Sweden Wants More Nukes // Germany Commits to Energy Suicide // Surging Dollar Triggers Food Crisis

Sweden Wants More Nukes

Sweden's incoming conservative government will ask Vattenfall AB, the state utility, to build more nuclear reactors.

"Swedes have debated nuclear energy for decades, but the source has garnered popular support recently amid the ongoing global crunch," reports Bloomberg. "Demand for electricity is poised to soar in coming decades as everything from heavy industry to transportation will rely on power instead of fossil fuels to keep humming."

The new reactors could be added to the Ringhals plant, but there's still some apprehension about project success as the plants in Finland, France, America, and the UK have all gone both over time and over budget. Still, 60% of the Swedish population would like to see more reactors in their country.

Vattenfall has been preparing for a nuclear resurgence since they controversially decommissioned reactors at Ringhals in 2019 and 2020--some thought the government pressured them to do so, though the government claims it was Vattenfall's decision alone. The utility now sees advanced SMRs as its nuclear future.

"In June, just after the government warned that Sweden was facing an acute power crisis, Vattenfall said it would start an 18-month study into [SMRs]," Bloomberg reports. "The first could come online in the early 2030s, the firm said."

Germany Commits to Energy Suicide

Germany, after decades as an export power house, is now a net importer. Its major unions and its industrial sector have warned that high energy prices will be their undoing. In Budapest last month, I watched a panel of German economists argue furiously over their country's follies. In a time of crisis, how is Germany's ruling class handling the situation?

Well, economic minister and Green Party product Robert Habeck said this:

This is suicidal behavior from Habeck and his party. The European grid needs $300 billion in re-investment for oil and gas to keep its current productivity levels. Habeck's saying that he's committed to terminating Germany's status as a world-caliber economy. And if he's so convinced fossil fuels are a problem, why is his country gobbling up so much LNG that they're pricing the developing world out of the market?

The mayor of Berlin, meanwhile, seems to think this winter and next (which will be worse) will be an easy, breezy affair. "Berlin's Governing Mayor Franziska Giffey can imagine briefly switching off the power supply in individual districts as an emergency measure in the energy crisis," reports Berliner Zeitung. "The most important thing is to protect the power supply infrastructure from overload, said Giffey on Thursday evening."

“If you then have to go without electricity at certain points for two hours, for three hours, then that is a scenario that is justifiable,” Giffey said. She worries that the system could experience overload because too many people are buying electric-powered heat pumps, which could place too much demand on the grid.

The recklessness of most European elites has amounted to self-sabotage as energy prices will continue to climb. As I wrote recently in Compact, "The costs aren’t just high bills and blackouts. Europe will lose some of its manufacturing base as firms flee the Continent in pursuit of more secure, less expensive hydrocarbons elsewhere. Horror director John Carpenter once said that whenever he reads about a reboot of his original Halloween movie coming out, a funny thing happens: He reaches out his hand, and someone puts a check in it. The United States similarly benefits every time Europeans impose new green diktats on themselves: As European natural-gas prices have climbed 400 percent this year, manufacturers have made landfall in America to spare themselves. Factories are taking jobs, wealth, and institutional knowledge with them."

But not every leader wants to be in the car as Habeck et al. drive it off a cliff. Hungarian Prime Minister Viktor Orban recently tweeted, "It is no help to #Ukraine if the European economy goes bankrupt. We are threatened by years of recession due to a primitive and ineffective sanctions regime. A hike in European unemployment will not help. We must aid Ukraine in a way that does not lead to our own defeat."

Surging Dollar Triggers Food Crisis

A strengthening dollar means tough times for the developing world.

"Food importers from Africa to Asia are scrambling for dollars to pay their bills as a surge in the US currency drives prices even higher for countries already facing a historic global food crisis," reports Bloomberg.

Food importers generally pay in dollars. Pair the rising dollar with high interest rates, the Ukraine war, and soaring commodity prices and you've got an incipient food crisis on your hands.

“There was always a historical strain on making these payments, but at the moment it’s unbearable pressure,” Tedd George, a consultant specializing in Africa and commodities markets told Bloomberg.

"To be sure, some countries may be cushioned by their purchases in other currencies like euros, while energy-exporting nations will profit from overseas revenues," reports Bloomberg. "Global food-commodity costs have also fallen for six straight months, giving hopes for a relief to consumers."

But the situation remains fragile. Currency fluctuations and doubts over whether or not Russia will continue to allow exports from the Black Sea still loom overhead.

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Conversation Starters

1. Toyota CEO Akio Toyoda is skeptical of the fast transition to electric vehicles. "Toyoda reiterated that he does not believe all-electric vehicles will be adopted as quickly as policy regulators and competitors think, due to a variety of reasons. He cited lack of infrastructure, pricing and how customers’ choices vary region to region as examples of possible roadblocks," CNBC reports.

2. The Chinese government has approved two new AP1000 nuclear reactors. "If built, the units will become ninth and tenth reactors based on Westinghouse’s Generation III+ advanced reactor technology in China. Four AP1000 units are already currently operating in China: Sanmen 1 and 2 in Zhejiang province and Haiyang 1 and 2 in Shandong province. The four reactors were commissioned in 2018," reports Power Magazine.

3. Russia's hesitance on re-upping a grain deal could spell trouble. "Moscow is prepared to reject the renewal of an agreement on grain exports from Black Sea ports unless its demands are addressed," reports Oilprice.com. "Moscow has submitted a list of complaints about the agreement, brokered by the United Nations and Turkey in July, to the United Nations, said Gennady Gatilov in an interview with Reuters published on October 13."

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