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Welcome to Grid Brief! Here’s what we’re looking at today: Europe is about to lose its largest gas field, the EIA provides context on Nigerian oil production, CANDU reactors are coming to Romania, and more.

Netherlands to Close Europe Largest Gas Field

Europe is about to lose its largest gas field.

“The Groningen field in the northeastern Netherlands will shut on October 1, people familiar with the matter said, asking not to be identified as the plans are still private. The cabinet will make an official decision later this month, a Dutch government spokesperson said,” reports Bloomberg. “The Netherlands previously aimed to close the field at the latest by October of next year depending on the geopolitical situation, but officials have faced political pressure over the repercussions from earthquakes it caused.”

While Groningen’s output is small in the grand scheme of Europe’s gas market, its flows are an important supply buffer. As a hot summer scorches the continent and as the first winter without Russian pipeline flows hangs on the horizon, sources re-assured Bloomberg that the decision isn’t irrevocable. If another energy crisis convulses Europe, Groningen may be able to restart in two weeks.

The State of Nigerian Oil Production

Nigeria was once the leading crude oil producer in Africa. But a cavalcade of unplanned production disruptions has brought its oil production down. These disruptions pose an ongoing threat to its oil output.

“In the third quarter of 2022, operators of the Trans Niger pipeline and the Forcados export terminal closed their facilities for repairs. The closures triggered a sharp drop in Nigeria's crude oil output, from 1.1 million barrels per day (b/d) in the second quarter to below 1 million b/d in the third quarter,” reports the Energy Information Administration. “Nigeria’s production recovered by the beginning of 2023, but an oil workers’ strike disrupted production again in April 2023. Crude oil production in Nigeria fell to slightly more than 1 million b/d in April of this year, dropping below Angola’s production, which was estimated at 1.1 million b/d that month.”

But the Nigerian government has taken steps to make the country more appealing to investors. The passage of the Petroleum Industry Act in 2021 was a significant reform. The legislation aims to overhaul the legal framework of Nigeria’s oil industry, encourage upstream development, and address the concerns of communities impacted by oil extraction. The changes include the creation of two industry regulators, restructuring of the national oil company, lower tax and royalty structures for crude oil production, and updates to upstream licensing and leasing terms.

Yet oil theft and sabotage of export infrastructure remain major concerns. These activities rack up production losses and exacerbate environmental pollution. Theft and sabotage also limit how much oil Nigeria can bring to the market. Until these issues are resolved, legislative progress and only help so much.

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CANDUs for Romania

Romania’s Nuclearelectrica and Canada have just inked a deal to build two more CANDU reactors at the country’s Cernavoda power plant.

“Cernavoda is the only nuclear power plant in Romania and consists of two 650 MWe pressurised heavy-water reactors,” reports World Nuclear News. “Unit 1 went into commercial operation in 1996 and unit 2 in 2007. Operator Nuclearelectrica plans to extend the operating life of unit 1 to 60 years. Most of the work on units 3 and 4 - like units 1 and 2, CANDU-6 reactors - was done in the 1980s prior to the fall of the government of Nicolae Ceausescu in 1989.”

Canada is in the process of refurbishing part of its CANDU fleet; a process which will restore its supply chains. This positions the country to both commit to a domestic to stave off power shortages in Ontario and to build abroad.

“This agreement with Romania represents the beginning of the CANDU renaissance,” Dr. Chris Keefer, a member of Canadians for Nuclear Energy and the host of the Decouple Podcast, told Grid Brief in a message.

"The signing of the Support Agreement between the Romanian State and Nuclearelectrica ... shows the firm support of the Romanian State for the development of the Romanian nuclear programme,” said Cosmin Ghita, CEO of Nuclearelectrica. “Units 3 and 4, which are scheduled to enter commercial operation in 2030 and 2031 respectively, will add another 10 TWh of clean, stable and affordable energy to the national energy system, supporting energy security. In addition, the four units at Cernavoda will generate about 66% of Romania’s clean energy, with an impact in achieving Romania’s decarbonisation targets.”

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Conversation Starters

• Germany may soften its emissions goals for polluting industries. “Starting next year, the country’s coalition government wants to track progress on emissions by focusing on economy-wide figures instead of the current sector-by-sector goals. The new approach will allow less-polluting industries to compensate for dirtier ones,” reports Bloomberg. “The move has been criticized by climate experts, who have warned that the reform will make it even harder for Germany, one of Europe’s biggest polluters, to meet its emissions goals. While the Economy Ministry defended the reform as helping overall efforts, it added that the country is still on track to fall short by a fifth of its goal to cut 1990 emission levels by 65% until 2030.”

• The Environmental Protection Agency may tighten rules on nitrogen oxide emissions for new gas power plants. “If approved by a federal court, the EPA would be required to issue a proposal by Nov. 7, 2024, stating whether updated new source performance standards, or NSPS, for NOx emissions are needed. The agency would issue a final action a year later,” reports Utility Dive. “The standard for new gas-fired power plants hasn’t been updated in more than 16 years and it no longer reflects achievable emission limits, according to the Environmental Defense Fund and Sierra Club, which sued the agency over the issue in December. The agency is required to review NSPS for stationary combustion turbines every eight years.”

• California wants hydrogen buses. “California transit agencies are leading the US public transport sector's shift to hydrogen fuel cells, using them to meet zero-emission bus requirements ahead of state deadlines,” reports S&P Global. “The California Air Resource Board has mandated that 25% of all new bus purchases by 2023 are be zero-emission, rising to 50% in 2026 and 100% in 2029, with a full transition by 2040. This rule parallels a state requirement that starting in 2026, 35% of new passenger vehicles sold must be considered zero-emission, rising to 51% in 2028, 68% in 2030 and 100% in 2035.”

Nuclear Barbarians

Crom’s Blessing

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