Renewable energy has been on a tear the past few years, with growth in many countries spurred by subsidies for
wind and solar power. Now the heads of 10 European utility companies
say EU subsidies should end, because they've got more renewable
energy than they know what to do with.
The 10 CEOs in question, who refer to themselves as the Magritte
group because they first met in an art gallery, represent companies
that control about half the power capacity of Europe. The group gave
a press conference today—
Reuters says that 10 such executives
giving a joint public statement is “unprecedented”—to hammer
home a message they’ve been trumpeting ahead of an EU energy summit
in 2014: There’s too much energy capacity, which has driven prices
down so far that they can’t make any money.
As long as there are nukes or coal plants, there’s too much capacity.
European utilities need to get on with things like Continue reading →
Tomorrow is the second anniversary of the earthquake and tsunami
that heavily damaged four of the six nuclear reactors at
Fukushima Dai-ichi in Japan on 11 March 2011, also known as 3/11.
The broken reactors at Fukushima continue to leak radioactive substances into
groundwater, the sea, and the air, where it is carried across oceans
to the U.S. and elsewhere.
And it could still get much worse:
if the No. 4 reactor pool, still suspended in the air, collapses and causes
the disintegration of spent fuel rods from all the other reactors there,
Tokyo, 200 miles away, will have to be evacuated.
Fukushima’s GE reactors are the same GE Mark I design as Southern Company’s
Plant Hatch 1 and 2 only 100 miles from here at Baxley, GA,
and about 200 miles from Atlanta and Charleston.
Hatch
is leaking radioactive tritium into our groundwater again.
Five more reactors
within 500 miles of here
are also GE Mark I.
Among the 311 or so facebook pages and websites about Fukushima
or against nuclear power is this concise one,
Unplug Nuclear Power,
which offers a simple action anyone can take tomorrow:
On 3/11, we will mark Fukushima day by using as little utility
supplied electricity as possible. This direct Action is designed to
punish the utility companies for continuing to push for nuclear
power even after the Fukushima disaster has proven that it is just
too dangerous. On that day, we will punish them in the only way that
they understand, by denying them our money. There will be four
levels of participation, go to the website,
www.unplugnuclearpower.com for a more complete description. Also, be
sure to join the Event. Finally, if you are in a group our
organization that can endorse this Action, please let us know.
In Europe it’s already happening: solar and wind are causing
bond-rater Moody’s to warn of downgrades of energy companies
that depend on heat from burning coal, gas, or biomass.
Moody’s earlier even warned the Bank of England
of a potential carbon bubble developing.
If combustion energy plants are affected like this,
the credit effects will be even bigger on even-more-expensive
nuclear plants, which Moody’s called a
bet-the-farm risk way back in 2009.
“Large increases in renewables have had a profound negative impact
on power prices and the competitiveness of thermal generation
companies in Europe,” said Scott Phillips, an assistant vice
president and analyst at Moody’s Infrastructure Finance Group, in a
statement.
“What were once considered stable companies have seen their business
models severely disrupted and we expect steadily rising levels of
renewable energy output to further affect European utilities’
creditworthiness.”
We saw that two out of three of the most profitable electric utilities in the world emphasize solar and wind energy: ENEL of Italy and Iberdrola of Spain, both of which operate in multiple countries, including Iberdrola claiming second most wind power in the U.S. Well, maybe those companies are small, so their profits are a fluke. Nope. We get similar results for profits divided by market cap:
ENEL of Italy is still number 1, with no nuclear and a lot of solar and wind energy. Iberdrola is #4 in profits/market instead of #3 in profits alone. However, Electricité de France (EDF) is #7 instead of #2, and Exelon is #9 instead of #4. Number 2 is Energias de Portugal (EDP), which is heavily into wind power including owning Horizon Wind Energy LLC:
Which are the most and least consistently profitable electric utilities in the world? Hint: the biggest losers all lost on nukes. But the biggest winners may surprise you.
Following up on Southern Company CEO Thomas A. Fanning’s brag that “We are a great, big company from an energy production standpoint,” I looked in the Forbes Global 2000 to see which are the biggest electricities in the world. Indeed, Southern Company (SO) is the biggest in the U.S. and number 6 in the world for 2012. But what about the rest, and what about previous years? Here’s a graph of profits for the top 40 electric utilities from 2006 through 2012. SO is the blue line muddling along in the middle:
Profits Graph by John S. Quarterman from
What’s that dark red line dropping way below the rest? Tokyo Electric Power (TEPCO), owner of the Fukushima nuclear plants. And the red line starting at the top and ending up near the bottom? E.ON, the company that owns most of Germany’s nuclear plants, as Germany shifts away from nuclear energy, after Cheronobyl and now Fukushima. The blue line that ends up as low as E.ON? Korea Electric Power (KEP), also an owner of nuclear plants. All the big losers are nuke owners.
What about the winners? The light green line ending up second by profits is Electricité de France (EDF), also an owner of nuclear plants, but one which has not yet had a major accident.
But what’s that purple line that starts near the top and ends up at the top?
The world’s worst nuclear disaster at Fukushima in Japan has had
economic effects on nuclear-owning power utilities.
What will happen to the Southern Company
as Georgia Power customers and U.S. taxpayers
get tired of paying for cost overruns
which are already almost a billion dollars?
The German government decided to abandon nuclear power after the
Fukushima nuclear disaster last year, closing eight plants
immediately and shutting down the remaining nine by 2022.
At Southern Company’s (SO) shareholder meeting, I enumerated some examples in the U.S., Japan, and Germany of nuclear gone bad, and pointed out Japan, Germany, and even Bulgaria had already or were getting out of nuclear, while Southern Company and Georgia continued to bet the farm on nuclear, and I asked what was SO’s exit strategy for when that bad bet goes bad? SO CEO Thomas A. Fanning said they had learned everything there was to learn from Fukushima, and besides Plant Vogtle is 100 miles inland where there are no earthquakes. He didn’t mention the same description applies to Chernobyl. He did say SO planned to make the U.S. nuclear industry the best in the world.
You kept using big bets and then bet the farm. Very interesting terminology.
Regarding operations credibility, a year ago Vogtle Unit 1 shut down 2 days after the NRC gave Vogtle a clean bill of health. But the SO CEO says it’s all better now.
Here’s the video, followed by links to sources for the points I made:
Exit strategy for when this big nuclear bet goes bad? –John S. Quarterman Shareholder Meeting, Southern Company (SO), Callaway Gardens, Pine Mountain, Georgia, 23 May 2012. Video by John S. Quarterman for Lowndes Area Knowledge Exchange (LAKE).
Here are the main points I was reading from, with links:
Renewable energy has been on a tear the past few years, with growth in many countries spurred by subsidies for wind and solar power. Now the heads of 10 European utility companies say EU subsidies should end, because they've got more renewable energy than they know what to do with.
As long as there are nukes or coal plants, there’s too much capacity.
European utilities need to get on with things like Continue reading 
