everyone peter zion here coming to you from the trail in colorado uh today i wanted to talk about
electricity we've got a lot of things going on in california and texas and france and in germany
i'm going to try to knock them down and knit them together into a story that hopefully makes some
sense so the biggest issue is that on the 11th of july the russians shut off something called
nordstream 1 which is the primary flow of natural gas from russia into germany direct goes under the
baltic sea natural gas provides about 15 percent of the electricity that the germans use and it is
also that natural gas is also used as the base of their heavy industry which is really the
foundation for everything in german manufacturing and to lose it even if it's temporary is a big
deal now the russians say it'll be back online in 10 days i'm not sure anyone believes them
well we'll know in 10 days but regardless of what happens with nordstream i would anticipate the
other natural gas pipelines that cross belarus and ukraine on their way to germany are also going to
go offline this year either due to war or partisan damage so one way or another the germans have to
figure out how to do without they're trying to bring in lng from some new facilities as
quickly as they can they're hoping to have those up and running by the end of the year
but any liquefied natural gas they bring in is something that's not going somewhere else in
the world so there's no way that this gets solved without much higher prices in anticipation of that
the french have preemptively nationalized their electricity company electricity de france
or i guess i should say re-nationalized it uh the reason for doing that is so that
the state can directly control the rates that are charged to customers
france has always been a more populous place than germany and it shows in their power sector
uh third up is texas texas had some near record heat over the course of the last week or two i was
unfortunate enough to be in dallas a few days ago it was a balmy 110
and so the whole system nearly crashed we almost had rolling blackouts
in central and northern texas because of the heat and then finally you've got california which is
pushing for a 100 green grid and as part of the debate they are looking to take diablo canyon
which is a nuclear power plant which provides about 10 of their power for the state offline
now what do all these have in common well everyone all four states are in some way participating in
some sort of a green transition different policies different places different fuel mixes but it's all
happening and in some places this works and in some places this doesn't so let's start with the
doesn't and talk about germany germany is neither a sunny nor a windy country they've invested
about 2 trillion euros in building out solar and wind and transmission capacity and yet it only
generates about 10 percent of their electricity needs by nameplate all of those facilities should
be generating 200 percent of their peak demand but instead it's only 10 percent uh why so bad
well like it's not just that it's not just windy and it's not just that the country is not sunny
uh they're also to be perfectly blunt doing some enron-esque things with their statistics so for
example the kind of coal that the germans use is called lignite it's 20 water by weight it is
the least efficient fuel out there and with the natural gas from russia going offline the germans
are mining and burning more of it it is now their primary source of electricity generating capacity
it takes 24 hours to spin up a lignite mine because the stuff is so wet and so calorie
not dense so when the sun does come out in germany they unplug the turbines that are generating the
coal based power and only allow the solar power into the grid they then don't count the emissions
from coal in that environment but then as soon as the sun goes down they have to plug it back
in and we go back to where we were so the germans are just flat out lying about their statistics and
honestly not doing a very good job but there are a lot of people in the green community who
continue to praise the germans as the model we should follow even though emissions have gone up
in germany since their commitment to the green transition uh france is a different story and
it's a better story it's a sunnier country it's a windier country not by a huge margin but enough
to make a difference and they get a substantial portion of their electricity from nuclear power so
they've got this base load that is green friendly at least from a carbon emissions point of view
although if you don't like nuclear in germany you're not going to like it in france either
texas is where things get a little weird texas is a very sunny place especially west texas that
is part of the american southwest that is the or the second sunniest location on the north
american continent and texas is also in the great plains which is definitely the windiest location
in the western hemisphere so while texas doesn't have an official green program they've been adding
solar and especially wind at huge volumes and it's really helped also as the turbines go higher and
higher and higher above about 700 feet you're tapping into stronger and more reliable wind
currents which means you can even lose it use it for base load capacity it's not so intermittent
and then that brings us to california now the hang on i gotta switch arms
you know this one's gonna go so long uh one of the fun things about california is its policy makers
are a little wackadoo from time to time uh but one of the things that california does not get enough
credit for is that the bureaucrats have been imbued with sufficient power to move the goal post
when it's clear that the technology is not working out so the state legislature in sacramento will
pass green mandates and if five ten years down the line it looks like the technology is not maturing
as i thought the bureaucrats have the authority to move those goal posts a little bit so it puts
pressure on industry without it necessarily being a death blow so i think a lot of the concerns that
folks have about california experiencing wide scale blackouts because of the green transition
are a little overblown uh it's something we should keep an eye on it's not something
that i'm saying is not a risk but california has developed a legal structure for dealing with this
we need to compare though california very sunny state moderately windy state with
germany not sunny or windy at all they have very similar mandates for their green tech
and it really doesn't work in germany at all we're seeing that right now with all the coal coming
back online and at least to this point refusal to bring nuclear back online we're going to see
a broad scale failure in europe particularly in germany of all things green probably this year
and certainly next year the winter is going to probably be pretty harsh but in california it's a
different picture not only does the geography work better for green tech and we have a more flexible
legal system there's also some secondary impacts that help in places like california and texas that
don't in germany it has to do again with geography peak demand in germany is in the winter at night
when solar can't help at all peak demand in texas in california is in the summer during the day and
if you have solar panels on your roof you are preventing that solar gain from going into your
attic i used to live in texas i went up and i took the thermometer and i discovered that before and
after my solar panels got put up the temperature difference in my attic was typically 30 degrees in
the in the heat of the summer that takes a lot of load makes it gentle words uh it makes it a
lot easier for you to cool your house if the solar energy is not hitting the roof in the first place
california and texas can count on that germany not so much so where does this take us well we're
going to see the green programs of europe and especially if germany broadly collapsed this year
it's going to be shown to be hollow the technologies are going to be shown to not
work very well at all in those geographies we're going to see carbon emissions expand considerably
but you're going to move over to california and everything is going to be just more or less
hunky-dory the green movement's going to have about two years to digest this and hopefully
the outcome of this for the green movement will be a recognition that geography matters you know the
first rule of geopolitics and if that's the case then maybe we'll get some smarter policies in a
whole lot of places new york state by the way very similar situation to the germans but california
can show a way forward and if the greens can realize that place matters and where you get
your power matters then diablo canyon probably won't shut down and we can have a new model of
an integrated system that is more carbon friendly for the environment without the risks as massive
rolling brown and blackouts that's probably where this is going to go it will mean that the knives
will come out within the green community between the ideologues who think that all solar is good
even if it's facing north at the north pole in the middle of night and those that can you know
actually do math like me anyway that's it for now everyone have a great day talk to you soon
via septum
you