Welcome to Grid Brief! Here’s what we’re looking at today: Germany relents on French nuclear subsidies, the Biden administration commits billions to grid hardening, Qatar inks an LNG deal with Shell, and more.

Germany Submits to French Nuclear

Germany has agreed to allow the French government to subsidize the nuclear energy that provides 70% of France’s electricity.

The agreement comes after months of haggling between Germany and France over power market reform. “Under the terms of the agreement, France will now be able to finance the renewal of its existing nuclear fleet with two-way Contracts for Difference (CFDs), in line with the Commission’s initial proposal,” reports Euractiv.

“This decision opens up a new nuclear era in Europe. Once France refurbishes its reactors, it will seal a permanent energy advantage over Germany,” said Mark Nelson, the Director of the Radiant Energy Group. “No other energy source competes with existing nuclear in its ability to cleanly and cheaply power industry. Germany just closed its reactors and its industries are suffering the consequences.”

French President Emmanuel Macron hailed the decision as a "major victory for France.”

Still, the agreement must pass through the European Parliament and Commission before it is ratified.

Biden Admin Commits $3.5b to Grid

The Biden administration announced the “largest ever” direct federal investment in the American electric grid. The $3.5 billion for 58 projects in 44 states will be committed to hardening the grid against extreme weather.

“Extreme weather events fueled by climate change will continue to strain the nation’s aging transmission systems, but President Biden’s Investing in America agenda will ensure America’s power grid can provide reliable, affordable power,” said US Secretary of Energy Jennifer Granholm.

According to the Department of Energy, the funding will bring 35 GW of weather-dependent renewables online. It will also invest in 400 microgrids for vulnerable communities.

The funding makes up about a third of the $10.5 billion in federal funds slated for allegedly grid-hardening projects via the DOE’s Grid Resilience and Innovation Partnerships (GRIPS) Program.

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Qatar’s New LNG Deal With Netherlands

Shell agreed to purchase Qatari LNG for the Netherlands.

“Starting in 2026, QatarEnergy will deliver as much as 3.5 million tons of LNG a year to Rotterdam’s Gate import terminal for 27 years under two deals, the Middle Eastern company said in a statement on Wednesday,” reports Bloomberg. “That comes a week after the producer signed a similar contract with France’s TotalEnergies SE, and indicates that more deals could be on the horizon.”

Qatar is making headway in its attempt to compete with America as Europe’s source for LNG after the Ukraine invasion. European countries have continued to ink longterm LNG contracts that guarantee they will be burning fossil fuels long after the EU’s goal to bring emissions to zero by 2050.

Conversation Starters

• A Japanese trading house wants in on Qatari LNG. “Japanese trading house Mitsui & Co is considering buying a stake in the North Field liquefied natural gas (LNG) expansion project in Qatar as a way to ensure a stable supply of LNG, a Mitsui spokesperson said,” reports Reuters. "‘We have always said that we would consider investing in any quality LNG projects, and the North Field is one of the projects,’ the spokesperson said, but declined to give further details. Japan is seeking to diversify energy sources and sign more term contracts for the super-chilled fuel to ensure a stable supply following an energy crisis caused by the war in Ukraine.”

• Solar power purchase agreements have slowed. “The average cost of solar power purchase agreements, or PPAs, in North America rose 4% during the third quarter of 2023, surpassing $50 per MWh for the first time since tracking began in 2018, according to a report from the power marketplace LevelTen,” reports Utility Dive. "Although both wind and solar PPAs have seen year-over-year price increases, prices do seem to be moderating, according to Gia Clark, senior director of strategic accounts at LevelTen. But with no sign that prices will decline in the future, the pace of PPA dealmaking on the LevelTen marketplace has begun to cool as corporate buyers evaluate other means of meeting their renewable energy goals.”

• Pipeline giant Kinder Morgan missed its profit estimates. “Kinder Morgan on Wednesday posted lower-than-expected profit for the third quarter, as higher interest expenses offset strength in its natural gas and products pipeline segment,” reports Reuters. “The pipeline and terminal operator reported an adjusted profit of 25 cents per share for the quarter ended Sept. 30, compared with analysts' average estimate of 26 cents, according to LSEG data. Shares of Kinder Morgan were down 1.3% at $16.91 in after-market trading. The U.S. Federal Reserve's rapid interest rate hikes to tame inflation have made borrowing more expensive for businesses.”

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