electricity

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“I am convinced that the nuclear industry has a future, that it is a strength of our country.” The fact that Manuel Valls, the prime minister, had to make such a statement in the National Assembly in Paris two weeks ago is a dramatic indication of the depths of the problems the nuclear sector in France is facing. Read more

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The conflict at the heart of Germany’s energy policy is finally coming to a head. Can Germany claim to be an environmental leader while continuing to burn more coal than any other developed country apart from the US?

The issue is easier to describe than to resolve. Germany has led the EU in adopting “green” policies, including the promotion and subsidy of renewables. Energy consumers, including industry, have tolerated ever-rising energy costs. Electricity in Germany costs over 90 per cent more than in the US. The country has begun the process of closing its nuclear power stations — the last will be closed in 2022, although a vexed question remains over how the decommissioning will be paid for. Energy policy enjoys support across the political spectrum. The Green party won just 7.3 per cent of the vote in the last federal election but green ideas permeate the thinking of all the other parties. The grand coalition between the Christian Democrats and the Social Democrats is committed to reducing emissions by 40 per cent by 2020, 70 per cent by 2040 and 80 to 95 per cent by 2050. The whole plan is explained in a post by Mat Hope on the CarbonBrief website. The German approach is now being exported to Brussels with a determined effort under the new European Commission to shape an EU energy policy along the same lines. Read more

British Government Signs A Deal For New Nuclear Power Plant

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The election is over and against all expectations we have a clear result. When it comes to energy policy, however, the agenda will be set not by what the Conservative party has promised in its manifesto but by external events. A number of looming issues are already obvious and the government will have no control over most of them.

The first is the further postponement of the plans for nuclear development starting at Hinkley Point in Somerset. Two new reactors capable of supplying some 7 per cent of total UK electricity demand are planned. The first was originally supposed to be on stream in time to cook Christmas dinner in 2017. But despite the prospect of a lavish price — index linked for 35 years regardless of what happens to global energy prices – and £10bn of even more generous financial guarantees, funding for the investment required is not in place. The reluctance of investors to commit will not be helped by the technical problems in the reactor vessels, which are now under investigation by the French nuclear regulator. This problem has widespread implications for the companies involved (Areva and EDF) and for nuclear development in many countries across the world, starting with France itself. Read more

Ed Miliband’s comments on energy in his Labour party conference speech on Tuesday have profound implications for policy. The immediate focus will be on the suggestion of a price freeze lasting until 2017. The industry will no doubt focus on the implications of cutting profits and the question of what happens if world prices rise. Some might also suggest that a hard freeze will not only deter new investment, but also lead to some companies exiting the business with the net effect of reducing competition. Mr Miliband clearly believes there is profiteering but he has not published the evidence. The Labour leader should and there needs to be a full competition inquiry. It may well be that if there is profiteering a price freeze is not the only nor the best solution. Read more

Those despairing of the lack of progress in managing climate change or the absence of practical and realistic energy policies in so many countries should take a look at the work being done by some of the world’s great universities.

In Durham, the Energy Institute has focused on the societal aspects of changes in energy technology. One of their main projects is to look at the role and potential of smart grids. Thanks to advances in IT, smart grids now offer the prospect of managing the distributed production and use of power in ways which will transform the economics of the whole sector. Smart grids create automatic processes which can help both businesses and households not only manage what they use but also to become producers themselves –selling power into the grid. Read more

The rumours that Vladimir Putin is about to replace Aleksey Miller as the chief executive of Gazprom continue to swirl around the markets across Europe. As usual it is hard to know what is true and what is dreamt up by Mr Miller’s enemies. Removing Mr Miller would not, however, solve Gazprom’s problems. What the company really needs is a new strategy. What should it be. ? Read more

For an interesting and creative perspective on the changes that are occurring in the energy sector take a look at the material being put out by Alexa Capital. Alexa is the brainchild of Bruce Huber the long-term guru of the renewables business at Jefferies.

To illustrate what the report is about let’s start with a question – why has the power sector, particularly in Europe, lost so much of its value when electricity demand (other than from nuclear generation) continues to rise? Read more