Welcome to Grid Brief! Here’s what we’re looking at today: Taiwan’s offshore wind hopes begin to fizzle, the Department of Energy begins scoping for HALEU fuel for advanced reactors, the Washington Post has obtained evidence suggesting Ukraine is responsible for the Nordstream pipeline bombing, and more.

Taiwan’s Offshore Headwinds

Taiwan had high hopes for offshore wind, but now domestic manufacturing requirements and skyrocketing costs are torpedoing its profitability.

In 2016, Taiwan’s President Tsa Ing-wen believed offshore wind would replace the nuclear energy she plans to phase out by 2025. Even though Taiwan has succeeded in building substantial offshore wind capacity, the country is nowhere near its goal. Worse still, high costs are hammering the industry, undermining its fundamentals.

“As of April, 200 turbines are spinning off the western coast of Taiwan, which incidentally hosts some of the world’s best sites for offshore wind farms in terms of wind resources. In total, they represent 1.5GW of installed capacity and are capable of meeting the electricity needs of 1.2 million households for a year,” reports AmCham Taiwan. “On the surface, it appears to be a remarkable success story. In fact, however, industry insiders are on edge, many projects are facing delays, and an atmosphere of uncertainty prevails.”

According to journalist Angelica Oung, Taiwanese wind industry pioneer Robert Tsai said that early capex for offshore wind was $6 million/MW—that’s $2.25 million/MW more than in Europe. Many hoped capex would fall, but COVID, the Ukraine War, and Taiwan’s requirement that the turbines be built with domestic parts, kept the upward pressure going.

Taiwan’s offshore wind projects now look to be some of the most expensive in the world.

DOE Scopes for HALEU Supply

The Department of Energy has started the Environmental Impact Statement scoping process for its program to support the commercial production of high-assay low-enriched uranium (HALEU) fuel.

“The current US commercial nuclear fuel cycle is based on reactor fuel that is enriched to no more than 5% U-235 (known as low-enriched uranium, LEU),” reports World Nuclear News. “Some of the advanced reactor technologies that are currently under development use HALEU fuel, which enables the design of smaller reactors that produce more power with less fuel than the current fleet.”

But America does not yet have commercial sources for HALEU, which could stymy advanced reactor development.

"We must jump-start a commercial-scale, domestic supply chain for HALEU," Assistant Secretary for Nuclear Energy Kathryn Huff said. "Acquiring these services in the United States will reduce reliance on Russia, create American jobs, and support US climate and energy security goals."

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New Nordstream Bombing Information

Three months before the bombing of the Nordstream natural gas pipeline, the Biden administration received credible information indicating that the Ukrainian military had planned a covert attack on the undersea network. A European intelligence service shared the previously undisclosed details of this plan with the CIA in June 2022.

The information suggests that Western allies suspected Ukrainian involvement in the attack for nearly a year. Recent investigations by German law enforcement have uncovered evidence that strengthens the case that Ukraine was responsible for the sabotage.

The intelligence report, which was shared on the chat platform Discord by an Air National Guard member named Jack Teixeira, was obtained by The Washington Post. The report indicated that the Ukrainian military operation was orchestrated by General Valerii Zaluzhnyi, the country's highest-ranking military officer, to keep President Volodymyr Zelensky unaware of the plan. By doing so, Ukraine could deny involvement in an attack that could jeopardize Western support.

“German investigators now believe that six individuals using fake passports rented a sailing yacht in September, embarked from Germany and planted explosives that severed the pipelines, according to officials familiar with that investigation,” reports the Washington Post. “They believe the operatives were skilled divers, given that the explosives were planted at a depth of about 240 feet, in the range that experts say helium would be helpful for maintaining mental focus.”

Conversation Starters

• European gas prices: 📈. “European gas futures jumped the most since March amid signs of a tighter liquefied natural gas market and potentially stronger Asian demand for the fuel,” reports Bloomberg. “The benchmark month-ahead Dutch contract settled 20% higher at €28.48 a megawatt-hour, after last week skidding to the lowest level in two years. The UK equivalent soared by 22%. The surge could signal the bottom of the market has been reached for now, with traders moving quickly to build positions.”

• A dam in Ukraine was sabotaged, causing massive flooding. The nuclear power plant in the flood area is safe. “The International Atomic Energy Agency (IAEA) says the impact of the damage to the dam on cooling water supplies to the Zaporizhzhia nuclear power plant is being monitored but alternative sources of water on-site should provide sufficient water for cooling ‘for some months’ and means ‘our current assessment is that there is no immediate risk to the safety of the plant,’” reports World Nuclear News.

• Kazakhstan goes after Big Oil. “Kazakhstan will continue to seek a court ruling on its claim that it is owed as much as $16.5 billion by international oil majors for project costs in two of the biggest oilfield developments in the country in the past decade, according to Kazakhstan’s Energy Minister Almasadam Satkaliyev. Kazakhstan, part of the OPEC+ group of oil producers, has had several litigations over project costs and delays with major international oil firms,” reports Oilprice.com. “In April, Kazakhstan said it was taking to court the oil majors developing the Kashagan and Karachaganak oilfields. The country began arbitration proceedings to claim $13 billion in costs deducted as part of profit-sharing agreements for the Kashagan oilfield and another $3.5 billion for the Karachaganak field development.”

Crom’s Blessing

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