Germany has closed its last three nuclear power plants, leaving the country without any nuclear generation after 60 years of a nuclear past.
The storied French nuclear program continues to be a tale of woe, with continued outages driving up its prices and leading to predictions that the world’s most nuclear nation, once a major power exporter to the rest of the European Union, has become an energy importer.
Russia has cut off its major gas exports to Europe, retaliating for European putback against Putin’s irrational invasion of Ukraine.
A disaster for European energy supplies and markets? Many pundits predicted a European energy meltdown going into the 2022 winter. Oil Price wrote, “All signs were pointing toward mutually assured destruction. Natural gas prices were inflated tenfold ahead of what was certain to be a brutal winter with punishing energy prices and heating shortages plunging Europeans into energy poverty and dangerously cold temperatures.”
But that forecast of doom did not develop. Instead, Europe managed quite well without French or German nukes or Russian gas. Oil Price followed up in the same article, “And then, the winter passed with barely a whisper. Europe had somehow, unbelievably, been spared.”
A mild winter, many observers commented.
Good luck? Not so, says an analysis in The Economist: “Amid fears of a shortage, the EU set a target in August to reduce natural-gas consumption by 15% over the winter (it recently announced this would remain in place for the next 12 months, too). Data released in late March by Bruegel, an economic think-tank in Brussels, showed that it met its initial target.”
According to The Economist analysis, “Gas demand from the beginning of December 2022 to the end of February 2023 was 16% lower than the average for that period between 2019 and 2021.” But continued policy development is important, The Economist warns: “Putin’s grip on Europe may look weaker than expected. But the continent needs long-term solutions to ease its tight energy supply.”
Energy analyst Jérôme à Paris, in the eponymous Substack blog, has a broader and interesting take on future European energy developments, focused around the German decision to abandon nuclear entirely, at a time when many are arguing that nuclear is the solution to carbon dioxide emissions from energy and a key to energy reliability.
Jérôme à Paris, a mysterious self-proclaimed “energy connoisseur, offshore wind specialist, project finance specialist” says what we are seeing in Europe is that “the end of baseload is coming.” The blogger observes, “While I agree that Germany should have closed its lignite plants before its nuclear plants, the more important story here is that it has closed ‘reliable’ baseload plants and replaced them by ‘intermittent’ renewables. And not on a small scale.”
The analysis notes that “Germany is a larger exporter of power than France,” adding that German exports “are at a higher price than France’s (i.e. that they produce more at times that are better correlated to demand than France). And that it is imports from Germany that allow France to go through peaks of high demand, because baseload cannot produce more than what it usually produces (that’s the whole point of baseload).”
Germany has a lot of coal and gas capacity that can follow load, but also a lot of wind power, which is growing. The fossil-fueled plants “are actually used very little – only when demand (including from France) is very high and renewables supply is very low – which does happen, but not that often anymore. Fossil fuel power plants are relatively cheap (and made in Europe), and if they are used rarely they don’t emit a lot of carbon dioxide.”
French nuclear, argues the “end of baseload” analysis, “requires the huge volumes of storage/flexible capacity provided by large scale hydro, which France has plenty of, and borrows plenty more of from its neighbors. That capacity can, and will, be used differently once it no longer has to deal with the very large daily cycle of baseload (excess production at night is dumped in the Alps, and given to the system back the next day).
“The future is not baseload, whether coal-fired or nuclear. The future is renewables and a mixture of smarter demand and flexible generation, whether hydro, new forms of storage, and a little bit of fossil fuel use….
While nuclear advocates are trying to gin up enthusiasm for their reliable baseload plants, in the UK investors are shying away from putting real money into the Sizewell C nuclear project. Britain wants to build a two-unit, 3,200-MW EPR reactor project, with a price tag over $20 billion and construction starting next year. The government pitches the project as a response to the Russian invasion of Ukraine and to reduce carbon dioxide emissions from the power sector, even labelling it a “sustainable” project under UK rules to attract investment.
The Telegraph reported last week, “The Government’s push to find investors for the £20bn Sizewell C nuclear power station has suffered a significant blow as Britain’s biggest fund managers have snubbed the scheme.” The newspaper reported, “Ministers have also reformed the funding model for nuclear plants to hand investors more up-front rewards. But senior sources in the asset management industry and two of the country’s biggest fund managers have dismissed the changes as irrelevant and insisted it would not persuade them to back Sizewell C.”
Britain’s largest money manager, Legal & General, with £1.3 trillion in assets, is shunning nuclear. A spokesman told The Telegraph, ““Our stance hasn’t changed: we are focused on investing in and supporting other innovative, viable, and cost-effective clean energy solutions that are already delivering results.”
–Kennedy Maize
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