My friend, Vladimir Kilmik, lives in Minsk and visits occasionally. He tells me that Russia can squeeze the economy of all of the European Union (EU) just by throttling the supply of natural gas.
The EU imports 90% of its natural gas needs and (spoiler alert) very little of it comes from other than the Eastern continents. It’s one thing to have it coming out of the ground – it has to be transported and here pipelines are needed. The Russians control most of those pipelines. The EU and the UK have been conducting a fairy tale existence. This is sort of like “we don’t use carbon-generating fuels, we don’t use nuclear power, we use renewable energy, which makes us good and clean and oh so responsible”.
This dream is only possible with a natural gas supply propping the thing up. In Germany, it is a fact that, by the end of 2022, the country will have over 23 GW less nuclear power capacity than ten years ago and 13.9 GW of lignite and hard-coal-fired power stations will be closed. In 2021, the German Energy Ministry wrote that (from Clean Energy Wire, May 2021) “All analyses of supply security known to the federal government and carried out in accordance with the latest scientific findings come to the conclusion that the secure supply of electricity in Germany will remain guaranteed at the current high level for the foreseeable future. The analyses also take into account the phase-out of nuclear energy and the end of coal-fired power generation.”
So, not a problem. Or perhaps. The whole premise of the statement by the German Energy Ministry is that the wind will blow enough, the solar panels will do their stuff and that natural gas power generation will be available. The plans are good: under the German Renewable Energy Act, Germany plans on increasing solar photovoltaic capacity to 100 GW (about 52 GW today),onshore wind to 71 GW (55 GW today), biomass to 8.4 GW, and offshore wind to 20 GW by 2030. Right now, natural gas generation is about 20 MW of the German maximum demand of about 70 MW.
The big takeaway from all this is that it doesn’t matter what the German Renewable Energy Act plans or executes; on a still, windless night, the availability of renewable energy hardly amounts to a row of beans. Now, recently, the still days and nights have arrived. Gas prices have increased, electricity prices have increased. The result is a number of nimble operators with gas turbines who buy gas on the spot market and supply electricity as needed. If you plan it right, you can make a lot of money. This sort of thing does not amuse gas suppliers, since it causes unexpected demand fluctuations, and it annoys power supply authorities. However, as long as Germany travels down the road it has set itself, this (and the re-emergence of coal as a source of electrical energy) is what is going to happen.
Speaking on this subject, Vladimir Putin said: “I would like to underline that the situation in the European energy markets is a bright example of the inadmissibility of hasty and politically motivated moves in any sphere, particularly in energy issues that determine the stability of industries and welfare and life quality of millions of people.”
I think he has hit the nail right on the head. All the wind turbines and solar panels are, yes, nonpolluting and good, but they are not reliable. The belief that you can shut down a reliable power generation plant and replace it with renewables and still have a reasonably priced power supply must now end. In Europe and Germany, this has now come to the fore in the last months: an absence of wind, cold winters, energy crises. What is to be done? Well, nothing right now. Clearly, gas is key and will have to be negotiated. But at what cost? There are options. Did I hear the ‘N’ word?