When there is more wind power than the grid needs, wind farms are paid to switch off. In 2022, about £800 million. Consumers are forced to cover these rising costs. Wind farms get paid more, if they overestimate their production. Some provide honest estimates, but those that cheat make millions in profits, while consumers struggle with energy costs.

France’s state-run utility EDF announced an increase in the cost of its Hinkley Point C nuclear power station in the UK to £46 bln and a delay to 2030. France is pressing the UK to help plug the multibillion-pound hole. Britain’s five nuclear power stations account for 14% of the country’s electricity mix. By the end of 2028, only one of those will still be open.

Electricity production will need to increase from 2,905 TWh in 2021 to 6,922 TWh in 2050 because of electric vehicles and heat pumps, according to the European Commission. This will require investment in the energy system of €1.5 trillion per year and 500,000 tons of copper, 80,000 tons of lithium and 60,000 tons of cobalt, according to a study.

Fog in Hungary in the morning predicts the spike in intra-day electricity prices. Algorithms buy power contracts and make money, when prices rise. Traders in Denmark are using the upheaval of the green energy transition and Russia's war. Five years ago, they made $100 mln per year, now it is $5 bln and European consumers are paying the price.

Demand for Europe’s debt sales is running at a record pace as investors clamor to lock in attractive yields before central banks start cutting rates. Issuers from across the ratings spectrum are attempting to get deals done at the start of the year. Because of the swollen public debt, investors want a premium for holding long-term bonds in particular.

Output shrank to about 37 TWh after two stations closed. The UK wants to build as much as 24 GW of new nuclear capacity by 2050, with 6 GW in the next decade at a cost of more than £150 billion. “With revenues materializing around a decade after the Final Investment Decision, few banks are willing to consider financing nuclear power.

The new regulations will require banks to set aside more capital. US banks currently have capital requirements from $9 to $13 for every $100 in risk-weighted assets. Under the new rules, they will need to add $2. This will affect lending, including to green energy projects. Banks will look to work alongside other corners of the finance sector to finance project.

Small module reactors suffer financing setbacks and regulatory headwinds. Shares of NuScale are down 70% this year. A $1.8 bln deal for X-energy to go public collapsed. Oklo plans to go public and raise $500 mln via SPAC, but the Nuclear Regulatory Commission denied its permission, saying it did not provide enough information on its reactor design.

Naarea has already raised €50 mln from a handful of French family offices. The molten salt fast neutron reactors the size of a bus will burn plutonium and radioactive waste, have a 40MW electricity output and produce heat as well. Ceramic will prevent corrosion from the liquid fuel, something that has hampered the development of such reactors in the past.

Enel is planning to cut renewable investments (from €17 bln to €12.1bln), spend more on grids and pledged more fiscal discipline, under the new management. Italy will account for 49% of investments. Enel’s debt was €69 bln at the end of 2022 and should be cut by €11.5 bln by the end of 2024. The group will exit Argentina, Peru and Romania.

Germany will cease sales of inflation-linked bonds starting next year, the country’s Federal Finance Agency said. Germany has four outstanding inflation-linked bonds totaling €66.25 bln with remaining maturities between 2.5 and 22.5 years. The nation’s outstanding inflation-linked securities will continue to be tradable on the open market.

High inflation will raise interest payments on these of bonds by a third to £92 bln over the next 5 years, on top of the £89 bln extra for the last 2 years (3.4% of GDP). The UK has 25% of debt linked to inflation, Italy is second with 12%. The reason is demand by UK pension schemes eager to buy assets that match their inflation-linkedin payments.