The big news this week is Hinkley Point, but since this has already been discussed at length in Euan’s recent post it doesn’t qualify as news any more. Accordingly, this week’s abbreviated Blowout features a little-known ~3.4 GWh pumped hydro plant in the Czech republic (inset) which has many similarities to the plant at Gorona del Viento in the Canaries and which, like GdV, suggests that the ultimate highest and best use of these plants may be as tourist destinations:
Climb a peak at the heart of the Jeseniky mountain range in northeastern Czech Republic and there’s an unexpected reward…..
As well as a breathtaking view of the surrounding mountains, there is a 15-hectare artificial lake that neatly fits the flat top. With another man-made reservoir more than 500 metres below it, it forms a pumped storage power plant — and more recently it has become a major tourist attraction. The Dlouhe Strane plant’s original function was to balance up electricity demands between day and night, but as renewable sources of energy have taken an increasing share of electricity generation, it now contributes to the stabilization of the power grid, which has to cope with the unpredictable output from renewables. The plant, conceived in the communist era, was originally fenced in. But after it began operations in 1996 following an 18-year construction period, its owner — the CEZ power company — opened it to visitors. Today, some 80,000 people a year come to see it, and the millionth visitor is expected this summer. In its standard working cycle, 2.5 million cubic meters of water are pumped from the lower to the upper lake at night, when energy production exceeds demand. During the day, when demand increases, the water flows down through underground tunnels to spin the blades of two 325-megawatt Francis turbines, the biggest in Europe, generating additional electricity. The turbines are able to generate the maximum output for 5 hours and 15 minutes. In the reverse mode, it takes 7 hours and 15 minutes to pump the water back up to the upper lake. Due to its ability to react quickly, the plant uses its turbines to keep the grid stable despite the numerous renewable power sources.
A series of events sponsored by the oil and gas industry are “polluting” the Democratic national convention with climate denialism and should be boycotted by leading Democrats, according to environmentalists. The American Petroleum Institute (API) has underwritten five events hosted in Philadelphia during the convention by media organizations Politico and the Atlantic. The events, which promote API’s Vote4Energy campaign, provide delegates and other attendees with literature and signage extolling the benefits of oil and gas drilling. While both Politico and the Atlantic said that API, the US’s leading fossil fuel lobby group, does not hold any sway over the content of the panel discussions, green groups claimed the events have allowed the denial of climate science to seep into the Democratic gathering. “These polluting events have a complete disrespect for the scientific facts and we are very concerned about the influence that fossil fuels have here,” said Brad Johnson, executive director of Climate Hawks Vote, a political action group which has a 10,000-strong petition urging Democrats to boycott the events. The group said it was disappointed the Atlantic and Politico had accepted the lobby group’s money. “API deliberately disseminate misinformation and journalists should have ethical and professional qualms about that,” Johnson said.
Hellenic Shipping News: Britain offers new oil and gas licenses amid exploration drought
Britain has cut rental fees by up to 90 percent in its latest tender for oil and gas licenses in the North Sea launched on Wednesday in a bid to attract companies to find new fields in the mature basin. Companies will now be able to apply for cheaper and more flexible licenses to gain access to 1,261 blocks by Oct. 26, followed by license awards to be issued by the Oil and Gas Authority (OGA) at a later date. The hunt for new oil and gas fields in the British part of the North Sea is expected to fall to the lowest in 45 years this year as energy companies have scaled back exploration budgets due to weak oil prices. Despite being an old basin, Britain’s North Sea is estimated to have billions of barrels left for extraction, worth around 200 billion pounds ($262.56 billion) to British government coffers. The latest licensing round, the 29th, offers access to new areas in the Rockall Trough, the mid-North Sea High and East Shetland, which were subject to a government-funded seismic testing campaign earlier this year. “We recognise that market conditions are currently very difficult but nevertheless we have a shared goal of making the basin as attractive as possible for exploration,” Andy Samuel, chief executive of the OGA, said.
Offshore Post: Oil & Gas Companies Show “Strong Survival Reflex”
According to Wood Mackenzie’s latest report on second quarter results across the oil and gas industry, companies are showing “a strong survival reflex”, with a tight management of their cash flow. Most of the 56 companies reviewed have used deep cuts on their capital in-vestment to survive, which has also produced a strong impact on their growth prospects. “Balance sheet management is front of mind across the industry – cost containment and capital discipline are still the strident messages emanating from all companies. But strategies will need to shift away from survival mode and look to the future”, says Tom Ellacott, Senior Vice President of Corporate Research at Wood Mackenzie. According to the research, these 56 companies will achieve cash flow neutrality at an average oil price of around $50 a barrel of Brent over this year. “This is some achievement given the majority needed over US$90 a barrel in 2014,” Ellacott stated. He explained that the companies have cut their exploration and production spending for the year by 49% on average, or US$230 billion (£175.34 billion), compared to 2014 levels. Aditionally, the research states that the annual growth rate has fallen and US independents were the most affected group, with the most severe cutbacks.
Wall Street Journal: How Much Oil Is in Storage Globally? Take a Guess
The historic fall in oil prices has created a pileup of inventories, much of it stashed in tanks in the U.S. and other industrialized countries that are committed to disclosing the latest tally, but millions of barrels of oil are flowing to locations outside the scope of industry trackers Some countries, such as Russia and China, choose not to report their oil-storage levels. And traders and oil companies that park supertankers have no obligation to make public their supply. This makes for more cryptic and volatile oil markets. How much crude is in these locations, and how quickly it can be resold into the market, can affect oil prices. “The data itself is so inconsistent,” said Harish Sundaresh, portfolio manager and commodities strategist for Loomis, Sayles & Co., which manages $240 billion. “In countries like Nigeria, Brazil, Angola, it’s not trustable.” Keeping track of inventories has become more complicated as developing countries store and consume more oil. Singapore, home to one of the world’s busiest ports and the Asian headquarters of many big oil-trading firms, is one country befuddling analysts. The waterways surrounding the island nation have become home to one of the world’s biggest oil-storage sites. But it is unclear how much oil is in the tankers anchored there.
The Middle East’s affair with nuclear power has been complicated. Iran brought on itself serious sanctions because of its nuclear program that it claimed was completely peaceful. Iraq has been the object of long-term suspicions about trying to make its own bomb. The rest of the region has been historically over-dependent on oil and gas. Yet, things are starting to change. At the start of 2016, there were seven countries in the Middle East and North Africa region working on nuclear programs for peaceful purposes – the UAE, Saudi Arabia, Jordan, Egypt, Morocco, Tunisia, and Algeria. A few years ago there were 11 of them, but after the Fukushima disaster, Oman, Qatar, and Kuwait put their nuclear plans on hold for an unspecified period. However, since 2014, cash has dwindled, thanks to the oil price rout, and nuclear power projects need quite a lot of upfront investment. The Middle East is experiencing fast-growing demand for electricity that’s closely linked to demographic trends, as Saudi Gazette notes. But thanks to falling oil revenues, these countries’ capability to fund such expensive projects has sharply fallen. Even Saudi Arabia has had to dig into its reserves in order to meet a budget deficit. Financial constraints are a major issue, according to research conducted by Apicorp, the Arab Petroleum Investment Corporation.
Offshore wind turbines can generate power cheaper than that from the planned Hinkley Point nuclear power plant (NPP) in the UK, even when transmission and balancing costs are included, Greenpeace’s Energydesk says. Danish state-owned utility Dong Energy earlier in July won the concession to build the Borssele I and II wind farms in Dutch waters, each of 350 MW, offering to sell the power at just EUR 72.7 (USD 80) per MWh. An analysis by Energydesk shows that this translates into GBP 60/MWh at current exchange rates. When transmission costs are added to the calculation, the price per MWh for Dong’s projects arrives at GBP 85. It then climbs to a maximum of GBP 92/MWh with balancing costs. Meanwhile, Hinkley has been awarded a strike price of GBP 92.5/MWh in 2012 prices, so it is closer to GBP 100/MWh, according to Greenpeace. In a report focused on nuclear energy in the UK, published in July, the National Audit Office said: “Supporting early new nuclear projects could lead to higher costs in the short term than continuing to support wind and solar. The cost competitiveness of nuclear power is weakening as wind and solar become more established.”
This week, like much of July, a heat wave is cooking America with extreme temperatures, affecting energy production as well as causing fires and water shortages, sucking electricity like crazy to power the cooling necessary to avoid discomfort and even death. According to the National Weather Service, 122 million Americans are under heat alerts. Fortunately, nuclear power hasn’t minded, scoring record capacity factors of 96% and up with no increase in price. Other energy sources do not fare so well. Just like during the polar vortex, when nuclear stepped up to relieve natural gas and coal when they failed to deliver on the demand, nuclear also performs wonderfully during extreme weather at the other end of the thermometer. This kind of constant baseload power during the hottest part of the day is essential to keep our air conditioning going and for stabilizing the grid against blackouts. Nuclear plants are the backbone of the electricity grid, operating all the time even under the most extreme weather conditions.
USA Today: Heat is on, but the power grid is holding
The retirement of coal and nuclear power plants in the U.S. over the last few years has raised concerns that the electric power industry might fail to deliver when demand for power heightens — such as during a blistering heat wave. But for the most part, that’s not the case this week as a so-called “heat dome” leaves the eastern and central parts of the U.S. sweltering with temperatures of 95 degrees or more and feeling as though it’s much hotter. “So far, so good,” said Michael Bryson, the vice president for systems operations at PJM Interconnection, the operator of the largest electric grid in the U.S. The story is similar across other regions to the north, south and west of PJM’s market where the massive heat wave has lingered, Bryson said in an interview. “They’re all in a similar position as us,” Bryson said of the other grid operators. “We’re kind of stressing the system a little bit, but all of us are in pretty good shape.” This comes as electric power generators continue to close coal and nuclear plants that cannot compete with low-price natural gas and government-supported solar and wind power. More such shutdowns are anticipated under the Obama administration’s Clean Power Plan, which would reduce carbon emissions from the U.S. power sector by 30% by 2030, compared with 2005 levels.
Sydney Morning Herald: Poland resists global shift away from coal
Poland may not be as economically developed as Britain, Germany, or France, but the country still has roughly 40 million people putting it in the top ranks of largest European countries. And Poland loves coal. The country produces 90 percent of its electricity from coal, and the government there is doubling down looking to build still more. “Building more efficient coal power plants will get us better results in cutting CO2 emissions than building renewable energy sources like wind or solar,” says Energy Minister Krzysztof Tchorzewski, a member of the Law and Justice party, came to power in October with union backing after it pledged to preserve mining jobs. All of this coal power is a double-edged sword. Coal has helped preserve more than 100,000 mining jobs across Poland, and the country’s economy is holding up about average for the EU as a whole. On the other hand, the use of coal is clearly having a detrimental effect on some aspects of Polish quality of life. For instance, the World Health Organization estimates that two-thirds of the EU’s most polluted cities are in Poland especially in the mining region of Upper Silesia.
Case studies of the consequences of force-feeding higher-priced energy sources into energy markets have been piling up for some time. Just a few months ago, US think tank the Manhattan Institute released a report titled Energy Policies and Electricity Prices: Cautionary Tales from the EU, authored by senior energy fellow Robert Bryce. Bryce found that the European nations that intervened the most in their energy markets — Germany, Spain, and Britain — had seen their electricity costs increase the fastest. “According to Eurostat, during 2005-14 residential electricity prices in the EU increased by an average of 63 per cent. In Germany, those rates grew by 78 per cent; in Spain, they increased by 111 per cent; and in the UK they rose 133 per cent. Over the same period, residential rates in the US rose by 32 per cent.” The Bryce study also cited a report by Swiss consulting firm Finadvice, which examined renewable energy policies in Europe and their effect on consumers. The Finadvice report concluded that “a correlation exists between the amount of variable renewable energy capacity that a country has (PV and wind) and its household electricity prices including taxes, levies and value-added tax”. The BP Statistical Review 2016 released last month highlights the indispensable role being played by fossil fuels in the provision of primary energy. The analysis showed that the share of fossil fuels in the provision of primary energy (electricity and transport) has barely changed in a decade. It has “slumped” from 87 per cent in 2005 to 86 per cent last year. The renewables share last year was just 2.8 per cent.
Denmark now produces over 40 percent of its electricity from wind. The country wants to get 50 percent of its electricity from wind by 2020 and 100 percent renewables by 2050. Despite this high wind supply, Denmark’s grid is more reliable than countries with lower percentages of renewables. So what’s Denmark’s secret to integrating high intermittent generation? The key, according to analysts, is steady policy commitment to clean energy that’s created a flexible grid of distributed energy resources interconnected across Europe. “The system operator and the whole energy system are constantly being developed to accommodate the fact that we are going away from fossil centralized production capacity to renewables,” said Troels Gregersen, Nordics energy expert at PA Consulting Group. National energy planning was central to this transition, according to Gerdes. In 1976, Denmark established a nationwide natural-gas system, required local heating, and shifted from oil to coal generation. In 1981, it added efficiency mandates. In 1985, Denmark targeted 100 megawatts of wind capacity with a grant program to support installation, followed by a 450-megawatt combined heat and power generation target in 1986. Denmark added an emissions reduction target of 20 percent by 2005 in 1990, and in 2012 established its 2050 fossil-free goal. As a result, Denmark became a global wind energy leader, installing nearly twice as much wind capacity per capita as any other nation, setting international records by producing 140 percent of its electricity demand on July 9 and 10 of this year, and generating 42 percent of its annual electricity supply in 2015. But surprisingly, integrating all this wind energy has been a breeze. “The grid operators are finding it hasn’t been as difficult as they thought it would have been,” said Gerdes. “Denmark with a much higher share of renewables…has much less downtime on the grids than we do.”
The world’s largest oil, coal, cement and mining companies have been given 45 days to respond to a complaint that their greenhouse gas emissions have violated the human rights of millions of people living in the Philippines. In a potential landmark legal case, the Commission on Human Rights of the Philippines (CHR), a constitutional body with the power to investigate human rights violations, has sent 47 “carbon majors” including Shell, BP, Chevron, BHP Billiton and Anglo American, a 60-page document accusing them of breaching people’s fundamental rights to “life, food, water, sanitation, adequate housing, and to self determination.” The move is the first step in what is expected to be an official investigation of the companies by the CHR, and the first of its kind in the world to be launched by a government body. The complaint argues that the 47 companies should be held accountable for the effects of their greenhouse gas emissions in the Philippines and demands that they explain how human rights violations resulting from climate change will be “eliminated, remedied and prevented.” It calls for an official investigation into the human rights implications of climate change and ocean acidification and whether the investor-owned “carbon majors” are in breach of their responsibilities.
Scientific American: Climate Change Fingerprints Are All over California Wildfires
Reports this week from the front lines of the Sand Fire in Southern California painted the scene as apocalyptic. The drought-fueled blaze was explosive, fast-moving and devastating, burning through 38,000 acres in the Santa Clarita Valley and forcing the evacuation of more than 10,000 homes. If the state’s wildfire season holds true to forecasts, the Sand Fire will be one of many catastrophic wildfires to scorch drought-stricken forests and shrublands across California this year. So far, only one wildfire has been larger — the 48,019-acre Erskine Fire, which started in June in the Sierra Nevada Mountains and destroyed 250 homes and buildings. None of the fires have been among the worst or largest wildfires the state has seen in recent years, but they’re part of a dire global warming-fueled trend toward larger, more frequent and intense wildfires. The number of blazes on public lands across the West has increased 500 percent since the late 1970s, said LeRoy Westerling, a professor studying climate and wildfire at the University of California-Merced. The outlook this summer is sobering: Wildland fire potential for most of coastal California and the Sierra Nevada Mountains is above normal and is expected to remain that way through October, according to the National Interagency Fire Center. The wildfire forecast follows a major heat wave in California, where the temperatures soared above 120°F (48.9°C) in some parts of Southern California. The region is seeing a significant warming trend. Each decade since 1970, average summer temperatures have warmed about 0.45°F (0.25°C).
The European Union’s climate-change agenda could lose momentum as a result of the bloc’s split with the United Kingdom, policy experts say. Wrangling over the terms of Brexit seems likely to delay the EU’s ratification of the Paris climate agreement, which aims to stabilize greenhouse-gas emissions, says Oliver Geden, head of the EU Research Division at the German Institute for International and Security Affairs in Berlin. “Brexit might be an excuse for some EU countries to withhold their signature,” he says. And because the United Kingdom has long been a proponent of strong climate policies within the EU bloc, the departure could strengthen the posi-tion of European countries that are reluctant to take forceful climate action. “The UK not being part of the negotiating mix means there is likely to be less pressure for ambitious targets and ensuring that the EU delivers on its Paris agreement commitments,” says Martin Nesbit, a policy expert at the Institute for European Environmental Policy in London.
National Interest: Poland, Not Brexit, Is the Real Threat to Europe’s Unity
Poland is now sidelined in the EU, subject to its rule-of-law mechanism following the ruling party’s assault on the Constitutional Tribunal. Polish leaders have soured relations with their hugely important neighbor, Germany, by railing against perceived German bullying of Polish interests. Poland’s reputation as a reliable European partner is tarnished after its leaders refused to cooperate on migration and climate change. Even President Obama, speaking at a press conference alongside Poland’s President Andrzej Duda during the recent NATO summit, called on Poland not to erode its democratic achievements. Once hailed as a success story of European expansion, the success and vitality of Poland’s democracy are being called into serious question for the first time since its emergence from the Cold War. Today EU watchers’ attention is focused on the fallout of the UK’s decision to leave the EU, so Polish democratic backsliding has fallen off the radar. But the EU is far less likely to survive the degradation of its norms by member states that were admitted a decade ago at great risk and expense for the union. The EU’s success depends not only on open trade and free movement, but on a common conviction that Europe cannot be divided along the lines of rule of law. Many observers fear that the UK’s departure from the union will inspire nativist parties in other countries to seek their own independence referenda. While this is a risk, the financial and political chaos surrounding the mechanics of Brexit—together with what could be a final agreement granting the UK access to the common market only in exchange for open borders and payments to the EU, à la Norway—will probably dissuade some imitators from following suit.
Nicola Sturgeon has claimed that independence may offer Scotland the greatest certainty and stability, and the maximum control over its own destiny, following the Brexit vote. The First Minister insisted another vote on breaking-up Britain was not her “starting point” and promised to explore all options to secure Scotland’s position in the EU. But she also said in a speech in Edinburgh that the outlook for the UK appeared to be uncertainty, upheaval and unpredictability while launching a blistering attack on the role of UK politicians in the vote last month. Setting out her next steps in protecting Scotland’s position, after it voted to remain, Ms Sturgeon said she would pursue a bespoke deal and claimed it was still possible to remain part of the EU and part of a Brexiting UK. But she also admitted that achieving such a deal would not be easy and said that even if it could be agreed at a UK level, the EU would then have to be persuaded to accept it. She told the Institute for Public Policy Research think-tank: “I am equally clear about this, if we find that our interest can’t be protected in a UK context, independence must be one of those options and Scotland must have the right to consider that option.”