The beginning of August looks like a potentially heart-stopping month for European energy, and this is already visible in today's prices (the graph). Multiple, seemingly unrelated sources of pressure are superimposed, which combine and will weigh on both the energy sector and many other aspects of the economy and our lives:
1. The drought and heat are being transferred from Western to Central and Eastern Europe. The production of hydroelectric power plants not only from large rivers, but also from the Alps, the Pyrenees, and the Carpathians is seriously decreasing. It is usually compensated by gas-fired power plants, but the price is high.
2. The drought is already affecting nuclear power plants. There are nuclear power plants that have been shut down not only in France, but also along the Danube - Hungary and Romania. The crisis could also affect Switzerland and the Czech Republic. And for these countries, the shutdown of a nuclear power plant is dramatic. The electricity shortage will be really big.
3. The heat stops the wind and at the same time significantly increases the consumption of cooling. The bad thing is that this is felt most strongly in the early evening hours, when the photovoltaics are no longer there.
4. The prices of liquefied natural gas remain high due to the Gulf War. At the same time, storage facilities are at a record low for this period of the year - on average only 55% as of August 1 for the entire EU. Gas-fired power plants will have to work as hard as possible, and at the same time, the filling process will have to be accelerated. There is no way it will happen.
5. The water levels in the dams in Norway are at a record low. Norway is the battery of Northwest Europe, but this summer it has no capacity. Even in southern Norway itself this year, extremely high electricity prices are being reported. And there is electricity everywhere - covering over 50% of final energy consumption. Will the dreamers of total electrification in Brussels pay attention to this red light?
6. The networks in Europe suffer from numerous bottlenecks and insufficient transmission capacity. The few countries with a surplus cannot help the majority with a shortage. Regional price spikes during peak hours will be shocking.
7. The war in the Persian Gulf continues to put pressure on the oil, gas and fuel markets. Even if the exchange prices of oil do not seem too high, this does not apply to the prices of final fuels. Diesel and kerosene remain very expensive. Refineries in Europe and the US are operating at unsustainable levels of 98-99% of their capacity. A strong hurricane in the US could throw the fuel market into chaos.
8. Ukraine's strikes against the Russian oil production and processing industry do not help much in this situation. Russia has temporarily become an importer of fuels, which is also putting strong pressure on the European market. The bad thing is that this also hinders exports from Kazakhstan, which is critical for us.
9. Shipping on the Rhine and Danube is dying. This is fatal for the supply of coal and petroleum fuels to countries such as Germany, Switzerland, Austria, Hungary, Serbia. Some coal-fired power plants that rely on imported black coal will not receive supplies. The same applies to all kinds of industries that rely on barges.
10. To top it all off, we have the ubiquitous carbon quotas, which keep the price stable above 80 euros/ton of CO2. This makes the operation of coal-fired power plants very expensive, which will have to be actively involved if we want to avoid power blackouts across Europe. However, it is unlikely that the Eurocrat will think of reducing the pressure on the system and all Europeans by lowering the prices of allowances...
Against this background, Bulgaria looks like an island of stability. Our Kozloduy NPP is extremely well prepared for low waters on the Danube. Not because it has a good climate adaptation strategy (it does not have one), but simply because it was designed and implemented at the time with an excellent plan to minimize risks and without regard to costs. If everything there happens according to the best practices for plant management, it should not lead to a unit being shut down.
Our dams are relatively full, which means that the HPP can produce a lot. The Chaira HPP is already operating with two turbines. The large photovoltaic capacities guarantee the daily surplus, and the record investments in batteries help it to be used in the evenings. The Maritsa East 2 TPP is constantly operating with 5 out of 8 units. It is no coincidence that Bulgaria reported such a large net export of electricity in July.
If electricity prices remain high, the state-owned TPP will turn on the others, and the private ones - TPP Bobov Dol and TPP KonturGlobal Maritsa-Iztok 3 - will also turn on the boilers. I assume that it is possible that even the AES Galabovo TPP will turn on. All this will ensure not only our consumption, but also record levels of export, which will be a lifesaver especially for Romania and Hungary.
Of course, I may be wrong, but it is better to be right.
These days, and the last few years, have proven something important – nature does not follow political strategies. There are days without sun, weeks without wind, years of drought and periods when rivers cannot produce electricity or cool nuclear reactors. Geopolitics and global fuel prices also do not take into account energy dreams. This is precisely why reliable energy is not built on opposing technologies, but on their combination. Nuclear power, hydroelectric power plants, renewable sources, natural gas and coal, energy storage systems, strong electricity transmission networks and sufficient reserves – each of these parts compensates for the weaknesses of the others.
Diversification is not an ideological choice, but a condition for security. The more diverse the energy mix and the more opportunities the system has to replace temporarily outages, the less it will depend on the vagaries of weather, wars and chance. In Europe, we do not lack technology, but statesmanship and action to ensure sustainable development.