In today’s issue:
- The Vikings don’t want to pay for our green dream delusions
- Can renewables survive without interconnectors?
- Even nuclear cannot save us now
Germany’s green energy transition used to be held up as an example we should follow. Only President Trump was willing to be a critic of the Energiewende in public. He complained to the UN that Germany’s policies were making Europe reliant on Russia, while the US paid the bill for Germany’s national defence… from Russia.
It all went dreadfully wrong for the Germans in 2022. They became an example of what not to do. Unfortunately for them, in the precise way Trump had warned about: reliance on Russian gas.
Since then, it’s only got worse. Whether its price, emissions, geopolitics or grid instability, the Germans are now the posterchild of energy chaos. The term “Energiewende” is practically derogatory these days.
It’s so bad on the ground that Germany’s plan to dump coal was recently cast into doubt once again by the leader of the Greens himself.
What’s even more shocking is that ridicule is now acceptable. Not just in the media. Not just by Trump. Not just on social media. But among Europe’s governments!
The Financial Times had be spraying coffee all over my keyboard last week:
Norway campaigns to cut energy links to Europe as power prices soar
Country’s energy minister describes ‘shit situation’ as domestic prices hit highest level since 2009Norway’s two governing parties want to scrap an electricity interconnector to Denmark, with the junior coalition partner also calling for a renegotiation of power links to the UK and Germany, as sky-high prices trigger panic in the rich Nordic country. A lack of wind in Germany and the North Sea will push electricity prices in southern Norway to NKr13.16 ($1.18) per kilowatt hour on
Thursday afternoon, their highest level since 2009 and almost 20 times their level just last week. “It’s an absolutely shit situation,” said Norway’s energy minister Terje Aasland.
To be clear, cutting power links is direct sabotage of the EU’s energy policy. It relies on Nordic electricity as much as their oil and gas to function.
Never to be outdone by the Norwegians, the Swedes also know who to blame for their own power chaos. At one point, electricity prices in southern Sweden were 18,000% higher than in central Sweden!
The Swedish prime minister gave the German energy policy an absolute pasting as a result: ‘I realise that nobody is happy when I say that ‘if we hadn’t shut down half of nuclear power, we wouldn’t have these problems’. But it’s true and it needs to be said.’
‘I’m furious with the Germans,’ the government’s energy minister added. Just in case the Germans didn’t know who the Swedish PM was referring to.
The Swedes aren’t just hurling insults though. And they didn’t just have the foresight to stick with and expand their own nuclear power while the Germans shut down theirs. In June they also rejected a new power interconnector cable with Germany. Specifically because they knew the German electricity market was a mess thanks to renewables.
No doubt they’re laughing about the Norwegians’ delayed reaction as much as me. But don’t laugh too hard. Because it’s our power cables that the Norwegians are threatening to cut off.
Back in October, one such subsea power cable connection to Norway failed. We almost had a blackout in the UK as a result. An extraordinary amount of gas power came online in minutes to save us.
So the big question is whether the UK’s renewables-based system can function without such interconnections to Norway.
The renewables-based energy grid is based on the idea that you can rely on other people’s carbon free power when you need it. That’s how they make it look viable. By assuming the problem can be solved by someone else somewhere else on demand.
Unsurprisingly, the Norwegians don’t seem so keen to pay the price for this.
Where does this leave renewables in the UK? In the doldrums financially as well as physically, if you ask me.
Not that you should worry. Our government is planning on going nuclear to solve the problem.
Nuclear and renewables don’t mix
Sweden’s experience makes the precise point I’ve been trying to articulate for months now. Attach some nuclear power plants to a grid that is dominated by renewables and you still get plenty of chaos.
Nuclear is a solution that doesn’t fit the problem that renewables create. I compared it to bullets that don’t fit into a barrel – a very embarrassing historical experience for the Irish.
The instability of renewables is not well countered by nuclear because of its high fixed costs. Nuclear is only cost efficient if it’s running at full capacity. But renewables are built to the point of overcapacity and beyond. This means everything else on the grid has to cycle up and down to adjust for renewables’ perfidious nature.
Over in Australia, this is becoming the crux of the debate about nuclear. There’s been a lot of controversy about models that assume Australia’s potential nuclear power plants will only run at 60% capacity factor. Around 90% would be fairer.
But if you are planning on adjusting nuclear output for the intermittency of renewables, who knows what capacity nuclear will actually run at?
You’d have to ask the weatherman. And he gets enough blame as it is.
In addition to this, the key benefit of nuclear is that it doesn’t need the absurdly large grid and transmission infrastructure projects which a renewables-based grid does.
But if we have a lot of renewables and we’re going to build that grid infrastructure for them anyway, then what’s the point?
That’s what the Swedes and Norwegians must be asking themselves now. They got their own energy policy right. But now Germany’s ridiculous decisions are still blowing up their electricity bills.
Think about what this does to political incentives. Bad energy policy in one country causes problems in another.
It seems to me that only going to a nuclear-dominated system makes sense. Then you don’t need batteries, renewables or an electricity grid that amounts to the largest infrastructure project in history by a large order of magnitude.
But nobody is proposing that. It’s bizarrely fashionable to declare that the energy transition needs to be a diversified mix of power sources. It’s as if politics is controlled by financial interests in a long list of power industries…
We’re all too busy thinking about subsidies, projects and jobs to acknowledge the French elephant in the room. A nuclear-dominated grid that performs very well on the other side of the Channel.
Eventually, even Australia and Germany’s government will get the message on both nuclear and renewables. Perhaps when the Norwegians pull the plug on them. But at least they’ll get it. At last.
Here’s what you want to own when they do.
Until next time,
Nick Hubble
Editor, Fortune & Freedom
