The Blackout No One Expected // Utilities Start to Embrace Wind and Solar // Russia-China Gas Pipeline Hits Milestone

The Blackout No One Expected

Around 40,000 Duke Energy customers have been without power since seemingly organized attacks on two substations in North Carolina were carried out over the weekend. 

The Federal Bureau of Investigation has now been brought in to solve the case. "Last night, unknown individuals vandalized at least two substations in Moore County with criminal intent. Motive for this crime remains unknown. Many Moore County residents remain without power," Rep. Richard Moore said in a statement. "I want to thank Sheriff Ronnie Fields and all local law enforcement as well as the SBI and FBI for their quick action to respond to the incident. I have also been in contact with Duke Energy and know they are working on all options to restore power as quickly as possible."

“Sabotage happens all the time at substations, since they’re usually in isolated areas and don’t have guards; but it doesn’t usually cause an outage, and certainly not a widespread one,” security consultant Tom Alrich told Utility Dive. “Unfortunately, it’s very hard to stop some yahoo who gets drunk and goes out to shoot up a substation.”

Duke Energy has said that they will work "around the clock" to bring the power back on, but due to the complexity of the problems the attacks created, it will be a "multi-day" restoration process.

Utilities Start to Embrace Wind and Solar

Utilities can now get in on the renewables game, thanks to the Inflation Reduction Act.

"Their new stance is driven less by evolving ideology than the changing economics of renewable energy, fueled in part by the sheer amount of money the federal government is putting on the table to encourage utilities to move more quickly to cleaner and more sustainable sources of energy like solar and wind," reports The New York Times.

What's sweetened the deal on renewables for utilities? Over $200 billion in tax breaks and other incentives set to span the next decade. But wait! There's more! NYT reports, "Buried in the hundreds of pages are carefully crafted provisions that will eventually help electric utilities gain additional profits for years to come, totaling hundreds of millions of dollars per year for some of the larger players, according to Wall Street analysts."

This transition looks to threaten electricity reliability nation-wide. Before, most renewables were built in the deregulated market areas. Eighty-percent of wind and solar in America lives in those markets. Utilities have historically resisted wind and solar because in many cases they weren't eligible for the incentives granted to independent power producers. And renewables create load-balancing headaches because of their intermittency. But now coal is harder and harder to keep online and the IRA's incentives are too enticing to resist.

The assumption is that natural gas, which provides the reliability upon which wind and solar parasitically feed, will remain bountiful and cheap. But will it stay that way? American gas production isn't increasing for two reasons: the interest rates aren't there to secure the old debt-financing model; no one want to sink capital into production with politicians telling the country they're going to end the fossil fuel industry. And now Europe depends on American LNG imports to replace a substantial portion of their former Russian pipeline flows.

If America's utilities take off on a renewables sprint, the country will enter uncharted territory. 

Russia-China Gas Pipeline Hits Milestone

An East-West natural gas pipeline from Russia to China has just reached an important construction milestone. A large tunnel on the Yangtze River was completed over the weekend.

"The tunnel in the river is more than 10 km (6.2 miles) long and its construction took 28 months to complete," reports Oilprice.com. "The tunnel completion is part of the east-route pipeline which will boost China’s energy supply amid rising global prices, Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University," said on Sunday.

But completion of the pipeline is still years away, expected to reach completion and commission in 2025.

China's energy imports from Russia--coal, oil, and natural gas--increased by $15 billion between 2021 ($35 billion) and 2022 ($60 billion). Russian natural gas already flows into China via the Power of Siberia Pipeline.

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Conversation Starters

1. Ontario's Darlington Unit 3 reactor's refurbishment is moving along ahead of schedule. "The fuel channel installation for Darlington Unit 3 is finished — and done so quickly the unit may be able to return to service months earlier than expected — Ontario Power Generation proudly announced recently," reports Durham Region. "The Darlington Nuclear Generating Station is in the midst of a refurbishment that will extend the life of the Clarington generating station for an extra 30 years."

2. Abilene Christian University is about to finish building its experimental molten salt reactor. "Imagine a nuclear reactor capable of generating clean, safe and affordable energy – possibly even creating a cure for cancer. Well, that’s the hope behind molten salt nuclear reactors. And one is taking shape right now on the campus of Abilene Christian University with the Nuclear Engineering Experimental Testing Laboratory, or NExT Lab," reports the Texas Standard. "It was 1967 when Charles Ivey first heard about molten salt reactors. The now retired physics professor was a graduate student at UT Austin, and remembers sitting in the lab thinking these reactors could be the future, 'It didn’t turn out to be the future. But I was so intrigued by the story.' Now, nearly 50 years later, one’s being built by his undergraduate alma mater: Abilene Christian University."

3. America's jet fuel consumption has dropped over the last few years. "Average jet fuel consumption in the United States so far in 2022 has been consistently below 2019, although airline passenger counts in the United States have nearly returned to 2019 levels in recent months, based on Transportation Security Administration (TSA) reports," writes the Energy Information Administration. "So far in 2022, jet fuel consumption has averaged 1.5 million barrels per day (b/d), according to weekly product supplied data reported in our Weekly Petroleum Status Report. By comparison, consumption of jet fuel in all of 2019 averaged 1.7 million b/d."

Crom's Blessing