Welcome to Grid Brief! Here’s what we’re looking at today: Spain slaps new taxes on its nuclear industry, shipowners worry about a “tipping point” in Red Sea conflict, and more.

Spain’s Nuclear Suckerpunch

Spain started this year by announcing its plan to close its nuclear plants as part of its climate ambitions. Now, as the VII Nuclear Waste Plan passed last year kicks in, it appears to be fast-tracking its closures.

“The extra costs of this Plan - which is valued at more than 20,220 million - represent a substantial change compared to the conditions under which the Protocol for the closure of the plants in 2019 was reached between Enresa (National Radioactive Waste Company) and the plants nuclear power for its operation and for which it was agreed to increase the Enresa rate by a maximum of 20 percent,” reports El Economista. “It is worth remembering that, after this increase, the entire Spanish nuclear fleet contributes each year to the Enresa Fund in the order of 450 million euros.” [translated with Google]

The plan will likely force premature retirements by increasing the tax burden on waste. This would mean the plant closures would be affected indirectly, absolving the government from taking direct responsibility for shuttering the fleet.

Red Eléctrica warns that Spain could face serious blackouts by 2030 if both its nuclear fleet and 9,000 MW of gas plants are lost to its climate policy.

For a deeper look into Spain’s anti-nuclear push, check out our Premium coverage.

Shipowners Fear Red Sea “Tipping Point”

Houthi rebels’ continued attacks in the Red Sea near the Suez Canal in response to the war in Gaza has shipowners on high alert, fearing the conflict could reroute shipping.

“Greece-based owner Harry Vafias said that his group’s tankers and bulk carriers are, for the moment, continuing to voyage through the Red Sea but the group is already reluctant to expose its gas carriers to the added risk,” reports Lloyd’s List.

“Things may change very fast,” Vafias told Lloyd’s List. “If there are three, four, five more attacks, or one of the hits causes a lot of damage or pollution, I think you will see owners staying away.”

Reroutes would send shipping around the Cape of Good Hope in South Africa, adding substantial time and distance to routes.

As we reported earlier this week, Qatar halted some of his LNG shipments through the region.

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Conversation Starters

• Kurdistan’s oil remains tied up in red tape. “A crucial oil pipeline that’s been shut for almost 10 months is being held up further by disagreements with producers over payments, Iraqi Prime Minister Mohammed Shia Al-Sudani said,” reports Bloomberg. “Renumeration for costs is the latest issue to have hit the northern-Iraq-to-Turkey pipeline, whose closure has resulted in almost $1 billion of lost revenue each month for the semi-autonomous Kurdistan Regional Government and companies operating in the area. The shutdown has kept almost half a million barrels of crude daily from global markets at a time of plentiful supply from elsewhere.”

• Germany looks to US, Australia for coal imports. “German importers of coal for power generation, heating and steelmaking have found new suppliers in the United States and Australia, enabling them to end their reliance on Russia, industry body VDKi said on Wednesday,” reports Reuters. “Between January and October 2023, Russia accounted for 2% of all German imported coal volumes - mainly supplies that had reached Germany and other European countries before a European Union ban in August 2022 under sanctions against Russia over its invasion of Ukraine, a VDKi handout seen by Reuters showed.”

• The Energy Information Administration expects gas and diesel prices to decrease. “We expect average U.S. retail gasoline prices to decrease in 2024 because of increased inventories related to increased refinery capacity,” reports the EIA. “In 2025, we expect slightly reduced gasoline consumption to further decrease prices. We expect similar supply-side factors to lower retail diesel prices in 2024 and 2025, although U.S. diesel consumption will likely exceed 2023 in both 2024 and 2025.”

Crom’s Blessing

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