Fuel for Thought – 1 Jul 2011

01 Jul, 2011

The viability of Germany’s ‘renewables for nuclear’ plan: The European Investment Bank (EIB) has come out in support for the viability of Germany’s nuclear closure plan. It is appropriate that the EIB supports governments to deliver renewable generation, but the EIB’s claim that the German plan is viable focuses on a limited analysis of the headline investment required. The more complex reality of the challenges Germany must overcome are set out in this week’s article.

France to dominate next generation nuclear: Despite scepticism from other European countries, France has made its nuclear intentions clear. This is not surprising since two French giants EDF and Areva are set to play a pivotal role in delivering the next generation of nuclear capacity. But as its neighbours walk away from nuclear, France is clearly going to take full advantage of the opportunity to build on its position as Europe’s dominant exporter of baseload low carbon power.

A utility perspective on major infrastructure investment: Unprecedented utility infrastructure investment is required to progress the European decarbonisation agenda while maintaining security of supply. Sam Laidlaw recently provided Centrica’s perspective on the hurdles to delivering infrastructure investment of this scale in a speech at the Economist UK Energy Summit. Laidlaw is clearly mindful of the Centrica agenda, voicing his concerns over increasing energy bills and support for gas and new nuclear. But this speech is also a shot across the bows of the UK government. Laidlaw makes it clear that the current policy and regulatory environment will not support the investment required and that time is running out.

A summer shock to European power markets? The European Network of Transmission System Operators sets out potential causes of stress in European power markets in its Summer Outlook. While individual markets look to be well prepared, the report highlights the risk of market instability from a combination of events in different markets, eg a summer heat wave in France combined with the current low hydro stocks in Scandinavia. The interdependency of European power markets in periods of more extreme conditions is likely to increase significantly as the penetration of intermittent renewables capacity rises. This will also have implications for gas demand and swing requirements as gas-fired generation provides flexibility.

Picture of the week:

The Niederaußem lignite power plant and nearby Garweiler mine in Nord Rhine Westphalia, Germany. The previous town of Garzweiler was moved to a different location (the creatively named New Garzweiler) to accomodate strip mining expansion.