impact on how the end
of season storage levels look. As of now, expectations are that working storage levels will end the heating season in the 1.2-1.3 TCF range.
This would mirror last year’s levels going into spring and will likely raise the same concerns we started to see late last summer when it
became known that winter storage levels were going to start very low compared to previous years. With the forward NYMEX gas curve still
well below the $3.00 level out through the 2012, taking advantage of this low price environment is strongly recommended to mitigate future
price risk.
• Electricity and gas utility company National Grid Plc said it agreed to buy NU.S-based utility-scale wind and solar energy developer Geronimo
Energy for at least $100 million. National Grid said it was also progressing on an agreement to buy a 51 percent stake in 378 megawatts of
solar and wind generation projects developed by Geronimo for $125 million. The projects, which have long-term power purchase agreements
in place, will be jointly owned by National Grid and Washington State Investment Board and operated by National Grid.
United States Energy Markets - Review
Global Energy Review – European Markets
• Germany: Huge amounts of synthetic fuels generated from renewable energies will be required to fully decarbonize the German
economy, according to industry association BDI, which eyes yearly imports of 340 terawatt hours (TW/h) by 2050 – the equivalent of
Germany’s entire power fleet. Under EU projections, low-carbon electricity from renewables and nuclear should cover just over half of
Europe’s total energy demand by 2050, which leaves more than 40% for liquid fuels and other types of green gases, such as
hydrogen. Germany’s current energy consumption amounts to around 380 TW/h, which means around 90% of the country’s energy
needs would be covered by imports at the current rate. The imports are expected to come mainly from places like Australia, the Middle
East, Africa or Latin America, which have a greater potential than Europe for renewables like solar and wind
• UK spot gas prices hit a fresh 18-month low on Wednesday weighed down by a long system and high LNG send-out. The UK’s NBP
day-ahead contract was last seen trading 0.45p lower at 43p/th at one broker and its lowest point since August 2017, while the TTF
equivalent was down EUR 0.26 at EUR 17/MWh on the Pegas platform.
• A group of plaintiffs from Estonia, France, Ireland, Romania, Slovakia, Sweden, and the US are filing a lawsuit against the European
Union to challenge the inclusion of forest biomass in the bloc’s renewable energy directive. This could deprive the EU of an energy
source which currently makes up close to 60% of the bloc’s renewables, more than solar and wind power combined. The group argues
that EU institutions have failed to take account of scientific evidence showing that forest biomass harvesting and combustion for
energy purposes exacerbates climate change by causing deforestation outside of Europe. According to them, the directive worsens
climate change by exacerbating forest cutting in the US to meet the growing demand for wood pellet fuel in the EU. Plaintiffs have
experienced harms to their health, livelihoods, communities and cultural traditions as a result of logging, wood pellet manufacturing,
and production of biomass energy.
European Energy Markets - Review
Global Energy Review – Asia/Pac Markets
• Australia: Up to five gigawatts of new wind and solar energy are expected to be generated in Victoria's west by 2025.
Australia's energy market operator has said upgrades to western Victoria's transmission network are now a national priority as
otherwise they will not be able to cope with the increased volumes. Developers are lining up to build wind and solar projects in
towns to the west and north of Ballarat. There is $3 billion worth of projects currently underway and if the infrastructure issues
were addressed it is estimated that the number of projects could be doubled or even tripled. The Australian Energy Market
Operator (AEMO) has predicted as much as 5,000 megawatts of new renewable energy will be generated in the state's west by
2025.
• China: China could achieve an operating nuclear capacity of 55-56GW by 2020 as it starts to feel the pressure to meet its
targets of having 58GW of nuclear power units in operation and 30GW of projects under construction by the end of 2020. The
contribution of nuclear power is estimated to further increase from 3.9% of national power generation as of the end of 2017. All
of the country’s new nuclear power projects in the pipeline are also expected to adopt third-generation (G-III) technology.
• Malaysia: The Malaysian government has launched a new round of competitive bidding for 500 MW of grid-connected solar
projects, the third under the country's Large Scale Solar (LSS) programme. Projects with capacities ranging between 1 MW
and 100 MW can take part in the competition and submit bids under the request for proposals (RfP) procedure until 19 August
2019. Foreign bidders involved in a consortium will be allowed to take up to 49% in the projects, which are expected be
commissioned in 2021 and will sell the produced electricity to the state-run power utility Tenaga Nasional Berhad (TNB) under
power purchase agreements (PPAs). The process is slated to raise MYR2bn (approximately US$490m) in investment.
Asia-Pac Energy Markets - Review
Global Energy Review – LATAM Markets
• Ecuador: Ecuador could lose two of its seven glaciers over the next few years due to global warming, a phenomenon that
worries experts because it would alter the paramo ecosystem and its effect on the nation’s water supply and humidity. This
increase has already left obvious signs that temperatures are changing, but according to another expert, Bolivar Caceres of the
National Meteorological and Hydrological Institute (Inamhi), the threat is imminent.
• Venezuela: Plans by the German operator of a portion of the Venezuelan state oil company’s tanker fleet to return 10 vessels
because of unpaid fees prompted a unit of state-run PDVSA to declare a maritime emergency, according to a document from
the state-run firm and sources. PDVSA’s weak finances, the result of mismanagement, a sharp decline in oil output and U.S.
sanctions designed to oust President Nicolas Maduro, have prompted dozens of suppliers and partners to stop working for the
company. The United States and more three dozen other countries have thrown their support behind an interim government
being formed by the country’s congress chief, Juan Guaido. Over a dozen tankers with Venezuelan oil around the world have
been arrested in recent years by authorities or otherwise prevented from leaving because PDVSA has not paid for services.
• Costa Rica: Costa Rica seeks to become a world leader in the decarbonization of the economy and to do its bit in the fight
against climate change. It intends to do so through an ambitious plan that aims to abolish the use of fossil fuels in the year
2050 and boost clean energies. The National Decarbonization Plan 2018-2050 was presented by the President of Costa Rica,
Carlos Alvarado; the First Lady, Claudia Dobles; the Minister of Environment and Energy, Carlos Rodríguez; while the official
event was led by the Costa Rican Christiana Figueres, leader negotiator of the Paris Agreement against climate change. The
National Decarbonisation Plan envisages changes in the offering of mobility and public and private transport, in the
management of forms of energy, in sustainable construction and industry, as well as in the waste management. The initiative
also includes guidelines to improve agricultural practices and land use, preventing deforestation.
LATAM Energy Markets - Review
Appendix – Commodity Pricing Data
Brent Crude - month ahead contract (US$ per barrel)
Foreign Exchange (Euro/USD)
Appendix – Commodity Pricing Data
Coal CIF ARA 2019 delivery ($/T)
Natural gas prices, “Calendar year 2019” (NBP in £p/therm & TTF in €/MW/h)
Glossary
Term Definition
Avg Price Industrial Users Latest unit cost for electricity consumed by industrial users as reported by the U.S. Energy Information Administration (EIA). The EIA usually publishes the data 4 months after the month of consumption.
Henry Hub Natural GasThe Henry hub in Erath, Louisiana serves as the pricing point for natural gas futures traded on the New York Mercantile Exchange (NYMEX).
WTI Crude Oil
The reported WTI light crude oil future price is the market determined value of next month’s contract to either buy or sell in multiples of 1,000 barrels West Texas Intermediate or other light sweet crude oil. WTI light crude oil contracts are only executed for physical delivery in relatively few cases but nevertheless they serve as an important pricing mechanism for contracts that are actually executed for physical delivery.
PJM Region Weekday
The Pennsylvania-New Jersey-Maryland (PJM) interconnection functions as a power pool for all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. The PJM power pool is currently the largest competitive wholesale electricity market. The price reported here is the price during weekdays.
Palo Verde Weekday
The Palo Verde switchyard located in Tonopah, Arizona is a key point in the western states power grid and is used as a pricing point for electricity across the southwest United States. The price reported here is the average market price for peak electricity to be consumed on the next day. Peak hours under this contract are from Mon – Sat between 0700 – 2200 hours local time.
Brazilian EthanolThe market price for a next month delivery of 1liter of ethanol at the mill gate in Sao Palo state as calculated by Cepea.
Rotterdam CoalThe market price for a next month delivery of coal in the Amsterdam – Rotterdam – Antwerp (ARA) port area.
GermanyThe market price for one MWh of baseload electricity to be delivered next month as traded on the EPEX Spot Market www.epexspot.com.
FranceThe market price for one MWh of baseload electricity to be delivered next month as traded on the EPEX Spot Market www.epexspot.com.
Glossary
Term Definition
SpainThe market price for one MWh of baseload electricity to be delivered next month as traded on the trading platform belonging to the Operador do Mercado Iberico de Energia (OMIP).
SwissThe market price for one MWh of baseload electricity to be delivered next month as traded on the European Energy Exchange (EEX).
UKThe market price for one MWh of baseload electricity to be delivered next EFA month as traded on the Intercontinental Exchange (ICE). EFA month stands for the specific calendar in use under the Electricity Forwards Agreement that breaks up the year in equal blocks of 4 and 5 weeks so as to simplify trading.
TTFThe Title Transfer Facility (TTF) is a virtual hub that serves as a pricing point for natural gas contracts within the Dutch gas network. The actual contracts are traded on the European Energy Derivatives Exchange (ENDEX).
NBPThe National Balancing Point (NBP) is a virtual hub that serves as a pricing point for natural gas contracts within the United Kingdown. The actual contracts are traded on the Intercontinental exchange (ICE).
Singapore Fuel OilThe market price for Free on Board (FOB) 180 Centistoke (CST) fuel oil in Singapore port to be delivered next month.
Japan LNGThe reported price for LNG in Japan is derived from the price of West Texas Intermediate (WTI) crude oil by means of an index formula and is reported in US Dollar per decatherm.
Queensland Baseload PowerThe market price for one MWh of baseload electricity to be delivered next month in Queensland as traded on the Australian Securities Exchange (ASX).
Brent Crude OilBrent crude oil is a combination of light crude oil from 15 different oil fields located in the North Sea. Due to the high quality of Brent crude, it is ideal for making gasoline and middle distillates. As such, Brent crude forms the pricing benchmark in Europe and Africa.
Glossary
Term Definition
Foreign ExchangeThe blue line in the graph presents the daily exchange rates Euro to USD while the red line represents the moving average over the last 14 trading days.
Coal CIF ARA 20XX DeliveryCoal is an important input fuel for electricity generation. The coal price reported in appendix 3 is inclusive of commodity Cost, Insurance and Freight (CIF) from its origin to the ports of Amsterdam – Rotterdam –Antwerp (ARA) to be delivered next month.
Natural Gas Price for Calendar 20XX
The featured contracts in this graph are for the delivery of natural gas in the UK (NBP), Dutch (TTF) and German (EEX) markets in the next Calendar year. The benefit of the annual contract is that the buyer has an average price throughout the year rather than individual prices for each month that are priced according to market conditions and can show great variances between winter and summer prices. For further information on the specific country contracts, please refer to the glossary for the world report.
European Electricity Prices for Calendar Year 20XX
The featured contracts represent the current market price for one MWh of baseload electricity to be delivered next calendar year (except UK) as traded on each of the respective exchanges mentioned as source. The electricity market in the UK features the season contract as its longest contract. As a result, the reported market price is the average of the nearest summer and winter contracts.
European Day Ahead Electricity Prices
Next to future contracts, each electricity exchange also features a day ahead contract. The day ahead contracts are characterized by greater volatility than the monthly and longer period future contracts as they are more susceptible to actual supply and demand on the day as well as the other factors influencing the longer contract prices.
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The material contained herein represents the opinion and views of NUS Consulting
Group and is provided to discuss general market activity, industry and sector
trends, as well as other broad-based economic, market and political conditions.
This information should not be construed as research or investment/purchasing
advice. Persons responsible for the purchase of energy for an organisation must
consider their organisation’s own objectives, risk tolerance and market forecast
when undertaking energy purchasing decisions.
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