Isolating its wind & solar generation (RES) for the month of Sept however reveals future challenges.
GER had 9 days in Sept with little #wind. Not just Germany, all of Europe. On avg, GER used 2.7GW of its 62GW wind cap.
That is a capacity factor of 4.5%. Ouch!
2/n
While Sept turned GER into an importer for 2d (from CZE, SWE & DK) to cover consumption (FRA couldn't help; coal maxed out), RES also required it to export excesses during 15d.
Its Energiewende already turned GER into an imp/export "junky" as d-s are tough to match.
3/
So what?
Well, GER is scheduled to turn off all coal assets by 2035 (nukes by 2022; ex grid reserve) & replace it with wind & solar.
Only NatGas is permitted to complement intermittant RES in coming years - such are the directives of Germany's green energy laws today.
4/n
Many "experts" claim that this is a good thing, both for the climate and the consumer.
That is because RES will basically bring prices of electricity near-zero.
I kid you not - that is an official claim, among other, by its renewable lobby.
5/n
GER's Energiewende would require many conditions for it to work - none of which will be met by 2035, if ever.
One such condition is higher cross-border cap. In Sept it would have required 720GWh/d of imports (ex coal & nuclear) to cover its load. It has 52GW imp cap today.
6/
Did neighbours agree to increase cross-border cap with GER (future storage & transmissions should reduce total need) or is it uncoordinated?
Will neighbours have excess generation cap ex RES (same climate) to match future peaks? Today's c-border balancing doesn't suggests so!
U see, electricity was never only about energy assets (or their emissions) & always about timing & location too.
Wind will primarily be located offshore (north). Much of it will have to be transported south (industry). That will require a doubling of transmission lines.
7/
I'm afraid this target too will prove impossible to achieve by 2035 (despite a grid acceleration law since 2016) as nobody wants a new transmission line in the backyard.
At the current pace, GER would complete 50% of its grid expansion by 2035.
8/
We covered, among others, the challenges for more chemical storage in our thread here.
GER will require >15TWh of c-storage to cover so called "Dunkelflauten" - prolonged periods without wind or sunshine in Jan/Feb. It has a few MWh today.
For past 20y GER energy policy wasn't about emission.
Instead, ideology (Greens), campaign panic (CDU/CSU; Merkel’s nuclear exit post Fukushima) or personal entanglements (SPD; Schörder’s push for Russian gas) dominated decision making. Blame them all.
10/
For that purpose, the GER public was told that nuclear is an uncontrollable risk - a lie!
Its Energiewende, however, risks an "economic meltdown" if it doesn't allow for a nuclear renaissance to meet its de-carbonisation targets - a fact!
Here is my theory how the major incident - a so called blackout - occurred at 12:30 CET today in the power system of Spain & Portugal:
1/n
At the time of the incident, Spain and Portugal operated the grid at very high renewables share of about 66% - i.e solar (55%) and wind (11%; eolica)
2/n
While this isn’t unusual for Spain, it does mean that the grid operates with little inertia (resistance to change) during such time. The grid is therefore vulnerable to external effects…!
On this platform, certain perma bulls keep pushing a bullish crude narrative based on relative U.S. inventories—day after day, for three years now.
Their logic: Total U.S. crude inventories (including the SPR) are at 838 million barrels (orange line), 200 million barrels below the 10-year average → bullish!
Yet, inventories keep falling, and prices remain stuck in a range. Clearly, they are wrong.
1/9 @UrbanKaoboy @Iris62655179 @BrentRuditLeo
The problem with their logic?
a) The U.S. is no longer the marginal importer of crude oil—Asia is (or was).
b) U.S. inventories are artificially high on a 10-year average due to the shale boom, which took off in 2014. Shale growth and Covid distort the data, keeping inventories (ex SPR) elevated. So any 5- or 10-year comparison is meaningless—period.
2/n US Crude Oil Inventory ex SPR
Including SPRs, the picture looks more normalised - but not tight. But does the US really need 700mb of strategic reserves in 2025? I don't think so.
Yesterday, I shared a few thoughts that I’d like to expand on, especially given how volatile the current tariff landscape under this admin has become.
Navigating it isn’t just difficult—it’s nearly impossible to avoid missteps. Hopefully some traders will expand on my thoughts...
1/n
What do we know?
As at 23 March 2025, Comex copper price in New York is trading at 14% premium to LME in London. Buying a tonne of copper in NY costs $11,213 versus 9,842 in London, $1,371 per tonne more than in London.
2/n
Why is that? Because of tariff FEARS, not tariffs.
Traders are hedging future risk of potential tariffs on all forms of the raw material, such as cathodes, concentrates, ores, and even scrap. But there aren't such tariffs in place for copper yet (unlike alumnium).
The current Comex price action in the U.S. is basically a Trump tariff trade mirage and is otherwise as misleading of fundaments as the May 2024 price action of which I warned on multiple occasions.
1/n $/pound
In May 2024 however, U.S. price action was more in synch with London. But it didn't reflect weak Chinese housing & construction fundamentals which has been 15-30% of GLOBAL copper use for the past two decades. Today, U.S. prices trade as if borders close tomorrow.
2/n Comex - LME arb in $/t
Unlike May 2024, copper blue chips like $FCX, however, do not buy the rally. So at least it seems that the equity market understands the tariff aspect of the copper price mirage.
In this episode, we discuss China's 2nd of 5 economic paths it can follow.
This episode will also focus on Xi the leader. To understand Xi means to better understand China's economic path forward.
1/n #China
Can China replace malinvestment with more consumption?
Answer: Maybe a little bit & over a long time frame, but President Xi does not want to focus on this path. Instead, he wants to implement his socialist utopia.
2/n
Yes, China’s rising entrepreneurs were welcomed by the Communist Party for at least two decades. But all of that is in reverse.
Under Xi Jinping, China has moved full circle: from low growth & low freedom in the pre-reform era back towards something similar today.
In this episode, we discuss China's investment-led growth model & the first of 5 economic paths China can follow.
As you would expect, also this episode is full of Chinese characteristics!
1/n #China
Starting in 1990s, China’s economic engine has been fueled by capital investments.
Its central planning bureau defined GDP targets, picked winners and drove growth from debt-driven capital formations (green line).
2/n
Has any other nation tried this before, ever? Not to our knowledge.
We checked at ALL G20 economies and their respective growth models for past 70 years. 45% capital formation share is a unique experiment in economic history.