Japanese utilities buy into vast offshore wind farm in UK

EU Power Market Overhaul targets soaring electricity prices by decoupling gas from power, boosting renewables, refining price caps, and stabilizing grids amid inflation, supply shocks, droughts, nuclear outages, and intermittent wind and solar.

Key Points

EU plan to redesign electricity pricing, curb gas-driven costs, boost renewables, and protect consumers from volatility.

✅ Decouples power prices from marginal gas generation

✅ Caps non-gas revenues to fund consumer relief

✅ Supports grid stability with storage, demand response, LNG

While energy prices are soaring around the world, Europe is in a particularly tight spot. Its heavy dependence on Russian gas -- on top of droughts, heat waves, an unreliable fleet of French nuclear reactors and a continent-wide shift to greener but more intermittent sources like solar and wind -- has been driving electricity bills up and feeding the highest inflation in decades. As Europe stands on the brink of a recession, and with the winter heating season approaching, officials are considering a major overhaul of the region’s power market to reflect the ongoing shift from fossil fuels to renewables.

1. How is electricity priced? 
Unlike oil or natural gas, there’s no efficient way to save lots of electricity to use in the future, though projects to store electricity in gas pipes are emerging. Commercial use of large-scale batteries is still years away. So power prices have been set by the availability at any given moment. When it’s really windy or sunny, for example, then more is produced relatively cheaply and prices are lower. If that supply shrinks, then prices rise because more generators are brought online to help meet demand -- fueled by more expensive sources. The way the market has long worked is that it is that final technology, or type of plant, needed to meet the last unit of consumption that sets the price for everyone. In Europe this year, that has usually meant natural gas. 

2. What is the relationship between power and gas? 
Very close. Across western Europe, gas plants have been a vital part of the energy infrastructure for decades, with Irish price spikes highlighting dispatchable power risks, fed in large part by supplies piped in from Siberia. Gas-fired plants were relatively quick to build and the technology straightforward, at least compared with nuclear plants and burns cleaner than coal. About 18% of Europe’s electricity was generated at gas plants last year; in 2020 about 43% of the imported gas came from Russia. Even during the depths of the Cold War, there’d never been a serious supply problem -- until the relationship with Russia deteriorated this year after it invaded Ukraine. Diversifying away from Russia, such as by increasing imports of liquefied natural gas, requires new infrastructure that takes a lot of time and money.

3. Why does it work this way? 
In theory, the relationship isn’t different from that with coal, for example. But production hiccups and heatwave curbs on plants from nuclear in France to hydro in Spain and Norway significantly changed the generation picture this year, and power hit records as plants buckled in the heat. Since coal-fired and nuclear plants are generally running all the time anyway, gas plants were being called upon more often -- at times just to keep the lights on as summer temperatures hit records. And with the war in Ukraine resulting in record gas prices, that pushed up overall production costs. It’s that relationship that has made the surging gas price the driver for electricity prices. And since the continent is all connected, it has pushed up prices across the region. The value of the European power market jumped threefold last year, to a record 836 billion euros ($827 billion today).

4. What’s being considered? 
With large parts of European industry on its knees and households facing jumps in energy bills of several hundred percent, as record electricity prices ripple through markets, the pressure on governments and the European Union to intervene has never been higher. One major proposal is to impose a price cap on electricity from non-gas producers, with the difference between that and the market price channeled to relief for consumers. While it sounds simple, any such changes would rip up a market design that’s worked for decades and could threaten future investments because of unintended consequences.

5. How did this market evolve?
The Nordic region and the British market were front-runners in the 1990s, then Germany followed and is now the largest by far. A trader can buy and sell electricity delivered later on same day in blocks of an hour or even down to 15-minute periods, to meet sudden demand or take advantage of price differentials. The price for these contracts is decided entirely by the supply and demand, how much the wind is blowing or which coal plants are operating, for example. Demand tends to surge early in the morning and late afternoon. This system was designed when fossil fuels provided the bulk of power. Now there are more renewables, which are less predictable, with wind and solar surpassing gas in EU generation last year, and the proposed changes reflect that shift. 

6. What else have governments done?
There are also traders who focus on longer-dated contracts covering periods several years ahead, where broader factors such as expected economic output and the extent to which renewables are crowding out gas help drive prices. This year’s wild price swings have prompted countries including Germany, Sweden and Finland to earmark billions of euros in emergency liquidity loans to backstop utilities hit with sudden margin calls on their trading.

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Vancouver Natural Gas Ban Reversal spotlights energy policy, electrification tradeoffs, heat pumps, emissions, grid reliability, and affordability, reshaping building codes and decarbonization pathways while inviting stakeholders to weigh practical constraints and climate goals.

Key Points

Vancouver ending its ban on natural gas in new homes to balance climate goals with reliability, costs, and technology.

✅ Balances emissions goals with reliability and affordability

✅ Impacts builders, homeowners, and energy infrastructure

✅ Spurs debate on electrification, heat pumps, and grid capacity

In a significant policy shift, Vancouver has decided to lift its ban on natural gas appliances in new homes, a move that marks a pivotal moment in the city's energy policy and environmental strategy. This decision, announced recently and following the city's Clean Energy Champion recognition for Bloedel upgrades, has sparked a broader conversation about the future of energy systems and the balance between environmental goals and practical energy needs. Stewart Muir, CEO of Resource Works, argues that this reversal should catalyze a necessary dialogue on energy choices, highlighting both the benefits and challenges of such a policy change.

Vancouver's original ban on natural gas appliances was part of a broader initiative aimed at reducing greenhouse gas emissions and promoting sustainability, including progress toward phasing out fossil fuels where feasible over time. The city had adopted stringent regulations to encourage the use of electric heat pumps and other low-carbon technologies in new residential buildings. This move was aligned with Vancouver’s ambitious climate goals, which include achieving carbon neutrality by 2050 and significantly cutting down on fossil fuel use.

However, the recent decision to reverse the ban reflects a growing recognition of the complexities involved in transitioning to entirely new energy systems. The city's administration acknowledged that while electric alternatives offer environmental benefits, they also come with challenges that can affect homeowners, builders, and the broader energy infrastructure, including options for bridging the electricity gap with Alberta to enhance regional reliability.

Stewart Muir argues that Vancouver’s policy shift is not just about natural gas appliances but represents a larger conversation about energy system choices and their implications. He suggests that the reversal of the ban provides an opportunity to address key issues related to energy reliability, affordability, and the practicalities of integrating new technologies, including electrified LNG options for industry within the province into existing systems.

One of the primary reasons behind the reversal is the recognition of the practical limitations and costs associated with transitioning to electric-only systems. For many homeowners and builders, natural gas appliances have long been a reliable and cost-effective option. The initial ban on these appliances led to concerns about increased construction costs and potential disruptions for homeowners who were accustomed to natural gas heating and cooking.

In addition to cost considerations, there are concerns about the reliability and efficiency of electric alternatives. Natural gas has been praised for its stable energy supply and efficient performance, especially in colder climates where electric heating systems might struggle to maintain consistent temperatures or fully utilize Site C's electricity under peak demand. By reversing the ban, Vancouver acknowledges that a one-size-fits-all approach may not be suitable for every situation, particularly when considering diverse housing needs and energy demands.

Muir emphasizes that the reversal of the ban should prompt a broader discussion about how to balance environmental goals with practical energy needs. He argues that rather than enforcing a blanket ban on specific technologies, it is crucial to explore a range of solutions that can effectively address climate objectives while accommodating the diverse requirements of different communities and households.

The debate also touches on the role of technological innovation in achieving sustainability goals. As energy technologies continue to evolve, renewable electricity is coming on strong and new solutions and advancements could potentially offer more efficient and environmentally friendly alternatives. The conversation should include exploring these innovations and considering how they can be integrated into existing energy systems to support long-term sustainability.

Moreover, Muir advocates for a more inclusive approach to energy policy that involves engaging various stakeholders, including residents, businesses, and energy experts. A collaborative approach can help identify practical solutions that address both environmental concerns and the realities of everyday energy use.

In the broader context, Vancouver’s decision reflects a growing trend in cities and regions grappling with energy transitions. Many urban centers are evaluating their energy policies and considering adjustments based on new information and emerging technologies. The key is to find a balance that supports climate goals such as 2050 greenhouse gas targets while ensuring that energy systems remain reliable, affordable, and adaptable to changing needs.

As Vancouver moves forward with its revised policy, it will be important to monitor the outcomes and assess the impacts on both the environment and the community. The reversal of the natural gas ban could serve as a case study for other cities facing similar challenges and could provide valuable insights into how to navigate the complexities of energy transitions.

In conclusion, Vancouver’s decision to reverse its ban on natural gas appliances in new homes is a significant development that opens the door for a critical dialogue about energy system choices. Stewart Muir’s call for a broader conversation emphasizes the need to balance environmental ambitions with practical considerations, such as cost, reliability, and technological advancements. As cities continue to navigate their energy futures, finding a pragmatic and inclusive approach will be essential in achieving both sustainability and functionality in energy systems.

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Atlin Hydro and Transmission Project delivers First Nation-led clean energy via hydropower to the Yukon grid, replacing diesel, cutting emissions, and creating jobs, with a 69-kV line from Atlin, B.C., supplying about 35 GWh annually.

Key Points

A First Nation-led 8.5 MW hydropower and 69-kV line supplying clean energy to the Yukon, reducing diesel use.

✅ 8.5 MW capacity; ~35 GWh annually to Yukon grid

✅ 69-kV, 92 km line links Atlin to Jakes Corner

✅ Creates 176 construction jobs; cuts diesel and emissions

A First Nation-led clean-power generation project for British Columbia’s Northwest will provide a significant economic boost and good jobs for people in the area, as well as ongoing revenue from clean energy sold to the Yukon.

“This clean-energy project has the potential to be a win-win: creating opportunities for people, revenue for the community and cleaner air for everyone across the Northwest,” said Premier John Horgan. “That’s why our government is proud to be working in partnership with the Taku River Tlingit First Nation and other levels of government to make this promising project a reality. Together, we can build a stronger, cleaner future by producing more clean hydropower to replace fossil fuels – just as they have done here in Atlin.”

The Province is contributing $20 million toward a hydroelectric generation and transmission project being developed by the Taku River Tlingit First Nation (TRTFN) to replace diesel electricity generation in the Yukon, which is also supported by the Government of Yukon and the Government of Canada, and comes as BC Hydro demand fell during COVID-19 across the province.

“Renewable-energy projects are helping remote communities reduce the use of diesel for electricity generation, which reduces air pollution, improves environmental outcomes and creates local jobs,” said Bruce Ralston, Minister of Energy, Mines and Low Carbon Innovation. “This project will advance reconciliation with TRTFN, foster economic development in Atlin and support intergovernmental efforts to reduce greenhouse gas emissions.”

TRTFN is based in Atlin with territory in B.C., the Yukon, and Alaska. TRTFN is an active participant in clean-energy development and, since 2009, has successfully replaced diesel-generated electricity in Atlin with a 2.1-megawatt (MW) hydro facility amid oversight issues such as BC Hydro misled regulator elsewhere in the province today.

TRTFN owns the Tlingit Homeland Energy Limited Partnership (THELP), which promotes economic development through clean energy. THELP plans to expand its hydro portfolio by constructing the Atlin Hydro and Transmission Project and selling electricity to the Yukon via a new transmission line, in a landscape shaped by T&D rates decisions in jurisdictions like Ontario for cost recovery.

The Government of Yukon is requiring its Yukon Energy Corporation (YEC) to generate 97% of its electricity from renewable resources by 2030. This project provides an opportunity for the Yukon government to reduce reliance on diesel generators and to meet future load growth, at a time when Manitoba Hydro's debt pressures highlight utility cost challenges.

The new transmission line between Atlin and the Yukon grid will include a fibre-optic data cable to support facility operations, with surplus capacity that can be used to bring high-speed internet connectivity to Atlin residents for the first time.

“Opportunities like this hydroelectricity project led by the Taku River Tlingit First Nation is a great example of identifying and then supporting First Nations-led clean-energy opportunities that will support resilient communities and provide clean economic opportunities in the region for years to come. We all have a responsibility to invest in projects that benefit our shared climate goals while advancing economic reconciliation.” said George Heyman, Minister of Environment and Climate Change Strategy.

“Thank you to the Government of British Columbia for investing in this important project, which will further strengthen the connection between the Yukon and Atlin. This ambitious initiative will expand renewable energy capacity in the North in partnership with the Taku River Tlingit First Nation while reducing the Yukon’s emissions and ensuring energy remains affordable for Yukoners.“ said Sandy Silver, Premier of Yukon.

“The Atlin Hydro Project represents an important step toward meeting the Yukon’s growing electricity needs and the renewable energy targets in the Our Clean Future strategy. Our government is proud to contribute to the development of this project and we thank the Government of British Columbia and all partners for their contributions and commitment to renewable energy initiatives. This project demonstrates what can be accomplished when communities, First Nations and federal, provincial and territorial governments come together to plan for a greener economy and future.” said John Streicker, Minister Responsible for the Yukon Development Corporation. 

“Atlin has enjoyed clean and renewable energy since 2009 because of our hydroelectric project. Over its lifespan, Atlin’s hydro opportunity will prevent more than one million tonnes of greenhouse gases from being created to power the southern Yukon. We are looking forward to the continuation of this project. Our collective dream is to meet our environmental and economic goals for the region and our local community within the next 10 years. We are so grateful to all our partners involved for their financial support, as we continue onward in creating an energy efficient and sustainable North.” said Charmaine Thom, Taku River Tlingit First Nation spokesperson.

Quick Facts:

• The 8.5-MW project is expected to provide an average of 35 gigawatt hours of energy annually to the Yukon. To accomplish this, TRTFN plans to leverage the existing water storage capability of Surprise Lake, add new infrastructure, and send power 92 km north to Jakes Corner, Yukon, along a new 69-kilovolt transmission line.
• The project is expected to cost $253 - 308.5 million, the higher number reflecting recently estimated impacts of inflation and supply chain cost escalation, alongside sector accounting concerns such as deferred BC Hydro costs noted in recent reports.
• The project is expected to have a positive impact on local and provincial economic development in the form of, even as governance debates like Manitoba Hydro board changes draw attention elsewhere:
• 176 full-time positions during construction;
• six to eight full-time positions in operations and maintenance over 40 years; and
• increased business for B.C. contractors.
• Territorial and federal funders have committed $151.1 million to support the project, most recently the $32.2 million committed in the 2022 federal bdget.

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California Electricity Reliability covers grid resilience amid heat waves, rolling blackouts, renewable energy integration, resource adequacy, battery storage, natural gas peakers, ISO oversight, and peak demand management to keep homes, businesses, and industry powered.

Key Points

Dependable California power delivery despite heat waves, peak demand, and challenges integrating renewables into grid.

✅ Rolling blackouts revealed gaps in resource adequacy.

✅ Early evening solar drop requires fast ramping and storage.

✅ Agencies pledge planning reforms and flexible backup supply.

One hallmark of an advanced society is a reliable supply of electrical energy for residential, commercial and industrial consumers. Uncertainty that California electricity will be there when we need it it undermines social cohesion and economic progress, as demonstrated by the travails of poor nations with erratic energy supplies.

California got a small dose of that syndrome in mid-August when a record heat wave struck the state and utilities were ordered to impose rolling blackouts to protect the grid from melting down under heavy air conditioning demands.

Gov. Gavin Newsom quickly demanded that the three overseers of electrical service to most of the state - the Public Utilities Commission, the Energy Commission and the California Independent Service Operator – explain what went wrong.

"These blackouts, which occurred without prior warning or enough time for preparation, are unacceptable and unbefitting of the nation's largest and most innovative state," Newsom wrote. "This cannot stand. California residents and businesses deserve better from their government."

Initially, there was some fingerpointing among the three entities. The blackouts had been ordered by the California Independent System Operator, which manages the grid and its president, Steve Berberich, said he had warned the Public Utilities Commission about the potential supply shortfall facing the state.

"We have indicated in filing after filing after filing that the resource adequacy program was broken and needed to be fixed," he said. "The situation we are in could have been avoided."

However, as political heat increased, the three agencies hung together and produced a joint report that admitted to lapses of supply planning and grid management and promised steps to avoid a repeat next summer.

"The existing resource planning processes are not designed to fully address an extreme heat storm like the one experienced in mid August," their report said. "In transitioning to a reliable, clean and affordable resource mix, resource planning targets have not kept pace to lead to sufficient resources that can be relied upon to meet demand in the early evening hours. This makes balancing demand and supply more challenging."

Although California's grid had experienced greater heat-related demands in previous years, most notably 2006, managers then could draw standby power from natural gas-fired plants and import juice from other Western states when necessary.

Since then, the state has shut down a number of gas-fired plants and become more reliant on renewable but less reliable sources such as windmills and solar panels.

August's air conditioning demand peaked just as output from solar panels was declining with the setting of the sun and grid managers couldn't tap enough electrons from other sources to close the gap.

While the shift to renewables didn't, unto itself, cause the blackouts, they proved the need for a bigger cushion of backup generation or power storage in batteries or some other technology. The Public Utilities Commission, as Beberich suggested, has been somewhat lax in ordering development of backup supply.

In the aftermath of the blackouts, the state Water Resources Control Board, no doubt with direction from Newsom's office, postponed planned shutdowns of more coastal plants, which would have reduced supply flexibility even more.

Shifting to 100% renewable electricity, the state's eventual goal, while maintaining reliability will not get any easier. The state's last nuclear plant, Diablo Canyon, is ticketed for closure and demand will increase as California eliminates gasoline- and diesel-powered vehicles in favor of "zero emission vehicles" as part of its climate policies push and phases out natural gas in homes and businesses.

Politicians such as Newsom and legislators in last week's blackout hearing may endorse a carbon-free future in theory, but they know that they'll pay the price as electricity prices climb if nothing happens when Californians flip the switch.

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Electricity Investment Surpasses Oil and Gas 2016, driven by renewable energy, power grids, and energy efficiency, as IEA reports lower oil and gas spending, rising solar and wind capacity, and declining coal power plant approvals.

Key Points

A 2016 milestone where electricity topped global energy investment, led by renewables, grids, and efficiency, per the IEA.

✅ IEA: electricity investment hit $718b; oil and gas fell to $650b.

✅ Renewables led with $297b; solar and wind unit costs declined.

✅ Coal plant approvals plunged; networks and storage spending rose.

Investments in electricity surpassed those in oil and gas for the first time ever in 2016 on a spending splurge on renewable energy and power grids as the fall in crude prices led to deep cuts, the International Energy Agency (IEA) said.

Total energy investment fell for the second straight year by 12 per cent to US$1.7 trillion compared with 2015, the IEA said. Oil and gas investments plunged 26 per cent to US$650 billion, down by over a quarter in 2016, and electricity generation slipped 5 per cent.

"This decline (in energy investment) is attributed to two reasons," IEA chief economist Laszlo Varro told journalists.

"The reaction of the oil and gas industry to the prolonged period of low oil prices which was a period of harsh investment cuts; and technological progress which is reducing investment costs in both renewable power and in oil and gas," he said.

Oil and gas investment is expected to rebound modestly by 3 per cent in 2017, driven by a 53 per cent upswing in U.S. shale, and spending in Russia and the Middle East, the IEA said in a report.

"The rapid ramp up of U.S. shale activities has triggered an increase of U.S. shale costs of 16 per cent in 2017 after having almost halved from 2014-16," the report said.

The global electricity sector, however, was the largest recipient of energy investment in 2016 for the first time ever, overtaking oil, gas and coal combined, the report said.

"Robust investments in renewable energy and increased spending in electricity networks, which supports the outlook that low-emissions sources will cover most demand growth, made electricity the biggest area of capital investments," Varro said.

Electricity investment worldwide was US$718 billion, lifted by higher spending in power grids which offset the fall in power generation investments.

"Investment in new renewables-based power capacity, at US$297 billion, remained the largest area of electricity spending, despite falling back by 3 per cent as clean energy investment in developing nations slipped, the report said."

Although renewables investments was 3 per cent lower than five years ago, capacity additions were 50 per cent higher and expected output from this capacity about 35 per cent higher, thanks to the fall in unit costs and technology improvements in solar PV and wind generation, the IEA said.

COAL INVESTMENT IS COMING TO AN END

Investments in coal-fired electricity plants fell sharply. Sanctioning of new coal power plants fell to the lowest level in nearly 15 years, reflecting concerns about local air pollution, and emergence of overcapacity and competition from renewables, with renewables poised to eclipse coal in global power generation, notably in China. Coal investments, however, grew in India.

"Coal investment is coming to an end. At the very least, it is coming to a pause," Varro said.

The IEA report said energy efficiency investments continued to expand in 2016, reaching US$231 billion, with most of it going to the building sector globally.

Electric vehicles sales rose 38 per cent in 2016 to 750,000 vehicles at $6 billion, and represented 10 per cent of all transport efficiency spending. Some US$6 billion was spent globally on electronic vehicle charging stations, the IEA said.

Spending on electricity networks and storage continued the steady rise of the past five years, as surging electricity demand puts power systems under strain, reaching an all-time high of US$277 billion in 2016, with 30 per cent of the expansion driven by China’s spending in its distribution system, the report said.

China led the world in energy investments with 21 per cent of global total share, the report said, driven by low-carbon electricity supply and networks projects.

Although oil and gas investments fell in the United States in 2016, its total energy investments rose 16 per cent, even as Americans use less electricity in recent years, on the back of spending in renewables projects, the IEA report said.

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MidAmerican Energy Wind XI expands Iowa wind power with the Beaver Creek and Prairie farms, 169 turbines and 338 MW, delivering renewable energy, grid reliability, rural jobs, and long-term tax revenue through major investment.

Key Points

MidAmerican Energy Wind XI is a $3.6B Iowa wind buildout adding 2,000 MW to enhance reliability, jobs, and tax revenue.

✅ 169 turbines at Beaver Creek and Prairie deliver 338 MW.

✅ Wind supplies 36.6 percent of Iowa electricity generation.

✅ Projects forecast $62.4M in property taxes over 20 years.

Power company MidAmerican Energy recently announced the beginning of operations at two huge wind farms in the US state of Iowa.

The two projects, called Beaver Creek and Prairie, total 169 turbines and have a combined capacity of 338 megawatts (MW), enough to meet the annual electricity needs of 140,000 homes in the state.

“We’re committed to providing reliable service and outstanding value to our customers, and wind energy accomplishes both,” said Mike Fehr, vice president of resource development at MidAmerican. “Wind energy is good for our customers, and it’s an abundant, renewable resource that also energizes the economy.”

The wind farms form part of MidAmerican Energy’s major Wind XI project, which will see an extra 2,000MW of wind power built, and $3.6 billion invested amid notable wind farm acquisitions shaping the market by the end of 2019. The company estimates it is the largest economic development project in Iowa’s history.

Iowa is something of a hidden powerhouse in American wind energy. The technology provides an astonishing 36.6 percent of the state’s entire electricity generation and plays a growing role in the U.S. electricity mix according to the American Wind Energy Association (AWEA). It also has the second largest amount of installed capacity in the nation at 6917MW; Texas is first with over 21,000MW.

Along with capital investment, wind power brings significant job opportunities and tax revenues for the state. An estimated 9,000 jobs are supported by the industry, something a U.S. wind jobs forecast stated could grow to over 15,000 within a couple of years.

MidAmerican Energy is also keen to stress the economic benefits of its new giant projects, claiming that they will bring in $62.4 million of property tax revenue over their 20-year lifetime.

Tom Kiernan, AWEA’s CEO, revealed last year that, as the most-used source of renewable electricity in the U.S., wind energy is providing more than five states in the American Midwest with over 20 percent of electricity generation, “a testament to American leadership and innovation”.

“For these states, and across America, wind is welcome because it means jobs, investment, and a better tomorrow for rural communities”, he added.

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