MorganEnergy

While EdF is still talking about investing in the UK, and British Energy blusters about how it doesn’t need foreign help to build new power stations, the French energy giant is busy diversifying its risks.

Earlier this week EdF increased its stake in US-based Constellation Energy, and is expected to invest further in the coming years. EdF is, of course, in the general business of electricity generation and retail around the world. However, its specific interest in Constellation is tied to UniStar, a joint venture between the two companies intended to develop, you guessed it, a new generation of nuclear power stations in the USA.

Last weekend the technorati and venture capitalists of the world gathered together here in Silicon Valley to discuss business opportunities at the annual SciFoo event. One of the hot topics this year was renewable energy. Nature has a long article following on from this, which is sadly subscriber only. However, Oliver Morton has summarized some of the conclusions on this blog.

My own view on this is that what really matters is not what is technologically feasible or economically feasible, but what is politically feasible. Attempts at introducing renewable generation too often founder when faced with NIMBYist protests against the generation itself, or the transmission enhancements needed to bring that power to market. It has become abundantly clear that we humans, as a species, want electrical power, and want to save the planet, but both of those things have to come without the cost of having wind turbines and transmission lines in our own back yards.

From that point of view, I am particularly encouraged by the solar roofs program being run by SCE, in that the installations are often invisible except from the air, and are located right where the power is needed.

Update: PG&E has recently announced plans to construct an 800 MW solar plant. That’s serious generation.

Other people’s commentary on the blackout anniversary can be found at the following sites:

• Knowledge Problem
• Wall Street Journal

Five years on from the great East Coast blackout of 2003, Scientific American revisits the issue and asks is we are any closer to finding a cure for such occurrences. Worryingly, despite all of the talk of reliability standards and smart grids, it appears that we are not:

If the standards have reduced the number of blackouts, the evidence has yet to bear it out. A study of NERC blackout data by researchers at Carnegie Mellon University in Pittsburgh found that the frequency of blackouts affecting more than 50,000 people has held fairly constant at about 12 per year from 1984 to 2006. Co-author Paul Hines, now assistant professor of engineering at the University of Vermont in Burlington, says current statistics indicate that a 2003-level blackout will occur every 25 years.

You can find the original research here (Look for the paper called “Trends in the History of Large Blackouts in the United States”.). A password is required, but it is relatively straightforward to obtain. And the conclusions of the paper are actually somewhat stronger than Scientific American reports. By some of the measures used, the frequency of blackouts is actually increasing slightly.

High oil and gas prices are forcing electricity prices up across the US. Now one state regulator has decided to take action. The Louisiana Public Service Commission has declared an “energy emergency”. Under a special state law, the PSC is able to make such declarations when it believes that utility bills are becoming too burdensome for citizens. The state’s four investor-owned electricity utilities will now be required to implement deferred payment plans for low-income customers to help ease the pain of rocketing bills. More details from Platts.

It appears that the Senate has taken an interest in the Lake Erie Loop scam. According to Mike Giberson of Knowledge Problem, Senator Charles Schumer of New York has asked FERC to investigate the issue. Giberson supports this call, and we agree. This was a clear case of traders pushing up costs by doing something that would never be done in normal operation, and which could have been avoided. Because the scam involved exploiting seams between two RTOs (NYISO and PJM), FERC is the only regulatory body that can actually look at the issue. It will be interesting to see how this plays out.

Various rumors continue to leak out regarding the on-off sale of British Energy. Energy Business Review claims that Centrica is still trying to find a partner to boost its offer for the nuclear generator. More recently the Financial Times reported that Centrica is considering adding a £4bn cash component to its merger offer. British Energy shareholders, including the UK government, are believed to prefer cash to shares.

However, the FT also notes that EdF continues to be the preferred buyer for Mr. Brown and his government. Even the normally fiercely patriotic Daily Telegraph is prepared to accept a sale to the French on the grounds that the only viable alternative would be importing more energy from countries such as Russia and Algeria.

Unfortunately for Mr. Brown, EdF seems unwilling to buy at the price he, and other major BE shareholders, appear to want. And the more desperate the British become, the more likely it is that EdF will stick to its guns and refuse to spend more than it wants. After all, as the International Herald Tribune points out, there are plenty of other options for investment around the world. Interest in nuclear generation is booming in many parts of the globe. Britain might be conveniently just across the water, and also home to a large EdF-owned retail business, but the USA, China and South Africa are all promising investment targets. The IHT also notes that EdF does not want to become dependent wholly on nuclear generation. The company needs peaking plant as well, and the recent merger of Gaz de France with Suez is a major threat to EdF’s gas-related business.

All in all, it doesn’t look like there will be any movement on the British Energy sale any time soon, which probably means that a new deal will be announced tomorrow.

Still traveling. In the meantime, here is a post by Dr. Sioshansi on Chinese electricity shortages courtesy of EU Energy Policy.

Much traveling going on here again, but in the meantime please check out this interesting post from Michael Giberson at Knowledge Problem which explains how cunning traders were using inventive schedules to artificially create congestion between PJM and NYISO. Estimates of the amount of money milked from the system range as high as $290 million. Ouch.

Wave power took a significant step forward last week when the Scottish Energy Minister, Jim Mather, officially switched on a prototype 100kW turbine on the coast of Islay. The generator belongs to WaveGen, and small versions of the plant, named “Limpet”, have been operating since late 2000. The new protoype is being tested in advance of a planned 4 MW plant to be built at Siadar Bay on the Isle of Lewis.

Unlike other proposed wave generation systems, the Limpet does not bob around in the water but, as its name suggests, clings to the rocky shore line. The action of the waves forces air in and out of the turbine chamber, and the turbine usefully generates power from air movement in both directions. The plant is enclosed in a concrete bunker that is small and anonymous enough to please all but the most ardent environmentalist, and because it is on shore it is easy to service and connect to the grid.

More information is available from the Wavegen brochure (PDF) and npower’s web site for the Siadar Bay project. The BBC has a video report from the Islay site.