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  • NextEra: Offshore Wind Not Worth It // Vietnam to Join the LNG Import Club? // Constellation’s New Hydrogen Production Site

NextEra: Offshore Wind Not Worth It // Vietnam to Join the LNG Import Club? // Constellation’s New Hydrogen Production Site

NextEra: Offshore Wind Not Worth It

American renewable energy firm NextEra—one of the largest renewable energy companies in the world—told the CERAWeek energy conference in Houston that offshore wind is a bad investment.

CEO John Ketchum said that NextEra already finds it difficult to maintain onshore wind fleets, which are less complicated and less capital intensive than offshore. Costs associated with offshore wind projects continue to rise, particularly due to complicated subsea cable installation, supply chain issues, and the constant threat of extreme weather and saltwater corrosion.

“NextEra’s warnings about the challenges of offshore wind come just weeks after the Biden Administration announced the country’s first U.S. offshore wind energy lease sale in the Gulf of Mexico,” reports Oilprice.com. “More than 300,000 acres of offshore waters would be up for grabs for offshore wind development if the White House proposal moves forward.”

Plus, last December, the Department of the Interior auctioned five lease areas in the Pacific for offshore wind development, resulting in winning bids of over $757 million.

Ketchum also mentioned that he did not thing the energy transition is possible without natural gas. "I mean it's just putting your head in the sand to believe that the energy transition that this country is embarking on will work without natural gas power generation,” he told CERAWeek.

Vietnam to Join the LNG Import Club?

Now that liquified natural gas prices are down, Vietnam is contemplating snapping up some imports.

“PetroVietnam Gas JSC is in discussions with suppliers about procuring an LNG shipment for this summer to the Thi Vai terminal, according to traders with knowledge of the matter,” reports Bloomberg. “PV Gas, as the state-owned company is known, is seeking government approval before releasing a tender to purchase a shipment, the traders said.”

But Vietnam's government has been slow to approve policies due to an anti-graft campaign, and it is unclear when PV Gas will get the greenlight. Despite the slump in gas prices, rates are still high, discouraging some emerging nations from continuing to buy spot shipments. Still, LNG imports would help Vietnam cut emissions and its reliance on coal.

Constellation’s New Hydrogen Production Site

Constellation Energy has announced that its Nine Mile Point Nuclear Plant in New York has begun producing hydrogen at a demonstration-scale using nuclear energy.

The plant is using 1.25 MW of energy per hour to produce 560 kilograms of clean hydrogen a day, which is enough to meet the plant’s operational hydrogen use.

“It will also help set the stage for possible large-scale deployments at other clean energy centers in Constellation’s fleet that would couple clean hydrogen production with storage and other on-site uses,” Constellation said.

The utility plans to invest $900m through 2025 to advance commercial clean hydrogen production to supply clean energy for industries like aviation, long haul transportation, steelmaking, and agriculture. This will lay groundwork for possible large-scale deployments at other clean energy centers in Constellation’s fleet.

Three other clean hydrogen production sites are on the way: “The Davis–Besse nuclear plant in Ohio is expected to start producing hydrogen sometime this year, while the Prairie Island plant in Minnesota and Palo Verde plant in Arizona are expected to start producing hydrogen in 2024. The plants all received DOE grants to advance their clean hydrogen development,” reports Utility Dive.

“This accomplishment tangibly demonstrates that our nation’s existing reactor fleet can produce clean hydrogen today,” Kathryn Huff, DOE’s assistant secretary for nuclear energy, said. “DOE is proud to support cost-shared projects like this to deliver affordable clean hydrogen.”

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Conversation Starters

  1. EDF has extended the life of two UK nuclear plants. “EDF Energy, part of France's EDF, said on Thursday it will extend the lifetimes of its Hartlepool and Heysham 1 nuclear plants in Britain by two years to March 2026. They had been slated for closure in 2024 but EDF said last year it would review whether there was a case to keep them open beyond that,” reports Reuters. “EDF Energy, which operates all of Britain’s eight nuclear power plants providing around 13% of the country’s electricity, said it would invest 1 billion pounds ($1.2 billion) over 2023-25 to help the UK plants maintain output.”

  2. Argentina has secured a $540 million loan for a new pipeline. “Argentina's government has secured a $540mn loan from the Development Bank of Latin America (CAF) to finance the construction of the President Nestor Kirchner gas pipeline, the country's economy ministry announced on March 7. The project will support the transport of natural gas from the Vaca Muerta shale formation, helping to remove a bottleneck in order to support increased production,” reports Natural Gas World. “Vaca Muerta holds the world's second-largest shale gas reserves and the fourth-largest shale oil deposits. But its potential has been held back by a lack of evacuation capacity. With extra capacity, though, the formation could be used to displace LNG and pipeline gas imports that Argentina depends on.”

  3. US Energy Secretary Jennifer Granholm expressed optimism for permitting reform at CERAWeek. “Speaking during a panel discussion at the CERAWeek by S&P Global conference in Houston, Granholm expressed President Joe Biden's support for a bill introduced late December of last year, in which Senator Joe Manchin, Democrat-West Virginia, outlined a push for permitting reform that would expedite approvals for both clean energy and oil and natural gas projects,” reports S&P Global. “Although the bill was met with support from Biden, it had limited congressional support with Republicans and progressives aligned in their opposition. The bill has since been rejected, but Granholm remained optimistic about permitting reform and its ability to invigorate clean energy projects.”

Crom’s Blessing