00:00Jonathan Bruegel is a power sector analyst at the Institute for Energy, Economics and Financial Analysis.
00:06Great to have you on the program.
00:08You're in Paris. I mean, there have been some power outages in northern France.
00:12How are you handling the heat wave where you are?
00:16Well, thank you. I like most Parisians. I'm trying the best I can to cope with it,
00:22like looking for some shady place, drinking a lot of cold water.
00:27But that's pretty much what we can do. There aren't many other remedies.
00:32So you haven't got some industrial fans blasting, using up extra electricity?
00:37No. As you know, like France and Western Europe is still quite low equipped in air conditioning.
00:45And that's what strikes me from a professional angle that the system is already very strained due to air conditioning.
00:53But there will be increasing air conditioning equipment in the future.
00:57So my concern is how the system will cope with more and more equipment in air conditioning in the future
01:02in those countries like France, Germany and the UK.
01:06Well, France has curbed its nuclear power output to protect local rivers,
01:11which are used normally to cool reactors because they're too warm.
01:15So what impact is that having on electricity spot prices?
01:47Well, the impact is an upward impact on the prices.
01:48It reduces. So we have lower production from gas plants and low production from nuclear plants,
01:54as you said, lower cooling due to rising temperature in rivers.
01:59So that's the double effect, which creates a tight supply demand margin and higher prices.
02:05Why are heat waves such a headache for Europe's power grids?
02:12It's because it's a combination of tight supply and tight demand.
02:17So we see this happening and Europe cannot face it.
02:24Well, it can face it, but on the margin.
02:27And on the margin is not sufficient.
02:28So it's creating some power outages like we have seen in France.
02:33And the system is just not designed in summer for such high demand.
02:39Well, what about renewables?
02:42That's what everyone's talking about as being the future, the green transition.
02:45Now, wind is clearly struggling right now.
02:47Solar is helping.
02:49What does that tell us about Europe's energy transition, how it's working?
02:55Well, it has two points.
02:57Clearly, as you said, wind energy is weaker in those times.
03:02That's a bit obvious.
03:04During high pressure condition, we have low wind speed and therefore lower wind production factors.
03:11And we have lower wind output.
03:12That's one point.
03:14But at the same time, on the flip side, we have solar, which is at its best condition of the
03:18year.
03:19The days are long.
03:21Sunshine is intense.
03:22And we see the highest production volumes of solar in most European countries.
03:27At some points during the day, in some countries, we can see up to 30, even 40 percent of demand
03:33covered by solar.
03:34That's enormous.
03:35So we have this complementary between wind and solar, which is not ideal.
03:42If not, the system would not be so strained.
03:45But it's still on a good way.
03:47And what we need is just more solar.
03:50It's highlighting the case for more solar, which is more needed in summer.
03:55In winter, wind is doing its job.
03:58We need more solar to the job in summer.
04:00If hotter summers are the new normal, what is Europe's biggest energy challenge from here?
04:10Well, I would say that the energy infrastructure in Europe is not designed for the climate we have.
04:18It's designed for the climate we had.
04:19Now we have a climate where we see a winter peak from December to February, what we have historically been
04:26seeing.
04:27But we now also, with climate change, we are seeing a summer peak.
04:32So in June, July, August, where the peak in gigawatts could be almost as high as the winter peak.
04:37And the system is not equipped for this summer peak because it was not designed for that.
04:43So what do we need to solve this problem is, well, as I said before, obviously we need to develop
04:50solar at a faster pace and much faster pace.
04:52But also there are some other solutions that we should not discard.
04:56We should rely more on batteries, like when solar fades in the evening or disappears during the night, we need
05:02battery to replace solar.
05:05Also in a period like now we have now, heat waves, we need more demand-side management, which means the
05:12customer being able to be reactive to this period of tight supply demand.
05:17For instance, in winter, during cold waves, we see industrial and commercial consumers shutting down the demand.
05:23So we could see the same in summer, and we still don't see it.
05:26And the last point, which is still very important, we need a stronger interconnection between countries.
05:32Stronger interconnection between countries, like countries being able to export and import power from one another with less constraints.
05:38So we need a stronger European grid.
05:41Always great to talk to you.
05:42Thank you, Jonathan Bruegel from the Institute of Energy Economics.
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