Alexander Stahel 🌻 Profile picture
Oct 1, 2022 13 tweets 6 min read Read on X
September was an interesting month to understand the challenges of Germany's so called "Energiewende".

At first, it may not look unusual. Germany was able to export 2,076 GWh of electricity for the month and covered peak loads most of the times.

1/n #Electricity
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.

9/
What went wrong?

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!

11/ Thx
ourworldindata.org/safest-sources…
For my German speaking audience, here is a recent clip which discusses the issues at hand in a most relevant and factual manner.

#Atomkraft

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More from @BurggrabenH

Sep 21
Pre-2020, Gold had one marginal buyer, that being gold-backed ETFs.

Today, gold has at least 3 marginal buyers that can overlap or alternate each other. They are:

- Gold backed Western ETFs (which buy, sell or hold based on US real rates);

- Central Banks seeking higher gold reserves (China; India; Thailand; Vietnam; Qatar, KSA or even Poland) for geopolitical & other reasons;

- Chinese & other Asian wholesale or retail market participants and professional speculators;

Who bought most last? India!

Why? The government cut import duties on gold by 9% at end of July, triggering a renewed surge in demand. “The impact of the duty cut was unprecedented, it was incredible,” said Philip Newman, managing director of Metals Focus in London. “It really brought consumers in.”

At least for now, there seems to be always somebody.

1/nImage
Note however that Chinese retail buying has slowed down recently, as best illustrated by the Shanghai gold premium over international prices.

I will elaborate on the Chinese retail clients more soon.

2/n Image
However, professional Chinese speculators have increased their futures positions somewhat again. Who is the better indicator of what comes next, retail or the pros? IDK

3/3 Thx Image
Read 5 tweets
Sep 4
In 2023, I said I will tweet less about oil and I will stick to this promise but today I make an exception and will break the promise as we enter a period of more volatility for oil...

So let's talk about OPEC and Saudi market share. It's decision making time.

1/n
Step by step:

The Saudis decided to keep oil from falling <$75 for 2y by cutting overproportionally in their OPEC+ quota context.

They have cap for 12mbpd but produce 9mbpd. It was 10.5mbpd in 2022. Pick a number but they are 15-20% below their fair share.

2/n Image
Why did they do so?

Likely because of bad advisers. There is a whole crew of supply gloomers out there charging clients money to claim the Permian or US shale is about to roll over.

Well, it isn't.

3/n US weekly DOE crude oil Image
Read 14 tweets
Jun 18
Let me share some real time data on the EU natgas market that are hard to get.

European gas consumption for 28 countries matches last's years to the cubic meter (Oct 2022 - Oct 2023 = Year 2022).

However, consumption remains 17% below 2019/20 season.

Is there a supply issue? Rubbish. The global LNG market is oversupplied from every corner; EU storages will be filled by end of Aug where we sit. We have too much gas.

#TTF 1/4 (in mcm/day and YTD)Image
Three factors matter why there is less consumption vs 2019/20 season:

1) Milder weather: 70% of total consumption is temperature related. Temperatures are milder, thus Europe consumes 14% less vs 2019/20.

Is that permenant? It sure looks like a trend where I sit. But climate scientists can answer that best.

Households Consumption; 2/4Image
2) Less power generation: Europe replaces more and more natgas in the grid with solar & wind and in the case of France with better capacity utilisation of its nuclear fleet. That adds up...!

Selected Power Consumption: 7 countries; 3/4 Image
Read 4 tweets
Apr 9
Nvidia sold a lot of new AI chips over the past 18 months and is forecast to grow its unit sales aggressively.

But does everybody understand what such forecast would mean for electricity demand in the West?

A 🧵

1/n #AI
Step by step:

The average Swiss household consumes 4000-5000kWh of power pa. It is similar for most Western HH.

Let’s assume a 4-person household consumes 5000kWh per annum.

That translates into 570 Watt per hour (5000 x 1000 / 365 days / 24h)…

2/n Image
The latest version of Nvidia’s processors for AI purposes is called H100 SXM.

How much power does it consume?

Answer: 700 Watt (per hour).

In other words, one processor will consume 20% more power than a 4-person household consumes pa!

3/n Image
Read 10 tweets
Mar 12
India likes a "GOOD" deal - also in crude oil - and is about to teach Russia a lesson what that means.

Spoiler 1: it's not a pretty one!
Spoiler 2: China & Turkey will learn quickly..!

Let's look at the Indian-Russo crude oil bromance.

1/x Thread
Before the invasion in Feb 2022, Russia exported some 2.8mbpd (55%) of its 5.5mbpd crude to Europe by way of pipeline (Druzhba) & sea transportation (seaborne).

But not just crude oil...

2/x Image
Russia also sold products such as diesel or jet to Europe for a total of 1.4mbpd in petroleum product exports.

In other worlds, G7 sanctioned as introduced in Dec 2022 required 4.2+mbpd of crude & products to be re-shuffeled in globally. Big numbers!

3/x Image
Read 18 tweets
Jan 16
For now, Red Sea disruptions due to Houthi attacking commercial vessels randomly remains a ton-mile story, not a crude oil story.

Within different shipping segments the picture of diverting cargo around the Suez Canal remains a Container Vessel story, to a less extent also a Product Tanker & Crude Oil tanker story.

1/5 Some high frequency data...!
Container Vessels owners have been the most consequent in diverting cargo.

Since Nov, the number of container vessels crossing the Suez Canal has collapsed by 80% in both directions.

2/n Image
Crude Oil tankers from the Middle East (Saudi Arabia; UAE; Iraq; Kuwait; Qatar or Oman) to Europe are also lower but our high frequency data does not yet show a similar collapse.

It also nicely illustrates how changing Russian crude flows (Urals diverted to India & China and away from Europe) have increased traffic through the Suez Canal - good for Egypt as Russian dark fleet vessels will or cannot seek an alternative route to ship oil from the Baltics to India.

3/n @OKalleklevImage
Read 5 tweets

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