Key Senate committee approves utility re-regulation

China Coal-Fired Power Consolidation targets capacity cuts through mergers, SASAC-led restructuring, debt reduction, asset optimization, and retiring inefficient plants across state-owned utilities to improve efficiency, stabilize liabilities, and align with energy transition policies.

Key Points

A SASAC-driven plan merging utility assets to cut coal capacity, reduce debt, and retire outdated, loss-making plants.

✅ Merge five central utilities' coal assets to streamline operations

✅ Target 25-33% capacity cuts and >50% loss reduction by 2021

✅ Prioritize debt-ridden regions: Gansu, Shaanxi, Xinjiang, Qinghai, Ningxia

China plans to slash coal-fired power capacity at its five biggest utilities by as much as a third in two years by merging their assets, amid broader power-sector strains that reverberate globally, according to a document seen by Reuters and four sources with knowledge of the matter.

The move to shed older and less-efficient capacity is being driven by pressure to cut heavy debt levels at the utilities. China, is, however, building more coal-fired power plants and approving dozens of new mines to bolster a slowing economy, even as recent power cuts highlight grid imbalances.

The five utilities, which are controlled by the central government, accounted for around 44% of China’s total coal-fired power capacity at the end of 2018, a share likely to be tested by rising electrification goals, with electricity to meet 60% by 2060 according to industry forecasts.

“(The utilities) will strive to reduce coal-fired power capacity by one quarter to one third ...cutting total losses by more than 50% from the current level to achieve a significant decline in debt-to-asset ratios by the end of 2021,” the document said.

The plan, initiated and overseen by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), follows heavy losses at some of the utilities, amid a pandemic-era demand drop that hit industrial consumption.

Some of their coal-fired power stations have filed for bankruptcy in recent years as Beijing promotes the use of renewable energy and advances its nuclear program while opening up the state-controlled power market.

The SASAC did not immediately respond to a fax seeking comment and the sources declined to be identified as they were not authorised to speak to the media.

The utilities - China Huaneng Group Co, China Datang Corp, China Huadian Corp, State Power Investment Corp and China Energy Group - did not respond to faxes requesting comment.

Together, they had 474 coal-fired power plants with combined power generation capacity of 520 gigawatts (GW) at the end of last year.

Their coal-fired power assets came to 1.5 trillion yuan ($213 billion) while total coal-fired power liabilities were 1.1 trillion yuan, the document said.

The document was seen by two people at two of the utilities and was also verified by a source at SASAC and a government researcher.

It was not clear when the document was published but it said the merging and elimination of outdated capacity would start from 2019 and be achieved within three years, aiming to improve the efficiency and operations at the companies, reflecting a broader electricity sector mystery that policymakers are trying to resolve.

Utilities with debt-ridden operations in the northwestern regions of Gansu, Shaanxi, Xinjiang, Qinghai and Ningxia would be the first to carry out the plan, it said, even as India ration coal supplies during demand surges.

The government researcher said the SASAC has been researching possible consolidation in the coal-fired power sector since 2017, but added: “It’s easier said than done.”

“No one is willing to hand in their high quality assets and there is no point in merging the bad assets,” the government researcher said.

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UK Market Stability Outlook remains febrile as the Bank of England, Treasury, and OBR forecasts shape fiscal policy, interest rates, gilt yields, inflation, energy bills, and pound sterling, with Oct. 31 guidance to reassure investors.

Key Points

A view of investor confidence as BOE policy, fiscal plans, and energy aid shape inflation and interest rates.

✅ Markets await Oct. 31 fiscal statement and OBR projections

✅ Energy support design drives inflation and disposable income

✅ Pound weakness adds imported inflation; rates seen up 75 bps

Bank of England Deputy Governor Dave Ramsden said financial markets are still unsettled about the outlook for the UK and that a Treasury statement due on Oct. 31 may provide some reassurance.

Speaking to the Treasury Committee in Parliament, Ramsden said officials in government and the central bank are dealing with huge economic shocks, notably the surge in energy prices that came with Russia’s attack on Ukraine. Investors are reassessing where interest rates and the fiscal stance are headed.

“Markets remain quite febrile,” Ramsden told members of Parliament in London on Monday. “Things have not settled down yet.”

He described the events following Prime Minister Liz Truss’s ill-fated fiscal statement on Sept. 23, which set out a series of tax cuts funded by borrowing that spooked investors and triggered a rout in UK assets. Ramsden said those events damaged the UK’s credibility among investors, but reversing that program and Truss’s decision to step aside have helped the nation regain confidence.

“Credibility is hard won and easily lost,” Ramsden said. “That credibility is being recovered. That has to be followed through. A return to the kind of stability around policy making and around the framing of fiscal events will be really important.”

He said the issue with the Sept. 23 statement was that “it had one side of the fiscal arithmetic in it” and that the decision to include forecasts from the Office for Budget Responsibility will help underpin the confidence investors have in assessing the UK budget due out next week, including potential moves to end the link between gas and electricity prices for consumers.

“What we are going to get on Oct. 31 will be very important,” Ramsden said, “as it will address measures such as the price cap on household energy bills and other fiscal choices.”

“My sense is that will take account of all the statements on both the revenue and on the spending side.”

The central bank already was getting some information from Chancellor of the Exchequer Jeremy Hunt’s team about the fiscal statement due. Hunt said last week he’d curtail government plans to subsidize household fuel bills in April, when a 16% decrease in energy bills is anticipated, instead of letting it run as long as planned and replace it with a more targeted program. 

“To the extent possible, we will obviously have a little bit of time to take account of that before we make our decisions later next week,” Ramsden said.

With Truss stepping down in the next day and handing power to Rishi Sunak, it isn’t certain the Oct. 31 statement will go ahead as planned. Ramsden’s remarks confirm reports that Hunt is preparing to make the statement, amid a free electricity debate in the industry, even before Sunak names his team.

Any hint about what sort of package Hunt will offer on energy is crucial to the BOE’s forecasts. Without aid for energy, consumers will be exposed to high winter heating and electricity costs and to the full force of whatever happens in natural gas and electricity markets, and that will have a big impact on how much disposable income is available to households.

The energy plan, alongside the energy security bill, “will be a key element, as obviously it will have a bearing on the path for inflation, which is critical, but also how much additional support relative to what we were assuming at the time of the September MPC there will be for households at different points in the income distribution,” Ramsden added.

Investors currently expect the BOE to hike rates by 75 basis points next week.

Ramsden also said the BOE is watching the pound’s decline to assess how that changes the outlook for inflation.

“We have to take account of it,” Ramsden said. “When sterling deprreciaties that feeds through to imported inflation. It’s fallen quite significantly. The overall trend is down.”

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Canada Power Grid Climate Resilience integrates extreme weather planning, microgrids, battery storage, renewable energy, vegetation management, and undergrounding to reduce outages, harden infrastructure, modernize utilities, and safeguard reliability during storms, ice events, and wildfires.

Key Points

Canada's grid resilience hardens utilities against extreme weather using microgrids, storage, renewables, and upgrades.

✅ Grid hardening: microgrids, storage, renewable integration

✅ Vegetation management reduces storm-related line contact

✅ Selective undergrounding where risk and cost justify

The increasing intensity of storms that lead to massive power outages highlights the need for Canada’s electrical utilities to be more robust and innovative, climate change scientists say.

“We need to plan to be more resilient in the face of the increasing chances of these events occurring,” University of New Brunswick climate change scientist Louise Comeau said in a recent interview.

The East Coast was walloped this week by the third storm in as many days, with high winds toppling trees and even part of a Halifax church steeple, underscoring the value of storm-season electrical safety tips for residents.

Significant weather events have consistently increased over the last five years, according to the Canadian Electricity Association (CEA), which has tracked such events since 2003.

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Nearly a quarter of total outage hours nationally in 2016 – 22 per cent – were caused by two ice storms, a lightning storm, and the Fort McMurray fires, which the CEA said may or may not be classified as a climate event.

“It (climate change) is putting quite a lot of pressure on electricity companies coast to coast to coast to improve their processes and look for ways to strengthen their systems in the face of this evolving threat,” said Devin McCarthy, vice president of public affairs and U.S. policy for the CEA, which represents 40 utilities serving 14 million customers.

The 2016 figures – the most recent available – indicate the average Canadian customer experienced 3.1 outages and 5.66 hours of outage time.

McCarthy said electricity companies can’t just build their systems to withstand the worst storm they’d dealt with over the previous 30 years. They must prepare for worse, and address risks highlighted by Site C dam stability concerns as part of long-term planning.

“There needs to be a more forward looking approach, climate science led, that looks at what do we expect our system to be up against in the next 20, 30 or 50 years,” he said.

Toronto Hydro is either looking at or installing equipment with extreme weather in mind, Elias Lyberogiannis, the utility’s general manager of engineering, said in an email.

That includes stainless steel transformers that are more resistant to corrosion, and breakaway links for overhead service connections, which allow service wires to safely disconnect from poles and prevents damage to service masts.

Comeau said smaller grids, tied to electrical systems operated by larger utilities, often utilize renewable energy sources such as solar and wind as well as battery storage technology to power collections of buildings, homes, schools and hospitals.

“Capacity to do that means we are less vulnerable when the central systems break down,” Comeau said.

Nova Scotia Power recently announced an “intelligent feeder” pilot project, which involves the installation of Tesla Powerwall storage batteries in 10 homes in Elmsdale, N.S., and a large grid-sized battery at the local substation. The batteries are connected to an electrical line powered in part by nearby wind turbines.

The idea is to test the capability of providing customers with back-up power, while collecting data that will be useful for planning future energy needs.

Tony O’Hara, NB Power’s vice-president of engineering, said the utility, which recently sounded an alarm on copper theft, was in the late planning stages of a micro-grid for the western part of the province, and is also studying the use of large battery storage banks.

“Those things are coming, that will be an evolution over time for sure,” said O’Hara.

Some solutions may be simpler. Smaller utilities, like Nova Scotia Power, are focusing on strengthening overhead systems, mainly through vegetation management, while in Ontario, Hydro One and Alectra are making major investments to strengthen infrastructure in the Hamilton area.

“The number one cause of outages during storms, particularly those with high winds and heavy snow, is trees making contact with power lines,” said N.S. Power’s Tiffany Chase.

The company has an annual budget of $20 million for tree trimming and removal.

“But the reality is with overhead infrastructure, trees are going to cause damage no matter how robust the infrastructure is,” said Matt Drover, the utility’s director for regional operations.

“We are looking at things like battery storage and a variety of other reliability programs to help with that.”

NB Power also has an increased emphasis on tree trimming and removal, and now spends $14 million a year on it, up from $6 million prior to 2014.

O’Hara said the vegetation program has helped drive the average duration of power outages down since 2014 from about three hours to two hours and 45 minutes.

Some power cables are buried in both Nova Scotia and New Brunswick, mostly in urban areas. But both utilities maintain it’s too expensive to bury entire systems – estimated at $1 million per kilometre by Nova Scotia Power.

The issue of burying more lines was top of mind in Toronto following a 2013 ice storm, but that’s city’s utility also rejected the idea of a large-scale underground system as too expensive – estimating the cost at around $15 billion, while Ontario customers have seen Hydro One delivery rates rise in recent adjustments.

“Having said that, it is prudent to do so for some installations depending on site specific conditions and the risks that exist,” Lyberogiannis said.

Comeau said lowering risks will both save money and disruption to people’s lives.

“We can’t just do what we used to do,” said Xuebin Zhang, a senior climate change scientist at Environment and Climate Change Canada.

“We have to build in management risk … this has to be a new norm.”

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Fort Frances Microgrid aims to boost reliability in Ontario with grid-connected and island modes, Siemens feasibility study, renewable energy integration, EV charging expansion, and resilience modeled after First Nations projects and regional biomass initiatives.

Key Points

A community microgrid in Fort Frances enabling grid and island modes to improve reliability and integrate renewables.

✅ Siemens-led feasibility via FedNor funding

✅ Grid-connected or islanded for outage resilience

✅ Integrates renewables, EV charging, and industry growth

When the power goes out in Fort Frances, Ont., the community may be left in the dark for hours.

The hydro system's unreliability — caused by its location on the provincial power grid — has prompted the town to seek a creative solution: its own self-contained electricity grid with its own source of power, known as a microgrid. 

Located more than 340 kilometres west of Thunder Bay, Ont., on the border of Minnesota, near the Great Northern Transmission Line corridor, Fort Frances gets its power from a single supply point on Ontario's grid. 

"Sometimes, it's inevitable that we have to have like a six- to eight-hour power outage while equipment is being worked on, and that is no longer acceptable to many of our customers," said Joerg Ruppenstein, president and chief executive officer of Fort Frances Power Corporation.

While Ontario's electrical grid serves the entire province, and national efforts explore macrogrids, a microgrid is contained within a community. Fort Frances hopes to develop an integrated, community-based electric microgrid system that can operate in two modes:

• Grid-connected mode, which means it's connected to the provincial grid and informed by western grid planning approaches
• Island mode, which means it's disconnected from the provincial grid and operates independently

The ability to switch between modes allows flexibility. If a storm knocks down a line, the community will still have power.

The town has been given grant funding from the Federal Economic Development Agency for Northern Ontario (FedNor), echoing smart grid funding in Sault Ste. Marie initiatives, for the project. On Monday night, council voted to grant a request for proposal to Siemens Canada Limited to conduct a feasibility study into a microgrid system.

The study, anticipated to be completed by the end of 2023 or early 2024, will assess what an integrated community-based microgrid system could look like in the town of just over 7,000 people, said Faisal Anwar, chief administrative officer of Fort Frances. A timeline for construction will be determined after that. 

The community is still reeling from the closure of the Resolute Forest Products pulp and paper mill in 2014 and faces a declining population, said Ruppenstein. It's hoped the microgrid system will help attract new industry to replace those lost workers and jobs, drawing on Manitoba's hydro experience as a model.

This gives the town a competitive advantage.

"If we were conceivably to attract a larger industrial player that would consume a considerable amount of energy, it would result in reduced rates for everyone…we're the only utility really in Ontario that can offer that model," Ruppenstein said.

The project can also incorporate renewable energy like solar or wind power, as seen in B.C.'s clean energy shift efforts, into the microgrid system, and support the growth of electric vehicles, he said. Many residents fill their gas tanks in Minnesota because it's cheaper, but Fort Frances has the potential to become a hub for electric vehicle charging.

A few remote First Nations have recently switched to microgrid systems fuelled by green energy, including Gull Bay First Nation and Fort Severn First Nation. These are communities that have historically relied on diesel fuel either flown in, which is incredibly expensive, or transported via ice roads, which are seeing shorter seasons each year.

Natural Resources Minister Jonathan Wilkinson was in Thunder Bay, Ont., to announce $35 million for a biomass generation facility in Whitesand First Nation, complementing federal funding for the Manitoba-Saskatchewan transmission line elsewhere in the region.

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Ukraine Power Grid Attacks disrupt critical infrastructure as missiles and drones strike power plants, substations, and lines, causing blackouts. Emergency repairs, international aid, generators, and renewables bolster resilience and keep hospitals and water running.

Key Points

Russian strikes on Ukraine's power infrastructure cause blackouts; repairs and aid sustain hospitals and water.

✅ Missile and drone strikes target plants, substations, and lines.

✅ Crews restore power under fire; air defenses protect sites.

✅ Allies supply equipment, generators, and grid repair expertise.

Ukraine is facing an ongoing battle to maintain its electrical grid in the wake of relentless Russian attacks targeting power plants and energy infrastructure. These attacks, which have intensified in the last year, are part of Russia's broader strategy to weaken Ukraine's ability to function amid the ongoing war. Power plants, substations, and energy lines have become prime targets, with Russian forces using missiles and drones to destroy critical infrastructure, as western Ukraine power outages have shown, leaving millions of Ukrainians without electricity and heating during harsh winters.

The Ukrainian government and energy companies are working tirelessly to repair the damage and prevent total blackouts, while also trying to ensure that civilians have access to vital services like hospitals and water supplies. Ukraine has received support from international allies in the form of technical assistance and equipment to help strengthen its power grid, and electricity reserve updates suggest outages can be avoided if no new strikes occur. However, the ongoing nature of the attacks and the complexity of repairing such extensive damage make the situation extraordinarily difficult.

Despite these challenges, Ukraine's resilience is evident, even as winter pressures on the battlefront intensify operations. Energy workers are often working under dangerous conditions, risking their lives to restore power and prevent further devastation. The Ukrainian government has prioritized the protection of energy infrastructure, with military forces being deployed to safeguard workers and critical assets.

Meanwhile, the international community continues to support Ukraine through financial and technical aid, though some U.S. support programs have ended recently, as well as providing temporary power solutions, like generators, to keep essential services running. Some countries have even sent specialized equipment to help repair damaged power lines and energy plants more quickly.

The humanitarian consequences of these attacks are severe, as access to electricity means more than just light—it's crucial for heating, cooking, and powering medical equipment. With winter temperatures often dropping below freezing, plans to keep the lights on are vital to protect vulnerable communities, and the lack of reliable energy has put many lives at risk.

In response to the ongoing crisis, Ukraine has also focused on enhancing its energy independence, seeking alternatives to Russian-supplied energy. This includes exploring renewable energy sources, such as solar and wind power, and new energy solutions adopted by communities to overcome winter blackouts, which could help reduce reliance on traditional energy grids and provide more resilient options in the future.

The battle for energy infrastructure in Ukraine illustrates the broader struggle of the country to maintain its sovereignty and independence in the face of external aggression. The destruction of power plants is not only a military tactic but also a psychological one—meant to instill fear and disrupt daily life. However, the unwavering spirit of the Ukrainian people, alongside international support, including Ukraine's aid to Spain during blackouts as one example, continues to ensure that the fight to "keep the lights on" is far from over.

As Ukraine works tirelessly to repair its energy grid, it also faces the challenge of preparing for the long-term impact of these attacks. The ongoing war has highlighted the importance of securing energy infrastructure in modern conflicts, and the world is watching as Ukraine's resilience in this area could serve as a model for other nations facing similar threats.

Ukraine’s energy struggle is far from over, but its determination to keep the lights on remains a beacon of hope and defiance in the face of ongoing adversity.

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U.S. EV Market Share Dip Q1 2024 reflects slower BEV adoption, rising PHEV demand, affordability concerns, charging infrastructure gaps, tax credit shifts, range anxiety, and automaker strategy adjustments across the electric vehicle market.

Key Points

Q1 2024 EV and hybrid share slipped as BEV sales lag, PHEVs rise, and affordability and charging concerns temper demand.

✅ BEV share fell to 7.0% as affordable models remain limited

✅ PHEV sales rose 50% YoY, easing range anxiety concerns

✅ Policy shifts and charging gaps weigh on consumer adoption

The U.S. electric vehicle (EV) market, once a beacon of unbridled growth, appears to be experiencing a course correction. Data from the U.S. Energy Information Administration (EIA) reveals that the combined market share of electric vehicles (battery electric vehicles, or BEVs) and hybrids dipped slightly in the first quarter of 2024, marking the first decline since the onset of the COVID-19 pandemic, even as EU EV share rose during lockdowns in 2020.

This news comes as a surprise to many analysts who predicted continued exponential growth for the EV market. While overall sales of electric vehicles surged into 2024 and did increase by 7% compared to Q1 2023, this growth wasn't enough to keep pace with the overall rise in vehicle sales. The result: a decline in market share from 18.8% in Q4 2023 to 18.0% in Q1 2024.

Several factors may be contributing to this shift. One potential culprit is a slowdown in battery electric vehicle sales. BEVs saw their share of the market dip from 8.1% to 7.0% in the same period. This could be attributed to a lack of readily available affordable options, with many popular EV models still commanding premium prices and concerns that EV supply may miss demand in the near term.

Another factor could be the rising interest in plug-in hybrid electric vehicles (PHEVs). PHEV sales witnessed a significant jump of 50% year-over-year, reflecting how gas-electric hybrids are getting a boost from major automakers, potentially indicating a consumer preference for vehicles that offer both electric and gasoline powertrain options, addressing concerns about range anxiety often associated with BEVs.

Industry experts offer mixed interpretations of this data. Some downplay the significance of the dip, attributing it to a temporary blip, even though EVs remain behind gas cars in total sales. They point to the ongoing commitment from major automakers to invest in EV production and the potential for new, more affordable models to hit the market soon.

Others express more concern, citing Europe's recent EV slump and suggesting this might be a sign of maturing consumer preferences. They argue that simply increasing the number of EVs on the market might not be enough. Automakers need to address issues like affordability, charging infrastructure, and range anxiety to maintain momentum.

The role of government incentives also remains a question mark. The federal tax credit for electric vehicles is currently set to phase out gradually, potentially impacting consumer purchasing decisions in the future. Continued government support, through incentives or infrastructure development, could be crucial in maintaining consumer interest.

The coming quarters will be crucial in determining the long-term trajectory of the U.S. EV market, especially after the global electric car market's rapid expansion in recent years. Whether this is a temporary setback or a more lasting trend remains to be seen. Addressing consumer concerns, ensuring a diverse range of affordable EV options, and continued government support will all be essential in ensuring the continued growth of this critical sector.

This development also presents an opportunity for traditional automakers. By capitalizing on the growing PHEV market and addressing consumer concerns about affordability and range anxiety, they can carve out a strong position in the evolving automotive landscape.

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