Germany is preparing for gas rationing. The operator of the French electricity network is request consumers to use less electricity. In the UK, protests erupt over the latest electricity price hike which plunged millions of homes in what a local think tank called fuel stress. Europe has a serious energy problem.
The problem dates back years and indicates a lingering complacency on the part of European governments that no matter what, there will always be gas from Russia. After all, even during the Cold War, Russia pumped billions of cubic meters of gas to European countries. Now things are different, and it’s not just because of the war in Ukraine.
For some years, Europe has been enthusiastically trying to reduce its dependence on all fossil fuels, not just Russian gas. The EU has recently vaunted that in 2022, renewable energy sources accounted for 37.5% of gross electricity consumption, with wind and hydro constituting two-thirds of total renewable energy production. Why then, one wonders, should Germany prepare for gas rationing and France ask its citizens to consume less electricity? Now, this has a bit to do with the war in Ukraine. The war appears to have driven EU governments – and Downing Street – into a frenzy seeking to distance themselves from Russia in every possible way, up to and including curtailing Russian gas imports.
Russian President Vladimir Putin’s demand to pay in rubles for gas supplied by Russia appears to have only increased the desire of European governments to ditch gas, and the three Baltic states have already announcement they had stopped buying Russian gas from 1 April. For now, they are using storage gas. For later, there is either LNG arriving at the Klaipeda terminal in Lithuania, or an interconnection with Poland. Lithuania calls on the rest of the EU to follow its example. Interestingly, the Baltic countries do not seem to have replaced their gas dependence with wind and solar dependence.
The same is true for the rest of the European Union. Earlier this year, Bloomberg reported that renewables across the EU are ‘crowding out’ natural gas. The report cites a study by environmental think tank Ember, whose lead author said
“These are times and paradigm shifts where governments and businesses are starting to take this much more seriously. Alternatives are available, they are cheaper, and they are likely to become even cheaper and more competitive. Renewables are now an opportunity, not a cost,” explained Charles Moore.
So why the fight for gas now? Why not really speed up the construction of new wind farms and solar farms, and show Putin what Europeans are made of? This is one of the trickiest questions of the current era, its answer necessarily includes references to the price of the copper, steel, polysilicon, and just about all metal and mineral products. Moreover, building these facilities takes time, longer than, for example, switching to LNG (if you have import terminals) or coal.
Indeed, in a recently published plan to reduce consumption of Russian gas – and also of oil and coal – the European Commission has bet heavily not on wind and solar but on more gas and coal.
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According to a breakdown of the plan, published by Germany’s Die Welt, the EU will seek to replace 50 billion cubic meters of annual Russian gas consumption with LNG from other sources and another 10 billion cubic meters with pipeline from other sources sources. This represents a total of 60 billion cubic meters of the annual consumption of 155 billion cubic meters of Russian gas. According to the plan, an additional 20 billion cubic meters could be replaced by using more coal, according to Industry and Internal Market Commissioner Thierry Breton.
It is the same Europe that demands and works for the end of coal. It is the same Europe that planned to close all of its coal-fired power plants by 2030 in order to meet the emissions reduction targets of the Paris Agreement. This same Europe is also betting on the replacement of natural gas by fuel oil to replace another 10 billion cubic meters of Russian gas.
In total, the European Commission seems to be considering replacing more than half of its Russian gas consumption with other fossil fuels. In comparison, wind and solar power are expected to contribute some 22.5 billion cubic meters of replaced Russian gas, of which 10 billion cubic meters wind and 12.5 billion cubic meters of solar. That’s not much for a region poised to become the greenest on the planet in no time.
So it looks like the reality of energy supply and consumption is reasserting itself as the EU finds itself in a pickle. If his plan involves so much more fossil fuel consumption, then fossil fuels must be easier – and faster – to find and, perhaps, cheaper than wind and solar. Otherwise, why favor them over renewable energies?
By Irina Slav for Oilprice.com
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