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!
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
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!
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.
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
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.
Brazil is is an interesting microcosm to study in the oil industry.
It's a large, growing consumer of petroleum products. It's the 8th largest producer of crude oil in Dec 2023 as well as a large producer & consumer of biofuels.
Most importantly, it's energy agency reports the data in detail & timely (unlike most countries globally).
1/n
Brazil's resource wealth (mainly offshore) is well documented but it struggled for years to follow through.
Finally, it does with an exit rate of 3.9mbpd of oil production in 2023. Only the US, SA, RUS, CAD, IRQ, CN & IRN (incl condi; in this order) produced more that month. That's 50% growth since Jan 2018!
2/n
Better still, most such production growth reaches the international market. In Dec 2023, Brazil exported 1.7mbpd of crude oil - an ATH.
Remember, in oil net exports is the key number to measure.
Shall we look at the European NatGas market together?
Will Europe have to freeze this winter, after much mild weather luck last winter?
Will TTF drag coal prices up as last winter?
Thread 1/n
Our rolling forecast upfront for those of you with a little ADD:
Best-estimate today, Europe will exit the winter 23/24 in March at or around 40% storage levels (red line) which suggests TTF doesn't have to spike, ceteris paribus. Is it a bear? Neither.
Let me explain.
2/n
Natgas has unique characteristics for a commodity:
Supply is inelastic while demand is highly ELASTIC: Colder temps >> demand goes up exponentially & vice versa.
Not all demand is equal but heating buildings (HH & retail demand) is 65-70% of winter demand (Oct-Mar).
In 2023, BYD will sell some 3 million passanger cars, of which 1.5m will likely be Battery Electric Vehicles (BEV) & the rest Plug-in Hybrids (PHEV). At least that is what we see coming from tracking monthly figures.
2/n Note: table incomplete due to poor company breakouts
BYD's Chairman shared somewhat bigger sales targets recently. He hopes to "double last year's sales to 3.6 million units".