Team CANDU New Brunswick to Conduct Feasibility Study for Second Nuclear Power Plant at Point Lepreau

By Canada News Wire


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Team CANDU New Brunswick announced that the Government of New Brunswick has accepted its proposal to conduct a feasibility study for the construction of a Generation III+ Advanced CANDU Reactor - (ACR-1000).

"We are extremely pleased that the Province of New Brunswick has accepted Team CANDU New Brunswick's proposal to conduct a feasibility study for the new ACR-1000," said AECL's Chief Operating Officer Ken Petrunik. "We are confident the study will clearly demonstrate that a second unit will provide an energy-secure future and economic self sufficiency for the Province."

Premier Shawn Graham said the feasibility study is an important step forward in the energy sector in New Brunswick, and could help produce tremendous growth in the province.

"This feasibility study may lead to a significant private sector investment into electricity generation in New Brunswick creating up to 4,000 jobs during construction 500 permanent, high-paying jobs to operate the facility," said New Brunswick Premier Shawn Graham. "It further cements New Brunswick's growing position as an energy hub on the Eastern seaboard and could be yet another catalyst towards our goal of self sufficiency by 2026."

Energy Minister Jack Keir added the feasibility study and other energy projects are having a positive impact on the region and province.

"Our ongoing work with Team CANDU has already brought positive spin-offs for the province like a Centre of Excellence for Retubing of CANDU reactors," Keir said. "And the potential for future collaboration is even greater. The energy sector has the potential to bring transformational change to our province, and this is further evidence of this fact."

The feasibility study will be funded by Team CANDU and is designed to evaluate the potential for an ACR-1000 to be constructed at the Point Lepreau Generating Station near Saint John, New Brunswick, and will examine the business case for private sector investment; identify prospective markets for this new source of power; and indicate the potential environmental and socio-economic impacts of this project.

Each of the Team CANDU New Brunswick partners will take on a share of the project feasibility study that is expected to cost approximately $2.5 million and take up to six months to complete.

Team CANDU New Brunswick represents five of the world's leading nuclear technology and engineering companies that have joined together to provide a nuclear energy solution to meet the province's growing electricity needs. Team CANDU New Brunswick draws on the experience and expertise of Atomic Energy of Canada Limited, Babcock & Wilcox Canada, GE-Hitachi Nuclear Energy Canada Inc., Hitachi Canada Ltd and SNC-Lavalin Nuclear Limited.

"Team CANDU New Brunswick has the expertise and experience to deliver a safe and high quality energy solution for the Province of New Brunswick," said Patrick Lamarre, President of SNC-Lavalin Nuclear. "We are proud of our record for delivering turnkey projects on-time and on-budget, and we look forward to putting our combined expertise to work for the benefit of New Brunswickers."

The ACR-1000 is an advanced CANDU reactor, building on the pedigree of the existing technology to deliver the same benefits at an even lower cost.

When constructed at Point Lepreau, the ACR-1000 will have a projected output of 1085 megawatts of electricity and a planned operating life of 60 years.

Mr. Petrunik added, "Team CANDU NB fully supports the province's vision to become a world-class centre of excellence for nuclear power research and development. The ACR-1000 is a made-in-Canada solution that we believe is the best choice for New Brunswick in terms of safety, proven performance and project delivery."

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Longer, more frequent outages afflict the U.S. power grid as states fail to prepare for climate change

Power Grid Climate Resilience demands storm hardening, underground power lines, microgrids, batteries, and renewable energy as regulators and utilities confront climate change, sea level rise, and extreme weather to reduce outages and protect vulnerable communities.

 

Key Points

It is the grid capacity to resist and recover from climate hazards using buried lines, microgrids, and batteries.

✅ Underground lines reduce wind outages and wildfire ignition risk.

✅ Microgrids with solar and batteries sustain critical services.

✅ Regulators balance cost, resilience, equity, and reliability.

 

Every time a storm lashes the Carolina coast, the power lines on Tonye Gray’s street go down, cutting her lights and air conditioning. After Hurricane Florence in 2018, Gray went three days with no way to refrigerate medicine for her multiple sclerosis or pump the floodwater out of her basement.

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“Florence was hell,” said Gray, 61, a marketing account manager and Wilmington native who finds herself increasingly frustrated by the city’s vulnerability.

“We’ve had storms long enough in Wilmington and this particular area that all power lines should have been underground by now. We know we’re going to get hit.”

Across the nation, severe weather fueled by climate change is pushing aging electrical systems past their limits, often with deadly results. Last year, amid increasing nationwide blackouts, the average American home endured more than eight hours without power, according to the U.S. Energy Information Administration — more than double the outage time five years ago.

This year alone, a wave of abnormally severe winter storms caused a disastrous power failure in Texas, leaving millions of homes in the dark, sometimes for days, and at least 200 dead. Power outages caused by Hurricane Ida contributed to at least 14 deaths in Louisiana, as some of the poorest parts of the state suffered through weeks of 90-degree heat without air conditioning.

As storms grow fiercer and more frequent, environmental groups are pushing states to completely reimagine the electrical grid, incorporating more grid-scale batteries, renewable energy sources and localized systems known as “microgrids,” which they say could reduce the incidence of wide-scale outages. Utility companies have proposed their own storm-proofing measures, including burying power lines underground.

But state regulators largely have rejected these ideas, citing pressure to keep energy rates affordable. Of $15.7 billion in grid improvements under consideration last year, regulators approved only $3.4 billion, according to a national survey by the NC Clean Energy Technology Center — about one-fifth, highlighting persistent vulnerabilities in the grid nationwide.

After a weather disaster, “everybody’s standing around saying, ‘Why didn’t you spend more to keep the lights on?’ ” Ted Thomas, chairman of the Arkansas Public Service Commission, said in an interview with The Washington Post. “But when you try to spend more when the system is working, it’s a tough sell.”

A major impediment is the failure by state regulators and the utility industry to consider the consequences of a more volatile climate — and to come up with better tools to prepare for it. For example, a Berkeley Lab study last year of outages caused by major weather events in six states found that neither state officials nor utility executives attempted to calculate the social and economic costs of longer and more frequent outages, such as food spoilage, business closures, supply chain disruptions and medical problems.

“There is no question that climatic changes are happening that directly affect the operation of the power grid,” said Justin Gundlach, a senior attorney at the Institute for Policy Integrity, a think tank at New York University Law School. “What you still haven’t seen … is a [state] commission saying: 'Isn’t climate the through line in all of this? Let’s examine it in an open-ended way. Let’s figure out where the information takes us and make some decisions.’ ”

In interviews, several state commissioners acknowledged that failure.

“Our electric grid was not built to handle the storms that are coming this next century,” said Tremaine L. Phillips, a commissioner on the Michigan Public Service Commission, which in August held an emergency meeting to discuss the problem of power outages. “We need to come up with a broader set of metrics in order to better understand the success of future improvements.”

Five disasters in four years
The need is especially urgent in North Carolina, where experts warn Atlantic grids and coastlines need a rethink as the state has declared a federal disaster from a hurricane or tropical storm five times in the past four years. Among them was Hurricane Florence, which brought torrential rain, catastrophic flooding and the state’s worst outage in over a decade in September 2018.

More than 1 million residents were left disconnected from refrigerators, air conditioners, ventilators and other essential machines, some for up to two weeks. Elderly residents dependent on oxygen were evacuated from nursing homes. Relief teams flew medical supplies to hospitals cut off by flooded roads. Desperate people facing closed stores and rotting food looted a Wilmington Family Dollar.

“I have PTSD from Hurricane Florence, not because of the actual storm but the aftermath,” said Evelyn Bryant, a community organizer who took part in the Wilmington response.

The storm reignited debate over a $13 billion proposal by Duke Energy, one of the largest power companies in the nation, to reinforce the state’s power grid. A few months earlier, the state had rejected Duke’s request for full repayment of those costs, determining that protecting the grid against weather is a normal part of doing business and not eligible for the type of reimbursement the company had sought.

After Florence, Duke offered a smaller, $2.5 billion plan, along with the argument that severe weather events are one of seven “megatrends” (including cyberthreats and population growth) that require greater investment, according to a PowerPoint presentation included in testimony to the state. The company owns the two largest utilities in North Carolina, Duke Energy Carolinas and Duke Energy Progress.

Vote Solar, a nonprofit climate advocacy group, objected to Duke’s plan, saying the utility had failed to study the risks of climate impacts. Duke’s flood maps, for example, had not been updated to reflect the latest projections for sea level rise, they said. In testimony, Vote Solar claimed Duke was using environmental trends to justify investments “it had already decided to pursue.”

The United States is one of the few countries where regulated utilities are usually guaranteed a rate of return on capital investments, even as studies show the U.S. experiences more blackouts than much of the developed world. That business model incentivizes spending regardless of how well it solves problems for customers and inspires skepticism. Ric O’Connell, executive director of GridLab, a nonprofit group that assists state and regional policymakers on electrical grid issues, said utilities in many states “are waving their hands and saying hurricanes” to justify spending that would do little to improve climate resilience.

In North Carolina, hurricanes convinced Republicans that climate change is real

Duke Energy spokesman Jeff Brooks acknowledged that the company had not conducted a climate risk study but pointed out that this type of analysis is still relatively new for the industry. He said Duke’s grid improvement plan “inherently was designed to think about future needs,” including reinforced substations with walls that rise several feet above the previous high watermark for flooding, and partly relied on federal flood maps to determine which stations are at most risk.

Brooks said Duke is not using weather events to justify routine projects, noting that the company had spent more than a year meeting with community stakeholders and using their feedback to make significant changes to its grid improvement plan.

This year, the North Carolina Utilities Commission finally approved a set of grid improvements that will cost customers $1.2 billion. But the commission reserved the right to deny Duke reimbursement of those costs if it cannot prove they are prudent and reasonable. The commission’s general counsel, Sam Watson, declined to discuss the decision, saying the commission can comment on specific cases only in public orders.

The utility is now burying power lines in “several neighborhoods across the state” that are most vulnerable to wide-scale outages, Brooks said. It is also fitting aboveground power lines with “self-healing” technology, a network of sensors that diverts electricity away from equipment failures to minimize the number of customers affected by an outage.

As part of a settlement with Vote Solar, Duke Energy last year agreed to work with state officials and local leaders to further evaluate the potential impacts of climate change, a process that Brooks said is expected to take two to three years.

High costs create hurdles
The debate in North Carolina is being echoed in states across the nation, where burying power lines has emerged as one of the most common proposals for insulating the grid from high winds, fires and flooding. But opponents have balked at the cost, which can run in the millions of dollars per mile.

In California, for example, Pacific Gas & Electric wants to bury 10,000 miles of power lines, both to make the grid more resilient and to reduce the risk of sparking wildfires. Its power equipment has contributed to multiple deadly wildfires in the past decade, including the 2018 Camp Fire that killed at least 85 people.

PG&E’s proposal has drawn scorn from critics, including San Jose Mayor Sam Liccardo, who say it would be too slow and expensive. But Patricia Poppe, the company’s CEO, told reporters that doing nothing would cost California even more in lost lives and property while struggling to keep the lights on during wildfires. The plan has yet to be submitted to the state, but Terrie Prosper, a spokeswoman for the California Public Utilities Commission, said the commission has supported underground lines as a wildfire mitigation strategy.

Another oft-floated solution is microgrids, small electrical systems that provide power to a single neighborhood, university or medical center. Most of the time, they are connected to a larger utility system. But in the event of an outage, microgrids can operate on their own, with the aid of solar energy stored in batteries.

In Florida, regulators recently approved a four-year microgrid pilot project, but the technology remains expensive and unproven. In Maryland, regulators in 2016 rejected a plan to spend about $16 million for two microgrids in Baltimore, in part because the local utility made no attempt to quantify “the tangible benefits to its customer base.”

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In Texas, where officials have largely abandoned state regulation in favor of the free market, the results have been no more encouraging. Without requirements, as exist elsewhere, for building extra capacity for times of high demand or stress, the state was ill-equipped to handle an abnormal deep freeze in February that knocked out power to 4 million customers for days.

Since then, Berkshire Hathaway Energy and Starwood Energy Group each proposed spending $8 billion to build new power plants to provide backup capacity, with guaranteed returns on the investment of 9 percent, but the Texas legislature has not acted on either plan.

New York is one of the few states where regulators have assessed the risks of climate change and pushed utilities to invest in solutions. After 800,000 New Yorkers lost power for 10 days in 2012 in the wake of Hurricane Sandy, state regulators ordered utility giant Con Edison to evaluate the state’s vulnerability to weather events.

The resulting report, which estimated climate risks could cost the company as much as $5.2 billion by 2050, gave ConEd data to inform its investments in storm hardening measures, including new storm walls and submersible equipment in areas at risk of flooding.

Meanwhile, the New York Public Service Commission has aggressively enforced requirements that utility companies keep the lights on during big storms, fining utility providers nearly $190 million for violations including inadequate staffing during Tropical Storm Isaias in 2020.

“At the end of the day, we do not want New Yorkers to be at the mercy of outdated infrastructure,” said Rory M. Christian, who last month was appointed chair of the New York commission.

The price of inaction
In North Carolina, as Duke Energy slowly works to harden the grid, some are pursuing other means of fostering climate-resilient communities.

Beth Schrader, the recovery and resilience director for New Hanover County, which includes Wilmington, said some of the people who went the longest without power after Florence had no vehicles, no access to nearby grocery stores and no means of getting to relief centers set up around the city.

For example, Quanesha Mullins, a 37-year-old mother of three, went eight days without power in her housing project on Wilmington’s east side. Her family got by on food from the Red Cross and walked a mile to charge their phones at McDonald’s. With no air conditioning, they slept with the windows open in a neighborhood with a history of violent crime.

Schrader is working with researchers at the University of North Carolina in Charlotte to estimate the cost of helping people like Mullins. The researchers estimate that it would have cost about $572,000 to provide shelter, meals and emergency food stamp benefits to 100 families for two weeks, said Robert Cox, an engineering professor who researches power systems at UNC-Charlotte.

Such calculations could help spur local governments to do more to help vulnerable communities, for example by providing “resilience outposts” with backup power generators, heating or cooling rooms, Internet access and other resources, Schrader said. But they also are intended to show the costs of failing to shore up the grid.

“The regulators need to be moved along,” Cox said.

In the meantime, Tonye Gray finds herself worrying about what happens when the next storm hits. While Duke Energy says it is burying power lines in the most outage-prone areas, she has yet to see its yellow-vested crews turn up in her neighborhood.

“We feel,” she said, “that we’re at the end of the line.”

 

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Cheap at Last, Batteries Are Making a Solar Dream Come True

Solar Plus Storage is accelerating across utilities and microgrids, pairing rooftop solar with lithium-ion batteries to enhance grid resilience, reduce peak costs, prevent blackouts, and leverage tax credits amid falling prices and decarbonization goals.

 

Key Points

Solar Plus Storage combines solar generation with batteries to shift load, boost reliability, and cut energy costs.

✅ Cuts peak demand charges and enhances blackout resilience

✅ Falling battery and solar costs drive nationwide utility adoption

✅ Enables microgrids and grid services like frequency regulation

 

Todd Karin was prepared when California’s largest utility shut off power to millions of people to avoid the risk of wildfires last month. He’s got rooftop solar panels connected to a single Tesla Powerwall in his rural home near Fairfield, California. “We had backup power the whole time,” Karin says. “We ran the fridge and watched movies.”

Californians worried about an insecure energy future are increasingly looking to this kind of solution. Karin, a 31-year-old postdoctoral fellow at Lawrence Berkeley National Laboratory, spent just under $4,000 for his battery by taking advantage of tax credits. He's also saving money by discharging the battery on weekday evenings, when energy is more expensive during peak demand periods. He expects to save around $1,500 over the 10 years the battery is under warranty.

The economics don’t yet work for every household, but the green-power combo of solar panels plus batteries is popping up on a much bigger scale in some unexpected places. Owners of a rice processing plant in Arkansas are building a system to generate 26 megawatts of solar power and store another 40 MW. The plant will cut its power bill by a third, and owners say they will pass the savings to local rice growers. New York’s JFK Airport is installing solar plus storage to reduce its power load by 10 percent, while Pittsburgh International Airport is building a 20-MW solar and natural gas microgrid to keep it independent from the local utility. Officials at both airports are worried about recent power shutdowns due to weather and overload-related blackouts.

And residents of the tiny northern Missouri town of Green City (pop. 608) are getting 2.5 MW of solar plus four hours of battery storage from the state’s public utility next year. The solar power won’t go directly to townspeople, but instead will back up the town’s substation, reducing the risk of a potential shutdown. It’s part of a $68 million project to improve the reliability of remote substations far from electric generating stations.

“It’s a pretty big deal for us,” says Chad Raley, who manages technology and renewables at Ameren, a Missouri utility that is building three rural solar-plus-storage projects to better manage the flow of electricity across the local grid. “It gives us so much flexibility with renewable generation. We can’t control the sun or clouds or wind, but we can have battery storage.”

The first solar-plus-storage installations started about a decade ago on a small scale in sunny states like California, Hawaii, and Arizona. Now they’re spreading across the country, driven by falling prices of both solar panels and lithium-ion batteries the size of a shipping container imported from both China and South Korea, with wind, solar, and batteries making up most of the utility-scale pipeline nationwide. These countries have ramped up production efficiencies and lowered labor costs, leaving many US manufacturers in the dust. In fact, the price of building a comparable solar-plus-storage generating facility is now cheaper than operating a coal-fired power plant, industry officials say. In certain circumstances, the cost is equal to some natural gas plants.

“This is not just a California, New York, Massachusetts thing,” says Kelly Speakes-Backman, CEO of the Energy Storage Association, an industry group in Washington. She says more than 30 states have renewable storage on the grid. Utilities have proposed and states have approved 7 gigawatts to be installed by 2030, and most new storage will be paired with solar across the US.

Speakes-Backman estimates the unit cost of electricity produced from a solar-plus-storage system will drop 10 to 15 percent each year through 2024, supporting record growth in solar and storage investments. “If you have the option of putting out a polluting or non-polluting generating source at the same price, what are you going to pick?” says Speakes-Backman.

She notes that PJM, a large Mid-Atlantic wholesale grid operator, announced it will deploy battery storage to help smooth out fluctuating power from two wind farms it operates. “When the grid fluctuates, storage can react to it quickly and can level out the supply,” she says. In the Midwest, grid-level battery storage is also being used to absorb extra wind power. Batteries hold onto the wind and put it back onto the grid when people need it.

While the solar-plus-storage trend isn’t yet putting a huge dent in our fossil fuel use, according to Paul Denholm, an energy analyst at the National Renewable Energy Laboratory in Golden, Colorado, it is a good beginning and has the side effect of cutting air pollution. By 2021, solar and other renewable energy sources will overtake coal as a source of energy, and the US is moving toward 30% electricity from wind and solar, according to a new report by the Institute for Energy Economics and Financial Analysis, a nonprofit think tank based in Cleveland.

That’s a glimmer of hope in a somewhat dreary week of news on carbon emissions. A new United Nations report released this week finds that the planet is on track to warm by 3.9 degrees Celsius (7 Fahrenheit) by 2100 unless drastic cuts are made by phasing out gas-powered cars, eliminating new coal-fired power plants, and changing how we grow and manage land, and scientists are working to improve solar and wind power to limit climate change as well.

Energy-related greenhouse gas emissions in the US rose 2.7 percent in 2018 after several years of decline. The Trump administration has rolled back climate policies from the Obama years, including withdrawing from the Paris climate accords.

There may be hope from green power initiatives outside the Beltway, though, and from federal proposals like a tenfold increase in US solar that could remake the electricity system. Arizona plans to boost solar-plus-storage from today’s 6 MW to a whopping 850 MW by 2025, more than the entire capacity of large-scale batteries in the US today. And some folks might be cheering the closing of the West’s biggest coal-fired power plant, the 2.25-gigawatt Navajo Generating Station, in Arizona, which had spewed soot and carbon dioxide over the region for 45 years until last week. The closure might help the planet and clear the hazy smog over the Grand Canyon.

 

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Over 30% of Global Electricity from Renewables

Global Renewable Electricity Milestone signals solar, wind, hydro, and geothermal surpass 30% of power generation, driven by falling costs, battery storage, smart grids, and ambitious policy targets that strengthen energy security and decarbonization.

 

Key Points

It marks renewables exceeding 30% of global power, enabled by cheaper tech, storage, and strong policy.

✅ Costs of solar and wind fall, boosting competitiveness

✅ Storage and smart grids improve reliability and flexibility

✅ Policies target decarbonization while ensuring just transition

 

A recent report by the energy think tank Ember marks a significant milestone in the global energy transition. For the first time ever, according to their analysis, renewable energy sources like solar, wind, hydro, and geothermal now account for more than 30% of the world's electricity generation, a milestone echoed by wind and solar growth globally. This achievement signifies a pivotal shift towards a cleaner and more sustainable energy future.

The report attributes this growth to several key factors. Firstly, the cost of renewable energy technologies like solar panels and wind turbines has plummeted in recent years, making them increasingly competitive with traditional fossil fuels. Secondly, advancements in battery storage technology are facilitating the integration of variable renewable sources like solar and wind into the grid, addressing concerns about reliability. Thirdly, a growing number of countries are implementing ambitious renewable energy targets and policies, driven by environmental concerns and the desire for energy security.

The rise of renewables is not uniform across the globe. Europe leads the pack, with the European Union generating a staggering 44% of its electricity from renewable sources in 2023. Countries like Denmark, Germany, and Spain are at the forefront of this clean energy revolution. Developing nations are also starting to embrace renewables, driven by factors like falling technology costs and the need for affordable electricity access.

However, challenges remain. Fossil fuels still dominate the global energy mix, accounting for roughly two-thirds of electricity generation. Integrating a higher proportion of variable renewables into the grid necessitates robust storage solutions and smart grid technologies. Additionally, the transition away from fossil fuels needs to be managed carefully to ensure a just and equitable outcome for workers in the coal, oil, and gas sectors.

Despite these challenges, the report by Ember paints an optimistic picture. The rapid growth of renewables demonstrates their increasing viability and underscores the global commitment to a cleaner energy future, and in the United States, for example, renewables are projected to reach one-fourth of U.S. electricity generation, reinforcing this trajectory. The report also highlights the economic benefits of renewables, with new jobs created in the clean energy sector and reduced reliance on volatile fossil fuel prices.

Looking ahead, continued technological advancements, supportive government policies, and increased investment in renewable energy infrastructure are all crucial for further growth, with scenarios such as BNEF's 2050 outlook suggesting wind and solar could provide half of electricity, underscoring the importance of sustained effort. Furthermore, international cooperation is essential to ensure a smooth and equitable global energy transition. Developed nations can play a vital role by sharing technology and expertise with developing countries.

The 30% milestone is a significant step forward, but it's just the beginning. As the world strives to combat climate change and ensure energy security for future generations, renewables are poised to play a central role in powering a sustainable future, with wind and solar surpassing coal in the U.S. offering a clear signal of the shift. The report by Ember serves as a powerful reminder that a clean energy future is not just a dream, but a rapidly unfolding reality.

 

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China to build 2,000-MW Lawa hydropower station on Jinsha River

Lawa Hydropower Station approved on the Jinsha River, a Yangtze tributary, delivers 2,000 MW via four units; 784 ft dam, 12 sq mi reservoir, Sichuan-Tibet site, US$4.59b investment, Huadian stake, renewable energy generation.

 

Key Points

A 2,000 MW dam project on the Jinsha River with four units, a 784 ft barrier, and 8.36 billion kWh annual output.

✅ Sichuan-Tibet junction on the Jinsha River

✅ 2,000 MW capacity; four turbine-generator units

✅ 8.36 bn kWh/yr; US$4.59b total; Huadian 48% stake

 

China has approved construction of the 2,000-MW Lawa hydropower station, a Yangtze tributary hydropower project on the Jinsha River, multiple news agencies are reporting.

Lawa, at the junction of Sichuan province and the Tibet autonomous region, will feature a 784-foot-high dam and the reservoir will submerge about 12 square miles of land. The Jinsha River is a tributary of the Yangtze River, and the project aligns with green hydrogen development in China.

The National Development and Reform Commission of the People’s Republic of China, which also guides China's nuclear energy development as part of national planning, is reported to have said that four turbine-generator units will be installed, and the project is expected to produce about 8.36 billion kWh of electricity annually.

Total investment in the project is to be US$4.59 billion, and Huadian Group Co. Ltd. will have a 48% stake in the project, reflecting overseas power infrastructure activity, with minority stakes held by provincial firms, according to China Daily.

In other recent news in China, Andritz received an order in December 2018 to supply four 350-MW reversible pump-turbines and motor-generators, alongside progress in compressed air generation technologies, for the 1,400-MW ZhenAn pumped storage plant in Shaanxi province.

 

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Oil crash only a foretaste of what awaits energy industry

Oil and Gas Profitability Decline reflects shale-driven oversupply, OPEC-Russia dynamics, LNG exports, renewables growth, and weak demand, signaling compressed margins for producers, stressed petrodollar budgets, and shifting energy markets post-Covid.

 

Key Points

A sustained squeeze on hydrocarbon margins from agile shale supply, weaker OPEC leverage, and expanding renewables.

✅ Shale responsiveness caps prices and erodes industry rents

✅ OPEC-Russia cuts face limited impact versus US supply

✅ Renewables and EVs slow long-term oil and gas demand

 

The oil-price crash of March 2020 will probably not last long. As in 2014, when the oil price dropped below $50 from $110 in a few weeks, this one will trigger a temporary collapse of the US shale industry. Unless the coronavirus outbreak causes Armageddon, cheap oil will also support policymakers’ efforts to help the global economy.

But there will be at least one important and lasting difference this time round — and it has major market and geopolitical implications.

The oil price crash is a foretaste of where the whole energy sector was going anyway — and that is down.

It may not look that way at first. Saudi Arabia will soon realise, as it did in 2015, that its lethal decision to pump more oil is not only killing US shale but its public finances as well. Riyadh will soon knock on Moscow’s door again. Once American shale supplies collapse, Russia will resume co-operation with Saudi Arabia.

With the world economy recovering from the Covid-19 crisis by then, and with electricity demand during COVID-19 shifting, moderate supply cuts by both countries will accelerate oil market recovery. In time, US shale producers will return too.

Yet this inevitable bounceback should not distract from two fundamental factors that were already remaking oil and gas markets. First, the shale revolution has fundamentally eroded industry profitability. Second, the renewables’ revolution will continue to depress growth in demand.

The combined result has put the profitability of the entire global hydrocarbon industry under pressure. That means fewer petrodollars to support oil-producing countries’ national budgets, including Canada's oil sector exposures. It also means less profitable oil companies, which traditionally make up a large segment of stock markets, an important component of so many western pension funds.

Start with the first factor to see why this is so. Historically, the geological advantages that made oil from countries such as Saudi Arabia so cheap to produce were unique. Because oil and gas were produced at costs far below the market price, the excess profits, or “rent”, enjoyed by the industry were very large.

Furthermore, collusion among low-cost producers has been a winning strategy. The loss of market share through output cuts was more than compensated by immediately higher prices. It was the raison d’être of Opec.

The US shale revolution changed all this, exposing the limits of U.S. energy dominance narratives. A large oil-producing region emerged with a remarkable ability to respond quickly to price changes and shrink its costs over time. Cutting back cheap Opec oil now only increases US supplies, with little effect on world prices.

That is why Russia refused to cut production this month. Even if its cuts did boost world prices — doubtful given the coronavirus outbreak’s huge shock to demand — that would slow the shrinkage of US shale that Moscow wants.

Shale has affected the natural gas industry even more. Exports of US liquefied natural gas now put an effective ceiling on global prices, and debates over a clean electricity push have intensified when gas prices spike.

On top of all this, there is also the renewables’ revolution, though a green revolution has not been guaranteed in the near term. Around the world, wind and solar have become ever-cheaper options to generate electricity. Storage costs have also dropped and network management improved. Even in the US, renewables are displacing coal and gas. Electrification of vehicle fleets will damp demand further, as U.S. electricity, gas, and EVs face evolving pressures.

Eliminating fossil fuel consumption completely would require sustained and costly government intervention, and reliability challenges such as coal and nuclear disruptions add to the complexity. That is far from certain. Meanwhile, though, market forces are depressing the sector’s usual profitability.

The end of oil and gas is not immediately around the corner. Still, the end of hydrocarbons as a lucrative industry is a distinct possibility. We are seeing that in dramatic form in the current oil price crash. But this collapse is merely a message from the future.

 

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Baltic States Disconnect from Russian Power Grid, Join EU System

Baltic States EU Grid Synchronization strengthens energy independence and electricity security, ending IPS/UPS reliance. Backed by interconnectors like LitPol Link, NordBalt, and Estlink, it aligns with NATO interests and safeguards against subsea infrastructure threats.

 

Key Points

A shift by Estonia, Latvia, and Lithuania to join the EU grid, boosting energy security and reducing Russian leverage.

✅ Synchronized with EU grid on Feb 9, 2025 after islanding tests.

✅ New interconnectors: LitPol Link, NordBalt, Estlink upgrades.

✅ Reduces IPS/UPS risks; bolsters NATO and critical infrastructure.

 

In a landmark move towards greater energy independence and European integration, the Baltic nations of Estonia, Latvia, and Lithuania have officially disconnected from Russia's electricity grid, a path also seen in Ukraine's rapid grid link to the European system. This decisive action, completed in February 2025, not only ends decades of reliance on Russian energy but also enhances the region's energy security and aligns with broader geopolitical shifts.

Historical Context and Strategic Shift

Historically, the Baltic states were integrated into the Russian-controlled IPS/UPS power grid, a legacy of their Soviet past. However, in recent years, these nations have sought to extricate themselves from Russian influence, aiming to synchronize their power systems with the European Union (EU) grid. This transition gained urgency following Russia's annexation of Crimea in 2014 and further intensified after the invasion of Ukraine in 2022, as demonstrated by Russian strikes on Ukraine's grid that underscored energy vulnerability.

The Disconnection Process

The process culminated on February 8, 2025, when Estonia, Latvia, and Lithuania severed their electrical ties with Russia. For approximately 24 hours, the Baltic states operated in isolation, conducting rigorous tests to ensure system stability and resilience, echoing winter grid protection efforts seen elsewhere. On February 9, they successfully synchronized with the EU's continental power grid, marking a historic shift towards European energy integration.

Geopolitical and Security Implications

This transition holds significant geopolitical weight. By disconnecting from Russia's power grid, the Baltic states reduce potential leverage that Russia could exert through energy supplies. The move also aligns with NATO's strategic interests, enhancing the security of critical infrastructure in the region, amid concerns about Russian hacking of US utilities that highlight cyber risks.

Economic and Technical Challenges

The shift was not without challenges. The Baltic states had to invest heavily in infrastructure to ensure compatibility with the EU grid and navigate regional market pressures such as a Nordic grid blockade affecting transmission capacity. This included constructing new interconnectors and upgrading existing facilities. For instance, the LitPol Link between Lithuania and Poland, the NordBalt cable connecting Lithuania and Sweden, and the Estlink between Estonia and Finland were crucial in facilitating this transition.

Impact on Kaliningrad

The disconnection has left Russia's Kaliningrad exclave isolated from the Russian power grid, relying solely on imports from Lithuania. While Russia claims to have measures in place to maintain power stability in the region, the long-term implications remain uncertain.

Ongoing Security Concerns

The Baltic Sea region has experienced heightened security concerns, particularly regarding subsea cables and pipelines. Increased incidents of damage to these infrastructures have raised alarms about potential sabotage, including a Finland cable damage investigation into a suspected Russian-linked vessel. Authorities continue to investigate these incidents, emphasizing the need for robust protection of critical energy infrastructure.

The successful disconnection and synchronization represent a significant step in the Baltic states' journey towards full integration with European energy markets. This move is expected to enhance energy security, promote economic growth, and solidify geopolitical ties with the EU and NATO. As the region continues to modernize its energy infrastructure, ongoing vigilance against security threats will be paramount, as recent missile and drone attacks on Kyiv's grid demonstrate.

The Baltic states' decision to disconnect from Russia's power grid and synchronize with the European energy system is a pivotal moment in their post-Soviet transformation. This transition not only signifies a break from historical dependencies but also reinforces their commitment to European integration and collective security. As these nations continue to navigate complex geopolitical landscapes, their strides towards energy independence serve as a testament to their resilience and strategic vision.

 

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