9 ms·

A solution to current high power prices

32 points by guerby 4y ago

guerby 4y ago
"The right way to design tariffs is already used in the UK and France: real two-way “contracts for differences” where the generators get money from the public entity when prices are low, and pay back the difference between spot prices and their agreed price, when spot prices are high, like today. In France and the UK, this is providing a natural hedge to power prices and helps keep retail prices down. " On CfD: https://en.wikipedia.org/wiki/Contract_for_difference#Electricity_generation https://en.wikipedia.org/wiki/Contract_for_difference#Electr...
OrangeMonkey 4y ago
This seems unrealistic. The suggestion is to switch to 25 year contracts for a commodity? With current inflation uncertain and future inflation a pure guess and the consumption rate of these resources unknown in the future, I have no idea who would sign this statement. Europe literally just shut down LNG derivatives market and gave an emergency loan to the counterparties doing what is suggested because they are going bankrupt and can't fulfill their obligations. This doesnt make sense.
- makomk 4y ago
  The UK's CfDs are adjusted for inflation each year, so that's not an issue, and the cost of specific renewable energy installations is much more predictable than natural gas - most of the cost is paid up front to construct them in the first place. The difficult part is that there isn't really any market-based way to set the price after the fact; the way the UK does it is via a reverse auction where anyone whose bid is too high doesn't get to build their wind farm, and that obviously doesn't work if it's already built.
photochemsyn 4y ago
The most obvious solution to high power prices is a negotiated settlement in Ukraine and a lifting of sanctions on Russia - regardless of whether you like that or not for geopolitical or ideological reasons, that would bring power prices crashing down overnight. The next in line would be central banks and government bonds doing the quantitative easing, aka printing money, and delivering that money not to the private banks, but to the power consumers. This wouldn't lower power prices, however. Based on past actions of central bankers, this is the opposite of what they'd do (i.e. they'd demand IMF-style austerity programs in exchange for funding regional governments). Increasing shipments of fossil fuels to Europe from non-Russian sources as a means of reducing power costs is implausible, as global supplies aren't there - but I do notice that each LNG tanker being sent from the USA to Europe is immensely profitable for the suppliers, so maybe the plan is working out as intended? Fossil fuel profits on Wall Street have hit records lately, even surpassing those of the arms manufacturers supplying the ongoing war in Ukraine. Europe's in a very poor position between the USA and Russia, the former wanting to continue the war indefinitely (and to maintain sanctions) and the latter clearly pushing for a permanent division of Ukraine. Some people saw how all this would play out six months ago, however, here's there Jan 2022 prognosis: https://www.vortexa.com/insights/products/reality-check-on-russian-oil-and-gas-sanctions/ https://www.vortexa.com/insights/products/reality-check-on-r... Outcome: This would rather sanction the importers than Russia, as importers would have to scramble for alternative supplies, while Russia would find alternative buyers elsewhere. Potential hiccups in this rearrangement would put more harm on Europe, with consumers immediately feeling any price increase and delay in supplies...
- user432678 4y ago
  That solution might be obvious, but it is also obvious that negotiating settlement with terrorists is not a good idea in a long run.
  - sampa 4y ago
    current politics 101: name the people you don't agree with terrorists
    - qsort 4y ago
      Current politics 102: Pretend that a genocidal war of aggression waged by a terrorist state and involving several war crimes -- among which mass rape -- amounts to a minor disagreement over policy details.
      - zosima 4y ago
        Politics 101: Claim that your enemy is a genocidal aggressor madman and is devoid of all humanity. Real war 101: All sides commit horrible atrocities. Just stop it.
        qsort 4y ago
        Ah yes, all sides. Obviously. Is this satire? It doesn't matter that one side is waging aggressive war, doesn't it? It doesn't matter that only one side is murdering civilians and raping women doesn't it? How awfully convenient.
        YarickR2 4y ago
        zosima 4y ago
        This seems naive or even infantile. When USA invaded Iraq, ought we then also to have supported the Iraqi rebels? US soldiers committed some nasty war crimes, didn't they? Ukrainian soldiers have no doubt, committed nasty war crimes too. Modern war is horrible. When your friends are one second standing beside you, the next randomly blown up into a pool of flesh and blood, you can be certain there will be war crimes, because people break in that environment. It's not a Russian or American or Ukrainian thing.
iso1631 4y ago
The solution is to increase supply and reduce demand. You can use CFD to spread the risk but that just hides the actual problem, when demand is greater than supply, demand will be squashed with higher prices, and supply will be encouraged by higher prices. We need to be cutting supply of gas even more than Russia has forced due to climate change, that means increasing supply of non fossil fuels, rapidly and drastically (given that reducing demand by a significant amount isn't going to happen without major changes to lifestyle, which the left love, but people won't actually do)
- makomk 4y ago
  The problem is that the extra payments to renewable energy providers under the non-CfD model are a pure windfall for them that doesn't help to incentivise increased supply, since they're not likely to be there in a few years - consumers can't afford those energy prices and they go away once we have either a sufficiently big recession or sufficiently large amounts of renewable energy. Also, governments needed to subsidise the current renewable suppliers that are benefiting from the high prices in order to get them to build in the first place, so it made sense to structure that subsidy as a two-way CfD since letting them keep the extra has no real economic benefits and a whole bunch of extra potential cost for energy users and the rest of the economy.
  - tomatocracy 4y ago
    There is some effect on incentivising more supply to be built, but it's limited. Current higher prices are encouraging renewables developers to seek a smaller portion of generation to be covered by long-term PPAs/CfDs than they previously would have done. They are also making it easier to finance on that basis. The quantity of commercial PPAs available is limited by how much appetite there is for power from companies which are in a position to sign PPAs and how much downside power price risk they are willing to take. So this means that the limited "resource" of PPA counterparties can be used to cover more generation being built. This is relevant for projects which would not otherwise expect to secure CfDs. There's not really any similar constraint on government-backed CfDs though. I guess theoretically the quantity available could be limited by how much government appetite there is for taking downside power price risk but in reality CfDs are artificially constrained in each auction round to ensure that there is price competition.
fancyfredbot 4y ago
This 'solution' to high energy prices is already in place in France and the UK, but energy prices in both of those countries are very high.
- vladvasiliu 4y ago
  I don't know if it's still the case in the UK with Brexit, but in France and, I think, the whole of EU, electricity prices are pegged to gas prices [0]. They're looking to change this. [0] https://www.politico.eu/article/pressure-for-eu-level-intervention-in-energy-market-mounts-amid-soaring-prices/ https://www.politico.eu/article/pressure-for-eu-level-interv... In particular: Part of the problem is that the price of electricity is pegged to the price of the most expensive fuel required to meet demand for each day, called the merit order, which recently has been natural gas. And with Russia’s Gazprom curbing flows — paired with other global supply chain difficulties — the price of gas has risen to eye-watering levels, sending power prices soaring.
  - mmarq 4y ago
    That’s not a problem, nor an invention or the EU. It’s how all perfectly competitive markets work: price equals marginal cost.
  - fancyfredbot 4y ago
    I don't disagree, in fact I think that this is a natural consequence of free market pricing, but my point was that the OP says that in France the profits made from the high energy prices are flowing to the state entity and that this should solve the problem of high prices, but it doesn't seem to be doing that.
    - vladvasiliu 4y ago
      The thing in France is that the "state entity" (EDF) doesn't handle everything. It's not even fully "state" anymore. There has been a "liberalization" of the energy market for the end clients, and some have opted for "market pricing" from third-party companies. They're likely feeling the burn. In my case, my electric bill hasn't moved (my usage is fairly constant). I opted for the "state entity" and for the "regulated price". It's not entirely clear what will happen next year, though. Although there's talk about renationalizing the state entity, which would, probably, allow more lee-way to the state to control the prices. There's also talk about hurrying up the service of the stopped nuclear reactors. That could also help lower demand for gas, at least from the gas power stations that have to fill in the baseline, which should lower gas prices, hence electricity prices (via the peg). I'm unable to estimate the proportion of gas that has to fill in for nuclear compared to other uses. I admit I'm not very well versed in all this, so I may be missing something.
charlesdm 4y ago
The right way is to move away from gas and invest in renewables.
- whoooooo123 4y ago
  How will renewables power Europe when the sun isn't shining and the wind isn't blowing?
  - jl6 4y ago
    For renewables, read renewables+storage.
  - pjc50 4y ago
    How will gas power Europe when the Russians shut off the gas? If you want to go nuclear: OK, sure, so what do we use for power in the decade before the first plant comes online?
    - almost_usual 4y ago
      Well Europe is already invested in LNG. I imagine there will be more LNG terminals being built despite it not being great for the environment. Ex: https://www.seattletimes.com/business/germany-announces-new-lng-facility-in-move-away-from-russian-energy/ https://www.seattletimes.com/business/germany-announces-new-...
    - jules 4y ago
      The advantage of nuclear is that it will work almost certainly, albeit possibly at a high cost. We should continue to invest into wind and solar where that makes economic sense. On the off chance that a magic energy storage technology comes along we can then phase out nuclear again. However, betting the future of an entire continent on the coming into existence of such a technology is wildly irresponsible.
      - ben_w 4y ago
        None of the advantages of nuclear answer pjc50's question. > coming into existence of such a technology The tech already exists in multiple forms, the question is the logistics of expanding the deployment of that tech. The conclusion remains valid, betting on that is irresponsible, but the energy storage isn't magic.
fancythat 4y ago
Complicated solution for a "simple" problem. It will probably not work. Why not build more garbage incinerators instead? Proven, readily available technology, that can solve immediate danger of not having enough gas for heating. Unfortunately, EU is biased against it (https://zerowasteeurope.eu/press-release/european-parliament-steps-forward-to-stop-burning-eu-funds/ https://zerowasteeurope.eu/press-release/european-parliament...), maybe it is time to change that stance.
- DoingIsLearning 4y ago
  Burning garbage in a furnace is an obsolete technology with serious GHG emissions. The page you yourself link has a case study in Madeira island where garbage burning uses up 20% of funds for waste management but only deals with 1.4% of waste. With cheap and easy to roll out Solar and Wind these furnaces are an evolutionary dead end in energy policy.
  - fancythat 4y ago
    Solar and wind are great technologies that need impractical and eco-unfriendly batteries to become long term solutions. That doesn't mean that garbage burning cannot be augmented by wind and solar where there is opportunity for this. The argument for waste burning is quite simple: you are left without gas and you substitute what you don't have with what you have, in this case garbage. That doesn't automatically exclude other alternatives, but rather together with them, makes them more viable.
  - yakak 4y ago
    Um, the article I went to from the OPs links complains that the incinerator has too much capacity and uses nearly all available garbage on Madeira, so Madeira is missing recycling targets. Electricity being more valuable would imply even better economics.
dukeofdoom 4y ago
A while back I read that the technology for small nuclear reactors exists. Seems like emergency production and distribution of these would work.
sega_sai 4y ago
I can't comment on detailed economics, but but given this phrase "In France and the UK, this is providing a natural hedge to power prices and helps keep retail prices down" the rest of the article seems dubious to me, given how high prices are in the UK.
throwtheacctawy 4y ago
cool_dude85 4y ago
Why do we need the stupid market mechanisms at all? Government owned gas and electric monopolies, generation to the meter (heck, even extraction if the relevant reserves exist within the country), and a sizeable fuel fund to smooth out short term spikes. If the spikes are serious enough, you can run it at a loss for a while to keep people from freezing to death. All that and you get the benefit of oversight and democratic control of natural monopolies that deliver commodities that are necessary for day-to-day life in Europe. And nobody gets to make a profit from owning shares in the gas company. Sounds like a win-win.
- lazide 4y ago
  Good luck with that - it often quickly devolves into politicians using subsidies to curry votes and pointing fingers at the opposition for the inevitable brownouts and grid collapses. At least with a market folks will go bankrupt for suitably bad decisions, with gov’t nationalization, ‘the people’ end up getting both ends.
  - AshamedCaptain 4y ago
    The market may allow a "folk" to go bankrupt, but will not allow companies to go bankrupt. Cue re-nationalization of EDF the moment things hint at becoming tight for EDF. I'm quite sure the EC will eventually "force" France to re-privatize EDF again, but only as soon as there's profits to be made...
    - lazide 4y ago
      That’s because these aren’t real markets, they’re barely disguised monopolies with captured regulators putting on a show. Which is basically gov’t run power, albeit with less accountability since you can’t figure out who to vote out. Pretty convenient for those running it though!
    - makomk 4y ago
      The reason things were becoming tight for EDF in the first place was mainly that the French government made them sell electricity at below-market prices for political reasons though.
shp0ngle 4y ago
The most obvious solution is to produce even more stuff in China and kill all European industry. Problem solved
filleokus 4y ago
I always get a slight headache when I think of electricity prices and how one could improve the pricing mechanism. The marginal cost of production mechanism is resonable, it's basically how it works for any other market. Except that all electricity in a grid is basically infinitely fungible with zero transaction cost so all goods cost the same. But at the same time, it's something fundamentally different about hydro or nuclear compared to solar or wind. It will "always" work (except for maintenance etc). At least in Sweden it's not that uncommon for it to be dark (cold) and calm winds all over the country at the same time. The EU grid is somewhat connected, but the transfer lines doesn't have infinite capacity. Wouldn't it kinda make sense to have different markets, or some kind of derivate mechanism, that makes it profitable to either have base load power sources, or seldomly used fossil based power plant "backups"?.
- davedx 4y ago
  But a supply demand market already benefits baseload. When intermittent generators like wind are low output, prices increase, and nuclear makes more money
  - filleokus 4y ago
    Sure. But as consumers, I'm guessing we only accept intermittent generators given that baseload providers exist. It seems "unfair" that I can build a wind turbine and profit when the wind blows 80-90% of the time, causing me to be the marginal producer and heavily outcompete nuclear. And then during the critical hour/day/week when neither I, nor any other windmill can produce power, the expensive nuclear power plant has to come and save the day. Sure they'll get paid, but not enough to finance it the rest of the year. (The devil is of course in the dynamic details. How big is the correlation between output of different intermittent producers, how much can consumption reduce etc). I'm not sure I understand the lingo in TFA, but I think a similar (but probably worse) mechanism could be: All providers much sell "baseload" power, regardless of how it's produced. You sell yearly contracts on MW capacity. If you are a nuclear plant, you can just sell rated capacity. If you are a wind turbine, you have to hedge the risk of it not blowing. Either by buying baseload capacity from nuclear or some other reserve, buying batter power, or by over provisioning the amount of installed capacity etc.
pvorb 4y ago
What makes this even more absurd is that Germany currently has to produce electricity using gas in order to sell it to France, where nuclear power plants needed to be shut down because of low water levels in rivers. Without that, Germany wouldn't need very expensive gas for electricity at all at the moment and could rely on renewables and coal, which would lead to lower prices.
- delibes 4y ago
  If only it were the case that we hadn't caused massive climate change by burning fossil fuels, causing a severe drought across Europe, so that there were a shortage of simple cooling fluid for the nuclear power plants. If only we could've done see it coming and something...
  - imtringued 4y ago
    Frankly this has more to do with the fetish of building overly large nuclear power plants. They are usually far bigger than coal plants but they get connected to rivers of similar size.
RagnarD 4y ago
Uranium is a renewable resource from seawater (see, e.g., https://spectrum.ieee.org/uranium-from-seawater https://spectrum.ieee.org/uranium-from-seawater). It is, by far, the highest power density, cleanest, and safest source of power. The total waste generated (waste which France routinely recycles) from all nuclear power in the U.S. since commercial inception could fit into a volume of a football field with a height of about 10 yards (see https://www.nei.org/fundamentals/nuclear-waste https://www.nei.org/fundamentals/nuclear-waste) Small modular reactors are even safer and more economical and are ready to go. Only environmentalist irrationality has suppressed development of nuclear energy, and it's up to anyone who wants reliable electrical power to dismiss their propaganda and promote greatly increased adoption worldwide.
- BizarroLand 4y ago
  The paranoiac in me would easily lead me to believe that big oil propped up the anti-nuclear environmentalism of the 80's in order to eke out an additional 40-60 years of energy supremacy. I don't always listen to that kind of my own thinking, but it is plausible enough to me.
- kitkat_new 4y ago
  how is Uranium renewable?
  - RagnarD 4y ago
    Because there's an essentially unlimited amount that's recoverable from seawater and more is always being added into solution from rocks. I gave a link already to one article on extraction from seawater, it's easy to find much more about that.

32 points by guerby 4y ago

"The right way to design tariffs is already used in the UK and France: real two-way “contracts for differences” where the generators get money from the public entity when prices are low, and pay back the difference between spot prices and their agreed price, when spot prices are high, like today. In France and the UK, this is providing a natural hedge to power prices and helps keep retail prices down. " On CfD: https://en.wikipedia.org/wiki/Contract_for_difference#Electricity_generation https://en.wikipedia.org/wiki/Contract_for_difference#Electr...

OrangeMonkey 4y ago

This seems unrealistic. The suggestion is to switch to 25 year contracts for a commodity? With current inflation uncertain and future inflation a pure guess and the consumption rate of these resources unknown in the future, I have no idea who would sign this statement. Europe literally just shut down LNG derivatives market and gave an emergency loan to the counterparties doing what is suggested because they are going bankrupt and can't fulfill their obligations. This doesnt make sense.

makomk 4y ago
The UK's CfDs are adjusted for inflation each year, so that's not an issue, and the cost of specific renewable energy installations is much more predictable than natural gas - most of the cost is paid up front to construct them in the first place. The difficult part is that there isn't really any market-based way to set the price after the fact; the way the UK does it is via a reverse auction where anyone whose bid is too high doesn't get to build their wind farm, and that obviously doesn't work if it's already built.

photochemsyn 4y ago

The most obvious solution to high power prices is a negotiated settlement in Ukraine and a lifting of sanctions on Russia - regardless of whether you like that or not for geopolitical or ideological reasons, that would bring power prices crashing down overnight. The next in line would be central banks and government bonds doing the quantitative easing, aka printing money, and delivering that money not to the private banks, but to the power consumers. This wouldn't lower power prices, however. Based on past actions of central bankers, this is the opposite of what they'd do (i.e. they'd demand IMF-style austerity programs in exchange for funding regional governments). Increasing shipments of fossil fuels to Europe from non-Russian sources as a means of reducing power costs is implausible, as global supplies aren't there - but I do notice that each LNG tanker being sent from the USA to Europe is immensely profitable for the suppliers, so maybe the plan is working out as intended? Fossil fuel profits on Wall Street have hit records lately, even surpassing those of the arms manufacturers supplying the ongoing war in Ukraine. Europe's in a very poor position between the USA and Russia, the former wanting to continue the war indefinitely (and to maintain sanctions) and the latter clearly pushing for a permanent division of Ukraine. Some people saw how all this would play out six months ago, however, here's there Jan 2022 prognosis: https://www.vortexa.com/insights/products/reality-check-on-russian-oil-and-gas-sanctions/ https://www.vortexa.com/insights/products/reality-check-on-r... Outcome: This would rather sanction the importers than Russia, as importers would have to scramble for alternative supplies, while Russia would find alternative buyers elsewhere. Potential hiccups in this rearrangement would put more harm on Europe, with consumers immediately feeling any price increase and delay in supplies...

user432678 4y ago
That solution might be obvious, but it is also obvious that negotiating settlement with terrorists is not a good idea in a long run.
- sampa 4y ago
  current politics 101: name the people you don't agree with terrorists
  - qsort 4y ago
    Current politics 102: Pretend that a genocidal war of aggression waged by a terrorist state and involving several war crimes -- among which mass rape -- amounts to a minor disagreement over policy details.
    - zosima 4y ago
      Politics 101: Claim that your enemy is a genocidal aggressor madman and is devoid of all humanity. Real war 101: All sides commit horrible atrocities. Just stop it.
      - qsort 4y ago
        Ah yes, all sides. Obviously. Is this satire? It doesn't matter that one side is waging aggressive war, doesn't it? It doesn't matter that only one side is murdering civilians and raping women doesn't it? How awfully convenient.
        YarickR2 4y ago
        zosima 4y ago
        This seems naive or even infantile. When USA invaded Iraq, ought we then also to have supported the Iraqi rebels? US soldiers committed some nasty war crimes, didn't they? Ukrainian soldiers have no doubt, committed nasty war crimes too. Modern war is horrible. When your friends are one second standing beside you, the next randomly blown up into a pool of flesh and blood, you can be certain there will be war crimes, because people break in that environment. It's not a Russian or American or Ukrainian thing.

iso1631 4y ago

The solution is to increase supply and reduce demand. You can use CFD to spread the risk but that just hides the actual problem, when demand is greater than supply, demand will be squashed with higher prices, and supply will be encouraged by higher prices. We need to be cutting supply of gas even more than Russia has forced due to climate change, that means increasing supply of non fossil fuels, rapidly and drastically (given that reducing demand by a significant amount isn't going to happen without major changes to lifestyle, which the left love, but people won't actually do)

makomk 4y ago
The problem is that the extra payments to renewable energy providers under the non-CfD model are a pure windfall for them that doesn't help to incentivise increased supply, since they're not likely to be there in a few years - consumers can't afford those energy prices and they go away once we have either a sufficiently big recession or sufficiently large amounts of renewable energy. Also, governments needed to subsidise the current renewable suppliers that are benefiting from the high prices in order to get them to build in the first place, so it made sense to structure that subsidy as a two-way CfD since letting them keep the extra has no real economic benefits and a whole bunch of extra potential cost for energy users and the rest of the economy.
- tomatocracy 4y ago
  There is some effect on incentivising more supply to be built, but it's limited. Current higher prices are encouraging renewables developers to seek a smaller portion of generation to be covered by long-term PPAs/CfDs than they previously would have done. They are also making it easier to finance on that basis. The quantity of commercial PPAs available is limited by how much appetite there is for power from companies which are in a position to sign PPAs and how much downside power price risk they are willing to take. So this means that the limited "resource" of PPA counterparties can be used to cover more generation being built. This is relevant for projects which would not otherwise expect to secure CfDs. There's not really any similar constraint on government-backed CfDs though. I guess theoretically the quantity available could be limited by how much government appetite there is for taking downside power price risk but in reality CfDs are artificially constrained in each auction round to ensure that there is price competition.

fancyfredbot 4y ago

This 'solution' to high energy prices is already in place in France and the UK, but energy prices in both of those countries are very high.

vladvasiliu 4y ago
I don't know if it's still the case in the UK with Brexit, but in France and, I think, the whole of EU, electricity prices are pegged to gas prices [0]. They're looking to change this. [0] https://www.politico.eu/article/pressure-for-eu-level-intervention-in-energy-market-mounts-amid-soaring-prices/ https://www.politico.eu/article/pressure-for-eu-level-interv... In particular: Part of the problem is that the price of electricity is pegged to the price of the most expensive fuel required to meet demand for each day, called the merit order, which recently has been natural gas. And with Russia’s Gazprom curbing flows — paired with other global supply chain difficulties — the price of gas has risen to eye-watering levels, sending power prices soaring.
- mmarq 4y ago
  That’s not a problem, nor an invention or the EU. It’s how all perfectly competitive markets work: price equals marginal cost.
- fancyfredbot 4y ago
  I don't disagree, in fact I think that this is a natural consequence of free market pricing, but my point was that the OP says that in France the profits made from the high energy prices are flowing to the state entity and that this should solve the problem of high prices, but it doesn't seem to be doing that.
  - vladvasiliu 4y ago
    The thing in France is that the "state entity" (EDF) doesn't handle everything. It's not even fully "state" anymore. There has been a "liberalization" of the energy market for the end clients, and some have opted for "market pricing" from third-party companies. They're likely feeling the burn. In my case, my electric bill hasn't moved (my usage is fairly constant). I opted for the "state entity" and for the "regulated price". It's not entirely clear what will happen next year, though. Although there's talk about renationalizing the state entity, which would, probably, allow more lee-way to the state to control the prices. There's also talk about hurrying up the service of the stopped nuclear reactors. That could also help lower demand for gas, at least from the gas power stations that have to fill in the baseline, which should lower gas prices, hence electricity prices (via the peg). I'm unable to estimate the proportion of gas that has to fill in for nuclear compared to other uses. I admit I'm not very well versed in all this, so I may be missing something.

charlesdm 4y ago

The right way is to move away from gas and invest in renewables.

whoooooo123 4y ago
How will renewables power Europe when the sun isn't shining and the wind isn't blowing?
- jl6 4y ago
  For renewables, read renewables+storage.
- pjc50 4y ago
  How will gas power Europe when the Russians shut off the gas? If you want to go nuclear: OK, sure, so what do we use for power in the decade before the first plant comes online?
  - almost_usual 4y ago
    Well Europe is already invested in LNG. I imagine there will be more LNG terminals being built despite it not being great for the environment. Ex: https://www.seattletimes.com/business/germany-announces-new-lng-facility-in-move-away-from-russian-energy/ https://www.seattletimes.com/business/germany-announces-new-...
  - jules 4y ago
    The advantage of nuclear is that it will work almost certainly, albeit possibly at a high cost. We should continue to invest into wind and solar where that makes economic sense. On the off chance that a magic energy storage technology comes along we can then phase out nuclear again. However, betting the future of an entire continent on the coming into existence of such a technology is wildly irresponsible.
    - ben_w 4y ago
      None of the advantages of nuclear answer pjc50's question. > coming into existence of such a technology The tech already exists in multiple forms, the question is the logistics of expanding the deployment of that tech. The conclusion remains valid, betting on that is irresponsible, but the energy storage isn't magic.

fancythat 4y ago

Complicated solution for a "simple" problem. It will probably not work. Why not build more garbage incinerators instead? Proven, readily available technology, that can solve immediate danger of not having enough gas for heating. Unfortunately, EU is biased against it (https://zerowasteeurope.eu/press-release/european-parliament-steps-forward-to-stop-burning-eu-funds/ https://zerowasteeurope.eu/press-release/european-parliament...), maybe it is time to change that stance.

DoingIsLearning 4y ago
Burning garbage in a furnace is an obsolete technology with serious GHG emissions. The page you yourself link has a case study in Madeira island where garbage burning uses up 20% of funds for waste management but only deals with 1.4% of waste. With cheap and easy to roll out Solar and Wind these furnaces are an evolutionary dead end in energy policy.
- fancythat 4y ago
  Solar and wind are great technologies that need impractical and eco-unfriendly batteries to become long term solutions. That doesn't mean that garbage burning cannot be augmented by wind and solar where there is opportunity for this. The argument for waste burning is quite simple: you are left without gas and you substitute what you don't have with what you have, in this case garbage. That doesn't automatically exclude other alternatives, but rather together with them, makes them more viable.
- yakak 4y ago
  Um, the article I went to from the OPs links complains that the incinerator has too much capacity and uses nearly all available garbage on Madeira, so Madeira is missing recycling targets. Electricity being more valuable would imply even better economics.

dukeofdoom 4y ago

A while back I read that the technology for small nuclear reactors exists. Seems like emergency production and distribution of these would work.

sega_sai 4y ago

I can't comment on detailed economics, but but given this phrase "In France and the UK, this is providing a natural hedge to power prices and helps keep retail prices down" the rest of the article seems dubious to me, given how high prices are in the UK.

throwtheacctawy 4y ago

cool_dude85 4y ago

Why do we need the stupid market mechanisms at all? Government owned gas and electric monopolies, generation to the meter (heck, even extraction if the relevant reserves exist within the country), and a sizeable fuel fund to smooth out short term spikes. If the spikes are serious enough, you can run it at a loss for a while to keep people from freezing to death. All that and you get the benefit of oversight and democratic control of natural monopolies that deliver commodities that are necessary for day-to-day life in Europe. And nobody gets to make a profit from owning shares in the gas company. Sounds like a win-win.

lazide 4y ago
Good luck with that - it often quickly devolves into politicians using subsidies to curry votes and pointing fingers at the opposition for the inevitable brownouts and grid collapses. At least with a market folks will go bankrupt for suitably bad decisions, with gov’t nationalization, ‘the people’ end up getting both ends.
- AshamedCaptain 4y ago
  The market may allow a "folk" to go bankrupt, but will not allow companies to go bankrupt. Cue re-nationalization of EDF the moment things hint at becoming tight for EDF. I'm quite sure the EC will eventually "force" France to re-privatize EDF again, but only as soon as there's profits to be made...
  - lazide 4y ago
    That’s because these aren’t real markets, they’re barely disguised monopolies with captured regulators putting on a show. Which is basically gov’t run power, albeit with less accountability since you can’t figure out who to vote out. Pretty convenient for those running it though!
  - makomk 4y ago
    The reason things were becoming tight for EDF in the first place was mainly that the French government made them sell electricity at below-market prices for political reasons though.

shp0ngle 4y ago

The most obvious solution is to produce even more stuff in China and kill all European industry. Problem solved

filleokus 4y ago

I always get a slight headache when I think of electricity prices and how one could improve the pricing mechanism. The marginal cost of production mechanism is resonable, it's basically how it works for any other market. Except that all electricity in a grid is basically infinitely fungible with zero transaction cost so all goods cost the same. But at the same time, it's something fundamentally different about hydro or nuclear compared to solar or wind. It will "always" work (except for maintenance etc). At least in Sweden it's not that uncommon for it to be dark (cold) and calm winds all over the country at the same time. The EU grid is somewhat connected, but the transfer lines doesn't have infinite capacity. Wouldn't it kinda make sense to have different markets, or some kind of derivate mechanism, that makes it profitable to either have base load power sources, or seldomly used fossil based power plant "backups"?.

davedx 4y ago
But a supply demand market already benefits baseload. When intermittent generators like wind are low output, prices increase, and nuclear makes more money
- filleokus 4y ago
  Sure. But as consumers, I'm guessing we only accept intermittent generators given that baseload providers exist. It seems "unfair" that I can build a wind turbine and profit when the wind blows 80-90% of the time, causing me to be the marginal producer and heavily outcompete nuclear. And then during the critical hour/day/week when neither I, nor any other windmill can produce power, the expensive nuclear power plant has to come and save the day. Sure they'll get paid, but not enough to finance it the rest of the year. (The devil is of course in the dynamic details. How big is the correlation between output of different intermittent producers, how much can consumption reduce etc). I'm not sure I understand the lingo in TFA, but I think a similar (but probably worse) mechanism could be: All providers much sell "baseload" power, regardless of how it's produced. You sell yearly contracts on MW capacity. If you are a nuclear plant, you can just sell rated capacity. If you are a wind turbine, you have to hedge the risk of it not blowing. Either by buying baseload capacity from nuclear or some other reserve, buying batter power, or by over provisioning the amount of installed capacity etc.

pvorb 4y ago

What makes this even more absurd is that Germany currently has to produce electricity using gas in order to sell it to France, where nuclear power plants needed to be shut down because of low water levels in rivers. Without that, Germany wouldn't need very expensive gas for electricity at all at the moment and could rely on renewables and coal, which would lead to lower prices.

delibes 4y ago
If only it were the case that we hadn't caused massive climate change by burning fossil fuels, causing a severe drought across Europe, so that there were a shortage of simple cooling fluid for the nuclear power plants. If only we could've done see it coming and something...
- imtringued 4y ago
  Frankly this has more to do with the fetish of building overly large nuclear power plants. They are usually far bigger than coal plants but they get connected to rivers of similar size.

RagnarD 4y ago

Uranium is a renewable resource from seawater (see, e.g., https://spectrum.ieee.org/uranium-from-seawater https://spectrum.ieee.org/uranium-from-seawater). It is, by far, the highest power density, cleanest, and safest source of power. The total waste generated (waste which France routinely recycles) from all nuclear power in the U.S. since commercial inception could fit into a volume of a football field with a height of about 10 yards (see https://www.nei.org/fundamentals/nuclear-waste https://www.nei.org/fundamentals/nuclear-waste) Small modular reactors are even safer and more economical and are ready to go. Only environmentalist irrationality has suppressed development of nuclear energy, and it's up to anyone who wants reliable electrical power to dismiss their propaganda and promote greatly increased adoption worldwide.

BizarroLand 4y ago
The paranoiac in me would easily lead me to believe that big oil propped up the anti-nuclear environmentalism of the 80's in order to eke out an additional 40-60 years of energy supremacy. I don't always listen to that kind of my own thinking, but it is plausible enough to me.
kitkat_new 4y ago
how is Uranium renewable?
- RagnarD 4y ago
  Because there's an essentially unlimited amount that's recoverable from seawater and more is always being added into solution from rocks. I gave a link already to one article on extraction from seawater, it's easy to find much more about that.