ERCOT Electricity Demand Keeps Setting Records // The French Government Moves to Nationalize EDF // German Chemicals Industry Risks Shutdown

ERCOT Electricity Demand Keeps Setting Records

Texas just hit its ninth record higha for electricity usage, according to Bloomberg. Since 2016, the state has lost 2 GW of dispatchable power capacity. The state is in the process of onboarding a staggering amount of intermittent renewables. With the grid this fragile it's now falling on customers to contain their electricity use to protect the grid. The calls for conservation have caught recent ERCOT customers in Lubbock off guard.

“Anytime I’ve ever heard that there’s going to be issues or we’re having extreme weather, I’ve always been proactive and start unplugging things,” Jacinda Willingham, a Lubbock resident told the Texas Tribune. “I decided I was going to try to start raising the temperature on my thermostat to see if I could survive and have some levels of comfort.”

Willingham is in her seventies. During the sweltering, triple-digit heatwave she has been keeping her home's temperature at 75 degrees and waking up early to get all of her cooking and housework done before it gets too hot. But Willingham also works from home. "She does most of her work in a single office," reports the Texas Tribune, "which happens to be the hottest room of her house, and tries to get her work done early before she puts her computer in rest mode when temperatures rise."

She's but one Lubbock resident worried about the heat and ERCOT's ability to keep online. At time of writing, the temperature in Lubbock is 104 degrees.

Lubbock made the decision to join ERCOT years before the last year's ice storm revealed its dysfunction. Yet after the fallout of Uri, the city persisted. "Last June, Lubbock Power & Light transitioned 70% of its customers to ERCOT’s market. The remaining 30% will join next year." According to the Texas Tribune, city officials wanted to join ERCOT in large part because they wanted residents to have more electricity providers to choose from.

“This had been a process that had been evaluated for years,” Christy Martinez-Garcia, a member of Lubbock's City Council, said. “But I believe the public was not really prepared.”

Last Monday, ERCOT released a statement saying that Texans had reduced their energy usage by 500 MW to help the grid meet its demand. "As consumers crank up their air conditioners, pushing demand to new heights, ERCOT expects to have enough supply on hand as long as plants don’t break down or wind doesn’t stop blowing," reports Bloomberg.

And while ERCOT promises it has what it takes to weather the heat, ERCOT's demand today is forecasted to hit 81.5 gigawatts. "That’s getting close to the operator’s extreme summer projection of more than 82.1 gigawatts," Bloomberg writes. "ERCOT had only projected demand to peak at 77.9 gigawatts."

The French Government Moves to Nationalize EDF

The French government has moved to nationalize the power company EDF with an offer of $9.8 billion.

"On Tuesday, the French Finance Ministry said the offer price of 12 euros a share, equivalent to about $12, represented a 53% premium on EDF’s closing price July 5, the day before Prime Minister Élisabeth Borne said the government intended to hold 100% of EDF’s shares, compared with the 84% it owns currently," reports the Wall Street Journal. "The state said it would also buy other EDF instruments."

The decision to nationalize the EDF comes amidst an energy crisis exacerbated by the Ukraine war and climate change, which require "strong decisions to ensure France’s energy independence and sovereignty,” France's ministry said.

One can only hope that this will mean more respect and attention for the country's nuclear fleet, a vital element of the European energy system. Due to years of neglect, "[u]nexpected corrosion on the cooling systems of its nuclear reactors in France has forced 12 of its 56 reactors offline as prices have surged during the war," reports WSJ. "The company reported last week that power generation at its French nuclear reactors had dropped 15% in the first half of the year compared with the same period last year."

German Chemicals Industry Risks Shutdown

According to Wolfgang Grosse Entrup, German chemical association VCI's chief executive, the industry has done everything in its power to reduce its gas consumption and can do no more. They can either scale back or quit producing.

"For our companies, we are currently once again doing everything we can to exploit every last potential gas saving," said Entrup. "But there's not much more we can save, as efficiency has already been the driving force in the past few years."

"Germany's chemical and pharmaceutical industries are the country's largest gas consumer, with 15% of total consumption," reports Reuters. The German chemical industry is also the nation's third-largest industrial sector, surpassed only by automotive manufacturing and machinery.

This is dark news for the largest economy in the EU. Germany has done a great deal to reduce its dependence on Russia, imports from which accounted for some 40% of its consumption before war broke out in Ukraine. Now it seems the shortages on the horizon threaten a collapse of German industry.

Earlier in the month, German Federation of Trade Unions head Yasmin Fahimi said, "Entire industries are in danger of collapsing permanently because of the gas bottlenecks: aluminum, glass, the chemical industry."

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Conversation Starters

• Australia's Paladin Energy Limited has decided to restart its Langer Heinrich uranium mine in Namibia in Q1 2024. "The company said the decision to resume operation of the mine, which was suspended in 2028 due to low uranium prices, is supported by a strong uranium market," reports World Nuclear News.

• Alliant Energy in Wisconsin is offering its customers $25 dollars for control over their thermostats. Alliant wants to enroll 7,000 customers with "smart thermostats" by next year. "The company is offering sign-up bonuses of $25 and annual payments of $25 in exchange for letting the utility adjust the temperature in their homes by a few degrees up to 20 times per year," reports Wisconsin Public Radio.

• The Sierra Club is suing the Army Corps of Engineers for issuing the Driftwood LNG export facility in Louisiana a permit that allegedly violates the Clean Water Act.

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