By David Boles

A long term effect on the price of carbon has evolved from the nuclear situation in Fukushima Dai-ichi, and has yet to be played out. German power prices jumped to the highest level in almost 2 years on Monday(rising 6.8% on the front year contract) when Merckel alluded to a shift away from Nuclear power, after electoral defeat at the hands of the Greens. If we take RWE( large player in European Utility market) as an example, they own two of the 7 Nuclear facilities closed by Merckel, which account for 35% of the country's 20.7 gigawatts of Nuclear power capacity. In 2010, RWE produced 164.9m³ of CO_2. At current EUA Dec '13 future prices, this translates to a cost of €3.17 bn to cover their Carbon mandate in 2013. This figure will increase dramatically if their 2 nuclear plants are to close due to this power output being replaced by fossil fuels. This figure will increase dramatically if their 2 nuclear plants are to close permanently. The cost to the utilities will be reduced if the jump in power prices experienced this week is sustained.

The shortfall in power if nuclear plants remain closed is likely to be filled by a number of gas fired power stations that were put on hold when Merckel stretched the life cycles of nuclear plants last autumn out to 2035. Utilities have already moved on the changing energy landscape in Germany, Bremen Local Utilities last week said they will build a 445MW gas turbine plant to be ready for production by 2013. Gas is favourable over other fossil fuels as it produces less than half the CO₂ of coal. Another added benefit to gas generation is its ability to be switched on and off quickly. This fits well with renewable generated electricity and their reliance on favourable weather patterns. Some analysts are predicting the role of 'bridging technology' (from fossil to renewables) that was once Nuclear's domain will now be replaced by gas. The fact that gas already has substantial infrastructure in place and ample supply is likely to support this theory.

Nuclear is not giving up without a fight and local media are reporting that EON and RWE are initiating legal proceedings, to counter any measures for the immediate closure of their nuclear plants. The French Government, so far have appeased any calls to shut any of their nuclear power load. Nuclear energy in France accounts for a much larger share of their energy mix, accounting for 80% of their electricity needs. This is comparable to a figure of 45% for Germany and 18% for the United Kingdom. The French are married to nuclear but the debate to exit Nuclear will no doubt heat up and all this will undoubtedly affect the European Energy and Emission landscape for some time to come.

OTHER NEWS:

• The US fall two places behind China and Germany for Renewable investment in 2010.
• On Tuesday the 29^th of March Californian legislators passed a bill, requiring utilities to produce one third of their energy needs from renewable sources.
• Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland and Romania following a European Commission decision on Tuesday can now allocate free allowances to their power producers until 2019. This measure is to allow these Nations to modernise their power output.
• A Chinese airline has joined 3 American airlines in litigation proceedings against the European Commission over their Carbon mandate under the EU-ETS.

"I'd put my money on solar energy… I hope we don't have to wait til oil and coal run out before we tackle that."

—Thomas Edison, in conversation with Henry Ford and Harvey Firestone, March 1931

By David Boles

A long term effect on the price of carbon has evolved from the nuclear situation in Fukushima Dai-ichi, and has yet to be played out. German power prices jumped to the highest level in almost 2 years on Monday(rising 6.8% on the front year contract) when Merckel alluded to a shift away from Nuclear power, after electoral defeat at the hands of the Greens. If we take RWE( large player in European Utility market) as an example, they own two of the 7 Nuclear facilities closed by Merckel, which account for 35% of the country's 20.7 gigawatts of Nuclear power capacity. In 2010, RWE produced 164.9m³ of CO_2. At current EUA Dec '13 future prices, this translates to a cost of €3.17 bn to cover their Carbon mandate in 2013. This figure will increase dramatically if their 2 nuclear plants are to close due to this power output being replaced by fossil fuels. This figure will increase dramatically if their 2 nuclear plants are to close permanently. The cost to the utilities will be reduced if the jump in power prices experienced this week is sustained.

The shortfall in power if nuclear plants remain closed is likely to be filled by a number of gas fired power stations that were put on hold when Merckel stretched the life cycles of nuclear plants last autumn out to 2035. Utilities have already moved on the changing energy landscape in Germany, Bremen Local Utilities last week said they will build a 445MW gas turbine plant to be ready for production by 2013. Gas is favourable over other fossil fuels as it produces less than half the CO₂ of coal. Another added benefit to gas generation is its ability to be switched on and off quickly. This fits well with renewable generated electricity and their reliance on favourable weather patterns. Some analysts are predicting the role of 'bridging technology' (from fossil to renewables) that was once Nuclear's domain will now be replaced by gas. The fact that gas already has substantial infrastructure in place and ample supply is likely to support this theory.

Nuclear is not giving up without a fight and local media are reporting that EON and RWE are initiating legal proceedings, to counter any measures for the immediate closure of their nuclear plants. The French Government, so far have appeased any calls to shut any of their nuclear power load. Nuclear energy in France accounts for a much larger share of their energy mix, accounting for 80% of their electricity needs. This is comparable to a figure of 45% for Germany and 18% for the United Kingdom. The French are married to nuclear but the debate to exit Nuclear will no doubt heat up and all this will undoubtedly affect the European Energy and Emission landscape for some time to come.

OTHER NEWS:

• The US fall two places behind China and Germany for Renewable investment in 2010.
• On Tuesday the 29^th of March Californian legislators passed a bill, requiring utilities to produce one third of their energy needs from renewable sources.
• Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland and Romania following a European Commission decision on Tuesday can now allocate free allowances to their power producers until 2019. This measure is to allow these Nations to modernise their power output.
• A Chinese airline has joined 3 American airlines in litigation proceedings against the European Commission over their Carbon mandate under the EU-ETS.

"I'd put my money on solar energy… I hope we don't have to wait til oil and coal run out before we tackle that."

—Thomas Edison, in conversation with Henry Ford and Harvey Firestone, March 1931