Christian Bauer

If we are serious about deploying heat pumps at scale, we need to get serious about the single most important metric for their adoption: the electricity-to-gas price ratio. For too long, the conversation has been dominated by upfront costs and technology. While grants and technical innovation are vital, they don't address the fundamental question every household asks: "What will my monthly energy bill look like?" The running cost reality is simple maths: A heat pump with a seasonal coefficient of performance (SCOP) of 3 needs the price of electricity to be less than 3 times the price of gas to deliver savings. If the ratio is 4:1 or above, even the most efficient heat pumps struggle to be financially viable for consumers. This isn't a technology problem; it's a policy design problem. Many countries still load policy levies and taxes disproportionately onto electricity bills, artificially inflating the cost of running a heat pump compared to a fossil fuel boiler. To unlock the market, policymakers must act decisively to rebalance these costs. Shifting levies from electricity to gas, or funding them through general taxation, would send the right price signal and make heat pumps the clear economic choice. The chart below is taken from the latest Climate Change Committee report. Link in comments.

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The German government 🇩🇪 has assessed their energy transition strategy and 1 sections was about hydrogen. In a nutshell, they conclude: green h2 will remain more expensive than anticipated, new gas power plants should not be required to be H2 ready and thus, the H2 core grid should be redimensioned to reflect more real market growth. They will reduce their 10GW electrolyser target and will ask Brussels to scrap complex additionality rules. Instead of chasing H2 for industry uses, they will focus on Refineries as a more clear business case. In other words, they want to recalibrate and be more realistic. Fine. I think we all know those targets were desilussional ( same as for offshore wind ) , but no one really wants to contradict a government that want to help ( remember Timmermans and his 20MTons RePowerEU goals 😉) . But what the analysis falls short of giving us is (at least for the moment ) : how to get to the more realist path and keep incentivizing industry , transport and power sector to shift toward H2? You can’t just simply walk away from a sector , that under Draghi’s report , is a key one to maintain Europe’ competitiveness. Germany’s dunkelflaute is not going away just because H2 is expensive , and batteries are not a solution there. We surely can not save the steel and chemical industry by increasing dependency on more expensive natural gas … - We should be more realistic: yes ( the European Court of Auditors already told it in 2024) - We should stick to 2030 regulatory framework: Yes ! 🙌 - we should now be more open to other tech (nuk, CCS, bio , geothermal): of course - we should therefore give up on renewable electrolysis at a critical moments: absolutely NO 👎. Check on #China, 🇨🇳 who has already 65% of all operational electrolysis capacity and growing, according to IEA. Increasing knowhow , scaling , reducing cost and getting ready for the future… let’s not lose sight . You want to discuss all these maters ? Join us at the #EuropeanHydrogenWeek ( more on comments )

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With the widespread deployment of solar PV, nuclear reactors increasingly need to modulate their power output in spring and summer. They can do so, but on the long run it is suboptimal. The argument that this makes it possible to save fuel is a bit weak. The share of nuclear fuel manufacturing is not significant in the cost of nuclear energy. However, nuclear reactors are infrastructures dominated by fixed costs, which means that they are more economically affected by a decrease in their load factor than fossil fuel power plants (low fixed costs and high variable costs). It is essential to take this rapidly growing phenomenon into account when planning the electricity system. On the one hand, we need to support all levers of electricity flexibility (on the production, storage and demand sides) and the economic incentives to develop them. This support is as important as that currently given to renewable energies. On the other hand, nuclear reactors built today must be designed keeping in mind the context in which they will be operating in the coming decades. In other words, what will their economic model be in a world where electricity price is almost null for several hours a day? The coupling of nuclear reactors with thermal storage capacities is a particularly interesting avenue to explore in this regard (this is what we are developing at HEXANA, with the coupling of sodium-cooled fast-neutron reactors with molten-salt heat storage). This allows the reactor to operate at full power at all times, while adjusting electricity and heat production in real time to the needs of the grid and the customers. Several companies are exploring this type of solution globally, which may offer a way to respond to a rapidly growing issue for the electrical system. https://lnkd.in/eghAW_VE

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#hydrogen #GOs New Insights on the #Hydrogen and Guarantees of Origin (#GOs) Market The latest EU report titled "Technical assistance to monitor functioning of the guarantees of origin (GO) system" provides an in-depth look at the GOs market and its impact on renewable energy and hydrogen tracking. ➡️ Source: https://lnkd.in/eKuVkbMu ✅ Key Takeaways: 📌 The GO market has achieved a healthy level of liquidity. 📌 While transparency has improved, price discovery remains limited. GO prices vary based on factors such as technology, region, and additionality—factors not always visible to consumers. Forecasting prices remains difficult due to elements of monopolistic competition. 📌 More than 90% of hydropower, 50% of wind, and 30% of solar electricity production in Europe is currently tracked via GOs. 📌 The GO system is effective in tracking renewable electricity, but further harmonisation is needed to reduce the risk of misuse. 📌 #Hydrogen: ▪️ As of the end of 2023: only 0.4% of EU hydrogen production was based on water electrolysis (45 tonnes or 1.5 GWh). ▪️ An additional 9.2% (1,033 tonnes or 34 GWh) was produced as a green by-product (e.g., from chlor-alkali electrolysis). ▪️ The Hydrix index (as of January 2025) estimates green hydrogen prices in #Germany at €7.80–€9.50/kg, roughly 2.5x higher than grey hydrogen (€3–€4/kg). 📌 Hydrogen GO trading volumes ▪️ RFNBO certification has only been possible since December 2024. ▪️ Until now, certified green hydrogen has only been traded via GOs or Non-Governmental Certificates (NGCs). ▪️ Assuming certification, 1,500 GOs could have been issued in 2023 for hydrogen produced via electrolysis. ▪️ While only a few EU Member States are active in the gas GO market and even fewer support EU-wide GO trading, interest in GOs is growing: - Smaller projects often opt for GOs/NGCs due to lack of RFNBO compliance. - Larger projects (many pre-FID) are preparing for RFNBO certification to benefit from offtake obligations under the compliance market.

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The global electricity system is evolving fast — and the Electricity Mid-Year Update 2025 from the International Energy Agency (IEA) highlights just how fundamental the changes are.    My key takeaways:  ▪️Demand is surging: Electricity demand is growing more than twice as fast as total energy use, driven by electrification and AI. ▪️Renewables break records: Wind and solar are expected to cover around 90% of the increase in global electricity demand this year, setting new milestones. By 2026 at the latest, renewables are forecast to surpass coal in global electricity generation. ▪️Negative prices are on the rise: In key EU markets, negative wholesale prices almost doubled within a year — from 4.5% in 2024 to around 9% in 2025. This underlines the urgent need for storage and demand side flexibility and a market design that supports this. ▪️Secure and resilient power systems are essential: Investment in grids, storage and flexible generation is increasingly critical to ensure stability, resilience and supply security as renewables expand.    At RWE, we are fully committed to driving this transformation, with our investments in renewables, storage, and flexible generation across our markets. 

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Are utility-scale batteries good for the grid, or are they bad? With a BESS connection queue of 500+ GW, this question has moved up the energy policy agenda very quickly. The same questions are being asked in Belgium, the Netherlands, the UK, pretty much all across Europe (somewhat less so in American LMP markets). Here is our now report commissioned by ECO STOR GmbH. What we find: 👉 Batteries may impact the grid in many ways, but their effect on congestion (and hence the costs of network expansion and redispatch) is likely to be the most important, financially speaking 👉 With battery dispatch and network load changing every 15 mins, batteries will sometimes relief congestion, and sometimes exacerbate bottlenecks (we find that each happens during roughly 20% of the time) 👉 Our empirical analysis finds that on annual average, batteries *reduce* network congestion, if only a little. That's a surprise since the policy debate centers very much around the assumption that batteries are bad 👉 We don't have locational pricing here, so the beneficial effect is purely accidental 👉 We could do *much* better than that, e.g. if we split the German bidding zone (politically unlikely) or of we exposed batteries to a locational grid signal such as a dynamic grid fee (imperfect, but better than nothing) Enjoy the read!

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