The Direction for Future European Energy : Eurelectric : Statement

[John Hjorth]

Eurelectric : European Electricity Sector gears up for the Energy Transition.

 

General public commitment to no investments in coal fired powerplants in Europe after 2020 [except for Poland and Greece, who have not committed].

 

Certainly a different direction than what I perceive is the future direction on the other side of the Atlantic Sea.

[Jurgis]

I would really like to see safe and cheap nuclear available. Might have to wait until fusion works... We need Flon Musk.

[John Hjorth]

Personally, I share your opinion on nuclear energy. Here it is acually tabu to have such an opinion,so I keep it for my self most of the time.

 

The political decision in Germany to shut down all nuclear power plants after the TEPCO accident seemed madness to me. It created large losses in the German utilities E.ON and RWE. E.ON has spun off all coal powered plants in a separate company called Uniper, handing out Uniper shares to existing E.ON shareholders : "Here you are - mess around with this thing yourself - we have had it with it".

 

[German style of problem solution : In stead of solving the problem,

.]

[Jurgis]

I have been even more pro-nuclear, but with construction costs and safety being more screwed up than one would expect, I got a bit more moderate. Still it's a great source of potentially cheap energy with huge EROEI.

 

Fun clip.

Can we use German solution to Brexit perhaps?

 

Just kidding.  8)

[sys]

Certainly a different direction than what I perceive is the future direction on the other side of the Atlantic Sea.

 

energy generation in the united states is moving in the same direction.

[John Hjorth]

Certainly a different direction than what I perceive is the future direction on the other side of the Atlantic Sea.

 

energy generation in the united states is moving in the same direction.

 

sys,

 

Thanks. My perception might be wrong - on overall basis. I think that is what you meant. What I meant specifically with my comments was, that there is long term zero tolerance in the major parts of Europe going forward in the long run towards energy generation based on coal, which not to the same degree [at least to me - I might be wrong here] seems to be the situation in the US.

[rb]

Well everyone likes to complain about electricity prices. But in North America they're pretty cheap. Nuclear may be more expensive than nat gas (for now?) but it's not that big of a deal. Even if nuclear is 4 cents per kwh more expensive that doesn't add up to so much. A US household uses on average about 11,000 kwh. That's about $36 per month extra if everything was converted to nuclear. But really you wouldn't do more than an extra 40% of generation. So that's about an extra $15 per month per household on average. Of course no one likes to pay. But that's not a very high price to pay to make a blow a huge whole in global warming.

 

But of course between the environmental zealots who want everything to be solar, the coal people, the oil&gas lobby, and the I don't want to pay people it just ain't gonna happen.

[John Hjorth]

I have been even more pro-nuclear, but with construction costs and safety being more screwed up than one would expect, I got a bit more moderate. Still it's a great source of potentially cheap energy with huge EROEI.

 

Fun clip.

Can we use German solution to Brexit perhaps?

 

Just kidding.  8)

 

Off topic:

 

I suppose it's evident to everybody that I have lost some money on E.ON and RWE. And those Uniper shares I can't even ask for getting delivered as physical stock certificates [for use on the toilet] in our modern time, where everything is going on digital.

 

So, In short I just got carried away and thought it was time to slap the German people in general. Last time it was Uccmal and I who totally agreed on Italian style problem solution, based on the train wreck of the Italian banking system.

 

Please accept my apology, if you are reading this and you are German, and if I have offended you.

[SharperDingaan]

You might want to look a little more closely at oil/gas.

 

Crude oil was originally a substitute for whale oil - & light to see by. It replaced whale oil because it was cheaper, burned brighter, and was available near everywhere. It was also the ONLY industrial use for the stuff.

 

Electricity replaced burned oil, & essentially put oil out of business. It was saved through invention of the IC engine and the mass production of the car.

 

As cars go electric & the need for electricity rises, the existing need for oil/gas will decline - driving down price. Low priced & cleaner burning gas displacing the coal. Nukes remain important, but not by as much as everyone would like to think.

 

SD

   

[Jurgis]

Nukes remain important, but not by as much as everyone would like to think.

 

Nah, I get that.

But really it's the construction/safety/security/containment cost.

If we can get to prefab ship-and-drop safe/secure self-contained modules, nukes could take off hugely. I think Gates has been financing this direction. Hopefully it works out at some point.

 

But it is possible that solar+storage or some other combination will just outperform the nuke advancement.

 

Aside: it's way easier to advance a technology where you can improve 10% and ship, improve 10% and ship than technology where you have to get every single thing right and even then the sales might not happen. Nukes is the second one.

[rb]

I live in Ontario where we have lots of nuclear. This is our generation mix tonight as of 7 PM:

 

Nuclear: 9,919 MW

Hydro:  4,765 MW

Wind:    1,506 MW

Gas:        389 MW

Biofuel:    224 MW

Solar:        28 MW

 

As you can see there's a ton of nuclear in that mix. Last month I paid $60 for electricity. Btw, I'm not a low power user. In fact every month I get a letter from my utility berating me about how I'm in the high bracket of users and I should seriously think about conservation. So it's not so bad.

[sys]

Thanks. My perception might be wrong - on overall basis. I think that is what you meant. What I meant specifically with my comments was, that there is long term zero tolerance in the major parts of Europe going forward in the long run towards energy generation based on coal, which not to the same degree [at least to me - I might be wrong here] seems to be the situation in the US.

 

you are probably correct in your perception that their is greater public tolerance of coal generated electricity in the united states.  however, natural gas generation is significantly cheaper and there is regulatory and public pressure to increase use of electricity from renewable sources.  to my knowledge there aren't any new coal generated electrical plants being built and that is unlikely to change.

[Cardboard]

Problem with nukes are these spent fuel rods pools. And even after they cool down enough, it remains radioactive for 1,000`s of years.

 

I was watching some documentaries on that topic on PBS not long ago and some "new" underground facility in New Mexico. They were trying to figure out how to "identify" the site for the next 1,000 years. Makes you really think!

 

Cardboard

[John Hjorth]

Jurgis and Cardboard,

 

I remembered reading this article some time ago: Danes invent safe nuclear power plant.

 

I'm not an engineer, but from reading the article and taking it at face value, some problems with nuclear power today seem to be related to the technology chosen in the early days of nuclear power.

[Pelagic]

It's amazing to me how caught in the '70s and '80s the debate around nuclear still is. Safety is not the issue with nuclear plants today, nuclear is many times safer than even the safest renewables in terms of deaths per unit of energy produced. It's appealing to the public to claim a "safer" nuclear design but when you look at the data, modern nuclear plants are an extremely safe and effective form of energy generation. Additionally, storage isn't the issue it was when nuclear first came online either. We know how and where to store spent fuel safely in salt caverns for millions of years, it's just a matter of political will to make the system feasible. Debates focused on safety and what do to with waste have hamstrung nuclear power since its inception when in reality its track record is far better than that of any other form of energy generation, wind and solar included.

 

These two articles give a breakdown of deaths/energy produced by source.

http://www.nextbigfuture.com/2011/03/deaths-per-twh-by-energy-source.html

 

https://www.forbes.com/sites/jamesconca/2012/06/10/energys-deathprint-a-price-always-paid/#7331d062709b

 

In my opinion, nuclear has an optics problem. Most people have little to no understanding of how nuclear fission works and what the real risks involved are, nuclear and radiation are buzzwords that no one wants anything to do with. You can push statistics about how objectively safe nuclear is in comparison to other forms of generation and they'll still oppose nuclear because it's nuclear and nuclear is scary. In a command economy perhaps this issue would be irrelevant but for those of us in the west it magnifies itself in the form of regulations and public activism against nuclear that delays construction and adds to costs. Add to that the inherently complex nature of actually building a nuclear plant and the fact that each plant is a bespoke project, we're not quite at the reactor in a box plug and play point yet, and you have the reason nuclear has failed to live up to expectations. Part of me almost thinks nuclear has missed its shot, with renewables often offering a cheaper alternative with far less lead time and hassle to build, nuclear has to compete not only on optics but also on price against other clean energy sources.

 

I wonder if global warming and CO2 emissions had been as big of an issue in the 70s, when public opposition to nuclear began in earnest, if the opposition would have been as strong. 40 odd years of new nuclear construction in the US and elsewhere in the world would have changed nuclear power as we know it and likely significantly reduced CO2 emissions over that time period, to say nothing of particulate emissions from coal power which have killed literally millions of people during that same time period.

[John Hjorth]

Pelagic,

 

To most of the extent of your post, I personally agree.

 

In short: Mr. Buffett has written in the BRK Shareholder Letters, that this is about a "social contract" - [bRK: You make sure we make some decent money on our capital invested, and we will make sure you have access to energy ...].

 

- Germany is [to me, at least it seems to me] - just different.

 

A deal is a deal - a handshake is a handshake - except in Germany, where it to me seems obvious, that everything already agreed on, can be [political] subject of discussion.

 

I will never pour capital  into that industry in Germany again.

[kab60]

I think Nuclear blew it. It might have a safety (or optics problem?), but it definately has a cost problem. Look at the most recently proposed plant in the UK - Hinkley Point; it's guaranteed some 90 pounds/MWh for 35 years - inflation linked! And then you need state guarantees on top because no one will insurers it (I believe - might be a bit imprecise). In Denmark we're getting offshore wind (which was hugely expensive two years ago due to lack of competion) for less than 45 pound/MWh - for 10-12 years. And offshore wind is still much more expensive than onshore wind, and solar also keeps dropping like a rock. And then you also have the long lead times with Nuclear (ask the Finnish; some 10 years behind schedule?). Offshore wind takes a couple of years with the right regulatory frameworks, onshore wind less than that and you can put up a decent sized PV plant on a field in no time. Combined with a high baseload but really more need for flexibility and power that can quickly be turned on/off quickly in combination with renewables, I think Nuclear is dead, while gas will be needed for many years.

[Pelagic]

I think Nuclear blew it. It might have a safety (or optics problem?), but it definately has a cost problem. Look at the most recently proposed plant in the UK - Hinkley Point; it's guaranteed some 90 pounds/MWh for 35 years - inflation linked! And then you need state guarantees on top because no one will insurers it (I believe - might be a bit imprecise). In Denmark we're getting offshore wind (which was hugely expensive two years ago due to lack of competion) for less than 45 pound/MWh - for 10-12 years. And offshore wind is still much more expensive than onshore wind, and solar also keeps dropping like a rock. And then you also have the long lead times with Nuclear (ask the Finnish; some 10 years behind schedule?). Offshore wind takes a couple of years with the right regulatory frameworks, onshore wind less than that and you can put up a decent sized PV plant on a field in no time. Combined with a high baseload but really more need for flexibility and power that can quickly be turned on/off quickly in combination with renewables, I think Nuclear is dead, while gas will be needed for many years.

 

I agree. You have to put yourself in the shoes of an energy company or utility CEO, at the end of the day it's a lot easier to just build wind/solar as needed than to build complex long lead time nuclear projects. That your customers and the government are falling over themselves to get you to build more renewables and people are actively hostile to nuclear, despite what the data says, makes the decision even easier.

 

Nuclear's window of opportunity to become humanity's prime source of electrical generation was short lived, had it developed at a similar pace throughout the 80s, 90s and 00s we'd probably have a much higher % of nuclear at a lower cost than today's nuclear power with less renewables and coal usage worldwide. It still has a role today but I don't think we'll ever see it represent most of our power generation needs like early nuclear proponents envisioned.

[John Hjorth]

DONG Energy awarded three German offshore wind projects.

 

The two of the projects won based on zero subsidy per MW. That's a milestone. It's based on expected technology change going forward, to bigger offshore wind turbines of the size 13 - 15 MW, where the biggest ones right now as far as I know are from MHI Vestas at 9 MW.

 

I have actually looked closer at DONG Energy A/S as investment recently. I'm a CPA, but I don't understand their financials - I simply can't read them [<-!].

[John Hjorth]

You might want to look a little more closely at oil/gas.

 

Crude oil was originally a substitute for whale oil - & light to see by. It replaced whale oil because it was cheaper, burned brighter, and was available near everywhere. It was also the ONLY industrial use for the stuff.

 

Electricity replaced burned oil, & essentially put oil out of business. It was saved through invention of the IC engine and the mass production of the car.

 

As cars go electric & the need for electricity rises, the existing need for oil/gas will decline - driving down price. Low priced & cleaner burning gas displacing the coal. Nukes remain important, but not by as much as everyone would like to think.

 

SD

 

SharperDingaan,

 

Late reply here, but I haven't forgotten. I think your post here was - at least partially - adressed to me . - And I have vacation the coming week - please read : more time for investing work - studying and reading.

 

About four and a half year ago I invested in the Supermajors, Statoil, Lukoil and Gazprom [material overweight to Lukoil and Gazprom] - as a basket - at that time about 18 percent of portfolio, I think. I have diversified out these positions by adding to AUM a lot - without adding to those oil stocks -, on total family level - ten times or the like.

 

Honestly, it's nagging me - because of mediocre results so far - compared to about everything else I have done.

 

So: Where do I start, to get this about right [all over again]? - Perhaps it is not at all for me ...

 

Your insights, comments and directions will be much appreciated.

[John Hjorth]

France may close up to 17 nuclear reactors by 2015 - Hulot. Oh well, - I suppose the private shareholders of E.ON and RWE are standing on the boarder between Germany and France, waving with the flags: "Welcome to the club!" - to EDF shareholders.

[John Hjorth]

Not exactly related to European energy as such, but related to the general energy discussion that has taken place in this topic:

 

The Economist: Daily Chart [2018.03.28]: What a ten-year-old duck can teach us about electricity demand.

[Spekulatius]

Pelagic,

 

To most of the extent of your post, I personally agree.

 

In short: Mr. Buffett has written in the BRK Shareholder Letters, that this is about a "social contract" - [bRK: You make sure we make some decent money on our capital invested, and we will make sure you have access to energy ...].

 

- Germany is [to me, at least it seems to me] - just different.

 

I have fond memories of RWE being such a great blue chip & boring dividend stock. This all fell apart when the regulatory framework changed and politics did a backflip. This can happen in other industries as well or could happen in the same industry elsewhere. There is currently some fear anout British utilities.

 

A deal is a deal - a handshake is a handshake - except in Germany, where it to me seems obvious, that everything already agreed on, can be [political] subject of discussion.

 

I will never pour capital  into that industry in Germany again.

[John Hjorth]

Information.dk [August 2^nd 2018]: "The cooling water has become too hot: The heatwave now hits the nuclear power plants in Europe".

[John Hjorth]

Finally! :

 

Permit for the Nord Stream 2 project is granted by the Danish Energy Agency.

 

This is to me good to the whole European energy system. -It does not exactly harm me by being a long Gazprom investor either. [ ; - ) ]