Welcome to Grid Brief! Here’s what we’re looking at today: a heatwave hits Southeast Asia, America’s wind output fell despite a capacity increase in 2023, and more.

Southeast Asia Swelters in Heatwave

Southeast Asian countries are weathering a suffocating heatwave.

Thailand, Vietnam, the Philippines, and Myanmar are all cranking up the AC in record heat, putting their grids to the test. The increase in power demand has triggered an uptick on coal and LNG orders to stave off blackouts.

“If we see a repeat of last year, it is likely that Thailand’s hydropower generation will plummet when temperatures begin to rise, leading the country to burn more gas for power as well as ramp up imports from Laos,” Rystad Energy analyst Tristan Pheh told Bloomberg.

Thailand’s heat wave threatens power outages, while Myanmar has already seen blackouts.

Wind Capacity Up, Wind Generation Down

Last year, despite 6.2 GW of new wind capacity, wind generation in America fell for the first time since the 1990s, according to the Energy Information Administration.

“U.S. wind capacity increased steadily over the last several years, more than tripling from 47.0 GW in 2010 to 147.5 GW at the end of 2023. Electricity generation from wind turbines also grew steadily, at a similar rate to capacity, until 2023,” reports the EIA. “Last year, the average utilization rate, or capacity factor, of the wind turbine fleet fell to an eight-year low of 33.5% (compared with 35.9% in 2022, the all-time high).”

But the wind lull didn’t uniformly impact the whole country. While wind output increased in places like Texas (home to a third of America’s wind capacity), it fell elsewhere: “Wind generation decreased the most in the upper Midwest, which includes the East North Central Census Division and West North Central Census Division. Wind generation in the East North Central Census Division declined by 6% compared with 2022, and it declined in the West North Central Census Division by 8%. The Mountain Census Division reported a smaller reduction of 2%.”

All told, those regions comprise half the nation’s installed wind capacity.

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Conversation Starters

• Germany to pay coal more for reliability. “Germany’s coal phase-out plans face a potential setback after the energy regulator predicted the country will need a lot more fossil-fuel power plants on standby to help keep the lights on in the coming years,” reports Bloomberg. “The need for so-called reserve capacity to cover shortfalls in wind and solar generation during the 2026/27 winter period is set to reach 9.2 gigawatts, double the amount put aside for the last heating season, the regulator said Tuesday. That’s even more than the 8.3 gigawatts of mainly coal-fired backup deployed in 2022, when Russia curbed pipelined natural gas supplies to Europe.”

• Shell quits China’s power markets. “Shell has exited China's power markets as part of CEO Wael Sawan's drive to focus on more profitable operations including its natural gas and oil businesses. Shell decided to exit the power value chain in China, which includes power generation, trading and marketing businesses, it said in a statement. The decision was effective from the end of 2023,” reports Reuters. “‘We are selectively investing in power, focusing on delivering value from our power portfolio, which requires making difficult choices,’ Shell said. According to Shell's website, Shell Energy China was one of the first wholly-owned foreign entities to participate in the China's carbon emissions market, and is also registered to trade in the China's power market. The changes do not apply to Shell electric vehicle charging business, which is a key growth market for the company, a spokesperson said.”

• US LNG exports fall for fourth straight month. “U.S. exports of liquefied natural gas (LNG) fell for a fourth consecutive month to 6.19 million metric tons in April from 7.61 million in March on production outages, preliminary data from financial firm LSEG showed on Wednesday,” reports Reuters. “Recurring mechanical problems have hit Freeport LNG, the second largest U.S. plant by capacity. Last month, the Quintana, Texas, terminal exported five cargoes for a total of 330,000 tons, compared to 21 cargoes and 1.42 million tons in December.”

Crom’s Blessing

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