Manhattan Contrarian

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Update On Europe's Self-Inflicted Energy Crisis

The Europeans thought they had come up with the perfect strategy to “decarbonize” their energy systems and save the planet. Just build more and more wind turbines and solar panels, until you had plenty of electricity from those sources to power everything. Gradually close down the coal, natural gas and nuclear facilities along the way. And simultaneously suppress any and all domestic production of fossil fuels, because after all, soon we will not be needing those things any more. As far as I can tell, nobody ever took even a moment to do the basic arithmetical calculations to figure out how much backup (from what?) or energy storage it would take to get through a year with a system powered principally by the wind and sun. Hey, we’re in a “climate emergency”! Such questions have been ruled out of bounds, not to mention morally reprehensible.

Let’s take a look at some of the latest developments.

UK

The UK adopted its Climate Change Act way back in 2008, and legislatively adopted the “Net Zero” by 2050 goal in 2019. Meanwhile, it sits on top of several shale gas fields of high potential. Throughout the 2010s, several firms attempted to get the go-ahead to drill, but they were never successful beyond a couple of prototype wells. In late 2019, with new Prime Minister Boris Johnson now leading the Net Zero charge, the UK completely banned fracking. Supposedly the reason was risk of earthquakes, although as far as I know there has never been a significant earthquake caused by fracking. From the BBC, April 7, 2022:

[Fracking] was halted in the UK in 2019 amid opposition from green groups and local concerns over earth tremors. . . .

Here is a picture from the BBC of a group of oh-so-earnest Brits demonstrating to get fracking banned:

And thus today the UK has only dwindling supplies of gas from its aging North Sea fields, and no new production coming online. Although it buys little from Russia (only about 3% of its gas supplies, according to this September 1 piece from the Standard), it still is forced to buy on a rapidly tightening world market.

UK residential electricity and gas prices are subject to a price cap set by a regulator called Ofgem (Office of Gas and Electricity Markets). The cap has the effect of delaying, but not preventing, major price increases to consumers following price increases on world energy markets. Ofgem puts out data on the implication of its price caps for consumers of average amounts of energy. Here is their chart of what is about to happen to the average consumer on October 1:

Last winter the average consumer energy bill was 1277 pounds. This winter it is projected to go to 3549 pounds, approximately a trebling in one year. And further increases are expected next Spring.

But residential energy prices are still somewhat held down by the price cap. Businesses do not have the benefit of any such cap. Zero Hedge on August 31 had a roundup of Tweets (put together by a UK blogger called Crab Man) from small UK businesses that are getting put out of business by soaring costs of energy. A small sample:

  • "My mum owns a small café in Leicester. Her electricity bill has just jumped from £10k ($12k) a year to £55k ($64k) a year. She is working out her options but more than likely she will be forced to close."

  • “Arrived at work tonight to be told ‘we might have to shut the shop’ last week the electric bill came in 10 x dearer today . . . from £900 to £10,058.59 it’s a small family run business here since 1982 this would be tragic!”

  • “Aberdeen Chinese takeaway to close after fuel prices soar to more than 10,000 pounds a quarter.”

Plenty more of those at the link. With any luck the incoming Prime Minister (Liz Truss?) will take a different approach, but unfortunately the current situation is the result of a decade and more of incredibly stupid and self-destructive energy policy. The situation cannot be reversed overnight. Likely it will take years to get any significant amount of fracking and/or LNG import capacity up and running to get prices down.

Czech Republic

A remarkable thing about Europe’s ongoing energy suicide has long been that it has resulted from an all-party political consensus. There has been little to no organized political opposition to de-carbonization and Net Zero goals. In the UK the lion’s share of the Net Zero push has occurred under Conservative governments; and in Germany, Angela Merkel’s supposedly conservative-led coalition was in charge through the whole Energiewende thing.

Which makes the latest development from the Czech Republic so significant. Yesterday (September 3) a massive demonstration estimated at some 70,000 people filled Wenceslas Square in downtown Prague to protest principally rising energy prices. Legal Insurrection has a report here.

As Europe faces an historic energy crisis, the Czech Republic witnessed the continent’s first large-scale demonstration against surging energy costs. On Saturday, an estimated 70,000 demonstrators held an anti-government and anti-European Union protest in Czech capital Prague.

To be fair, the demonstration was not solely devoted to the energy price issue, and included as participants numerous groups with different agendas, ranging from the far right to the far left, and taking up other topics from immigration to the Ukraine war. Still, any political awakening on the energy front is welcome, however late.

Germany

In a post on July 30 I reported that Germany had begun consideration of various energy saving and rationing measures in light of Russia restricting and cutting off the flow of gas through its pipelines. Now the German source Deutsche Welle (German Wave) reports on September 3 that the government has enacted its first series of mandatory energy saving measures. A few examples:

The Energy Saving Ordinance comes into force today for six months. This is what it entails:

  • Retail stores may no longer keep their doors open throughout the day to reduce electricity consumption for air conditioning when it is hot outside — and for heating on cold winter days.

  • In public buildings, halls and corridors will generally no longer be heated, and the temperature in offices will be limited to a maximum of 19 degrees. In places where heavy physical work is performed, temperatures will be even lower in the future. However, the restrictions do not apply to social facilities such as hospitals, daycare centers, and schools, where higher air temperatures are essential for the "health of the people who spend time there," according to the Economy Ministry.

  • Cutting back on warm water. Likewise, in public buildings, instantaneous water heaters or hot water tanks should be switched off if they are mainly used for washing hands. Exceptions are made for medical facilities, schools, and daycare centers. Some cities go even further. There, the showers in swimming pools and sports halls will remain unheated.

  • Private pools may no longer be heated with gas and electricity, except for rehab centers, recreational facilities, and hotels. The new regulations will initially apply until the end of February.

It goes on and on from there. And of course, if they continue on the Net Zero path, this is only the beginning. It will only get worse and worse as time goes on. They have no clue as to how to make a mostly wind/solar energy system work to deliver power 24/365 for a modern economy.

This is what the Biden Administration has in mind if they aren’t shortly stopped by a new Congress or a new President.