Germany’s Energy Policy Shift Signals a Business Opportunity

According to MoneyWeek, Angela Merkel’s somewhat surprising volte face on nuclear energy creates an opportunity for investors.  Approximately 22% of Germany’s energy requirements were met by old and new nuclear reactors, making them the second largest contributors after coal-fired stations.  Now there’s a review of the existing nuclear capacity and a block on new developments.  The seven oldest of Germany’s seventeen nuclear power stations have been summarily shut down.  Irrespective of whether or not this is simply pre-election posturing that will be reversed at some point when reality reasserts itself, the fact is that suppliers of fossil fuels (especially gas) and developers of ‘green’ energy supplies will be rubbing their hands.  Germany plans to double the contribution of renewable energy (i.e. alternative  and greener sources) by 2020.

Most renewable energy supplies are still in their infancy and, although they lack the capacity for Fukushima style catastrophe, their control systems still have some way to go before they may be thought of as fully mature.

So, in parallel with the opportunity for stock market speculators, there’s also an opportunity for companies like Critical Software Technologies.  Critical has, in recent years, majored on systems that provide for structural health monitoring so that capital-intensive systems are able to implement and benefit from condition-based maintenance.

Take wind farms for example, particularly those offshore. From the tip of the turbine blades to the base of the concrete structures upon which they’re mounted, there are major long-term stresses at work.  Key components of these structures have to be maintained which means, in practical terms, that they have to be replaced – an expensive business.  In the absence of any other information, wind farm operators have to take a punt on how long they may reasonably leave components in place before it becomes absolutely necessary  to undertake very expensive maintenance.

Clearly, it’s a major expense to swop out a key component of a wind turbine whenever it’s done.  Leaving components in situ until they fail is unthinkable for all sorts of economic and safety reasons.  The answer, surely, has to be to monitor the stresses on key components in real time during actual operations so as to determine when maintenance activity is required.  When it’s not required, it’s not undertaken – it’s as simple as that.  This is an approach very well understood by those few pioneering companies that were bold enough to pursue an alternative to traditional maintenance regimes.

Before we go very much further with the development of large-scale alternative energy generation schemes, there’s a case to be made for ensuring – by regulation – that their control systems are capable of detecting potential operational problems so that they may be mitigated before they cause serious disruption.  Currently, systems tend to be reactive such that millions of pounds worth of damage, to say nothing of untold inconvenience, would result before it was possible to do anything about it.

Those developing alternative energy could learn a lot from the aerospace sector which is at the forefront of monitoring critical systems. Taking a few lessons on structural health monitoring from aerospace engineering will help the alternative energy sector meet its undoubted challenges, tempting more firms to enter what is still an immature sector, and to play their part in helping both the UK and Europe head off the blackouts that may well result from flawed energy policies.

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