Discover more from Irina Slav on energy
The race is on for most outlandish energy statement
I’ve always considered myself a reasonably stubborn individual but I have given up. I have given up on my long-held belief that if not all, if not most, then at least many people in a position of power know what they are doing. Even that has turned out to be excessively optimistic.
I’ve written about the IEA’s Fatih Birol more than enough but he’s been generating comments again, so I feel the need to write about him again, this time with regard to oil supply and demand and how the balance must look for oil prices to remain affordable.
“I very much hope that the increase coming from [the] United States, from Brazil, Canada this year, [will] be accompanied by the increase coming from the key producers in Middle East and elsewhere,” Birol told CNBC in Davos because, of course, everyone who’s anyone is in Davos this week.
Then he went on to add “Otherwise, we have only one hope that we don’t have big trouble in the oil markets in summer, which is hoping … that the Chinese demand remains very weak.”
This from the man who’s been urging everyone who’d listen to forget about oil and gas because we really must bring those emissions down and soon, so we must all be investing in wind and solar because they can perfectly replace both oil and gas. It’s not the first time Birol has done an U-turn on fossil fuels, of course, but it’s the latest time so it was worth a mention.
In the U.S., meanwhile, I hear the administration is considering the possibility of a ban on oil exports. This is happening just seven short years after the ban was lifted, turning the U.S. into a sizeable player on international oil markets with greater price-setting power than before when it was mostly a consumer, albeit the largest consumer.
The consideration is not too serious, for now, remarks on it being that export curbs are “not out of the question”. I will go against the grain here and say that it would be a brilliant decision solving more than one problem the administration is currently having with the energy industry: they will deprive those fat cats of their windfall profits from exported crude and rein local prices in. So what if some oil companies go bust? Everything has a price, even prices have a price, in this case.
The rest of the world will have to take care of itself, however it can. So what if this hurts Washington’s reputation as reliable energy ally? As I like to say, every government should prioritise its own citizens over the citizens of any other country. And the governments of those other countries might sometimes need a reminder about the right order of priorities, even if such reminders tend to be financially painful.
Both Birol and the U.S. administration are old favourites of mine but I’m happy to say this week brought a new contender into my running race for outrageous energy statements. Let’s all welcome the chief executive of Enel, the Italian-based international electricity and gas utility. Just how strong a contender Francesco Starace is becomes clear from the fact he enters the race with not one but two statements, from this week alone. Davos, of course.
The first statement is about battery storage, or, more specifically, recycled battery storage. It’s not a new idea, certainly, but it will probably start garnering more attention as more recyclable EV batteries become available as the revolution unfolds. If it stops unfolding I don’t know what we’ll do about storage. Anyway, here’s Starace’s statement.
“The “Second Life” project has been integrated and powered by Loccioni, an Italian system integrator specializing in sustainable storage systems. It takes disused Nissan LEAF batteries and uses them for a storage system with an overall capacity of 4MW and maximum energy storage of 1.7MWh. The system uses 78 Nissan Leaf batteries, 48 of which have been recycled and 30 of which are brand new. It can inject power into the city’s grid for up to 15 minutes, should the power plant become unavailable. This project perfectly shows the great potential that exists for disused car batteries.”
I don’t know about all of you, but to me, these 15 minutes do not seem to show anything perfectly. They do not show anything anywhere near perfectly. What they seem to show is that 78 Leaf batteries can supply power to a town of 86,000 for 15 minutes in case something quickly fixable happens to that town’s power plant.
Of course the question remains what time of day these batteries can supply a whole 15 minutes of power and whether or not this time would vary as demand varies, which it does. So, if 78 batteries can only provide 15 minutes of power, how many would be needed for an hour or two, or three?
I am a big fan of recycling, I’ve said this before. I’m also a fan of reusing things. Single-use anything is not among my favourite phrases. It’s only applicable to hygiene products and beer cans, possibly olive oil bottles as well. The idea of using spent batteries from EVs to build storage arrays is theoretically perfect… until you remember these batteries are far from their optimal performance. Which, to me, means you’d need a lot of them for the storage array to make sense. And what happens when they do reach the final end of their extended lives? How long is this extension, actually? Questions abound.
Yet, as most of you already know, this was not the most notable statement Starace made this week. No, the most notable statement that the chief executive of an electricity and gas utility Francesco Starace made was, and I quote, “Burning gas to produce electricity is, today, stupid.”
Starace was talking to CNBC, commenting on the EU’s attempts to cut off its dependence on Russian hydrocarbons. Too much gas, Starace said, was “being used in a stupid way, because burning gas to produce electricity is, today, stupid.”
“Stop using gas for heating, stop using gas for generating electricity when there are alternatives that are better,” he also said, obviously feeling in a generous mood. The alternatives? Have a guess. “Alternative methods of electricity generation include wind and solar power, among others,” per CNBC.
If you think that bright engineering mind stopped there, you’d be wrong. Starace went on to say that “Overall I think there will be a reduction of gas consumption in Europe across the board coming mostly from those, like I said, ‘stupid’ uses,” clearly liking the sound of “gas” and “stupid” in a declarative sentence.
“So burning it to generate electricity is not smart anymore, there is a better way,” he also said. “Burning it to heat our homes is not intelligent, there is a better way.”
I cannot help but ask: however did the EU not think about this? That there is a better way? Whyever is a whole bloc of countries still being stupid and using electricity generated from gas and heat generated from burning gas (stupid) for heating homes and offices? Seriously, why didn’t they all just ask signor Francesco years ago? He would’ve told them “there is a better way” and now we wouldn’t have been in this embarrassing position where we have to beg for gas.
It is interesting, however, that this “better way” Starace is referring to does not get clarified or elaborated on in the interview. What does get clarified, by CNBC, is that “The Enel Group — whose main shareholder is the Italian Ministry of Economy and Finance — has said it will abandon gas generation by 2040. It also plans to leave the retail gas market in 2040.” Well, I’ll be mogadored, it looks like Enel is building a case against gas to make sure its business plan works as intended. Maybe, just maybe, there is a better way to do that?