Welcome to Grid Brief! Here’s what we’re looking at today: Colorado cities are asking FERC to reject cost allocation for Xcel’s big transmission project, Equinor and Deepak Fertilizers sign a long-term LNG deal, and more.

CO Cities Ask FERC to Block Transmission

In a recent complaint filed with the Federal Energy Regulatory Commission, the Municipal Energy Agency of Nebraska (MEAN) and three of its Colorado municipal members—Aspen, Glenwood Springs and Center, Colorado— asked FERC to bar Xcel’s Public Service Co. from extracting cost allocation from them for the Power Pathway Project.

MEAN and the three municipal utilities would, along with the rest of PSCo’s customers, pay for 20% of the project’s costs, or $400 million. MEAN et al. said that they expect their transmission costs to leap 114% in the first four years of the project, but that they receive no benefit from the project.

“The Power Pathway is a poster child for the type of project for which the Commission established required non-discriminatory regional planning and competitive procurement, based on its cost, geographic scope, high-voltage nature, and the likely benefit of the Power Pathway to multiple utilities and their respective ratepayers,” MEAN and the municipal utilities said.

Approved in 2022 by the Colorado Public Utility, the Power Pathway Project is a $1.7 billion investment that comprises about 550 miles of new double-circuit transmission line plus several new or expanded substations. The project is supposed to connect about 5.5 GW of wind, solar and other resources to the grid and spans twelve counties.

Equinor Inks LNG Deal With Indian Firm

Norway’s Equinor has just signed a 15-year LNG contract with India’s Deepak Fertilizers for an annual supply of 0.65 million tons (ca 9 TWh).

“Deepak’s new ammonia plant has created new gas demand in the growing Indian market. I am very happy that we have landed this agreement with Deepak Fertilisers. The agreement is another proof of how we use our position in the Atlantic basin to strengthen our relationship with key players in the growing Indian market,” said Equinor’s Senior vice president for Gas & Power, Helge Haugane.

The deal with the Norwegian energy giant is another data point for India’s current upswing in natural gas consumption. The Energy Information Administration forecasts Indian natural gas consumption to triple by 2050.

“India’s domestic natural gas production increased 2.4% annually on average between 2019 and 2022 as imports declined 1.5% annually,” reports the EIA. “In 2022, 7.0 billion cubic feet per day (Bcf/d) of natural gas was consumed across the residential, commercial, industrial, transportation, and electric power sectors. In 2022, the industrial sector accounted for more than 70% of total consumption, followed by the electric power sector at 17%.”

India’s deal with Equinor also signals the LNG sector’s waxing maturity.

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Conversation Starters

• China’s coal surge ebbs. “China’s coal boom is slowing as top mining regions limit growth and steer investment to the clean energy that will replace the dirtiest fossil fuel. Seven straight years of rising output, including a 10% surge in 2022 after nationwide power outages crippled industry, have produced a glut of coal. That’s kept prices low. But record production, which reached 4.7 billion tons in 2023, has incurred other costs, from increased fatalities among miners to poor financial performance at mining companies,” reports Bloomberg. “At the same time, China is running up against a deadline to peak coal consumption by 2025 to meet its climate goals. It means output growth could slow to 1.4% this year, Guosheng Securities Co. said in a note, which would be the weakest since 2017.”

• EU signs off on new sanctions in response to Navalny’s death. “The European Union on Wednesday agreed in principle on a new, 13^th , package of sanctions against Russia for its invasion of Ukraine, days after the death of opposition leader Alexey Navalny in a Russian prison,” reports Oilprice.com. “The EU aims to vote on the package in time for February 24, which marks the second anniversary of the war, Belgium, which holds the rotating EU presidency, said today. ‘This package is one of the broadest approved by the EU. It will undergo a written procedure and be formally approved for the 24 February,’ the Belgian Presidency of the Council of the EU wrote in a post on X.”

• Canadian O&G let go of all West Coast permits. “Canada is celebrating a milestone as oil and gas companies have now voluntarily relinquished the last remaining permits for oil and gas exploration and development off its Pacific Coast,” reports Oilprice.com. “Canada has a federal moratorium on all offshore oil and gas activities on its West Coast in place since 1972, following a provincial moratorium by British Columbia on oil and gas drilling from 1959. However, permits issued before 1972 were still valid. Now that Chevron relinquished the last remaining oil and gas development permits offshore Western Canada, the country marks a milestone in protecting its environmentally-sensitive Pacific Coast and waters, Canada’s federal Energy and Natural Resources Minister Jonathan Wilkinson said on Wednesday.”

Crom’s Blessing

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