The gas crisis in Europe continues. The European Commission has sent a letter to Slovakia requesting clarification for the reason it has announced its intention to put aside its EU the accession agreement. That agreement, despite requests for reconsideration, resulted in shutting down two 408 MWe reactors that had met International Atomic Energy Agency safety standards. The shutdown occurred as agreed on December 31, 2008, just 15 days ago. Slovakia has stated that the reactors are ready to operate from a technical perspective and that they are “ready to receive international experts to assess the state of the nuclear reactor”.
Those two reactors produced as much electricity as reasonably efficient natural gas fired generators burning a total of about 150 million cubic feet of natural gas every day. At current European gas prices, purchasing that amount of fuel would cost about $1.6 million per day.
Being the cynic that I am, I find it most interesting that the EU forced the Slovaks to shut down their reactors the night before the Russian/Ukrainian gas price negotiation brinkmanship resulted in the suspension of natural gas shipments to all of Europe. Some anti-nuclear commentators have remarked that the Slovaks have no right to want to go back on their agreement since the EU provided some compensation for giving up part of their existing electrical power supply system. Here is a quote from a Radio Netherlands report titled Austria furious at re-opening of nuclear plant:
Minister Mitterlehner (Austrian Energy Minister)says that, what’s more, Slovakia was given financial compensation for the closure of the nuclear power plant.
“Slovakia received about 614 million euro ($810 million at today’s exchange rate), not only to close the reactor, but also to develop alternative energy sources. And now we have to ask ourselves what has happened to that money. They should have taken the necessary measures to ensure sufficient power from other sources.”
Here is a clue what happened to the money: at a daily rate of $1.6 million for replacement natural gas fuel, $810 million would last about 16 months. The shutdown nuclear plants were licensed to run until 2014 or 2015. When commenting about the closure, the Slovak “Prime Minister said that he respected the decision to shut down the plant, but considered it as “energy treason” by the previous government, with Slovakia becoming an electricity importer”.
Lest anyone think that the gas crisis in Europe is only related to a pricing dispute with Ukraine over their historical discounts, here is a March 2008 quote from Average gas price for Europe could rise to $400 in 2008 – Gazprom
Gazprom’s CEO said on Friday that the average price for natural gas for Europe in 2008 could reach $400 per 1,000 cubic meters, 13% more than previously expected.
“The price in Europe now exceeds $370. We believe the average price in 2008 could be $378 and could even reach $400 per 1,000 cubic meters,” Alexei Miller said at a meeting with Russian President Vladimir Putin.
Miller said the price hike was necessitated by the weakening U.S. dollar. However, he said the price increase would not affect the growing demand for natural gas on the European market.
“Gazprom supplied 151 billion cubic meters of gas to the EU in 2007, and we plan [to ship] 157 billion cubic meters in 2008,” he said.
He added that gas supplies to Western Europe were based on long-term contracts, most of which would only expire after 2030.
In other words, steadily increasing gas prices for all of Europe is part of an orchestrated plan that includes long term contracts and dependent customers. I like the spunk that is being displayed by Slovakia’s leaders, who have essentially stated that they would rather beg forgiveness from the European Commission than be held hostage by Russian gas suppliers.
For those people who continue to assert that electricity supplies are not related to natural gas supplies, here is a link to one of many sites marketing portable electric heaters.
GazProm has made a strategic mistake, perhaps due to groupthink induced overconfidence. (It warms my heart to be able to say that.) There is one thing that some people, particularly those raised in autocratic environments, forget about laws and agreements. If people can make them, other people can break them. That does not hold true for physical laws, like the fact that fission is an emission-free, reliable heat source that can effectively replace other heat sources like coal, oil and natural gas. I fully expect another result from this crisis will be a renewed and contentious discussion in Germany about its planned nuclear phase-out.
It is pretty obvious that the Russian gas pushers did not consider it possible that their addicts just might have other options. Here is a quote from another story titled Poland plans first nuclear plant, LNG terminal as gas crisis bites that illustrates what I hope is the long term effect of Russia’s decision to go to the mat about Ukraine’s gas prices
“By 2020 we intend to see power flow from one or two nuclear plants,” Poland’s Prime Minister Donald Tusk told reporters in Warsaw.
Warsaw will consult South Korea and European nuclear powerhouse France on the nuclear project, a first for non-nuclear Poland.
Update: Posted Jan 16, 2009 0410 – the Christian Science Monitor has noticed the resurgence in nuclear interest due to the ongoing natural gas supply crisis in Europe and adds Italy to the list of countries with a big shift in attitudes toward the increased use of fission technology: Russian gas cutoff energizes nuclear comeback