Advanced Reactors Will Stand On The Shoulders Of Giants

European Energy Market Crisis drives record natural gas and electricity prices across the EU, as LNG supply constraints, Russian pipeline dependence, marginal pricing, and renewables integration expose volatility in liberalised power markets.

Key Points

A 2021 surge in European gas and electricity prices from supply strains, demand rebounds, and marginal pricing exposure.

✅ Record TTF gas and day-ahead power prices across Europe

✅ LNG constraints and Russian pipeline dependence tightened supply

✅ Debate over marginal pricing vs regulated models intensifies

By Ronan Bolton

The year 2021 was a turbulent one for energy markets across Europe, as Europe's energy nightmare deepened across the region. Skyrocketing natural gas prices have created a sense of crisis and will lead to cost-of-living problems for many households, as wholesale costs feed through into retail prices for gas and electricity over the coming months.

This has created immediate challenges for governments, but it should also encourage us to rethink the fundamental design of our energy markets as we seek to transition to net zero, with many viewing it as a wake-up call to ditch fossil fuels across the bloc.

This energy crisis was driven by a combination of factors: the relaxation of Covid-19 lockdowns across Europe created a surge in demand, while cold weather early in the year diminished storage levels and contributed to increasing demand from Asian economies. A number of technical issues and supply-side constraints also combined to limit imports of liquefied natural gas (LNG) into the continent.

Europe’s reliance on pipeline imports from Russia has once again been called into question, as Gazprom has refused to ride to the rescue, only fulfilling its pre-existing contracts. The combination of these, and other, factors resulted in record prices – the European benchmark price (the Dutch TTF Gas Futures Contract) reached almost €180/MWh on 21 December, with average day-ahead electricity prices exceeding €300/MWh across much of the continent in the following days.

Countries which rely heavily on natural gas as a source of electricity generation have been particularly exposed, with governments quickly put under pressure to intervene in the market.

In Spain the government and large energy companies have clashed over a proposed windfall tax on power producers. In Ireland, where wind and gas meet much of the country’s surging electricity demand, the government is proposing a €100 rebate for all domestic energy consumers in early 2022; while the UK government is currently negotiating a sector-wide bailout of the energy supply sector and considering ending the gas-electricity price link to curb bills.

This follows the collapse of a number of suppliers who had based their business models on attracting customers with low prices by buying cheap on the spot market. The rising wholesale prices, combined with the retail price cap previously introduced by the Theresa May government, led to their collapse.

While individual governments have little control over prices in an increasingly globalised and interconnected natural gas market, they can exert influence over electricity prices as these markets remain largely national and strongly influenced by domestic policy and regulation. Arising from this, the intersection of gas and power markets has become a key site of contestation and comment about the role of government in mitigating the impacts on consumers of rising fuel bills, even as several EU states oppose major reforms amid the price spike.

Given that renewables are constituting an ever-greater share of production capacity, many are now questioning why gas prices play such a determining role in electricity markets.

As I outline in my forthcoming book, Making Energy Markets, a particular feature of the ‘European model’ of liberalised electricity trade since the 1990s has been a reliance on spot markets to improve the efficiency of electricity systems. The idea was that high marginal prices – often set by expensive-to-run gas peaking plants – would signal when capacity limits are reached, providing clear incentives to consumers to reduce or delay demand at these peak periods.

This, in theory, would lead to an overall more efficient system, and in the long run, if average prices exceeded the costs of entering the market, new investments would be made, thus pushing the more expensive and inefficient plants off the system.

The free-market model became established during a more stable era when domestically-sourced coal, along with gas purchased on long-term contracts from European sources (the North Sea and the Netherlands), constituted a much greater proportion of electricity generation.

While prices fluctuated, they were within a somewhat predictable range, and provided a stable benchmark for the long-term contracts underpinning investment decisions. This is no longer the case as energy markets become increasingly volatile and disrupted during the energy transition.

The idea that free price formation in a competitive market, with governments standing back, would benefit electricity consumers and lead to more efficient systems was rooted in sound economic theory, and is the basis on which other major commodity markets, such as metals and agricultural crops, have been organised for decades.

The free-market model applied to electricity had clear limitations, however, as the majority of domestic consumers have not been exposed directly to real-time price signals. While this is changing with the roll-out of smart meters in many countries, the extent to which the average consumer will be willing or able to reduce demand in a predicable way during peak periods remains uncertain.

Also, experience shows that governments often come under pressure to intervene in markets if prices rise sharply during periods of scarcity, thus undermining a basic tenet of the market model, with EU gas price cap strategies floated as one option.

Given that gas continues to play a crucial role in balancing supply and demand for electricity, the options available to governments are limited, illustrating why rolling back electricity prices is harder than it appears for policymakers. One approach would be would be to keep faith with the liberalised market model, with limited interventions to help consumers in the short term, while ultimately relying on innovations in demand side technologies and alternatives to gas as a means of balancing systems with high shares of variable renewables.

An alternative scenario may see a return to old style national pricing policies, involving a move away from marginal pricing and spot markets, even as the EU prepares to revamp its electricity market in response. In the past, in particular during the post-WWII decades, and until markets were liberalised in the 1990s, governments have taken such an approach, centrally determining prices based on the costs of delivering long term system plans. The operation of gas plants and fuel procurement would become a much more regulated activity under such a model.

Many argue that this ‘traditional model’ better suits a world in which governments have committed to long-term decarbonisation targets, and zero marginal cost sources, such as wind and solar, play a more dominant role in markets and begin to push down prices.

A crucial question for energy policy makers is how to exploit this deflationary effect of renewables and pass-on cost savings to consumers, whilst ensuring that the lights stay on.

Despite the promise of storage technologies such as grid-scale batteries and hydrogen produced from electrolysis, aside from highly polluting coal, no alternative to internationally sourced natural gas as a means of balancing electricity systems and ensuring our energy security is immediately available.

This fact, above all else, will constrain the ambitions of governments to fundamentally transform energy markets.

Ronan Bolton is Reader at the School of Social and Political Science, University of Edinburgh and Co-Director of the UK Energy Research Centre. His book Making Energy Markets: The Origins of Electricity Liberalisation in Europe is to be published by Palgrave Macmillan in 2022.

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BC Ferries Island Class hybrid ferries deliver quiet, battery-electric travel with shore power readiness, lower emissions, and larger capacity on northern routes, protecting marine wildlife while replacing older vessels on Powell River and Texada services.

Key Points

Hybrid-electric ferries using batteries and diesel for quiet, low-emission service, ready for shore power upgrades.

✅ Operate 20% electric at launch; future full-electric via shore power

✅ 300 passengers, 47 vehicles; replacing older, smaller vessels

✅ Quieter transits help protect West Coast whales and marine habitat

In a champagne celebration, BC Ferries welcomed two new, hybrid-electric ships into its fleet Wednesday. The ships arrived in Victoria last month, and are expected to be in service on northern routes by the summer.

The Island Aurora and Island Discovery have the ability to run on either diesel or electricity.

"The pressure on whales on the West Coast is very intense right now," said BC Ferries CEO Mark Collins. "Quiet operation is very important. These ships will be gliding out of the harbor quietly and electrically with no engines running, that will be really great for marine space."

BC Ferries says the ships will be running on electricity 20 per cent of the time when they enter service, but the company hopes they can run on electricity full-time in the future. That would require the installation of shoreline power, which the company hopes to have in place in the next five to 10 years. Each ship costs around $40-million, a price tag that the federal government partially subsidized through CIB support as part of the electrification push.

When the two ships begin running on the Powell River to Texada, and Port McNeill, Alert Bay, and Sointula routes, two older vessels will be retired.

On Kootenay Lake, an electric-ready ferry is slated to begin operations in 2023, reflecting the province's wider shift.

"They are replacing a 47-car ferry, but on some routes they will be replacing a 25-car ferry, so those routes will see a considerable increase in service," said Collins.

Although the ships will not be servicing Colwood, the municipality's mayor is hoping that one day, they will.

"We can look at an electric ferry when we look at a West Shore ferry that would move Colwood residents to Victoria," said Mayor Rob Martin, noting that across the province electric school buses are hitting the road as well. "Here is a great example of what BC Ferries can do for us."

BC Ferries says it will be adding four more hybrid ships to its fleet by 2022, and is working on adding hybrid ships that could run from Victoria to Tsawwassen, similar to Washington State Ferries' hybrid upgrade underway in the region. 

B.C’s first hybrid-electric ferries arrived in Victoria on Saturday morning ushering in a new era of travel for BC Ferries passengers, as electric seaplane flights are also on the horizon for the region.

“It’s a really exciting day for us,” said Tessa Humphries, spokesperson for BC Ferries.

It took the ferries 60 days to arrive at the Breakwater District at Ogden Point. They came all the way from Constanta, Romania.

“These are battery-equipped ships that are designed for fully electric operation; they are outfitted with hybrid technology that bridges the gap until the EV charging infrastructure and funding is available in British Columbia,” said Humphries.

The two new "Island Class" vessels arrived at about 9 a.m. to a handful of people eagerly wanting to witness history.

Sometime in the next few days, the transport ship that brought the new ferries to B.C. will go out into the harbor and partially submerge to allow them to be offloaded, Humphries said.

The transfer process could happen in four to five days from now. After the final preparations are finished at the Breakwater District, the ships will be re-commissioned in Point Hope Maritime and then BC Ferries will officially take ownership.

“We know a lot of people are interested in this so we will put out advisory once we have more information as to a viewing area to see the whole process,” said Humphries.

Both Island Class ferries can carry 300 passengers and 47 vehicles. They won’t be sailing until later this year, but Humphries tells CTV News they will be named by the end of February. 

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Nuclear Plant Climate Risks span flood risk, heat stress, and water scarcity, threatening operations, safety systems, and steam generation; resilience depends on mitigation investments, cooling-water management, and adaptive maintenance strategies.

Key Points

Climate-driven threats to nuclear plants: floods, heat, and water stress requiring resilience and mitigation.

✅ Flooding threats to safety and cooling systems

✅ Heat stress reduces thermal efficiency and output

✅ Water scarcity risks limit cooling capacity

Climate change can affect every aspect of nuclear plant operations like fuel handling, power and steam generation and the need for resilient power systems planning, maintenance, safety systems and waste processing, the credit rating agency said.

However, the ultimate credit impact will depend upon the ability of plant operators to invest in carbon-free electricity and other mitigating measures to manage these risks, it added.
Close proximity to large water bodies increase the risk of damage to plant equipment that helps ensure safe operation, the agency said in a note.

Moody’s noted that about 37 gigawatts (GW) of U.S. nuclear capacity is expected to have elevated exposure to flood risk and 48 GW elevated exposure to combined rising heat, extreme heat costs and water stress caused by climate change.

Parts of the Midwest and southern Florida face the highest levels of heat stress, while the Rocky Mountain region and California face the greatest reduction in the availability of future water supply, illustrating the need for adapting power generation to drought strategies, it said.

Nuclear plants seeking to extend their operations by 20, or even 40 years, beyond their existing 40-year licenses in support of sustaining U.S. nuclear power and decarbonization face this climate hazard and may require capital investment adjustments, Moody’s said, as companies such as Duke Energy climate report respond to investor pressure for climate transparency.

“Some of these investments will help prepare for the increasing severity and frequency of extreme weather events, highlighting that the US electric grid is not designed for climate impacts today.”

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Nalcor Energy Pandemic Loss underscores Muskrat Falls delays, hydroelectric risks, oil price shocks, and COVID-19 impacts, affecting ratepayers, provincial debt, timelines, and software commissioning for the Churchill River project and Atlantic Canada subsea transmission.

Key Points

A $171M Q1 2020 downturn linked to COVID-19, oil price collapse, and Muskrat Falls delays impacting schedules and costs.

✅ Q1 2020 profit swing: +$92M to -$171M amid oil price crash

✅ Muskrat Falls timeline slips; cost may reach $13.1B

✅ Software, workforce, COVID-19 constraints slow commissioning

Newfoundland and Labrador's Crown energy corporation reported a pandemic-related profit loss from the first quarter of 2020 on Tuesday, along with further complications to the beleaguered Muskrat Falls hydroelectric project.

Nalcor Energy recorded a profit loss of $171 million in the first quarter of 2020, down from a $92 million profit in the same period last year, due in part to falling oil prices during the COVID-19 pandemic.

The company released its financial statements for 2019 and the first quarter of 2020 on Tuesday, and officials discussed the numbers in a livestreamed presentation that detailed the impact of the global health crisis on the company's operations.

The loss in the first quarter was caused by lower profits from electricity sales and a drop in oil prices due to the pandemic and other global events, company officials said.

The novel coronavirus also added to the troubles plaguing the Muskrat Falls hydroelectric dam on Labrador's Churchill River, amid Quebec-N.L. energy tensions that long predate the pandemic.

Work at the remote site stopped in March over concerns about spreading the virus. Operations have been resuming slowly, with a reduced workforce tackling the remaining jobs.

Officials with Nalcor said it will likely be another year before the megaproject is complete.

CEO Stan Marshall estimates the months of delays could bring the total cost to $13.1 billion including financing, up from the previous estimate of $12.7 billion -- though the total impact of the coronavirus on the project's price tag has yet to be determined.

"If we're going to shut down again, all of that's wrong," Marshall said. "But otherwise, we can just carry on and we'll have a good idea of the productivity level. I'm hoping that by September we'll have a more definitive number here."

The 824 megawatt hydroelectric dam will eventually send power to Newfoundland, and later Nova Scotia, through subsea cables, even as Nova Scotia boosts wind and solar in its energy mix.

It has seen costs essentially double since it was approved in 2012, and faced significant delays even before pandemic-forced shutdowns in North America and around the world this spring.

Cost and schedule overruns were the subject of a sweeping inquiry that held hearings last year, while broader generation choices like biomass use have drawn scrutiny as well.

The commissioner's report faulted previous governments for failing to protect residents by proceeding with the project no matter what, and for placing trust in Nalcor executives who "frequently" concealed information about schedule, cost and related risks.

Some of the latest delays have come from challenges with the development of software required to run the transmission link between Labrador and Newfoundland, where winter reliability issues have been flagged in reports.

The software is still being worked out, Marshall said Tuesday, and the four units at the dam will come online gradually over the next year.

"It's not an all or nothing thing," Marshall said of the final work stages.
Nalcor's financial snapshot follows a bleak fiscal update from the province this month. The Liberal government reported a net debt of $14.2 billion and a deficit of more than $1.1 billion, even as a recent Churchill Falls deal promised new revenues for the province, citing challenges from pandemic-related closures and oil production shutdowns.

Finance Minister Tom Osborne said at the time that help from Ottawa will be necessary to get the province's finances back on track.

Muskrat Falls represents about one-third of the province's debt, and is set to produce more power than the province of about half a million people requires. Anticipated rate increases due to the ballooning costs and questions about Muskrat Falls benefits have posed a significant political challenge for the provincial government.

Ottawa has agreed to work with Newfoundland and Labrador on a rewrite of the project's financial structure, scrapping the format agreed upon in past federal-provincial loan agreements in order to ease the burden on ratepayers, while some argue independent planning would better safeguard ratepayers.

Marshall, a former Fortis CEO who was brought in to lead Nalcor in 2016, has called the project a "boondoggle" and committed to seeing it completed within four years. Though that plan has been disrupted by the pandemic, Marshall said the end is in sight.

"I'm looking forward to a year from now. And I hope to be gone," Marshall said.

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Utility Battery Storage Rankings measure grid-connected capacity, not ownership, highlighting MW, MWh, and watts per customer across PJM, MISO, and California IOUs, featuring Duke Energy, IPL, ancillary services, and frequency regulation benefits.

Key Points

Rankings that track energy storage connected to utility grids, comparing MW, MWh, and W/customer rather than ownership.

✅ Ranks by MW, MWh, and watts per customer, not asset ownership

✅ Highlights PJM, MISO cases and California IOUs' deployments

✅ Examples: Duke Energy, IPL, IID; ancillary services, frequency response

The rankings do not tally how much energy storage a utility built or owns, but how much was connected to their system. So while IPL built and owns the storage facility in its territory, Duke does not own the 16 MW of storage that connected to its system in 2016. Similarly, while California’s utilities are permitted to own some energy storage assets, they do not necessarily own all the storage facilities connected to their systems.

Measured by energy (MWh), IPL ranked fourth with 20 MWh, and Duke Energy Ohio ranked eighth with 6.1 MWh.

Ranked by energy storage watts per customer, IPL and Duke actually beat the California utilities, ranking fifth and sixth with 42 W/customer and 23 W/customer, respectively.

Duke ready for next step

Given Duke’s plans, including projects in Florida that are moving ahead, the utility is likely to stay high in the rankings and be more of a driving force in development. “Battery technology has matured, and we are ready to take the next step,” Duke spokesman Randy Wheeless told Utility Dive. “We can go to regulators and say this makes economic sense.”

Duke began exploring energy storage in 2012, and until now most of its energy storage efforts were focused on commercial projects in competitive markets where it was possible to earn revenues. Those included its 36 MW Notrees battery storage project developed in partnership with the Department of Energy in 2012 that provides frequency regulation for the Electric Reliability Council of Texas market and two 2 MW storage projects at its retired W.C. Beckjord plant in New Richmond, Ohio, that sells ancillary services into the PJM Interconnection market.

On the regulated side, most of Duke’s storage projects have had “an R&D slant to them,” Wheeless said, but “we are moving beyond the R&D concept in our regulated territory and are looking at storage more as a regulated asset.”

“We have done the demos, and they have proved out,” Wheeless said. Storage may not be ready for prime time everywhere, he said, but in certain locations, especially where it can it can be used to do more than one thing, it can make sense.

Wheeless said Duke would be making “a number of energy storage announcements in the next few months in our regulated states.” He could not provide details on those projects.

More flexible resources
Location can be a determining factor when building a storage facility. For IPL, serving the wholesale market was a driving factor in the rationale to build its 20 MW, 20 MWh storage facility in Indianapolis.

IPL built the project to address a need for more flexible resources in light of “recent changes in our resource mix,” including decreasing coal-fired generation and increasing renewables and natural gas-fired generation, as other regions plan to rely on battery storage to meet rising demand, Joan Soller, IPL’s director of resource planning, told Utility Dive in an email. The storage facility is used to provide primary frequency response necessary for grid stability.

The Harding Street storage facility in May. It was the first energy storage project in the Midcontinent ISO. But the regulatory path in MISO is not as clear as it is in PJM, whereas initiatives such as Ontario storage framework are clarifying participation. In November, IPL with the Federal Energy Regulatory Commission, asking the regulator to find that MISO’s rules for energy storage are deficient and should be revised.

Soller said IPL has “no imminent plans to install energy storage in the future but will continue to monitor battery costs and capabilities as potential resources in future Integrated Resource Plans.”

California legislative and regulatory push

In California, energy storage did not have to wait for regulations to catch up with technology. With legislative and regulatory mandates, including CEC long-duration storage funding announced recently, as a push, California’s IOUs took high places in SEPA’s rankings.

Southern California Edison and San Diego Gas & Electric were first and fourth (63.2 MW and 17.2 MW), respectively, in terms of capacity. SoCal Ed and SDG&E were first and second (104 MWh and 28.4 MWh), respectively, and Pacific Gas and Electric was fifth (17 MWh) in terms of energy.

But a public power utility, the Imperial Irrigation District (IID), ended up high in the rankings – second in capacity (30 MW) and third  in energy (20 MWh) – even though as a public power entity it is not subject to the state’s energy storage mandates.

But while IID was not under state mandate, it had a compelling regulatory reason to build the storage project. It was part of a settlement reached with FERC over a September 2011 outage, IID spokeswoman Marion Champion said.

IID agreed to a $12 million fine as part of the settlement, of which $9 million was applied to physical improvements of IID’s system.

IID ended up building a 30 MW, 20 MWh lithium-ion battery storage system at its El Centro generating station. The system went into service in October 2016 and in May, IID used the system’s 44 MW combined-cycle natural gas turbine at the generating station.

Passing savings to customers
The cost of the storage system was about $31 million, and based on its experience with the El Centro project, Champion said IID plans to add to the existing batteries. “We are continuing to see real savings and are passing those savings on to our customers,” she said.

Champion said the battery system gives IID the ability to provide ancillary services without having to run its larger generation units, such as El Centro Unit 4, at its minimum output. With gas prices at $3.59 per million British thermal units, it costs about $26,880 a day to run Unit 4, she said.

IID’s territory is in southeastern California, an area with a lot of renewable resources. IID is also not part of the California ISO and acts as its own balancing authority. The battery system gives the utility greater operational flexibility, in addition to the ability to use more of the surrounding renewable resources, Champion said.

In May, IID’s board gave the utility’s staff approval to enter into contract negotiations for a 7 MW, 4 MWh expansion of its El Centro storage facility. The negotiations are ongoing, but approval could come in the next couple months, Champion said.

The heart of the issue, though, is “the ability of the battery system to lower costs for our ratepayers,” Champion said. “Our planning section will continue to utilize the battery, and we are looking forward to its expansion,” she said.” I expect it will play an even more important role as we continue to increase our percentage of renewables.”

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Floating Rotating Eco Hotel harnesses renewable energy via VAWTAU, recycles rainwater for greywater, and follows zero-waste principles. This mobile, off-grid, Qatar-based resort generates electricity by slow 360-degree rotation while offering luxury amenities.

Key Points

A mobile, off-grid hotel that rotates to generate power, uses VAWTAU, recycles greywater, and targets zero-waste.

✅ Rotates 360 deg in 24 hours to produce electricity

✅ VAWTAU system: vertical-axis turbine and sun umbrella

✅ Rain capture and greywater recycling minimize waste

A new eco-friendly, floating hotel plans to generate its own electricity by rotating while guests relax on board, echoing developments like the solar Marriott hotel in sustainable hospitality.

Led by Hayri Atak Architectural Design Studio (HAADS), the structure will be completely mobile, meaning it can float from place to place, never sitting in a permanent position. Building began in March 2020 and the architects aim for it to be up and running by 2025.

It will be based in Qatar, but has the potential to be located in different areas due to its mobility, and it sits within a region advancing projects such as solar hydrogen production that signal a broader clean-energy shift.

The design includes minimum energy loss and a zero waste principle at its core, aligning with progress in wave energy research that aims to power a clean future. As it will rotate around all day long, this will generate electrical energy to power the whole hotel.

But guests won’t feel too dizzy, as it takes 24 hours for the hotel to spin 360 degrees.

The floating hotel will stay within areas with continuous currents, to ensure that it is always rotating, drawing on ideas from ocean and river power systems that exploit natural flows. This type of green energy production is called ‘vawtau’ (vertical axis wind turbine and umbrella) which works like a wind turbine on the vertical axis, while alternative approaches like kite-based wind energy target stronger, high-altitude currents as well, and functions as a sun umbrella on the coastal band.

Beyond marine-current concepts such as underwater kites, the structure will also make use of rainwater to create power. A cover on the top of the hotel will collect rain to be used for greywater recycling. This is when wastewater is plumbed straight back into toilets, washing machines or outside taps to maximise efficiency.

The whole surface area is around 35,000 m², comparable in scale to emerging floating solar plants that demonstrate modular, water-based infrastructure, and there are a total of 152 rooms. It will have three different entrances so that there is access to the land at any time of the day, thanks to the 140-degree pier that surrounds it.

There will also be indoor and outdoor swimming pools, a sauna, spa, gym, mini golf course and other activity areas.

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