Electricity News in October 2023
ERCOT Issues RFP to Procure Capacity to Alleviate Winter Concerns
ERCOT Winter Capacity RFP seeks up to 3,000 MW through generation and demand response to bolster Texas grid reliability during peak load, leveraging Reliability Must-Run, incentive factors, and EEA risk mitigation for the 2023-24 season.
Key Points
An ERCOT initiative to procure 3,000 MW of generation and demand response to reduce EEA risk and improve reliability.
✅ Targets 3,000 MW from generation and demand response
✅ Uses RMR-style contracts with flexible incentive factors
✅ Aims to lower EEA probability below 10% this winter
The Electric Reliability Council of Texas (ERCOT) issued a request for proposals to stakeholders to procure up to 3,000 MW of generation or demand response capacity to meet load and reserve requirements during the winter 2023-24 peak load season (Dec. 1, 2023, through Feb. 29, 2024), amid ongoing Texas power grid challenges across the region.
ERCOT cited “several factors, including significant peak load growth since last winter, recent and proposed retirements of dispatchable Generation Resources, and recent extreme winter weather events, including Winter Storm Elliott in December 2022, Winter Storm Uri in February 2021, and the 2018 and 2011 winter storms, each of which resulted in abnormally high demand during winter weather.” It now seeks additional capacity under its “authority to prevent an anticipated Emergency Condition,” reflecting nationwide blackout risks identified by grid experts.
In its notice regarding the RFP, ERCOT identified a number of mothballed and recently decommissioned generation resources that may be eligible to offer capacity under the RFP. It further stated that offers must comport with the format of its “Reliability Must-Run” agreement but could include a proposed “Incentive Factor” that reflects the revenues the unit owners determine would be necessary to bring the unit back to operation. It added that the Incentive Factor is not necessarily limited to 10%. Providers of eligible demand response can submit offers based on similar principles that are not necessarily constrained by cost. The notice identifies potential acceptable sources of demand response, describes certain parameters for the kinds of demand response that are permitted to respond to the RFP, and outlines the time periods during which ERCOT must be able to deploy the demand response resources to improve electricity reliability across the system.
To meet the Dec. 1, 2023, service start date, ERCOT developed an aggressive timeline to solicit and evaluate proposals through the RFP. Responses to the RFP are due Nov. 6, 2023. ERCOT’s schedule provides that it will notify market participants that obtain awards on Nov. 23, 2023. Expect contracts to be executed by Nov. 30, 2023.
Unlike Regional Transmission Organizations in the Northeastern United States, ERCOT does not have a capacity market. Instead, ERCOT relies on a high price cap of $5,000 per MWh for its energy market (decreased from the $9,000 per MWh cap in effect during Winter Storm Uri) and an Operating Reserve Demand Curve adder that pays additional funds to generators supplying power and ancillary services, an area recently scrutinized for improper payments when supply conditions are tight. In the wake of Winter Storm Uri, some calls were made to have ERCOT adopt a capacity market for reliability reasons, and a number of legal battles continue to play out in the wake of Winter Storm Uri. (See recent McGuireWoods legal alert “Winter Storm Uri Power Dispute Reaches the Supreme Court of Texas.”) Though a capacity market was not adopted, the Texas Legislature approved a $7.2 billion loan program, widely described as an electricity market bailout for generators, to build up to 10,000 MW of dispatchable generation. The legislature also approved a version of the Public Utility Commission of Texas’ proposal to establish a “Performance Credit Mechanism,” but with a cost cap of $1 billion.
The loss of life and economic impacts of Winter Storm Uri in 2021, along with the energy crunches and calls for conservation this past summer, are driving changes to ERCOT’s “energy-only” market, including electricity market reforms under consideration. Texas policymakers are providing multiple financial incentives to promote investment in dispatchable on-demand generation, and voters will consider funding to modernize generation measures this year to make the Texas grid more reliable and able to deal with power demand from a growing economy and increased demand for electricity driven by weather. In the meantime, ERCOT’s plan to procure 3,000 MW through this RFP process is a stopgap measure intended to bolster reliability for the upcoming winter season and lower the probability of load shed in the event of severe winter weather.
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California allows electric school buses only from 2035
California Electric School Bus Mandate 2035 sets zero-emission requirements, outlines funding, state reimbursement, fleet electrification, infrastructure, and cost estimates, highlighting exemptions for frontier districts and alignment with clean transportation and climate policy goals.
Key Points
California's 2035 policy requires all new school buses be zero-emission, with funding and limited rural exemptions.
✅ Mandates zero-emission purchases for new school buses from 2035
✅ Estimates $5B transition cost with state reimbursement support
✅ Frontier districts may apply for 5-year extensions
California Governor Gavin Newsom has signed a new legislation requiring that from 2035, all newly ordered or contracted school buses must be zero-emission, a move aligned with California's push for expanded EV grid capacity statewide.
The state estimates that switching to electric school buses will cost around five billion dollars over the next decade, a projection reflecting electric bus challenges seen globally. That is because a diesel equivalent costs about 200,000 dollars less than a battery-electric version, as highlighted by critical analyses of California policy. And “the California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state.”
There are about 23,800 school buses on the road in California. About 500 are already electric, with conversion initiatives expected to expand the total, and 2,078 electric buses have been ordered.
There are – as always- exceptions to the rule. So-called “frontier districts,” which have less than 600 students or are in a county with a population density of less than ten persons per square mile, can file for a five-year extension, drawing on lessons from large electric bus fleets about route length and charging constraints. However, they must “reasonably demonstrate that a daily planned bus route for transporting pupils to and from school cannot be serviced through available zero-emission technology in 2035.”
Califonia is the fifth US state to mandate electric school buses, and jurisdictions like British Columbia are deploying electric school buses as well. Connecticut, Maryland, Maine, and New York implemented similar legislation, while California continues broader zero-emission freight adoption with Volvo VNR electric trucks entering service across the state.
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What to know about DOE's hydrogen hubs
U.S. Clean Hydrogen Hubs aim to scale production, storage, transport, and use as DOE and the Biden administration fund regional projects under the infrastructure law, blending green and blue hydrogen, carbon capture, renewables, and pipelines.
Key Points
Federally funded regional projects to make, move, and use low-carbon hydrogen via green, blue, and pink routes.
✅ $7B DOE funding via infrastructure law
✅ Mix of green, blue, pink hydrogen pathways
✅ Targets 10M metric tons annually by 2030
New details are emerging about the Biden administration’s landmark plans to build out a U.S. clean hydrogen industry.
On Friday, the Department of Energy named the seven winners of $7 billion in federal funds to establish regional hydrogen hubs. The hubs — funded through the infrastructure law — are part of the administration’s efforts to jump-start an industry it sees as key to achieving climate goals like the goal of 100 percent clean electricity by 2035 set by the administration. The aim is to demonstrate everything from the production and storage of hydrogen to its transport and consumption.
“All across the country, from coast to coast, in the heartland, we’re building a clean energy future here in America, not somewhere else,” President Joe Biden said while announcing the hubs in Philadelphia.
From 79 initial proposals, DOE chose the following: the Mid-Atlantic Hydrogen Hub, Appalachian Hydrogen Hub, California Hydrogen Hub, Gulf Coast Hydrogen Hub, Heartland Hydrogen Hub, Midwest Hydrogen Hub and Pacific Northwest Hydrogen Hub.
Many of the winning proposals are backed by state government leaders and industry partners, and by Southeast cities that have ramped up clean energy purchases in recent years as well. The Midwest hub, for example, is a coalition of Illinois, Indiana and Michigan — supported by politicians like Illinois Gov. J.B. Pritzker (D), as well as such companies as Air Liquide, Ameren Illinois and Atlas Agro. The mid-Atlantic hub is supported by Democratic members of Congress representing the region, including Delaware Sens. Chris Coons and Tom Carper and Rep. Lisa Blunt Rochester.
The administration hopes the hubs will produce 10 million metric tons of “clean” hydrogen annually by 2030. But much about the projects remains unknown — including how trends like cheap batteries for solar could affect clean power supply — and dependent on negotiations with DOE.
A win for ‘blue’ hydrogen?
Nearly all hydrogen created in the U.S. today is extracted from natural gas through steam methane reformation. The emissions-intensive process produces what is known as “grey” hydrogen — or “blue” hydrogen when combined with carbon capture and storage.
Four recipients — the Appalachian, Gulf Coast, Heartland and Midwest hydrogen hubs — include blue hydrogen in their plans, though the infrastructure law only mandated one.
That has drawn the ire of environmentalists, who argue blue hydrogen is not emissions-free, partly because of the potential for methane leaks during the production process.
“This is worse than expected,” Clean Energy Group President Seth Mullendore said after the recipients were announced Friday. “The fact that more than half the hubs will be using fossil gas is outrageous.”
Critics have also pointed out that many of the industry partners backing the hub projects include oil and gas companies. The coalitions are a mix of private-sector groups — often including renewable energy developers — and government stakeholders. Proposals have also looped in universities, utilities, environmental groups, community organizations, labor unions and tribal nations, among others.
“The massive build out of hydrogen infrastructure is little more than an industry ploy to rebrand fracked gas,” said Food & Water Watch Policy Director Jim Walsh in a statement Friday. “In a moment when every political decision that we make must reject fossil expansion, the Biden administration is going in the opposite direction.”
The White House has emphasized that roughly two-thirds of the $7 billion pot is “associated” with the production of “green” hydrogen, which uses electricity from renewable sources. Two of the chosen proposals — in California and the Pacific Northwest — are making green hydrogen their focus, reflecting advances such as offshore green hydrogen being pursued by industry leaders, while three other hubs plan to include green hydrogen alongside hydrogen made with natural gas (blue) or nuclear energy (pink).
Many hubs plan to use several methods for hydrogen production, and globally, projects like Brazil's green hydrogen plant highlight the scale of investment, but the exact mix may change depending on which projects make it through the DOE negotiations process. The Midwest hub, for example, told E&E News it’s pursuing an “all-of-the-above” strategy and has projects for green, blue and “pink” hydrogen. The mid-Atlantic hub in southeastern Pennsylvania, Delaware and New Jersey will also generate hydrogen with nuclear reactors.
Energy Secretary Jennifer Granholm has described clean hydrogen as a fresh business opportunity, especially for the natural gas industry, which has supported the concept of sending hydrogen to market through its pipeline network. Lawmakers like Sen. Joe Manchin (D-W.Va.) — who said the Appalachian hub will make West Virginia the “new epicenter of hydrogen” — have pushed for continuing to use natural gas to make hydrogen in his state.
“Natural gas utilities are committed to exploring all options for emissions reduction as demonstrated by the 39 hydrogen pilot projects already underway and are eager to participate in a number of the hubs,” said American Gas Association President and CEO Karen Harbert in a statement Friday.
Green hydrogen also has faced criticism. Some groups argue that the renewable resources needed to produce green hydrogen are limited, even with sources such as wind, solar and hydropower technology, so funding should be reserved for applications that cannot be easily electrified, mostly industrial processes. There also is uncertainty about how the Treasury Department will handle hydrogen made from grid electricity — which can include power from fossil fuel plants — in its upcoming guidance on the first-ever tax credit for clean hydrogen production.
“Even the cleanest forms of hydrogen present serious problems,” Walsh said. “As groundwater sources are drying up across the country, there is no reason to waste precious drinking water resources on hydrogen when there are cheaper, cleaner energy sources that can facilitate a real transition off fossil fuels.”
But Angelina Galiteva, CEO of the hub in drought-prone California, said hydrogen will enable the state “to increase renewable penetration to reach all corners of the economy,” noting parallel initiatives such as Dubai's solar hydrogen plans that illustrate the potential.
“Transitioning to renewable clean hydrogen will pose significantly less stress on water resources than remaining on the current fossil path,” she said.
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Tesla prepares to bring its electric cars to South America
Tesla Chile Market Entry signals EV expansion into South America, with a Santiago country manager, service technicians, and advisors, leveraging lithium supply, competing with BYD, and preparing sales, service, and charging infrastructure.
Key Points
Tesla will enter Chile to launch EV sales, service, and charging from Santiago, opening its South America expansion.
✅ Country manager role based in Santiago to lead market launch
✅ Focus on EV sales, service centers, and charging infrastructure
✅ Leverages Chile's lithium ecosystem; competes with BYD
Tesla is preparing to bring its electric cars to South America, according to a new job posting in Chile.
It has been just over a decade since Tesla launched the Model S and significantly accelerated EV inflection point in the deployment of electric vehicles around the world.
The automaker has expanded its efforts across North America, where the U.S. EV tipping point has been reached, and most countries in Europe, and it is still gradually expanding in Asia.
But there’s one continent that Tesla hasn’t touched yet: South America, even as global EV adoption raced to two million in five years.
It sounds like it is about to change.
Tesla has started to promote a job posting on LinkedIn for a country manager in Chile, aligning with international moves like UK expansion plans it has signaled.
The country manager is generally the first person hired when Tesla expands in a new market.
The job is going to be based in Santiago, the capital of Chile, where the company is also looking for some Tesla advisors and service technicians.
Chile is an interesting choice for a first entry into the South American market. The Chilean auto market consists of only about 234,000 vehicles sold year-to-date and that’s down 29% versus the previous year.
That’s roughly the number of vehicles sold in Brazil every month.
While the size of the auto market in the country is small, there’s a strong interest for electric vehicles as the EV era arrives ahead of schedule there, which might explain Tesla’s foray.
The country is rich in lithium, a critical material for EV batteries, where lithium supply concerns have also emerged, which has helped create interest for electric vehicles in the country. The government also announced an initiative to allow for only new sales of electric vehicles in the country starting in 2035.
Tesla’s Chinese competitor BYD has set its sight on the South American market by bringing its cheaper China-made EVs to the market, part of a broader Chinese EV push in Europe as well, but now it looks like Tesla is willing to test the market on the higher-end.
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America Going Electric: Dollars And Sense
California Net Zero Grid Investment will fuel electrification, renewable energy buildout, EV adoption, and grid modernization, boosting utilities, solar, and storage, while policy, IRA incentives, and transmission upgrades drive reliability and long-term rate base growth.
Key Points
Funding to electrify sectors and modernize the grid, scaling renewables, EVs, and storage to meet 2045 net zero goals.
✅ $370B over 22 years to meet 2045 net zero target
✅ Utilities lead gains via grid modernization and rate base growth
✅ EVs, solar, storage scale; IRA credits offset costs
$370 billion: That’s the investment Edison International CEO Pedro Pizarro says is needed for California’s power grid to meet the state’s “net zero” goal for CO2 emissions by 2045.
Getting there will require replacing fossil fuels with electricity in transportation, HVAC systems for buildings and industrial processes. Combined with population growth and data demand potentially augmented by artificial intelligence, that adds up to an 82 percent increase in electricity demand over 22 years, or 3 percent annually, and a potential looming shortage if buildout lags.
California’s plans also call for phasing out fossil fuel generation in the state, despite ongoing dependence on fossil power during peaks. And presumably, its last nuclear plant—PG&E Corp’s (PCG) Diablo Canyon—will be eventually be shuttered as well. So getting there also means trebling the state’s renewable energy generation and doubling usage of rooftop solar.
Assuming this investment is made, it’s relatively easy to put together a list of beneficiaries. Electric vehicles hit 20 percent market share in the state in Q2, even as pandemic-era demand shifts complicate load forecasting. And while competition from manufacturers has increased, leading manufacturers like Tesla TSLA -3% Inc (TSLA) can look forward to rising sales for some time—though that’s more than priced in for Elon Musk’s company at 65 times expected next 12 months earnings.
In the past year, California regulators have dialed back net metering through pricing changes affecting compensation, a subsidy previously paying rooftop solar owners premium prices for power sold back to the grid. That’s hit share prices of SunPower Corp (SPWR) and Sunrun Inc (RUN) quite hard, by further undermining business plans yet to demonstrate consistent profitability.
Nonetheless, these companies too can expect robust sales growth, as global prices for solar components drop and Inflation Reduction Act tax credits at least somewhat offset higher interest rates. And the combination of IRA tax credits and U.S. tariff walls will continue to boost sales at solar manufacturers like JinkoSolar Holding (JKS).
The surest, biggest beneficiaries of California’s drive to Net Zero are the utilities, reflecting broader utility trends in grid modernization, with investment increasing earnings and dividends. And as the state’s largest pure electric company, Edison has the clearest path.
Edison is currently requesting California regulators OK recovery over a 30-year period of $2.4 billion in losses related to 2017 wildfires. Assuming a amicable decision by early next year, management can then turn its attention to upgrading the grid. That investment is expected to generate long-term rate base growth of 8 percent at year, fueling 5 to 7 percent annual earnings growth through 2028 with commensurate dividend increases.
That’s a strong value proposition Edison stock, with trades at just 14 times expected next 12 months earnings. The yield of roughly 4.4 percent at current prices was increased 5.4 percent this year and is headed for a similar boost in December.
When California deregulated electricity in 1996, it required utilities with rare exceptions to divest their power generation. As a result, Edison’s growth opportunity is 100 percent upgrading its transmission and distribution grid. And its projects can typically be proposed, sited, permitted and built in less than a year, limiting risk of cost overruns to ensure regulatory approval and strong investment returns.
Edison’s investment plan is also pretty much immune to an unlikely backtracking on Net Zero goals by the state. And the company has a cost argument as well: Dr Pizarro cites U.S. Department of Energy and Department of Transportation data to project inflation-adjusted savings of 40 percent in California’s total customer energy bills from full electrification.
There’s even a reason to believe 40 percent savings will prove conservative. Mainly, gasoline currently accounts for a bit more than half energy expenditures. And after a more than 10-year global oil and gas investment drought, supplies are likely get tighter and prices possibly much higher in coming years.
Of course, those savings will only show up after significant investment is made. At this point, no major utility system in the world runs on 100 percent renewable energy, and California’s blackout politics underscore how reliability concerns shape deployment. And the magnitude of storage technology needed to overcome intermittency in solar and wind generation is not currently available let alone affordable, though both cost and efficiency are advancing.
Taking EVs from 20 to 100 percent of California’s new vehicle sales calls for a similar leap in efficiency and cost, even with generous federal and state subsidy. And while technology to fully electrify buildings and homes is there, economically retrofitting statewide is almost certainly going to be a slog.
At the end of the day, political will is likely to be as important as future technological advance for how much of Pizarro’s $370 billion actually gets spent. And the same will be true across the U.S., with state governments and regulators still by and large calling the shots for how electricity gets generated, transmitted and distributed—as well as who pays for it and how much, even as California’s exported policies influence Western markets.
Ironically, the one state where investors don’t need to worry about renewable energy’s prospects is one of the currently reddest politically. That’s Florida, where NextEra Energy NEE +2.8% (NEE) and other utilities can dramatically cut costs to customers and boost reliability by deploying solar and energy storage.
You won’t hear management asserting it can run the Sunshine State on 100 percent renewable energy, as utilities and regulators do in some of the bluer parts of the country. But by demonstrating the cost and reliability argument for solar deployment, NextEra is also making the case why its stock is America’s highest percentage bet on renewables’ growth—particularly at a time when all things energy are unfortunately becoming increasingly, intensely political.
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France Hits Record: 20% Of Market Buys Electric Cars
France Plug-In Electric Car Sales September 2023 show rapid EV adoption: 45,872 plug-ins, 30% market share, BEV 19.6%, PHEV 10.2%, with Tesla Model Y leading registrations amid sustained year-over-year growth.
Key Points
France registered 45,872 plug-ins in September 2023, a 30% share, with BEVs at 19.6% and PHEVs at 10.2%.
✅ Tesla Model Y led BEVs with 5,035 registrations in September
✅ YTD plug-in share 25%; BEV 15.9%, PHEV 9.1% across passenger cars
✅ Total market up 9% YoY to 153,916; plug-ins up 35% YoY
New passenger car registrations in France increased in September by nine percent year-over-year to 153,916, mirroring global EV market growth trends, taking the year-to-date total to 1,286,247 (up 16 percent year-over-year).
The market has been expanding every month this year (recovering slightly from the 2020-2022 collapse and the period when EU EV share grew during lockdowns across the bloc) and also is becoming more and more electrifying thanks to increasing plug-in electric car sales.
According to L’Avere-France, last month 45,872 new passenger plug-in electric cars were registered in France (35 percent more than a year ago), which represented almost 30 percent of the market, aligning with the view that the age of electric cars is arriving ahead of schedule. That's a new record share for rechargeable cars and a noticeable jump compared to just over 24 percent a year ago.
What's even more impressive is that passenger all-electric car registrations increased to over 30,000 (up 34 percent year-over-year), taking a record share of 19.6 percent of the market. That's basically one in five new cars sold, and in the U.S., plug-ins logged 19 billion electric miles in 2021 as a benchmark.
Plug-in hybrids are also growing (up 35% year-over-year), and with 15,699 units sold, accounted for 10.2 percent of the market (a near record value).
Plug-in car sales in France – September 2023
So far this year, more than 341,000 new plug-in electric vehicles have been registered in France, including over 321,000 passenger plug-in cars (25 percent of the market), while in the U.S., EV sales are soaring into 2024 as well.
Plug-in car registrations year-to-date (YOY change):
- Passenger BEVs: 204,616 (up 45%) and 15.9% market share
- Passenger PHEVs: 116,446 (up 31%) and 9.1% market share
- Total passenger plug-ins: 321,062 (up 40%) and 25% market share
- Light commercial BEVs: 20,292 (up 111%)
- Light commercial PHEVs: 281 (down 38%)
- Total plug-ins: 341,635 (up 43%)
For reference, in 2022, more than 346,000 new plug-in electric vehicles were registered in France (including almost 330,000 passenger cars, which was 21.5 percent of the market).
We can already tell that the year 2023 will be very positive for electrification in France, with a potential to reach 450,000 units or so, though new EV incentive rules could reshape the competitive landscape.
Models
In terms of individual models, the Tesla Model Y again was the most registered BEV with 5,035 new registrations in September. This spectacular result enabled the Model Y to become the fifth best-selling model in the country last month (Tesla, as a brand, was seventh).
The other best-selling models are usually small city cars - Peugeot e-208 (3,924), Dacia Spring (2,514), Fiat 500 electric (2,296), and MG4 (1,945), amid measures discouraging Chinese EVs in France. Meanwhile, the best-selling electric Renault - the Megane-e - was outside the top five BEVs, which reveals to us how much has changed since the Renault Zoe times.
After the first nine months of the year, the top three BEVs are the Tesla Model Y (27,458), Dacia Spring (21,103), and Peugeot e-208 (19,074), slightly ahead of the Fiat 500 electric (17,441).
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France and Germany arm wrestle over EU electricity reform
EU Electricity Market Reform CFDs seek stable prices via contracts for difference, balancing renewables and nuclear, shielding consumers, and boosting competitiveness as France and Germany clash over scope, grid expansion, and hydrogen production.
Key Points
EU framework using contracts for difference to stabilize power prices, support renewables and nuclear, and protect users.
✅ Guarantees strike prices for new low-carbon generation
✅ Balances consumer protection with industrial competitiveness
✅ Disputed scope: nuclear inclusion, grids, hydrogen eligibility
Despite record temperatures this October, Europe is slowly shifting towards winter - its second since the Ukraine war started and prompted Russia to cut gas supplies to the continent amid an energy crisis that has reshaped policy.
After prices surged last winter, when gas and electricity bills “nearly doubled in all EU capitals”, the EU decided to take emergency measures to limit prices.
In March, the European Commission proposed a reform to revamp the electricity market “to boost renewables, better protect consumers and enhance industrial competitiveness”.
However, France and Germany are struggling to find a compromise as rolling back prices is tougher than it appears and the clock is ticking as European energy ministers prepare to meet on 17 October in Luxembourg.
The controversy around CFDs
At the heart of the issue are contracts for difference (CFDs).
By providing a guaranteed price for electricity, CFDs aim to support investment in renewable energy projects.
France - having 56 nuclear reactors - is lobbying for nuclear energy to be included in the CFDs, but this has caught the withering eye of Germany.
Berlin suspects Paris of wanting an exception that would give its industry a competitive advantage and plead that it should only apply to new investments.
France wants ‘to regain control of the price’
The disagreement is at the heart of the bilateral talks in Hamburg, which started on Monday, between the French and German governments.
French President Emmanuel Macron promised “to regain control of the price of electricity, at the French and European level” and outlined a new pricing scheme in a speech at the end of September.
As gas electricity is much more expensive than nuclear electricity, France might be tempted to switch to a national system rather than a European one after a deal with EDF on prices to be more competitive economically.
However, France is "confident" that it will reach an agreement with Germany on electricity market reforms, Macron said on Friday.
Siding with France are other pro-nuclear countries such as Hungary, the Czech Republic and Poland, while Germany can count on the support of Austria, Luxembourg, Belgium and Italy amid opposition from nine EU countries to treating market reforms as a price fix.
But even if a last-minute agreement is reached, the two countries’ struggles over energy are creeping into all current European negotiations on the subject.
Germany wants a massive extension of electricity grids on the continent so that it can import energy; France is banking on energy sovereignty and national production.
France wants to be able to use nuclear energy to produce clean hydrogen, while Germany is reluctant, and so on.
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The nuclear power dispute driving a wedge between France and Germany
Franco-German Nuclear Power Divide shapes EU energy policy, electricity market reform, and decarbonization strategies, as Paris backs reactors and state subsidies while Berlin prioritizes renewables, hydrogen, and energy security after Russian gas shocks.
Key Points
A policy rift over nuclear shaping EU market reform, subsidies, and the balance between reactors and renewables.
✅ Nuclear in EU targets vs. renewables-first strategy
✅ Market design disputes over long-term power prices
✅ Energy security after Russian gas; hydrogen definitions
Near the French village of Fessenheim, facing Germany across the Rhine, a nuclear power station stands dormant. The German protesters that once demanded the site’s closure have decamped, in a sign of Europe's nuclear decline, and the last watts were produced three years ago.
But disagreements over how the plant from 1977 should be repurposed persist, speaking to a much deeper divide over nuclear power, which Eon chief's warning to Germany underscored, between the two countries on either side of the river’s banks.
German officials have disputed a proposal to turn it into a centre to treat metals exposed to low levels of radioactivity, Fessenheim’s mayor Claude Brender says. “They are not on board with anything that might in some way make the nuclear industry more acceptable,” he adds.
France and Germany’s split over nuclear power is a tale of diverging mindsets fashioned over decades, including since the Chernobyl disaster in USSR-era Ukraine. But it has now become a major faultline in a touchy relationship between Europe’s two biggest economies.
Their stand-off over how to treat nuclear in a series of EU reforms has consequences for how Europe plans to advance towards cleaner energy. It will also affect how the bloc secures power supplies as the region weans itself off Russian gas, even though nuclear would do little for the gas issue, and how it provides its industry with affordable energy to compete with the US and China.
“There can be squabbles between partners. But we’re not in a retirement home today squabbling over trivial matters. Europe is in a serious situation,” says Eric-André Martin, a specialist in Franco-German relations at French think-tank IFRI.
France, which produces two-thirds of its power from nuclear plants and has plans for more reactors, is fighting for the low-carbon technology to be factored into its targets for reducing emissions and for leeway to use state subsidies to fund the sector.
For Germany, which closed its last nuclear plants this year and, having turned its back on nuclear, has been particularly shaken by its former reliance on Russian gas, there’s concern that a nuclear drive will detract from renewable energy advances.
But there is also an economic subtext in a region still reeling from an energy crisis last year, reviving arguments for a needed nuclear option for climate in Germany, when prices spiked and laid bare how vulnerable households and manufacturers could become.
Berlin is wary that Paris would benefit more than its neighbours if it ends up being able to guarantee low power prices from its large nuclear output as a result of new EU rules on electricity markets, amid talk of a possible U-turn on the phaseout, people close to talks between the two countries say.
Ministers on both sides have acknowledged there is a problem. “The conflict is painful. It’s painful for the two governments as well as for our [EU] partners,” Sven Giegold, state secretary at the German economy and climate action ministry, where debates about whether a nuclear resurgence is possible persist, tells the Financial Times.
Agnès Pannier-Runacher, France’s energy minister, says she wants to “get out of the realm of the emotional and move past the considerable misunderstandings that have accumulated in this discussion”.
In a joint appearance in Hamburg last week, German chancellor Olaf Scholz and French president Emmanuel Macron made encouraging noises over their ability to break the latest deadlock: a disagreement over the design of the EU’s electricity market. Ministers had been due to agree a plan in June but will now meet on October 17 to discuss the reform, aimed at stabilising long-term prices.
But the French and German impasse on nuclear has already slowed down debates on key EU policies such as rules on renewable energy and how hydrogen should be produced. Smaller member states are becoming impatient. The delay on the market design is “a big Franco-German show of incompetence again”, says an energy ministry official from another EU country who requested anonymity.
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The Banker Trying to Fix the UK's Electricity Grid
UK power grid bottleneck is stalling renewable energy, with connection queues, planning delays, and transmission infrastructure gaps raising costs, slowing decarbonization, and deterring investment as government considers reforms led by a new chief adviser.
Key Points
Delays and capacity gaps that hinder connecting new generation and demand, raising costs and slowing decarbonization.
✅ Connection queues delay projects for years
✅ Planning and NIMBY barriers stall transmission builds
✅ Investment costs on bills risk political pushback
During his three decades at investment bank Morgan Stanley, Franck Petitgas developed a reputation for solving problems that vexed others. Fixing the UK’s creaking power grid could be his most challenging task yet.
Earlier this year, Prime Minister Rishi Sunak appointed Petitgas as his chief business adviser, and the former financier has been pushing to tackle the gridlock that’s left projects waiting endlessly for a connection, an issue he sees as one of the biggest problems for industry.
But there are no easy solutions to tackle the years-long queue to get on the grid or the drawn-out planning process for building clean power generation, with the energy transition stalled by supply delays compounding the problem. And sluggish progress in expanding and improving the electricity network is preventing the construction of new housing developments and offices, as well as slowing the transition to greener power.
That transition has already taken a knock after Sunak last week controversially watered down some of the UK’s climate ambitions, citing in part the cost to consumers. He also acknowledged the issues surrounding the grid and promised the “most transformative plans” in response, drawing on lessons from Europe’s power crisis where applicable. Those are due to be unveiled within weeks.
Shortly after his appointment, Petitgas offered reassurances to business leaders at a meeting in Downing Street that solutions were being worked on, according to people familiar with the matter. But there’s a lack of confidence across business that enough will be done.
Cost is a big factor in the expansion of the electricity grid, and some argue a state-owned generation model could ease bills over time. Improving the onshore network alone could require investment of between £100 billion and £240 billion ($122-$293 billion) by 2050, according to a government analysis last year.
With network expansion funded through power bills, that’s a big ask, particularly with Sunak trailing in polls ahead of an election expected next year.
“It’s very difficult for politicians to say more money should be on bills,” said Emma Pinchbeck, chief executive of Energy UK, a trade body. “So you get to a situation where no one wants to pay for the infrastructure investment until it’s really sticky, and that’s where we’ve got to with the grid.”
There are huge competitive and economic implications if the UK falls further behind. With US President Joe Biden spending an estimated $370 billion on climate measures through his Inflation Reduction Act, and China already a world leader in electric vehicles, Britain’s grid inaction is holding it back in the global race to decarbonize, said Jess Ralston, an analyst at the Energy and Climate Intelligence Unit think tank.
“The UK is dithering and delaying, and not making any strategic decisions,” she said. “You can see companies just saying ‘I’m going to the US, or I’m going to China’.”
In a statement, the government said it’s a “priority to speed up the time taken to connect new power generators and power consumers to the grid.” It added that it’s taking “significant steps to accelerate grid infrastructure,” including support for new Channel interconnectors announced this year.
The government expects demand for electricity to double by 2035 and that will mean more generation that needs to be linked up to the network by cables and pylons. Local grids will also have to expand to accommodate more connection points for electric vehicles and homes, and invest in large-scale energy storage capacity to balance supply.
But so far, the rapid rise in renewable energy investment has not been accompanied by matching spend on the power network, according to BloombergNEF, a pattern seen in Germany’s grid expansion woes as well.
“The pace and scale of what we now have to deliver is significantly different from the last few decades,” said Carl Trowell, president of UK strategic infrastructure at National Grid. “It’s a national endeavor.”
In June, Electricity Networks Commissioner Nick Winser sent the government recommendations for how to accelerate construction of more transmission infrastructure. He said efforts to decarbonize the power sector will be “wasted if we cannot get the power to homes and businesses.”
“We need a seriously stronger sense of urgency,” said Kevin O’Donovan, country manager for Statkraft UK, which is holding off investment in four wind farms and two solar projects due to grid connection delays.
In addition to cost, the other major stumbling block is planning. Politicians in the governing Conservative Party are wary of angering voters with new infrastructure in rural areas that typically vote Tory. Across the country, “Not In My Back Yard” campaigners – NIMBYs — pose a major challenge to projects.
Petitgas, 62, retired from Morgan Stanley last year after nearly 30 years at the bank, where he led its international division from London. The issues over connections and planning have been repeatedly pointed out to Petitgas by investors and trade groups over a series of meetings this year, according to people familiar with the matter, requesting anonymity discussing private talks.
Yet with a general election looming and the issue plagued by political headaches, many are skeptical that Sunak can find the solutions needed.
One business chief said Downing Street considers the issue too tricky and expensive to tackle in the short-term. Others are concerned that while Petitgas has license from Sunak, he doesn’t have influence across the relevant departments to get grids to the top of the agenda.
Wind Farms
Multiple parts of the UK’s climate plans are under pressure. Earlier this month, an auction for contracts to build new wind farms received zero bids from developers, even as wind leads the power mix in many regions, marking yet another green setback.
The UK is already behind on its target of having 50 gigawatts of offshore wind built by 2030, up from 14 GW today. The challenge is accelerating development without railroading local communities.
Within Sunak’s Conservative Party, some lawmakers are pushing back on new infrastructure in their local areas. A group including Environment Secretary Therese Coffey and former Home Secretary Priti Patel is campaigning against building new pylons across a stretch of eastern England.
According to Adam Bell, director of policy at consultancy Stonehaven, backbench pressure means Sunak is unlikely to take major action on the grid in the near term. He doesn’t see the prime minister accepting Winser’s recommendations, least of all accelerating planning decisions.
“Over the last year, Sunak has favored party management over things that will benefit the country,” Bell said.
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UK Electric cars will cost more if Sunak fails to strike Brexit deal
UK-EU EV Tariffs 2024 threaten a 10% levy under Brexit rules of origin, raising electric vehicle prices, straining battery supply chains, and risking a price war for manufacturers, consumers, and climate targets across automotive market.
Key Points
Tariffs from Brexit rules of origin imposing 10% duties on EVs, raising UK prices amid battery and supply chain gaps.
✅ 10% tariffs if rules of origin thresholds are unmet
✅ Price hikes on UK EVs, led by Tesla Model Y
✅ Battery supply gaps strain UK and EU manufacturers
Electric cars will cost British motorists an extra £6,000 if Rishi Sunak fails to strike a post-Brexit deal with the EU on tariffs, industry bosses have told The Independent.
UK manufacturers warned of a “devastating price war” on consumers, echoing UK concern over higher EV prices across the market – threatening both the electric vehicle (EV) market and the UK’s climate change commitments – if tariffs are enforced in January 2024.
In the latest major Brexit row, the Sunak government is pushing the European Commission to agree to delay the costly new rules, even as the UK readies for rising EV adoption across the economy, set to come in at the start of next year as part of Boris Johnson’s Brexit trade deal.
But Brussels has shown no sign it is willing to budge – even as Washington has announced a 100% tariff on Chinese-made EVs this year – leaving business leaders in despair about the impact of 10 per cent tariffs on exports on Britain’s car industry.
The tariffs would increase the price of a new Tesla Model Y – the UK’s most popular electric vehicle – by £6,000 or more, according to a new report by the Independent Commission on UK-EU Relations.
“For the sake of our economy and our planet, the government has a responsibility to get round the table with the EU, fix this and fix the raft of other issues with the Brexit deal,” said commission director Mike Buckley.
The new rules of origin agreed in the Brexit trade and cooperation agreement (TCA) require 45 per cent of an electric car’s value, as the age of electric cars accelerates, to originate in the UK or EU to qualify for trade without tariffs.
The British auto industry has warned the 2024 rules pose an “existential threat” to sales because of the lack of domestic batteries to meet the rules, even as EV adoption within the decade is widely expected to surge – pleading for a delay until 2027.
The VDA – the lobby group for Germany’s car industry – has also called for an “urgent” move to delay, warning that the rules create a “significant competitive disadvantage” for European carmarkers in relation to China, where tariffs on Chinese EVs are reshaping global trade, and other Asian competitors.
The new report by the Independent Commission on UK-EU Relations – backed by the manufacturers’ body Make UK and the British Chamber of Commerce – warns that the January tariffs will immediately push up costs and hit electric vehicle sales, despite UK EV inquiries surging during the fuel supply crisis in recent years.
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Ontario, Quebec to swap energy in new deal to help with electricity demands
Ontario-Quebec Energy Swap streamlines electricity exchange, balancing peak demand across clean grids with hydroelectric and nuclear power, enhancing reliability, capacity banking, and interprovincial load management for industry growth, EV adoption, and seasonal heating-cooling needs.
Key Points
10-year, no-cash power swap aligning peaks; hydro and nuclear enhance reliability and let Ontario bank capacity.
✅ Up to 600 MW exchanged yearly; reviews adjust volumes
✅ Peaks differ: summer A/C in Ontario, winter heating in Quebec
✅ Capacity banking enables future-year withdrawals
Ontario and Quebec have agreed to swap energy to build on an electricity deal to help each other out when electricity demands peak.
The provinces' electricity operators, the Independent Electricity System Operator holds capacity auctions and Hydro-Quebec, will trade up to 600 megawatts of energy each year, said Ontario Energy Minister Todd Smith.
“The deal just makes a lot of sense from both sides,” Smith said in an interview.
“The beauty as well is that Quebec and Ontario are amongst the cleanest grids around.”
The majority of Ontario's power comes from nuclear energy while the majority of Quebec's energy comes from hydroelectric power, including Labrador power in regional transmission networks.
The deal works because Ontario and Quebec's energy peaks come at different times, Smith said.
Ontario's energy demands spike in the summer, largely driven by air conditioning on hot days, and the province has occasionally set off-peak electricity prices to provide temporary relief, he said.
Quebec's energy needs peak in the winter, mostly due to electric heating on cold days.
The deal will last 10 years, with reviews along the way to adjust energy amounts based on usage.
“With the increase in energy demand, we must adopt more energy efficiency programs like Peak Perks and intelligent measures in order to better manage peak electricity consumption,” Quebec's Energy Minister Pierre Fitzgibbon wrote in a statement.
Smith said the energy deal is a straight swap, with no payments on either side, and won't reduce hydro bills as the transfer could begin as early as this winter.
Ontario will also be able to bank unused energy to save capacity until it is needed in future years, Smith said.
Both provinces are preparing for future energy needs, as electricity demands are expected to grow dramatically in the coming years with increased demand from industry and the rise of electric vehicles, and Ontario has tabled legislation to lower electricity rates to support consumers.
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N.S. abandons Atlantic Loop, will increase wind and solar energy projects
Nova Scotia Clean Power Plan 2030 pivots from the Atlantic Loop, scaling wind and solar, leveraging Muskrat Falls via the Maritime Link, adding battery storage and transmission upgrades to decarbonize grid and retire coal.
Key Points
Nova Scotia's 2030 roadmap to replace coal with wind, solar, hydro imports, storage, and grid upgrades.
✅ 1,000 MW onshore wind to supply 50% by 2030
✅ Battery storage sites and New Brunswick transmission upgrades
✅ Continued Muskrat Falls imports via Maritime Link
Nova Scotia is abandoning the proposed Atlantic Loop in its plan to decarbonize its electrical grid by 2030 amid broader discussions about independent grid planning nationwide, Natural Resources and Renewables Minister Tory Rushton has announced.
The province unveiled its clean power plan calling for 30 per cent more wind power and five per cent more solar energy in the Nova Scotia power grid over the coming years. Nova Scotia's plan relies on continued imports of hydroelectricity from the Muskrat Falls project in Labrador via the Emera-owned Maritime Link.
Right now Nova Scotia generates 60 per cent of its electricity by burning fossil fuels, mostly coal, and some increased use of biomass has also factored into the mix. Nova Scotia Power must close its coal plants by 2030 when 80 per cent of electricity must come from renewable sources in order reduce greenhouse gas emissions causing climate changes.
Critics have urged reducing biomass use in electricity generation across the province.
The clean power plan calls for an additional 1,000 megawatts of onshore wind by 2030 which would then generate 50 per cent of the the province's electricity, while also advancing tidal energy in the Bay of Fundy as a complementary source.
"We're taking the things already know and can capitalize on while we build them here in Nova Scotia," said Rushton, "More importantly, we're doing it at a lower rate so the ratepayers of Nova Scotia aren't going to bear the brunt of a piece of equipment that's designed and built and staying in Quebec."
The province says it can meet its green energy targets without importing Quebec hydro through the Atlantic loop. It would have brought hydroelectric power from Quebec into New Brunswick and Nova Scotia via upgraded transmission links. But the government said the cost is prohibitive, jumping to $9 billion from nearly $3 billion three years ago with no guarantee of a secure supply of power from Quebec.
"The loop is not viable for 2030. It is not necessary to achieve our goal," said David Miller, the provincial clean energy director.
Miller said the cost of $250 to $300 per megawatt hour was five times higher than domestic wind supply.
Some of the provincial plan includes three new battery storage sites and expanding the transmission link with New Brunswick. Both were Nova Scotia Power projects paused by the company after the Houston government imposed a cap on the utility's rate increased in the fall of 2022.
The province said building the 345-kilovolt transmission line between Truro, N.S., and Salisbury, N.B., and an extension to the Point Lepreau Nuclear Generating Station, as well as aligning with NB Power deals for Quebec electricity underway, would enable greater access to energy markets.
Miller says Nova Scotia Power has revived both.
Nova Scotia Power did not comment on the new plan, but Rushton spoke for the company.
"All indications I've had is Nova Scotia Power is on board for what is taking place here today," he said.
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Quebec premier inaugurates La Romaine hydroelectric complex
La Romaine Hydroelectric Complex anchors Quebec's hydropower expansion, showcasing Hydro-Québec ingenuity, clean energy, electrification, and grid capacity gains along the North Shore's Romaine River to power industry and nearly 470,000 homes.
Key Points
A four-station, $7.4B hydro project on Quebec's Romaine River producing 8 TWh a year for electrification and industry.
✅ Generates 8 TWh yearly, powering about 470,000 homes
✅ Largest Quebec hydro build since James Bay project
✅ Key to clean energy, grid capacity, and electrification
Quebec Premier François Legault has inaugurated the la Romaine hydroelectric complex on the province's North Shore.
The newly inaugurated Romaine hydroelectric complex could serve as a model for future projects, such as the Carillon Generating Station investment now planned in the province, Legault said.
"It brings me a lot of pride. It is truly the symbol of Quebec ingenuity," he said as he opened the vast power plant.
Legault was accompanied at today's event by Jean Charest, who was Quebec premier when construction began in 2009, as well as Hydro-Québec president and CEO Michael Sabia.
La Romaine is comprised of four power stations and is the largest hydro project constructed in the province since the Robert Bourassa generation facility, which was commissioned in 1979. It is the biggest hydro installation since the James Bay project, bolstering Hydro-Québec's hydropower capacity across the grid today.
The construction work for Romaine-4 was supposed to finish in 2020, but it was delayed the COVID-19 pandemic, the death of four workers due to security flaws and soil decomposition problems.
The $7.4-billion la Romaine complex can produce eight terawatt hours of electricity per year, enough to power nearly 470,000 homes.
It generates its power from the Romaine River, located north of Havre-St-Pierre, Que., near the Labrador border, where long-standing Newfoundland and Labrador tensions over Quebec's projects sometimes resurface today.
Legault said that Quebec still doesn't have enough electricity to meet demand from industry, including recent allocations of electricity for industrial projects across the province, and Quebecers need to consider more ways to boost the province's ability to power future projects. The premier has said previously that demand is expected to surge by an additional 100 terawatt-hours by 2050 — half the current annual output of the provincially owned utility.
Legault's environmental plan of reducing greenhouse gases and achieving carbon neutrality by 2050 hinges on increased electrification and a strategy to wean off fossil fuels provincewide, so the electricity needs for transport and industry will be massive.
An updated strategic plan from Hydro-Quebec will be presented in November outlining those needs, president and CEO Michael Sabia told reporters on Thursday, after recent deals with NB Power underscored interprovincial demand.
Legault said the report will trigger a broader debate on energy transition and how the province can be a leader in the green economy. He said he wasn't ruling out any potential power sources — except for a return to nuclear power at this stage.
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Warning: Manitoba Hydro can't service new 'energy intensive' customers
Manitoba Hydro capacity constraints challenge clean energy growth as industrial demand, hydrogen projects, EV batteries, and electrification strain the grid; limited surplus, renewables, storage, and transmission bottlenecks hinder new high-load connections.
Key Points
Limited surplus power blocks new energy-intensive loads until added generation and transmission expand Manitoba's grid.
✅ No firm commitments for new energy-intensive industrial customers
✅ Single large load could consume remaining surplus capacity
✅ New renewables need transmission; gas, nuclear face trade-offs
Manitoba Hydro lacks the capacity to provide electricity to any new "energy intensive" industrial customers, the Crown corporation warns in a confidential briefing note that undercuts the idea this province can lure large businesses with an ample supply of clean, green energy, as the need for new power generation looms for the utility.
On July 28, provincial economic development officials unveiled an "energy roadmap" that said Manitoba Hydro must double or triple its generating capacity, as electrical demand could double over the next two decades in order to meet industrial and consumer demand for electricity produced without burning fossil fuels.
Those officials said 18 potential new customers with high energy needs were looking at setting up operations in Manitoba — and warned the province must be careful to choose businesses that provide the greatest economic benefit as well as the lowest environmental impact.
In a briefing note dated Sept. 13, obtained by CBC News, Manitoba Hydro warns it doesn't have enough excess power to hook up any of these new heavy electricity-using customers to the provincial power grid.
There are actually 57 proposals to use large volumes of electricity, Hydro says in the note, including eight projects already in the detailed study phase and nine where the proponents are working on construction agreements.
"Manitoba Hydro is unable to offer firm commitments to prospective customers that may align with Manitoba's energy roadmap and/or provincial economic development objectives," Hydro warns in the note, explaining it is legally obliged to serve all existing customers who need more electricity.
"As such, Manitoba Hydro cannot reserve electric supply for particular projects."
Hydro says in the note its "near-term surplus electricity supply" is so limited amid a Western Canada drought that "a single energy-intensive connection may consume all remaining electrical capacity."
Adding more electrical generating capacity won't be easy, even with new turbine investments underway, and will not happen in time to meet demands from customers looking to set up shop in the province, Hydro warns.
The Crown corporation goes on to say it's grappling with numerous requests from existing and prospective energy-intensive customers, mainly for producing hydrogen, manufacturing electric vehicle batteries and switching from fossil fuels to electricity, such as to use electricity for heat in buildings.
In a statement, Hydro said it wants to ensure Manitobans know the corporation is not running out of power — just the ability to meet the needs of large new customers, and continues to provide clean energy to neighboring provinces today.
"The size of loads looking to come to Manitoba are significantly larger than we typically see, and until additional supply is available, that limits our ability to connect them," Hydro spokesperson Bruce Owen said in a statement.
Adding wind power or battery storage, for example, would require the construction of more transmission lines, and deals such as SaskPower's purchase depend on that interprovincial infrastructure as well.
Natural gas plants are relatively inexpensive to build but do not align with efforts to reduce carbon emissions. Nuclear power plants require at least a decade of lead time to build, and tend to generate local opposition.
Hydro has also ruled out building another hydroelectric dam on the Nelson River, where the Conawapa project was put on hold in 2014.
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B.C. ordered to pay $10M for denying Squamish power project
Greengen Misfeasance Ruling details a B.C. Supreme Court decision awarding $10.125 million over wrongfully denied Crown land and water licence permits for a Fries Creek run-of-river hydro project under a BC Hydro contract.
Key Points
A B.C. Supreme Court ruling awarding $10.125M for wrongful denial of Crown land and water licences on Greengen's project.
✅ $10.125M damages for misfeasance in public office
✅ Denial of Crown land tenure and water licence permits
✅ Tied to Fries Creek run-of-river and BC Hydro EPA
A B.C. Supreme Court judge has ordered the provincial government to pay $10.125 million after it denied permits to a company that wanted to build a run-of-the river independent power project near Squamish.
In his Oct. 10 decision, Justice Kevin Loo said the plaintiff, Greengen Holdings Ltd., “lost an opportunity to achieve a completed and profitable hydro-electric project” after government representatives wrongfully exercised their legal authority, a transgression described in the ruling as “misfeasance,” with separate concerns reflected in an Ontario market gaming investigation reported elsewhere.
Between 2003 and 2009, the company sought to develop a hydro-electric project on and around Fries Creek, which sits opposite the Brackendale neighbourhood on the other side of the Squamish River. To do so, Greengen Holdings Ltd. required a water licence from the Minister of the Environment and tenure over Crown land from the Minister of Agriculture.
After a lengthy process involving extensive communications between Greengen and various provincial and other ministries and regulatory agencies, the permits were denied, according to Loo. Both decisions cited impacts on Squamish Nation cultural sites that could not be mitigated.
Elsewhere, an Indigenous-owned project in James Bay proceeded despite repeated denials, underscoring varied approaches to community participation.
40-year electricity plan relied on Crown land
The case dates back to December 2005, when BC Hydro issued an open call for power with Greengen. The company submitted a tender several months later.
On July 26, 2006, BC Hydro awarded Greengen an energy purchase agreement, amid evolving LNG electricity demand across the province, under which Greengen would be entitled to supply electricity at a fixed price for 40 years.
Unlike conventional hydroelectric projects, such as new BC generating stations recently commissioned, which store large volumes of water in reservoirs, and in so doing flood large tracts of land, a run of the river project often requires little or no water storage. Instead, from a high elevation, they divert water from a stream or river channel.
Water is then sent into a pressured pipeline known as a penstock, and later passed through turbines to generate electricity, Loo explained, as utilities pursue long-term plans like the Hydro-Québec strategy to reduce fossil fuel reliance. The system returns water to the original stream or river, or into another body of water.
The project called for most of that infrastructure to be built on Crown land, according to the ruling.
All sides seemed to support the project
In early 2005, company principle Terry Sonderhoff discussed the Fries Creek project in a preliminary meeting with Squamish Nation Chief Ian Campbell.
“Mr. Sonderhoff testified that Chief Campbell seemed supportive of the project at the time,” Loo said.
