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Why has the price of electricity in Europe reached record highs?

economist.com

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Re: Why has the price of electricity in Europe reached record highs?

#131

Post by xxpor »

pfdietz wrote: post #24
gabaix wrote: post #15

Earlier quoted context omitted.

Building more nuclear helps de-risk wind droughts. This isn’t specific to nuclear; building more of a different kind mitigates the risk.

Not really. NPPs as backup to wind would be horribly expensive. Wind droughts don't happen often; even the current price during them would not make a NPP pay off. What would make sense is larger local stores of hydrogen, to be burned in combustion turbines during the rare wind outages.

We should probably prefer pumped hydro before stored h2.

Re: Why has the price of electricity in Europe reached record highs?

#132

Post by brabel »

bcrosby95 wrote: post #109
adrianN wrote: post #14

Earlier quoted context omitted.

But also in terms of cost? Nuclear power plants are not exactly cheap.

At this point nuclear is the most expensive per mw. And the vast majority of that expense is upfront. So almost no one wants to invest in these things because they're incredibly risky.

> they're incredibly risky.

Nuclear is risky?? I've heard the opposite, nuclear power plants tend to be extremely safe. You probably think it's risky because of 2 or 3 large scale accidents in the last 50 years or so. While those have a large impact, I don't think I would consider nuclear "extremely risky" just because of those.

Re: Why has the price of electricity in Europe reached record highs?

#133

Post by PeterisP »

jabl wrote: post #90
pfdietz wrote: post #18

Earlier quoted context omitted.

A NPP is an order of magnitude more expensive than a combined cycle power plant of the same power output. So even if electricity prices are high now because of gas constraints, that doesn't mean a NPP would have been a good idea. Europe should perhaps have diversified their gas suppliers, with more LNG.

> Europe should perhaps have diversified their gas suppliers, with more LNG. If climate change is supposed to be an existential threat, we shouldn't be doing major investments into fossil infrastructure. Anyway, if we spend all that money to build LNG infrastructure, like terminals, ships, and having contracts with suppliers etc. just for the few and far between situations where the price of LNG drops below Russian g…

One of considerations for LNG is that it's not purely an economic concern as from a country perspective energy independence might be considered just as important as climate change (in the short term) and it's worth paying some premium to secure it. Just as Europe has farming subsidy policies that essentially result in Europe paying a premium for food over what would be a "global market price" (importing more food from e.g. Africa and exporting less food), mostly in order to ensure long-term food supply independence.

Re: Why has the price of electricity in Europe reached record highs?

#134

Post by pfdietz »

modo_mario wrote: post #97
pfdietz wrote: post #45

Earlier quoted context omitted.

Absolutely. Hydrogen can be stored underground for maybe $1/kWh of storage capacity. There would also be power related costs, but those don't matter nearly as much for rare event backup. Germany alone has the potential to store an estimated 9.6 PWh of hydrogen, enough to supply their average electric power demand for years, not weeks. https://www.sciencedirect.com/science/article/abs/pii/S03603...

Creating hydrogen with excess power is really inefficient energy wise and also tips the scales of cost a lot.

Only a fraction of the renewable output would have to be routed through hydrogen, though. It turns out this is still cheaper than new nuclear for providing "synthetic baseload" supply, especially if one looks at projections of how much renewables should cost in the time it would take for any new nuclear plant initiated today to come online.

Re: Why has the price of electricity in Europe reached record highs?

#135

Post by ben_w »

dageshi wrote: post #126
modo_mario wrote: post #97

Earlier quoted context omitted.

Creating hydrogen with excess power is really inefficient energy wise and also tips the scales of cost a lot.

If the energy is basically free which under certain circumstances (lots of wind) could happen, does it matter how inefficient it is?

Depends how expensive the electrolyser is. Just because I did make something when I was 9 years old that could fill up a small jamjar with hydrogen, doesn’t necessarily mean it’s economically viable.

(I have no idea either way if this is an important limit or not. Just that it can have other sources of downside besides merely using otherwise wasted energy).

Re: Why has the price of electricity in Europe reached record highs?

#136

Post by xvedejas »

wffurr wrote: post #120
Arnt wrote: post #12

Earlier quoted context omitted.

Or, if you want: Not building twice as many (wind/anything) was a major mistake. Nuclear power plants fail sometimes, just like the wind fails. In 2016 almost a third of the plants in France were offline at the same time, some for planned maintenance, some unplanned, and the peak prices were higher than now. All these things are fixable by overbuilding enough. There's nothing special or magic about nuclear.

Can't overbuilding also increase prices because all those plants have capital costs that have to be paid for whether they produce or not?

The capital costs mean the plants cost more to run than they would otherwise, but this wouldn't necessarily factor into the price. There's no reason to pay more for extra energy that costs more, so adding a plant that charges even more than the market price would not be able to sell any energy: the market already provides for demand at a lower price. What might actually raise the price is plants going offline, or existing plants raising their price. These things will probably happen, but they could happen anyway regardless of whether new plants come online.

To attempt an analogy, if I put up a sign that I'm selling iPhones at $6000 each, that won't actually raise the prices of iPhones. That's because customers can already get enough iPhones from Apple, even though they complain that Apple sells them for too high a price too. My offer is just never an alternative, not until Apple raises their prices much much higher (or goes out of business).

Re: Why has the price of electricity in Europe reached record highs?

#137

Post by shakow »

fundatus wrote: post #128
shakow wrote: post #114

Earlier quoted context omitted.

> but my assumption is that they cannot carry enough power Right now ( https://www.electricitymap.org/zone/DE ), Germany is importing from France alone the equivalent of a bit under two French nuclear power plants at full power.

Might be, but in total Germany is a net exporter of electricity.

1. That's not the point, the point being to illustrate how interconnected the EU grid is.

2. Regarding your comment, I personally don't see Germany importing 72 gCO2/MW power to export 399 gCO2/MW power as a good thing for anyone but coal companies, but whatever floats your boat.

Re: Why has the price of electricity in Europe reached record highs?

#138

Post by fundatus »

gabaix wrote: post #15
Arnt wrote: post #12

Earlier quoted context omitted.

Or, if you want: Not building twice as many (wind/anything) was a major mistake. Nuclear power plants fail sometimes, just like the wind fails. In 2016 almost a third of the plants in France were offline at the same time, some for planned maintenance, some unplanned, and the peak prices were higher than now. All these things are fixable by overbuilding enough. There's nothing special or magic about nuclear.

Building more nuclear helps de-risk wind droughts. This isn’t specific to nuclear; building more of a different kind mitigates the risk.

> Building more nuclear helps de-risk wind droughts.

No, not at all. Nuclear is used for base loads, not to compensate fluctuating electricity production of other sources.

Re: Why has the price of electricity in Europe reached record highs?

#139

Post by pfdietz »

foepys wrote: post #98
Scoundreller wrote: post #47

Earlier quoted context omitted.

LNG gets expensive because it’s a globalize market. Cheaper to use pipelined Russian gas and try not to think too hard about the repercussions.

Considering what the US and Australia did to France a few days ago, the EU might not want to depend on LNG from the US. With Russia they know with whom they are dealing. France and Germany are the EU's most influential countries and the US is continuing to meddle in EU matters even after Trump left. From the EU point of view there is next to no change since Biden took office and now even France is questioning NATO.

LNG is a global market now, so one is not locked into LNG from just one supplier. It used to be that LNG required long term contracts, but there's enough sloshing around now that the market is more like oil.

Re: Why has the price of electricity in Europe reached record highs?

#140

Post by Retric »

shakow wrote: post #114
dan-robertson wrote: post #77

Earlier quoted context omitted.

French generation is ~70% nuclear (10% wind/solar) and German is ~10% (~40% wind/solar). Yet their prices track each other closely. So I think this explanation is too simplistic. Possibly there are large interconnects between the French and German grids levelling out wholesale prices, but my assumption is that they cannot carry enough power for this imagined scenario where nuclear makes a big difference.

> but my assumption is that they cannot carry enough power Right now ( https://www.electricitymap.org/zone/DE ), Germany is importing from France alone the equivalent of a bit under two French nuclear power plants at full power.

Germany is a net exporter of electricity to France 13.7TWh in 2017. But they trade a lot of power back and forth. https://www.agora-energiewende.de/fileadmin/Projekte/2018/Ja...
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