EU agrees to spend billions to make grid crisis-proof

Rolls-Royce and Exelon UKSMR Partnership accelerates factory-built small modular reactors, nuclear power, clean energy, 440MW units, advanced manufacturing, fleet deployment, net zero goals, and resilient, low-cost baseload generation in the UK and globally.

Key Points

A partnership to deploy factory-built SMR stations, providing 440MW low-carbon baseload for the UK and export markets.

✅ 440MW factory-built SMR units with rapid modular assembly

✅ Exelon to operate and enhance high capacity factors

✅ Supports UK net zero, jobs, and export-led manufacturing

Rolls-Royce and Exelon Generation have signed a Memorandum of Understanding to pursue the potential for Exelon Generation to operate compact nuclear power stations both in the UK and internationally, including markets such as Canada where New Brunswick SMR questions are prompting public debate today.

Exelon Generation will be using their operational experience to assist Rolls Royce in the development and deployment of the UKSMR.

Rolls-Royce is leading a consortium that is designing a low-cost factory built nuclear power station, known as a small modular reactor (SMR), with UK mini-reactor approval anticipated as development progresses. Its standardised, factory-made components and advanced manufacturing processes push costs down, while the rapid assembly of the modules and components inside a weatherproof canopy on the power station site itself avoid costly schedule disruptions.

The consortium is working with its partners and UK Government to secure a commitment for a fleet of factory built nuclear power stations, each providing 440MW of electricity, to be operational within a decade, helping the UK meet its net zero obligations in line with the green industrial revolution policy set out by government. A fleet deployment in the UK will lead to the creation of new factories that will make the components and modules which will help the economy recover from the Covid-19 pandemic and pave the way for significant export opportunities as well.

The consortium members feature the best of nuclear engineering, construction and infrastructure expertise in Assystem, Atkins, BAM Nuttall, Jacobs, Laing O'Rourke, National Nuclear Laboratory, Nuclear Advanced Manufacturing Research Centre, Rolls-Royce and TWI. Exelon will add valuable operational experience to the team.

Tom Samson, interim Chief Executive Officer of the UKSMR consortium, said: 'Nuclear power is central to tackling climate change and economic recovery, but it must be affordable, reliable and investable and the way we manufacture and assemble our power station brings its cost down to be comparable with offshore wind.

'It's a compelling proposition that could draw new players into the UK's power generation landscape, improving choice for consumers and providing uninterrupted low carbon energy to homes and businesses.

'The opportunity to partner with Exelon is a very exciting prospect for our program, complementing our existing Consortium partnerships with one of the world's largest nuclear operator adds an important dimension to our growth ambitions, embodies the strength of the UK and USA alliance on nuclear matters and reflects wider international moves, such as a Canadian premiers' SMR initiative to accelerate technology development, and offers our future customers the ability to achieve the highest performance standards associated with Exelon's outstanding operational track record.'

The power stations will be built by the UKSMR consortium, before being handed over to be operated by power generation companies. Exelon Generation will work closely with the consortium during the pre-operation period. Exelon Nuclear operates 21 nuclear reactors in America, and U.S. regulators recently issued a final safety evaluation for a NuScale SMR that underscores momentum in the sector. The Exelon nuclear fleet is an integral part of the U.S. clean power mix; it produces more than 158 million megawatt-hours of clean electricity every year.

Bryan Hanson, EVP and COO of Exelon Generation said: 'We believe that SMRs are a crucial part of the world's clean energy mix, as projects like Darlington SMRs advance in Ontario. With our experience both in the US and internationally, Exelon is confident that we can help Rolls Royce ensure SMRs play a key role in the UK's energy future. We've had a very strong record of performance for 20 consecutive years, with a 2019 capacity factor of 95.7 percent. We will leverage this experience to achieve sustainably high capacity factors for the UKSMRs.'

Ralph Hunter, Managing Director of Exelon Nuclear Partners, who runs Exelon's international clean energy business, said: 'We have a strong track record of success to be the operator of choice for the UKSMR. We will help develop operational capability, training and human capacity development in the UK, as utilities such as Ontario Power Generation commit to SMRs abroad, ensuring localisation of skills and a strong culture of safety, performance and efficiency.'

By 2050 a full UK programme of a fleet of factory built nuclear power stations in the UK could create:

Up to 40,000 jobs GBP52BN of value to the UK economy GBP250BN of exports

The current phase of the programme has been jointly funded by all consortium members and UK Research and Innovation.

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Ontario Natural Gas Moratorium gains momentum as IESO weighs energy storage, renewables, and demand management to meet rising electricity demand, ensure grid reliability, and advance zero-emissions goals while long-term capacity procurements proceed.

Key Points

A proposed halt on new gas plants as IESO assesses storage and renewables to maintain reliability and cut emissions.

✅ Minister seeks interim IESO report by Oct. 7

✅ Near-term contracts extend existing gas plants for reliability

✅ Long-term procurements emphasize storage, renewables, conservation

Ontario's energy minister says he doesn't think the province needs any more natural gas generation and has asked the electricity system regulator to speed up a report exploring a moratorium.

Todd Smith had previously asked the Independent Electricity System Operator (IESO) to report back by November on the feasibility of a moratorium and a plan to get to zero emissions in the electricity sector.

He has asked them today for an interim report by Oct. 7 so he can make a decision on a moratorium before the IESO secures contracts over the long term for new power generation.

"I've asked the IESO to speed up that report back to us so that we can get the information from them as to what the results would be for our grid here in Ontario and whether or not we actually need more natural gas," Smith said Tuesday after question period.

"I don't believe that we do."

Smith said that is because of the "huge success" of two updates provided Tuesday by the IESO to its attempts to secure more electricity supply for both the near term and long term. Demand is growing by nearly two per cent a year, while Ontario is set to lose a significant amount of nuclear generation, including the planned shutdown of the Pickering nuclear station over the next few years.

'For the near term, we need them,' regulator says
The regulator today released a list of 55 qualified proponents for those long-term bids and while it says there is a significant amount of proposed energy storage projects on that list, there are some new gas plants on it as well.

Chuck Farmer, the vice-president of planning, conservation and resource adequacy at the IESO, said it's hoped that the minister makes a decision on whether or not to issue a moratorium on new gas generation before the regulator proceeds with a request for proposals for long-term contracts.

The IESO also announced six new contracts — largely natural gas, with a small amount of wind power and storage — to start in the next few years. Farmer noted that these contracts were specifically for existing generators whose contracts were ending, while the province is exploring new nuclear plants for the longer term.

"When you look at the pool of generation resources that were in that situation, the reality is most of them were actually natural gas plants, and that we are relying on the continued use of the natural gas plants in the transition," he said in an interview. 

"So for the near term, we need them for the reliability of the system."

The upcoming request for proposals for more long-term contracts hopes to secure 3,500 megawatts of capacity, as Ontario faces an electricity shortfall in the coming years, and Farmer said the IESO plans to run a series of procurements over the next few years.

Opposition slams reliance on natural gas
The NDP and Greens on Tuesday criticized Ontario's reliance in the near term on natural gas because of its environmental implications.

The IESO has said that due to natural gas, greenhouse gas emissions from the electricity sector are set to increase for the next two decades, but by about 2038 it projects the net reductions from electric vehicles will offset electricity sector emissions.

Green Party Leader Mike Schreiner said it makes no sense to ramp up natural gas, both for the climate and for people's wallets.

"The cost of wind and solar power is much lower than gas," he said.

Ontario quietly revises its plan for hitting climate change targets
"We're in a now-or-never moment to address the climate crisis and the government is failing to meet this moment."

Interim NDP Leader Peter Tabuns said Ontario wouldn't be in as much of a supply crunch if the Progressive Conservative government hadn't cancelled 750 green energy contracts during their first term.

The Tories argued the province didn't need the power and the contracts were driving up costs for ratepayers, amid debate over whether greening the grid would be affordable.

The IESO said it is also proposing expanding conservation and demand management programs, as a "highly cost-effective" way to reduce strain on the system, though it couldn't say exactly what is on the table until the minister accepts the recommendation.

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5G Energy Costs highlight base station power consumption, carrier electricity bills, and carbon emissions in China, while advances in energy efficiency, sleep modes, and cooling systems aim to optimize low-latency networks and reduce operational expenses.

Key Points

5G energy costs rise with power-hungry base stations, yet per-bit efficiency and sleep modes help cut bills.

✅ 5G base stations use ~4x 4G electricity

✅ Per-bit 5G energy efficiency is ~4x better than 4G

✅ Sleep modes and advanced cooling reduce OPEX and emissions

As 5G developers look desperately for a "killer app" to prove the usefulness of the superfast wireless technology, mobile carriers in China are complaining about the high energy cost of 5G signal towers.

And the situation is, according to experts, more complicated than many have thought.

The costly 5G

5G technology can be 10 or more times faster than 4G and significantly more responsive to users' input, but the speed comes at a cost.

A 5G base station consumes "four times more electricity" than its 4G counterpart, said Ding Haiyu, head of wireless and terminals at the China Mobile Research Institute, during a symposium on 5G and carbon neutrality in Beijing, a key focus for countries pursuing a net-zero grid by 2050 worldwide.

But concerning each bit of data transmitted, 5G is four times more energy-efficient than 4G, according to Ding.

This means that mobile carriers should fully occupy their 5G network for as long time as possible, but that can be hard at this moment, as many people are still holding 4G smartphones.

"When the 5G stations are running without people using them, they are really electricity guzzlers," said Zhu Qingfeng, head of power supply design at China Information Technology Designing and Consulting Institute Co., Ltd., who represents China Unicom at the symposium. "Each of the three telecom carrier giants are emitting about ten million tonnes of carbon in the air."

"We have to shut down some 5G base stations at night to reduce emission," he added.

Some utilities are testing fuel cell solutions to keep backup batteries charged much longer, supporting network resilience at lower emissions.

A representative from China Telecom said electricity bills of the nationwide carrier reached a new high of 100 billion yuan (about $15 billion) a year, mirroring the power challenges for utilities as data center demand booms elsewhere.

Getting better

While admitting the excessive cost of 5G, experts at the symposium also agreed that the situation is improving, even as climate pressures on the grid continue to mount.

Ding listed a series of recent technologies that is helping reduce the energy use of 5G, including chips of better process, automatic sleeping and wake-up of base stations and liquid nitrogen-based cooling system, and superconducting cables as part of ongoing upgrades.

"We are aiming at halving the 5G electricity cost to only two times of 4G in two years," Ding said.

Experts also discussed the possibility of making use of 5G's low latency features to help monitoring the electricity grid, thus making the digital grid smarter and more cost effective.

G's energy cost is seen as a hot topic for the incoming World 5G Convention in Beijing in early August, alongside smart grid transformation themes. Stay tuned to CGTN Digital as we bring you the latest news about the convention and 5G technology.
 

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Canadian Softwood Lumber Tariffs challenge British Columbia's forestry sector, strain U.S.-Canada trade, and risk redirecting critical minerals and energy resources, threatening North American supply chains, manufacturing, and energy security across integrated markets.

Key Points

Duties imposed by the U.S. on Canadian lumber, affecting BC forestry, trade flows, and North American energy security.

✅ U.S. duties strain BC forestry and cross-border supply chains

✅ Risks redirecting critical minerals and energy exports

✅ Tariff rollback could bolster North American energy security

British Columbia Premier David Eby has raised concerns that U.S. tariffs on Canadian softwood lumber are prompting the province to redirect its critical minerals and energy resources, while B.C. challenges Alberta's electricity export restrictions domestically, away from the United States. In a recent interview, Eby emphasized the broader implications of these tariffs, suggesting they could undermine North American energy security and put electricity exports at risk across the border.

Since 2017, the U.S. Department of Commerce has imposed tariffs on Canadian softwood lumber imports, alleging that Canadian producers benefit from unfair subsidies. These duties have been a persistent source of tension between the two nations, coinciding with Canadian support for energy and mineral tariffs and significantly impacting British Columbia's forestry sector—a cornerstone of the province's economy.

Premier Eby highlighted that the financial strain imposed by these tariffs not only jeopardizes the Canadian forestry industry but also has unintended repercussions for the United States. He pointed out that the economic challenges faced by Canadian producers might lead them to seek alternative markets for their critical minerals and energy resources, as tariff threats boost support for Canadian energy projects domestically, thereby reducing the supply to the U.S. British Columbia is endowed with an abundance of critical minerals essential for various industries, including technology and defense.

The potential redirection of these resources could have significant consequences for American industries that depend on a stable and affordable supply of critical minerals and energy. Eby suggested that the tariffs might incentivize Canadian producers to explore other international markets, even as experts advise against cutting Quebec's energy exports amid the tariff dispute, diminishing the availability of these vital resources to the U.S.

In light of these concerns, Premier Eby has advocated for a reassessment of the tariffs, urging a more cooperative approach between Canada and the United States. He contends that eliminating the tariffs would be mutually beneficial, aligning with views that Biden is better for Canada's energy sector and cross-border collaboration, ensuring a consistent supply of critical resources and fostering economic growth in both countries.

The issue of U.S. tariffs on Canadian softwood lumber remains complex and contentious, with far-reaching implications for trade relations and resource distribution between the two nations. As discussions continue, stakeholders on both sides of the border are closely monitoring the situation, noting that Ford has threatened to cut U.S. electricity exports amid trade tensions, recognizing the importance of collaboration in addressing shared economic and security challenges.

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US Utilities Shift From Coal as natural gas stays cheap, renewables like wind and solar scale, Clean Power Plan uncertainty lingers, and investors, state policies, and emissions targets drive generation choices and accelerate retirements.

Key Points

A long-term shift by utilities from coal to cheap natural gas, expanding renewables, and lower-emission generation.

✅ Cheap natural gas undercuts coal on price and flexibility.

✅ Renewables costs falling; wind and solar add competitive capacity.

✅ State policies and investors sustain emissions reductions.

When President Donald Trump signed an executive order last week to sweep away Obama-era climate change regulations, he said it would end America's "war on coal", usher in a new era of energy production and put miners back to work.

But the biggest consumers of U.S. coal - power generating companies - remain unconvinced about efforts to replace Obama's power plant overhaul with a lighter-touch approach.

Reuters surveyed 32 utilities with operations in the 26 states that sued former President Barack Obama's administration to block its Clean Power Plan, the main target of Trump's executive order. The bulk of them have no plans to alter their multi-billion dollar, years-long shift away from coal, suggesting demand for the fuel will keep falling despite Trump's efforts.

The utilities gave many reasons, mainly economic: Natural gas - coal’s top competitor - is cheap and abundant; solar and wind power costs are falling; state environmental laws remain in place; and Trump's regulatory rollback may not survive legal challenges, as rushed pricing changes draw warnings from energy groups.

Meanwhile, big investors aligned with the global push to fight climate change – such as the Norwegian Sovereign Wealth Fund – have been pressuring U.S. utilities in which they own stakes to cut coal use.

"I’m not going to build new coal plants in today’s environment," said Ben Fowke, CEO of Xcel Energy, which operates in eight states and uses coal for about 36 percent of its electricity production. "And if I’m not going to build new ones, eventually there won’t be any."

Of the 32 utilities contacted by Reuters, 20 said Trump's order would have no impact on their investment plans; five said they were reviewing the implications of the order; six gave no response. Just one said it would prolong the life of some of its older coal-fired power units.

North Dakota's Basin Electric Power Cooperative was the sole utility to identify an immediate positive impact of Trump's order on the outlook for coal.

"We're in the situation where the executive order takes a lot of pressure off the decisions we had to make in the near term, such as whether to retrofit and retire older coal plants," said Dale Niezwaag, a spokesman for Basin Electric. "But Trump can be a one-termer, so the reprieve out there is short."

Trump's executive order triggered a review aimed at killing the Clean Power Plan and paving the way for the EPA's Affordable Clean Energy rule to replace it, though litigation is ongoing. The Obama-era law would have required states, by 2030, to collectively cut carbon emissions from existing power plants by 30 percent from 2005 levels. It was designed as a primary strategy in U.S. efforts to fight global climate change.

The U.S. coal industry, without increases in domestic demand, would need to rely on export markets for growth. Shipments of U.S. metallurgical coal, used in the production of steel, have recently shown up in China following a two-year hiatus - in part to offset banned shipments from North Korea and temporary delays from cyclone-hit Australian producers.

RETIRING AND RETROFITTING

Coal had been the primary fuel source for U.S. power plants for the last century, but its use has fallen more than a third since 2008 after advancements in drilling technology unlocked new reserves of natural gas.

Hundreds of aging coal-fired power plants have been retired or retrofitted. Huge coal mining companies like Peabody Energy Corp and Arch Coal fell into bankruptcy, and production last year hit its lowest point since 1978.

The slide appears likely to continue: U.S. power companies now expect to retire or convert more than 8,000 megawatts of coal-fired plants in 2017 after shutting almost 13,000 MW last year, according to U.S. Energy Information Administration and Thomson Reuters data.

Luke Popovich, a spokesman for the National Mining Association, acknowledged Trump's efforts would not return the coal industry to its "glory days," but offered some hope.

"There may not be immediate plans for utilities to bring on more coal, but the future is always uncertain in this market," he said.

Many of the companies in the Reuters survey said they had been focused on reducing carbon emissions for a decade or more while tracking 2017 utility trends that reinforce long-term planning, and were hesitant to change direction based on shifting political winds in Washington D.C.

"Utility planning typically takes place over much longer periods than presidential terms of office," Berkshire Hathaway Inc-owned Pacificorp spokesman Tom Gauntt said.

Several utilities also cited falling costs for wind and solar power, which are now often as cheap as coal or natural gas, thanks in part to government subsidies for renewable energy and recent FERC decisions affecting the grid.

In the meantime, activist investors have increased pressure on U.S. utilities to shun coal.

In the last year, Norway's sovereign wealth fund, the world's largest, has excluded more than a dozen U.S. power companies - including Xcel, American Electric Power Co Inc and NRG Energy Inc - from its investments because of their reliance on coal-fired power.

Another eight companies, including Southern Co and NorthWestern Corp, are "under observation" by the fund.

Wyoming-based coal miner Cloud Peak Energy said it doesn't blame utilities for being lukewarm to Trump's order.

"For eight years, if you were a utility running coal, you got the hell kicked out of you," said Richard Reavey, a spokesman for the company. "Are you going to turn around tomorrow and say, 'Let's buy lots of coal plants'? Pretty unlikely."

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Shell's Industrial Electricity Supply Strategy targets UK and US industrial customers, leveraging gas-to-power, renewables, long-term PPAs, and energy transition momentum to disrupt utilities, cut costs, and secure demand in the evolving electricity market.

Key Points

Shell will sell power directly to industrial clients, leveraging gas, renewables, and PPAs to secure demand and pricing.

✅ Direct power sales to industrials in UK and US

✅ Leverages gas-to-power, renewables, and flexible sourcing

✅ Targets long-term PPAs, price stability, and demand security

Royal Dutch Shell’s decision to sell electricity direct to industrial customers is an intelligent and creative one. The shift is strategic and demonstrates that oil and gas majors are capable of adapting to a new world as the transition to a lower carbon economy develops. For those already in the business of providing electricity it represents a dangerous competitive threat. For the other oil majors it poses a direct challenge on whether they are really thinking about the future sufficiently strategically.

The move starts small with a business in the UK that will start trading early next year, in a market where the UK’s second-largest electricity operator has recently emerged, signaling intensifying competition. Shell will supply the business operations as a first step and it will then expand. But Britain is not the limit — Shell recently announced its intention of making similar sales in the US. Historically, oil and gas companies have considered a move into electricity as a step too far, with the sector seen as oversupplied and highly politicised because of sensitivity to consumer price rises. I went through three reviews during my time in the industry, each of which concluded that the electricity business was best left to someone else. What has changed? I think there are three strands of logic behind the strategy.

First, the state of the energy market. The price of gas in particular has fallen across the world over the last three years to the point where the International Energy Agency describes the current situation as a “glut”. Meanwhile, Shell has been developing an extensive range of gas assets, with more to come. In what has become a buyer’s market it is logical to get closer to the customer — establishing long-term deals that can soak up the supply, while options such as storing electricity in natural gas pipes gain attention in Europe. Given its reach, Shell could sign contracts to supply all the power needed by the UK’s National Health Service or with the public sector as a whole as well as big industrial users. It could agree long-term contracts with big businesses across the US.

To the buyers, Shell offers a high level of security from multiple sources with prices presumably set at a discount to the market. The mutual advantage is strong. Second, there is the transition to a lower carbon world. No one knows how fast this will move, but one thing is certain: electricity will be at the heart of the shift with power demand increasing in transportation, industry and the services sector as oil and coal are displaced. Shell, with its wide portfolio, can match inputs to the circumstances and policies of each location. It can match its global supplies of gas to growing Asian markets, including China’s 2060 electricity share projections, while developing a renewables-based electricity supply chain in Europe. The new company can buy supplies from other parts of the group or from outside. It has already agreed to buy all the power produced from the first Dutch offshore wind farm at Egmond aan Zee.

The move gives Shell the opportunity to enter the supply chain at any point — it does not have to own power stations any more than it now owns drilling rigs or helicopters. The third key factor is that the electricity market is not homogenous. The business of supplying power can be segmented. The retail market — supplying millions of households — may be under constant scrutiny, as efforts to fix the UK’s electricity grid keep infrastructure in the headlines, with suppliers vilified by the press and governments forced to threaten price caps but supplying power to industrial users is more stable and predictable, and done largely out of the public eye. The main industrial and commercial users are major companies well able to negotiate long-term deals.

Given its scale and reputation, Shell is likely to be a supplier of choice for industrial and commercial consumers and potentially capable of shaping prices. This is where the prospect of a powerful new competitor becomes another threat to utilities and retailers whose business models are already under pressure. In the European market in particular, electricity pricing mechanisms are evolving and public policies that give preference to renewables have undermined other sources of supply — especially those produced from gas. Once-powerful companies such as RWE and EON have lost much of their value as a result. In the UK, France and elsewhere, public and political hostility to price increases have made retail supply a risky and low-margin business at best. If the industrial market for electricity is now eaten away, the future for the existing utilities is desperate.

Shell’s move should raise a flag of concern for investors in the other oil and gas majors. The company is positioning itself for change. It is sending signals that it is now viable even if oil and gas prices do not increase and that it is not resisting the energy transition. Chief executive Ben van Beurden said last week that he was looking forward to his next car being electric. This ease with the future is rather rare. Shareholders should be asking the other players in the old oil and gas sector to spell out their strategies for the transition.

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