EU’S ENERGY TRANSITION PLAN
SHOWS ITS WEAKNESS Even before the Ukrainian invasion by Russia, Perret Associates were raising their doubts on the feasibility of the EU energy transition, in particular its speed. The recent events since the beginning of 2022 have exposed in our view the weaknesses and inconsistencies of such plans.
Wind generation might already be reaching its limits, with investment in wind and solar generation capacity lagging behind initial plans. .
For instance, in Germany, which has been one of the leading countries in the development of wind power, the commissioning of fresh wind generation capacity has levelled off in recent years. Standing at just 12GW in 2002, it more than doubled to 26.8GW in 2010. It doubled again by 2017 to 56GW. Since then, the growth in capacity has fallen significantly, averaging just 3.3% during 2018-21. The construction of some wind turbines has been postponed due to COVID but this slowdown had already started before the pandemic.
Even more crucially, actual generation from wind and solar has remained below initial forecasts so far. Wind generation in Germany dropped by 13.6% in 2021 compared with 2020, at 114.6TWh, despite a 4.1% (2.5GW) increase in capacity of 2.5GW.
On that note it is worth reiterating that in 2021 the few remaining nuclear plants generated on average 8.05TWh of electricity per GW of installed capacity. The ratio was at 4.95TWh per GW for lignite and 3.2TWh per GW for hard coal. But it was at only 1.8 TWh per GW for wind and 0.9TWh per GW for solar.
In what might be seen as a bold move, Germany intends to shut down precisely the three most efficient electricity sources (nuclear, hard coal and lignite) during the period 2022-30 and replace them with two of the least efficient (wind and solar).
The recent events in Ukraine don’t seem to have yet derailed this long-term strategy. The German government has announced it was too late and would not be economically interesting to delay the closure of the last 3.1GW of nuclear capacity scheduled in December 2022.
German nuclear generation was still at 61TWh in 2020 and in fact recovered to 65.3TWh in 2021 (up 6.9% y-o-y) due to the lack of wind generation and the uncompetitiveness of gas. One can only imagine how high European power, coal and gas prices could have gone in October 2021 or in February 2022, had Germany already shut down its entire nuclear fleet.
11 | ADMISI - The Ghost In The Machine | Q1 Edition 2022
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32
