This week we focus on the squabble between the UK and Austria over Hinkley Point, which could have far-reaching effects on UK energy security and on the future of nuclear power in Europe. Certainly if an EU member state can delay or stop construction of a nuclear plant in another EU member state simply because it doesn’t like nuclear then the future of nuclear in the EU is gloomy indeed (h/t to Hugh Sharman for the links):
Power Engineering: Austrian PM confirms Hinkley lawsuit to be filed shortly
Austrian Chancellor Werner Faymann has confirmed that his country will be registering its lawsuit against the European Commission for its approval of a subsidy deal to finance the Hinkley Point nuclear plant, within ‘a few weeks.’ The news will be a bitter blow to British plans to build the plant, with a legal counsel for the Austrian government earlier this week stating that the action will automatically stall development of the nuclear power plant for between five and eight years. “We have the suit ready and will bring it in a couple of weeks before the European Court. We are complaining against the European Commission’s decision to allow the UK state to finance the costly expansion of a nuclear power plant.” Faymann told Austria magazine he would not be intimidated by … threats. “It may well be that David Cameron, if he is re-elected next week, would have us in some form or difficulties. But we Austrians are known for our perspective on nuclear power. We have long been the Gauls in Europe who have fought alone against nuclear power – and we will now continue to fight against an incorrigible cynic like David Cameron holding inflammatory speeches in favour of nuclear power plants, we will now proceed with lawsuits.”
Power Engineering: UK threatens diplomatic war on Austria over nuclear power lawsuit
A diplomatic cable indicating repercussions for Austria if it doesn’t drop its opposition to the UK’s nuclear power project at Hinkley Point has been leaked to the mainstream media. UK ministers are warning their Austrian counterparts retaliatory messages will be instigated if Vienna goes ahead with plans to challenge an EU state aid decision approving subsidies for new nuclear reactors at Hinkley Point in Somerset. David Cameron’s government is applying pressure in the knowledge that an Austrian legal objection could prove very damaging for the country’s energy plan. Lawyers say that an appeal by Austria could take between three and four years, almost certainly delaying plans for the nuclear plant to produce 7 per cent of the nation’s electricity by 2023. Initial measures would include: a complaint to the European Court about Austrian electricity labelling rules, pressure for Austria to contribute more to EU effort – sharing funds when it does not accept nuclear power as a “sustainable energy source”, and an investigation into whether Austria’s suit violated the Euratom treaty. “Further steps and escalation cannot be excluded after the complaint has been submitted,” the cable says.
Stories below on oil, gas and fracking, Indonesia to rejoin OPEC, bladeless wind turbines, disintegrating Antarctic Ice sheets, virtual power plants in Germany, more Russian gas for UK, wind power doing badly in California, Pacific islands keeping pace with rising sea levels, the 2015 El Niño, Swansea Bay, coal plant shutdowns in US and how climate change makes pot more potent.
Wall Street Journal: OPEC Sees Oil Price Below $100 a Barrel in the Next Decade
The Organization of the Petroleum Exporting Countries doesn’t see oil prices consistently trading at $100 a barrel again in the next decade, a pessimistic assessment that has the group considering the return of production limits to influence the market, according to people familiar with a recent strategy report. The report predicted that oil prices will be about $76 a barrel in 2025 in OPEC’s most optimistic scenario, the people said, a reflection of the cartel’s worries that American competitors will be able to cope with low prices and keep pumping out supplies. It also contemplated situations where crude oil costs below $40 a barrel in 2025, the people said. A price of “$100 is not in any of the scenarios,” said a delegate at the OPEC strategy presentation last week in Vienna.
Trade Arabia: Indonesia set to rejoin Opec after 7 years
Indonesia’s energy minister said yesterday that President Joko Widodo agreed to a plan for the country to rejoin Opec, seven years after Southeast Asia’s biggest crude producer left the oil exporters group. “He fully agrees because we need to associate with the market,” said the Energy and Mineral Resources Minister Sudirman Said. “We are one of the biggest buyers, so naturally we should establish relations with producers, not only exporters,” he stated. Said revealed that Widodo also approved his request to attend a two-day Opec meeting on June 3. Opec’s statute stipulates … that any “country with a substantial net export of crude petroleum, which has fundamentally similar interests to those of member countries, may become a full member of the organisation, if accepted by a majority of three-fourths of full members, including the concurring votes of all founder members.”
Financial Times: Fracking could unlock 140bn barrels of oil worldwide, says report
The contentious drilling process known as “fracking”, blamed by some for causing earthquakes in the US, could unlock nearly 140bn barrels of new global oil supplies, an amount equivalent to Russia’s known reserves, says a study. Countries such as Iran, Russia, Mexico and China stand to gain most from exploiting techniques used by modern-day wildcatters in America’s shale revolution to breathe life into their ageing oil and gasfields, according to analysis by IHS, the research company. Its study raises the prospect of substantial new supply sources in coming years if the technology developed to extract hard-to-access reserves in the US is used to boost recovery from older assets elsewhere. Some two-thirds of the extra recoverable oil would be produced in the Middle East and Latin America, IHS has estimated.
MarketWatch: US shale oil output begins its descent
Oil production from seven major U.S. shale plays is expected to fall by a total of 86,000 barrels a day in June, according to a monthly report from the Energy Information Administration released Monday. The previous report released a month ago also showed a forecast for a fall of 57,000 barrels a day in May. Oil output at the Eagle Ford shale play in South Texas is forecast to see the biggest decline, down 47,000 barrels a day in June. The Bakken shale play, which stretches from Canada into North Dakota and Montana, is expected to see output fall by 31,000 barrels a day, the report said. That would follow forecast declines in both regions for the month of May. “The data shows that production in the Bakken and Eagle Ford [plays] peaked in March at 1.33 million barrels a day and 1.73 million barrels a day, respectively,” said James Williams, energy economist at WTRG Economics.
Wall Street Journal: Shale oil producers to raise output
After slashing the number of drilling rigs for months, U.S. shale-oil companies say they are ready to bring rigs back into service, setting up the first big test of their ability to quickly react to rising crude prices. Last week, EOG Resources Inc. said it would ramp up output if U.S. prices hold at recent levels, while Occidental Petroleum Corp. boosted planned production for the year. Other drillers said they would open the taps if U.S. benchmark West Texas Intermediate reaches $70 a barrel. WTI settled at $60.50 Wednesday, while global benchmark Brent settled at $66.81. “U.S. supply could quickly rebound in response to the recent recovery in prices,” said Tom Pugh, a commodities economist at Capital Economics. “Based on the historical relationship with prices, the fall in the number of drilling rigs already looks overdone, and activity is likely to rebound over the next few months.”
Market Realist: Natural gas inventories at record levels yet gas prices rise
On May 14, 2015, the EIA (U.S. Energy Information Administration) released its weekly report on gas in storage. The government data showed inventories increased by 111 Bcf (billion cubic feet) to 1,897 Bcf, up from 1,786 Bcf in the week ending May 8. Gas stocks were 752 Bcf greater than what they were last year and 38 Bcf less than the five-year average of 1,935 Bcf. A Bloomberg survey projected an increase of 117 Bcf for the week ending May 8. The lower-than-expected inventory increase supported natural gas prices. Prices rallied even though inventories are at record levels. This is a basic disconnect between supply and demand.
Utilities in the U.S. have to comply with the EPA’s new Mercury and Air Toxics Standards, also known as MATS, which took effect last month. This means that many coal power plants that don’t meet the new maximum emission thresholds are shutting down. So far this year through April, 4,600 megawatts of coal has been removed from the grid, and 7,700 MW are expected to follow suit during the remainder of the year, for a total of 12.3 gigawatts (not a small number, any way to slice it). This year’s closures will represent about 1/3 of all the coal shut downs since 2010. Sadly, the rate is expected to slow down after that, with 7,300 MW expected to go belly up in 2016, and another 7,000 MW planned between 2017 and 2022. Hopefully by then more will be added to the list. But with just what has already happened since 2012 and what is planned to 2022, the total reduction in U.S. coal power capacity will have been 46,000 MW!
Canada announced Friday it plans to reduce its greenhouse gas emissions by 30 percent below 2005 levels by 2030 amid international efforts to create a new framework for ad-dressing climate change. Prime Minister Stephen Harper’s Conservative government said it formally submitted its target to the United Nations Framework Convention on Climate Change ahead of the major climate change conference in Paris in December. Canadian Environment Minister Leona Aglukkaq said the new target is fair and ambitious and reflects the country’s economic circumstances. Aglukkaq said they would introduce new regulations on methane emissions produced by the oil and gas industry as well as for natural gas-fired power generation and for the chemical and nitrogen fertilizer industries. There was no mention of new regulations for Alberta’s oil sands industry, Canada’s fastest growing source of emissions.
Reuters: UK gas import dependence grows
Britain’s largest energy supplier Centrica has signed new gas contracts with two of the world’s largest producers, Russia’s Gazprom and Norway’s Statoil, reflecting the UK’s growing dependence on gas imports as its production declines. The Gazprom deal give Britain a much higher exposure to Russian-sourced gas and comes despite European Union pressure to reduce the region’s dependence on Russian gas due to frosty relations with President Vladimir Putin over the conflict in Ukraine. Gazprom’s supplies to Centrica will rise to 29.1 billion cubic metres (bcm) until 2021, compared with 2.4 bcm agreed in a three-year deal in 2012. On average of the six-year deal, Gazprom will provide roughly 9 percent of Britain’s gas needs, according to Reuters calculations.”Whatever we might want as Europe, we need to be very careful about being pragmatic about the realities of it,” Centrica Chairman Rick Haythornthwaite at the company’s annual general meeting two weeks ago. “I think it’s unrealistic to think that Russian gas is going to be replaced in the near-term.” Gazprom, Russia’s top natural gas producer, meets a third of EU gas needs.
Energy bills will rise even more than expected to pay for wind farms and solar panels be-cause ministers have underestimated the cost of green subsidies, a leading think tank has warned. Ministers are on track to overshoot a budget for renewable energy subsidies that is already due to reach £7.6 billion by 2020, the analysis by Policy Exchange finds. The subsidies are paid for through levies on consumer bills, which official estimates suggest will rise to £141 per household each year by the end of this decade if ministers stick within the Treasury-set spending cap. But the Department of Energy and Climate Change (DECC) has repeatedly overshot the budget and is likely to do so again unless ministers scale back their plans, Policy Exchange finds. Ministers are expected to award a new series of subsidy contracts for projects such as wind farms as soon as this autumn – but the analysis suggests there may be no money left to do so.
South Wales Evening Post: Cameron says Swansea Bay Tidal Lagoon can transform Swansea
The proposed Swansea Bay Tidal Lagoon has the power to ‘transform’ the region, Prime Minister David Cameron has declared. During a visit to the city today the Tory leader, who won a second term in office after his party swept to victory at the General Election with a near 40 per cent share of the vote, said the Conservatives had worked to put the £1 billion project at the top of the national agenda. Speaking exclusively to the Evening Post at the newspaper’s High Street headquarters, Mr Cameron added that he was excited by the potential of the project, which would involve the construction of a six-mile U-shaped seawall between the Tawe and Neath river channels. He said: “From the moment I heard about this project I have always been personally very keen on really examining it because it seems to me it has real transformational potential for Swansea — there’s obviously the energy side of it, the clean, green energy, but also the recreational transformation and economic transformation. I am excited by projects that can really transform.”
At the very least, those concerned about global warming and the green economy can take heart from the fact that David Cameron has not appointed a climate change sceptic as secretary of state for the Department of Energy and Climate Change (he has form). Amber Rudd says climate science is “compelling” and has spoken strongly of the need for a strong deal at a crunch UN summit in Paris in December. Rudd, MP for Hastings and Rye, frequently quotes Margaret Thatcher when asked about the Tory attitude to climate change. “The first world leader to speak about climate change at the UN was Margaret Thatcher and she of course was a scientist and the science is completely compelling. If I’m challenged on it by any of my own party – although I haven’t been – I would say ‘I’m a Thatcherite – aren’t you?’”
Climate Wire: Germany adds ‘virtual power plants’ to its grid
Virtual power plants (VPPs) for small, distributed power generation have become a fixture of Germany’s electrical grid. While their numbers remain in the low thousands, VPPs withstood a five-year trial period in the electricity market. Now, with falling battery prices, they are beginning to change the nature of the grid. Two studies by Germany’s Fraunhofer Institute have shown the technical feasibility, both on the power generation side and in terms of overall grid stability. Proponents say VPPs could be scaled up to provide the whole of Germany with a stable electricity supply from 100 percent renewable energy. They can serve both as a power reserve or as a balancing source that can keep the grid humming. Global clean technology markets specialist Navigant Research estimates that by 2023 the VPP sector’s annual revenue worldwide could reach $5.3 billion as VPP capacity quintuples, growing from 4,800 megawatts in 2014 to nearly 28,000 MW.
Is it the first signs of a serious problem for wind power generation? Data shows a significant drop-off of wind power sales in California due to warm weather, which caused a drop in wind velocities. Wholesale power sales from wind generators in California in the first quarter of this year fell an eye-opening 32.7% compared to sales in the first quarter of 2014. Forty-eight wind farms in California sold 1.304 million MWh of wind power in the California Independent System Operator market in the first quarter of 2015, compared to 1.936 million MWh sold in Q1 2014, according to data filed with FERC and other government agencies and compiled by Platts. Is it possible that wind farms that so many believe will help mitigate the warming of a changing climate will instead be impaired by that very same warming?
A Spanish company called Vortex Bladeless is proposing a radical new way to generate wind energy that will once again upend what you see outside your car window. Their idea is the Vortex, a bladeless wind turbine that looks like a giant rolled joint shooting into the sky. The Vortex has the same goals as conventional wind turbines: To turn breezes into kinetic energy that can be used as electricity. But it goes about it in an entirely different way. Instead of capturing energy via the circular motion of a propeller, the Vortex takes advantage of what’s known as vorticity, an aerodynamic effect that produces a pattern of spinning vortices. Vorticity has long been considered the enemy of architects and engineers, who actively try to design their way around these whirlpools of wind. Where designers see danger, Vortex Bladeless’s founders—David Suriol, David Yáñez, and Raul Ingeniero—sees opportunity. “We said, ‘Why don’t we try to use this energy, not avoid it,’” Suriol says. The team started Vortex Bladeless in 2010 as a way to turn this vibrating energy into something productive.
The last intact section of one of Antarctica’s mammoth ice shelves is weakening fast and will likely disintegrate completely in the next few years, contributing further to rising sea levels, according to a Nasa study released on Thursday. The research focused on a remnant of the so-called Larsen B Ice Shelf, which has existed for at least 10,000 years but partially collapsed in 2002. What is left covers about 625 sq miles (1,600 sq km), about half the size of Rhode Island. Larsen B is located in the Antarctic Peninsula, which extends toward the southern tip of South America and is one of two principal areas of the continent where scientists have documented the thinning of such ice formations. “This study of the Antarctic Peninsula glaciers provides insights about how ice shelves farther south, which hold much more land ice, will react to a warming climate,” said Eric Rignot, co-author of the study and a glaciologist at Nasa’s Jet Propulsion Laboratory in Pasadena, California.
The geological stability and existence of low-lying atoll nations is threatened by sea-level rise and climate change. Funafuti Atoll, in the tropical Pacific Ocean, has experienced some of the highest rates of sea-level rise (∼5.1 ± 0.7 mm/yr), totaling ∼0.30 ± 0.04 m over the past 60 yr. We analyzed six time slices of shoreline position over the past 118 yr at 29 islands of Funafuti Atoll to determine their physical response to recent sea-level rise. Despite the magnitude of this rise, no islands have been lost, the majority have enlarged, and there has been a 7.3% increase in net island area over the past century (A.D. 1897–2013). There is no evidence of heightened erosion over the past half-century as sea-level rise accelerated. Reef islands in Funafuti continually adjust their size, shape, and position in response to variations in boundary conditions, including storms, sediment supply, as well as sea level.
A petition calling for world leaders to address climate change and “drastically cut carbon emissions” received a big endorsement last week in Rome from the pope. Members of the Global Catholic Climate Movement met with Pope Francis May 6 while in Rome for planning meetings around the upcoming papal encyclical on the environment. During his weekly audience in St. Peter’s Square, they introduced their petition and asked for his blessing. “He was very supportive,” Tomás Insua, a Buenos Aires, Argentina, native and co-founder of the group, said in an email. “He even joked that we were competing against his encyclical before it was published.” The petition, released in late March and addressed to world leaders, reads: “Climate change affects everyone, but especially the poor and most vulnerable people. Impelled by our Catholic faith, we call on you to drastically cut carbon emissions to keep the global temperature rise below the dangerous threshold of 1.5°C, and to aid the world’s poorest in coping with climate change impacts.”
Weather Network: El Niño is here
Earlier this week, the Australian Bureau of Meteorology released a statement, saying that conditions in the equatorial Pacific Ocean had developed enough for their forecasters to confirm an El Niño for 2015. As of today, Thursday, May 14, NOAA – the US National Oceanic and Atmospheric Administration – issued their own updated forecast, stating that the weak central Pacific El Niño that had been called back in March had strengthened and spread towards the east, developing into a more “classic” El Niño scenario. As it stands now, NOAA forecasters give a 90 per cent probability that El Niño will persist at least through the summer months of 2015, and an 80 per cent chance that it will still be around by the end of the year.
Daily Climate: Climate change to make pot more potent
Global warming may give a minor twist to that classic hippie bumper sticker that quips “Acid rain: Too bad it’s not as much fun as it sounds.” Turns out a warming climate could boost the medicinal and psychoactive properties of plants including cannabis. One prominent researcher who specializes in weed migration patterns in the face of climate change said marijuana grown outdoors will likely become stronger and require less water to thrive. “If you go back to the times plants evolved on land, the average CO2 (carbon dioxide) levels were 1,000 parts per million; today it’s about 400,” said Lewis Ziska, a plant physiologist with the U.S. Department of Agriculture’s Agricultural Research Service. About 4 percent of plant species have adapted to lower CO2 levels, most of them subtropical grasses such as sorghum, corn and millet. However, most plants – including marijuana – still feel deprived of the optimal CO2 levels they were born into.