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Factbox: Getting out of gas - the sold and scrapped projects

05/14/2021 | 03:44am EDT

LONDON (Reuters) - Natural gas, long touted as a transition fuel by policymakers and industry, is losing its appeal for some producers in Europe as they try to reach net-zero emissions.

Below are examples of projects that have been dropped, gas asset sales and companies shifting focus.

SOLD AND SCRAPPED

Earlier this year, Drax Group, which aims to become carbon negative by 2030, scrapped plans for a new 3.6 gigawatt (GW) gas-fired power plant in Britain, which would have been the largest in Europe.

"The future of gas power generation fuel is getting shorter all the time," Drax Group Chief Executive Will Gardiner said at the time.

Commercial coal generation at the Drax power station in Yorkshire ended in March and the rest of the units run on biomass.

Last month, France's EDF said it was selling its 1.3 GW West Burton B gas-fired power station in Britain to institutional investor EIG. It has planning consent for a 299 megawatt gas-fired power station at the site, West Burton C, but no immediate plans to build it.

Swedish utility Vattenfall said this week it would explore the possible sale of a Dutch gas-fired power plant as it focuses on phasing out fossil fuels. [L1N2MY0UI]

Italian company ERG said in March it plans to sell its gas-fired power plant assets to reinvest in solar and wind.

CCS

Britain's SSE agreed to sell its gas exploration and production assets as they are incompatible with its focus on net zero emissions.

With Norwegian energy firm Equinor, it is developing a 900 megawatt gas-fired power plant equipped with carbon capture technology (CCS) at Peterhead in Scotland.

SSE and Equinor also plan to develop two low-carbon power stations in North Linconshire, comprising carbon capture and storage (CCS) technology, and a hydrogen-fuelled power station.

"The beauty of CCS and hydrogen is that they can also be used to decarbonise heavy industry and other hard-to-reach sectors, which we know will be essential in achieving net zero by 2050," said Stephen Wheeler, managing director of SSE Thermal.

Meanwhile, RWE is investigating how hydrogen and carbon capture can help reduce carbon emissions from its 2.2 GW gas-fired Pembroke power station in Wales.

WRITE DOWNS/PHASE-OUT

Spain's largest gas-fired capacity owner, Naturgy, wrote down its Spanish plants by 1.15 billion euros as regulatory changes made these assets less profitable than renewables.

A report by accountancy firm PwC last year said nearly 23 GW of Spain's 24.6 GW combined-cycle gas turbine fleet would not be economically viable by 2030 if no capacity payment mechanisms are introduced in the country to ensure back-up supply.

Energias de Portugal has said it would not own any natural gas-fired power plants by 2030, while Italian utility Enel also said it would get out of gas by 2050.

(Reporting by Nina Chestney; editing by Barbara Lewis)

By Nina Chestney


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
DRAX GROUP PLC 2.38% 502.4388 Delayed Quote.30.88%
EDP - ENERGIAS DE PORTUGAL, S.A. 0.74% 4.522 Real-time Quote.-12.99%
EQUINOR ASA 0.35% 201.1 Real-time Quote.38.19%
RWE AG 0.37% 32.24 Delayed Quote.-7.06%
S&P GSCI NATURAL GAS INDEX -2.26% 228.9072 Delayed Quote.102.68%
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