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Texas Goes Big On Nat Gas Plants

The Texas Senate has approved an energy reform package that includes a $10bn "energy insurance program" to increase grid reliability by developing a new fleet of gas-fired power plants.

The plants could generate 10,000 MW and are expected to be built by Berkshire Hathaway Energy. SB-6 also includes a low-interest loan program to maintain older dispatchable generation plants.

But not everyone’s happy with the plan. “SB 6 passed 22-9, but it faces broad opposition from the power sector and conservation advocates for its changes to the state’s electricity market and environmental impacts,” reports Utility Dive. “Uncertainty over the plan’s cost could threaten the measure’s chances in the Texas House of Representatives.”

Critics also estimate the insurance program could cost up to $18bn. Smaller generators believe the bill won’t benefit them and will discourage further investment in Texas. Lastly, there’s concern that more capacity is all well and good, but without pipeline winterization, the gas plants will be just as vulnerable to winter storms as their predecessors.

Is America Too Expensive For Solar Manufacturing?

Chinese solar material producer, GCL Technology Holdings, plans to open its first factory outside of China to tap into higher prices overseas and serve foreign customers. But the company isn’t looking at America.

GCL’s CEO, Lan Tianshi, said that the company has been confining its search to Europe, the Middle East, and BRICS countries. According to Lan, America’s just too expensive—at least five times more expensive than China.

“US policies are attractive, but not attractive enough,” Lan said.

The company is likely to build a foreign factory through a joint venture with a local industry leader and could announce plans by the end of the year. GCL expects the factory to score double or even triple the profit of Chinese facilities because polysilicon prices are higher outside of China.

But a dark cloud hangs over Chinese solar manufacturing—and it’s not just the coal they use to make polysilicon. “GCL’s operations in China include a polysilicon plant in Xinjiang, where the US and others have accused the government of human rights abuses against the ethnic Uyghur Muslim population, and forcing them to work in factories against their will,” reports Bloomberg. “China has repeatedly denied the claims, saying they’re part of a conspiracy to undermine domestic industries.'“

Sinopec’s Big Plans for Hydrogen

China's state-owned oil and chemical company, Sinopec, is ready to build the first green hydrogen transmission line in the country.

“The company will construct a 400km pipeline from Inner Mongolia's Ulanqab to Beijing to transfer hydrogen from renewable energy projects in the northwestern region to cities in China's east,” reports Oilprice.com. “The pipeline, set to have an initial capacity of 100,000 tonnes a year, will also have ports to grant access to new potential hydrogen sources.”

Sinopec also plans to build a green hydrogen plant. Valued at around $830 million, the facility to produce 30,000 metric tons of green hydrogen and 240,000 tons of green oxygen annually will be located in Ordos, Inner Mongolia.

The hydrogen and oxygen generated using solar and wind power from Inner Mongolia will be transported to a nearby coal processing facility owned by ZTHC Energy, where Sinopec has a stake. Despite the ZTHC facility's use of coal to extract hydrogen, the Ordos project is expected to cut carbon emissions by 1.43 million tonnes annually, thus cutting the overall carbon footprint of the facility.

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Conversation Starters

1. Could more renewables be coming to Japan? “British energy supplier, Octopus Energy, is looking to ramp up its renewable energy supply mix in Japan. The company entered the Japanese market in late 2020 via a joint venture with Tokyo Gas and has garnered approximately 160,000 customers,” reports Oilprice.com. “The energy supplier currently relies on Tokyo Gas for electricity. About 80% is sourced through liquefied natural gas (LNG)-fired power generation. However, the company’s Japanese arm plans on adding more renewable energy to its procurement portfolio, as the purchasing price of renewable power is stable compared to LNG, as stated by Hajime Nakamura, the CEO of TG Octopus Energy in Japan.”

2. Oil cargo routes are repatterning. “In a first for the last seven years, several cargoes of North Sea Forties crude are traveling to the U.S. East Coast amid a global oil flow shift. Some of the 2.6 million barrels that have already arrived or are en route to the East Coast will be delivered to Canada. The North Sea barrels heading for the East Coast are replacing Russian oil with similar specifications due to the U.S. ban on Russian oil imports,” reports the Oil Patch. “Before the ban, half of total Russian oil imports into the United States went to East Coast refineries. Yeah, shockingly, the U.S. was importing oil from Russia. But there’s also another reason for the shift: French strikes. The French have been practicing their preferred national sport—strikes—especially enthusiastically of late, which has led to refinery interruptions. This, in turn, has prompted North Sea oil sellers to look west for new markets.”

3. In response to Europe’s embargo, Russian diesel has been flowing to South America. “Last month, Russia also sent more than 580,000 tonnes to Latin and South America, with almost 440,000 tonnes of those volumes heading to Brazil, another 140,000 tonnes are destined to Panama, Uruguay and Cuba, Refinitiv data showed,” reports Reuters. “In total, diesel supplies from Russia-controlled ports to Brazil totalled 663,000 tonnes in January-March, 2023 after 74,000 tonnes for the whole 2022, according to Refinitiv data.”

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