In today’s Talking Points: AGL Energy warns of fall in profits due to costly spot purchases; report advocates China adopt renewable energy integration policies to reduce energy waste; Rio shelves plans for iron ore mine in Guinea; Beijing’s groundwater depletion causing it to sink 11 cm per year.
AGL Energy warns of $100m plunge in gas profit
AGL Energy has incurred a $35 million hit from very costly spot purchases in the first week of the new financial year, and will have a gas profit of at least $100 million lower than the last year, the company says. AGL increased retail prices in South Australia by 12 percent last month, with prices in the National Electricity Market near record levels. Furthermore, gas prices have sharply increased due to the start-up of the fifth of Queensland’s six liquefied natural gas (LNG) export trains; at one point hitting $29 in Sydney— almost five times usual levels. Graeme Bethune, chief executive of EnergyQuest expressed that LNG shipments from Queensland made the gas market much tighter so minor interruptions to supply or increases in demand could produce a spike in prices”. He adds that cold weather and the restart of Torrens Island gas turbines in South Australia were also important factors.
Source: Australian Financial Review
Integration policies could reduce China’s energy waste: report
A new report suggests that renewable energy integration would be beneficial to China to transmit excess energy and reduce wasted wind power. The wind and solar energy output of Hebei province’s Zhangjiakou outweighs the small city’s demand, however as China is transitioning to a low-carbon economy, renewable energy integration is fundamental. Zhangjiakou, located near Beijing is China’s first nationally designated renewable energy demonstration zone, and they plan to expand this across the country. The report pointed to the examples set by Germany and Texas which both achieved very low rates of curtailment (0.5-1 percent) with renewable energy integration. The Paulson Institute suggests China could learn from them by establishing Beijing-Tianjin-Hebei renewable energy integration policies and linking renewable energy produced in Zhangjiakou with these centers of high electricity demand.
Source: China Daily
Rio Tinto shelves Simandou project in Guinea
Rio Tinto’s new CEO Jean-Sebastien Jacques has told The Times that Rio does not want to push forward with development of the Sindandou region of Guinea, the world’s biggest untapped deposit of iron ore. The company conducted a BFS (Banking Feasibility Study) and presented it to the Guinean government a few weeks ago. The mine has the potential to greatly contribute to the west African nation’s economy, but the capital intensity of developing it along with overcapacity in global iron ore output, has led Rio Tinto to withdraw for the time being.
Source: The Australian
Beijing’s water demand leads to groundwater depletion, subsistence
The intensive pumping of groundwater has caused parts of Beijing to sink by as much as 11cm per year. Specialists from China, Spain and Germany worked with China’s National Natural Science Foundation to analyse data from thousands of satellite images and global positioning sensors, and recently published their findings in the journal Remote Sensing. The worst affected district has been Chaoyang. Subsistence can threaten the safety of public and urban infrastructure, particularly train networks. The root cause is an insufficient supply of water to meet the capital city’s growing demand. One of the measures taken by the government to address the problem is the South-North Water Diversion Project, which is designed to channel 44.8 billion cubic meters of water yearly from the Yangtze River to the north via three canals.
Source: news.com.au