US to Refill Strategic Petroleum Reserve // Blackouts Decarbonize South Africa // France Leads EU’s Nuclear Charge
Welcome to Grid Brief! Here’s what we’re looking at today: the Biden administration wants to refill the SPR, South Africa lowers emissions through blackouts, France leads the EU’s charge for more nuclear, and more.
US to Refill Strategic Petroleum Reserve
On Monday the Biden administration announced plans to refill the Strategic Petroleum Reserve.
“The Energy Department is soliciting offers of crude oil to refill Big Hill, one of the four major oil storage facilities along the Gulf Coast that make up the Strategic Petroleum Reserve,” reports CNN.
The 3 million barrels the government wants to replenish make up only a small fraction of what Biden has withdrawn. When President Biden took office in 2021, the SPR held about 638 million barrels; now, it has shrunk to 362 million barrels, its lowest level since 1983.
Biden released barrels from the SPR to keep gas prices low and ease Europe’s pain weaning off Russian energy. But now some worry that draining so much of the reserve leaves the US vulnerable to emergencies—disasters, wars—in which it would need a more robust SPR. Others point out that the US managed to survive great conflicts without the SPR, which has only been around since 1975.
“The Energy Department said the purchase of 3 million barrels of oil is part of an effort to replenish reserves at a ‘good deal’ for taxpayers, noting that today’s prices are well below the average of about $95 from 2022,” reports CNN.
Blackouts Decarbonize South Africa
South Africa is meeting its emissions reduction goals ahead of schedule—thanks to blackouts.
“Regular breakdowns of the coal-fired power plants that supply more than 80% of South Africa’s electricity mean that less carbon dioxide is being pumped into the atmosphere and daily rotational cuts of more than 10 hours a day are further limiting emissions from factories,” reports Bloomberg.
In other words, the country’s dysfunctional energy system is unintentionally hitting green goals by creating energy poverty.
“It’s unintentional,” Crispian Olver, the executive director of South Africa’s Presidential Climate Commission, said on Monday.
South Africa has set a new target to reduce its emissions by 2030. The country aims to emit between 350 and 420 megatons of carbon dioxide equivalent, which is an improvement compared to the previous target set in 2015 (between 398 and 614 megatons by 2030). This updated target was instrumental in South Africa receiving commitments of $8.5 billion in climate finance from wealthier nations in 2021.
Olver argued that coal plants shouldn’t be decommissioned before their time, pointing out that they won’t increase emissions by very much. “It’s very difficult to recommend the decommissioning of power stations in the middle of an energy crisis,” he added.
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France Leads EU’s Nuclear Charge
France is trying to muster forces to make the European Union treat nuclear as clean energy.
France is forming the Nuclear Alliance, a group of countries advocating for the recognition of nuclear energy as a necessary part of achieving the EU's climate objectives. A draft statement from the group reveals that representatives from 15 EU countries, along with the United Kingdom plus the European Energy Commissioner Kadri Simson, will participate in the meeting held in Paris. Italy will also attend as an observer.
“The idea is to ensure that nuclear power maintains its current share of 25% of electricity production by 2050,” reports Bloomberg. “Even with new nuclear reactors taking many years to build and requiring large amounts of investment, the countries forecast that the technology can provide up to 150 gigawatts of electricity capacity by 2050.”
“This represents the equivalent of up to 30 to 45 new-build large reactors and small modular reactors in the EU,” reads the draft statement. The pro-nuclear bloc calls on the EU “to take into account the contribution of all affordable, reliable, fossil-free and safe energy sources to achieve climate neutrality by 2050.”
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Manchin wants to bring his permitting reform to the floor in August. “Sen. Joe Manchin, D-W.Va., aims to bring bipartisan permitting reform legislation to the Senate floor for a vote by July 31, the tentative start of the chamber’s summer recess,” reports Utility Dive. “‘That’s pretty aggressive. We’re going to get it done,’ Manchin, chairman of the Senate Energy and Natural Resources Committee, said during a hearing on permitting reform. ‘We can get together much quicker if we’re all in this, and I think we are. We want this done and everybody wants it done.’”
Petrobras gives up on fuel import parity. “Brazil's state-run oil giant Petrobras has approved a new commercial strategy to set diesel and gasoline prices, it said on Tuesday, ditching its previous import parity policy without revealing a specific fresh pricing formula,” reports Reuters. “Petroleo Brasileiro SA, as the firm is formally known, said the new strategy would use references such as the cost of main supply alternatives and what it called the ‘marginal value for Petrobras’, which takes into account opportunity cost given production, import and export alternatives. The company until now had directly pegged local fuel prices to international rates such as global oil prices and foreign exchange, but President Luiz Inacio Lula da Silva had long pledged to change that in a bid to make fuel cheaper.”
Germany is pumped for pumped storage. “German utility EnBW has announced plans to build a pumped hydro storage station in Forbach, in Baden-Württemberg, Germany. The site, where EnBW already operates the Rudolf Fettweis hydropower plant with a capacity of 71 MW, will be used for the new Forbach Pumped Storage Power Plant/New Lower Reservoir project,” reports PV Mag. “EnBW intends to invest €280 million ($304.9 million) in the project, with construction set to commence this year and completion expected by the end of 2027. The plan has received full approval from the Karlsruhe regional administration, following over five years of extensive work involving numerous experts and sectoral authorities.”
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