Shell proceeds with Alberta project
Royal Dutch Shell recently announced its decision to proceed with its Carmon Creek project in Alberta, Canada, expected to produce up to 80,000 barrels of oil per day. Carmon Creek is a thermal in situ project that is 100 percent Shell owned and will be part of the company's broader production, refining and marketing business across the full value chain in North America.
“I'm pleased we're moving ahead with this important project,” said Lorraine Mitchelmore, executive vice president heavy oil. “Shell's Peace River oil leases represent a significant development opportunity. Our decision to invest in Carmon Creek has been carefully studied with the goal of designing a project that is competitive from a commercial, technological and environmental perspective.”
At Carmon Creek, Shell combined its global procurement reach and technology with access to local expertise to design a facility that is both commercially viable and minimizes environmental impacts. This design includes a novel well-delivery system and the use of cogeneration that will also feed power into the Alberta grid; enough to power half a million homes. Once the project is up and running the aim is to virtually eliminate the need for freshwater use for steam generation through recycling of water produced with the oil.
Carmon Creek will build on Shell's more than 30 years of experience developing its Peace River heavy oil leases and established relationships with local communities and First Nations. It is expected to employ more than 1,000 local trades and contractors during peak construction periods.
Shell submitted its regulatory application for Carmon Creek in 2010 and received approval from the Alberta Energy Regulator in April 2013, following a rigorous and transparent review process. The project is expected to provide a secure, reliable energy source and benefits to Alberta and Canada for more than 35 years.
- For the startup of Phase One and Two, Carmon Creek will produce from 13 well pads. An inter field pipeline system will transport steam to the wells and produce bitumen, water and natural gas that will be sent to central processing facilities. The central processing facilities will separate bitumen from water and natural gas, which can then be used to produce steam. Diluted bitumen is expected to be exported to existing North American refineries.
- Cogeneration units are expected to produce an annual average of up to 630 megawatts (MW) of electricity, of which about 500 MW is expected to be sold to the northwest Alberta power grid.
- Shell is taking a well manufacturing approach to drill and complete the wells using the Sirius Well Manufacturing Services joint venture. This approach is based on standardization of components, and allows quicker and repeatable operations that provide opportunities to reduce costs.
- To minimize surface disturbance, approximately 48 wells will be closely spaced on each well pad. Each well pad will have a life of 10 to 15 years and as pads come to the end of their life the well pad equipment will be refurbished and reused on new pads and the land will be reclaimed to minimize project footprint. .
- As is common in heavy oil construction, modules will be built elsewhere and transported to site for final assembly and commissioning.
Ofwat allows retailers to raise prices from April
Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.
The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.
Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.
In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue.
Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”
There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:
- Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps.
- Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold.
- Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice.
Further consultation on the proposed adjustments to REC price caps can be expected by December.
"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.
"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."
United Utilities picks up pipeline award
A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.
The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.
“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.
Camus Energy secures $16m funding
Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent Ventures, Wave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.
As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.