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AHEAD OF SCHEDULE: The European Union’s natural gas storage tanks are filled past the 90% mark, according to new data from Gas Infrastructure Europe, defying analysts’ predictions and putting it far ahead of its schedule to fill past the mandatory 90% threshold as the bloc prepares for its second winter heating season largely without Russian fossil fuels.
You’ll recall that expectations for this winter were dire: IEA chief Fatih Birol warned last year that the bloc could face a shortage of up to 30 billion cubic meters this summer–—a position that would put its gas storage tanks at an alarming 65% storage point by 2023-2024 winter heating season.
“We are ringing the alarm bells for the European government and for the European Commission for next year,” Birol said then.
Why conditions have changed: The EU quickly moved to take action to diversify its gas supplies following Russia’s war in Ukraine, including investing more at a national and bloc-wide level in securing LNG imports from suppliers including Norway, the U.S., and Azerbaijan. It also launched a platform for joint gas purchases to help keep prices low.
The combined effort has been successful: Prices for Dutch TTF, the European gas benchmark, hovered around $41 per megawatt hour this week—far below last August, when they soared to a record high of $347.
What that means for Europe: The news is a victory for the EU, which prior to the war had relied on the Russian piped gas imports for roughly 40% of its winter demand. Analysts have long said this will be the last winter where storage issues are a concern in the EU, given increased LNG import capacity and more expected deals with suppliers including Qatar and the U.S.
EU leaders scrambled to take action last year after the Kremlin began throttling its natural gas exports via the Nord Stream 1 gas pipeline and its Yamal-Europe pipeline, before ultimately cutting both streams off completely.
It’s a strong symbol of success for the bloc, which has committed to fully ending its gas purchases from Russia by the year 2027. EU Energy Commissioner Kadri Simson praised the development, saying in a statement this week that the storage levels underscore the bloc’s preparedness for winter, and will help stabilize market prices in the coming months. “The EU energy market is in a much more stable position than it was this time last year, in good part because of the measures we have taken at EU level,” she said.
But others urged caution, noting the EU is not quite out of the woods yet. Tom Marzec-Manser, the head of gas analytics at ICIS, warned today that wholesale gas prices are still “noticeably” more expensive compared to historic levels, despite the sharp drop from last summer.
And high stored gas levels might not push prices down much further. “Stored gas can only get you so far through a winter and if that winter is cold there’s a certain amount of risk, and that’s what keeps gas price elevated for the time being,” he told Politico EU.
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MEMA ADMINISTRATOR RESIGNS: Maui Emergency Management Agency Administrator Herman Andaya – who has been heavily criticized for the island’s response to deadly wildfires that killed at least 111 people – resigned on Thursday, Nancy reports.
A statement from the mayor’s office stated that Andaya cited health reasons for submitting his resignation, which was effective immediately.
This move comes a day after Andaya was forced to defend himself and MEMA’s response to reporters. When the wildfires broke out on Aug. 8, residents said they were not evacuated and that none of the island’s warning sirens were sounded for evacuation. But when asked by reporters on Wednesday if Andaya regretted not activating the sirens, Andaya responded, “I do not.” More on that here.
On a related note … Shares of Hawaiian Electric Industries are up by 11% on Friday after the company said it plans to endure as a financially strong utility in the wake of the Maui wildfires, and that it doesn’t plan to restructure, the Wall Street Journal reports.
In a regulatory filing Friday, the company said it is seeking advice as part of “prudent scenario planning,” but that it intends to be in Hawaii through rebuilding efforts and beyond. The company is currently in talks with firms that specialize in restructuring advisory work.
The utilities’ shares cratered after the company faced allegations that its negligence and inaction fueled the disastrous blaze. At least four lawsuits have been filed that accuse the utility of misconduct and failure to take proper steps to prevent disasters such as the Maui wildfires.
UAE’S CLIMATE FUND: The United Arab Emirates is considering creating a multibillion-dollar fund to spur clean energy investments across the world – and they’re planning on unveiling it at this year’s U.N. climate talks in Dubai, Politico reports.
The fund could amount to tens of billions of dollars – which is a sizable slice of the money coming from the UAE’s sovereign wealth reserves. A G-7 government official said envoys from the oil-rich Mideast nation had mentioned the idea of a fund of at least $25 billion.
Creation of the fund would be one of the largest ever state-sponsored financial efforts to help countries fight climate change. And the move comes as the UAE and Abu Dhabi National Oil Co. CEO Sultan Al-Jaber, who is leading the climate talks, have drawn criticism from environmental advocates and some U.S. and European lawmakers for hosting the summit despite being one of the world’s largest contributors of greenhouse gases. Read more on that here.
TEXAS POWER PRICES SURGE 6,000%: Texas spot electricity prices soared by more than 60-fold, according to Bloomberg, climbing toward the $5,000 price cap as the state grid faces some of the tightest conditions on power supplies so far this summer.
Prices on the grid jumped to about $4,750 a megawatt hour on Thursday afternoon, up from the grid average of $75 at the same time Wednesday, according to data from the electric reliability council of Texas, otherwise known as Ercot.
An intense heat wave is baking Texas, sending demand for electricity soaring as homes and businesses crank up the air conditioning. On Thursday, Ercot appealed to households and businesses to voluntarily conserve power from 3 p.m. to 8 p.m. to help reduce strain on the grid. No emergency has been declared – but the margin of spare supplies is expected to narrow significantly unless more power generation comes online or consumers restrict use.
CCS GETS ANOTHER CHANCE: Enchant Energy Corp. is pursuing a retrofit of the Four Corners plant on the Navajo Nation in New Mexico by installing carbon capture technology – even after a previous first attempt flopped.
As E&E reports, the bid arrives amid a heated debate over the EPA’s proposed power plant rules, and whether carbon capture and storage is adequately demonstrated on fossil fuels. Currently, there are no commercial-scale CCS projects operating in the U.S.’s power sector, even though the EPA’s proposal considers the technology to be a top option to keep certain gas and coal plants online past 2040. Plus, the Biden administration is banking on the technology to help the country reach its goals of decarbonizing the grid by 2035.
While the mothballed Petra Nova project in Texas – the only CCS power project ever to capture CO2 in the United States at scale – is aiming to restart operations this year, other proposals haven’t broken ground. This puts Enchant’s project in a race with other proposals to be the second largest power plant ever installed with the technology.
The Rundown
CNN In a record year of catastrophes, FEMA’s disaster fund is slipping into the red before hurricane season even peaks
Bloomberg Chinese solar makers face new tariffs after U.S. says they’re dodging duties
Reuters Oil’s 7-week winning streak at risk from China economy jitters
