IEA: More Renewable Investment Required to Stabilise European Energy Markets

Guest essay by Eric Worrall

According to Dr. Fatih Birol, $4 trillion per year of global renewable investment would reduce European dependence on Russian Gas, though Russia is also to blame for the recent energy crisis for not sending more gas.

IEA: Green energy needed to avoid turbulent prices

By Jonathan Josephs
Business reporter, BBC News

A failure to invest sufficiently in green energy means “we may well see more and more turbulence in the energy markets”, the head of the International Energy Agency has told the BBC.

Dr Fatih Birol said that “is not good news for the global economy”. 

Energy prices in the UK, Europe and Asia have hit record highs in recent weeks triggering inflation concerns.

IEA’s annual World Energy Outlook warns clean energy and infrastructure need a $4 trillion a year investment.

Such an outlay would mean the world could limit the rise in global temperatures to 1.5 degrees above pre-industrial levels, as agreed in Paris six years ago.

The warning has been timed to greet the COP26 climate change summit, due to take place in Glasgow at the end of this month. Dr Birol said it was up to world leaders to incentivise the necessary investment at the summit.

“If you push clean energy, energy efficiency, solar electric cars and other [solutions], you don’t need any more to use fossil fuels, you switch to clean energy sources.

Russia, which is one of the world’s biggest producers of natural gas has been accused of withholding supplies that could ease those price pressures for political reasons. Dr Birol said “Russia could have been, and still can be more helpful. Our numbers show that Russia can easily increase the gas it is sending to Europe by 15%, which could underscore that they could be qualified as a reliable partner. 

“There are some statements coming from Moscow, which are helpful. But in addition to the statements, I would be very happy to see some gas volumes come to Europe”.

The IEA boss says that government money could be the trigger for renewed private investment in clean energy and the he is optimistic about what can be achieved in Glasgow. 

“It’s also very important that in COP government leaders around the world come together, unite and give a unmistakable signal to investors, saying that you investor, you see we are united to build a clean energy future”, but that “if you continue to invest in the old energy [such as fossil fuels], you may well lose money”

If you invest in the clean energy, you can make handsome profits. That’s [the] political signal I hope will go to investors“.

Read more: https://www.bbc.com/news/business-58901566

My question to Dr. Birol – how is Russia expected to supply more gas to Europe, without investing in “old energy”? Is IEA head Dr. Fatih Birol demanding Russian investors sacrifice themselves for the greater good of Europe?

Can you imagine what it must be like for Russian trade representatives discussing energy sales with their European counterparts? “You guys are evil, but please send some more evil right now, because your withholding of evil is evil”.

No doubt President Putin has tears of laughter streaming from his eyes, whenever he receives an update of the latest insanity of his trading partners.

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October 17, 2021 2:06 am

If Europe isn’t able to order the quatity of gas they need, it’s not Russias fault, they fullfilled all orders.

Reply to  Krishna Gans
October 17, 2021 4:41 am

“According to Dr. Fatih Birol, $4 trillion per year of global renewable investment would reduce European dependence on Russian Gas…”

Actually, NO it won’t. Technical reality (Intermittency and Diffusivity) kills this “pipe dream”.

Told you so in 2002. Nothing has changed. Still true in 2021.

Scissor
Reply to  Allan MacRae
October 17, 2021 5:29 am

Got that right. All the money in the world will not make the sun shine at night.

saveenergy
Reply to  Scissor
October 17, 2021 6:00 am

Bet youAll the money in the world‘, that the sun always shines 24/7 😎

mkelly
Reply to  saveenergy
October 17, 2021 7:30 am

If you are correct why do we have words like day and night?

You knew what he meant and typed that comment anyway.

John H
Reply to  mkelly
October 17, 2021 8:15 am

The sun always shines, just not in the right direction for 12 hours of the day. The wind is always blowing somewhere but also dead calm under the several blocking highs dotted around the planet.

mkelly
Reply to  John H
October 17, 2021 9:05 am

So John you didn’t know what Scissor meant either? And if you are going to be that picky the sun shines in ALL directions from the sun. We just cannot view it when what we call night is upon us. Are you and saveenergy the same person?

n.n
Reply to  saveenergy
October 17, 2021 8:49 am

Dark sarcasm will get you demerits. Also, how can you have any energy, if the winds don’t blow within range. You can’t have any energy, if the windows don’t blow within range.

gbaikie
Reply to  saveenergy
October 17, 2021 10:23 am

Nothing wrong with our average star.
But Europeans are dumber than the Soviets.

Peter K
Reply to  saveenergy
October 17, 2021 7:36 pm

If anyone is spending $4 trillion a year, surely there must be a measurable return on investment, to monitor the effectiveness of the expenditure. At the moment it all for a “warm and fuzzy feeling”.

DMacKenzie
Reply to  Allan MacRae
October 17, 2021 8:56 am

Birol is an economist, like Mark Carney. Not a STEM bone in their body. Got their Ph.D. by participation in seminars, where they honed their oratory skills, and a lot of cash flow from their parents’ bank account to the appropriate university fund. Really equivalent to quack charlatan smooth talking travelling salvation show evangelists…worse in that they believe what they are saying, and aren’t computationally or statistically capable of analyzing what they believe.

huls
Reply to  DMacKenzie
October 17, 2021 10:34 am

Economy, like all Social Sciences, is not science at all. There are no falsifiable theories. Only opinions. You know what to do with those.

Observer
Reply to  huls
October 17, 2021 1:30 pm

No, some of their opinions are clearly falsifiable.

It’s just that they never, ever try to falsify them.

Retired_Engineer_Jim
Reply to  huls
October 17, 2021 3:07 pm

Any wonder that it is called The Dismal Science?

Bill
Reply to  DMacKenzie
October 17, 2021 5:35 pm

Birol is an economist

What kind of economist says “government money could be the trigger for renewed private investment in clean energy“? This isn’t the thinking of an economist, it’s the thinking of an addle-brained government apparatchik.

Anon
Reply to  Krishna Gans
October 17, 2021 8:18 am

It is really as simple as that. Somehow Europe thinks it is just gas on demand out of the pipe. They seem to understand that when electrical power consumption exceeds demand they have to introduce rolling blackouts. There is no condemning the green electrical supplier, or the wind farms or the solar operators.

And a gas system is much less responsive than the electrical grid. A gas system requires extraction, purification and delivery, which could take weeks. The only answer for Europe is to build gas storage tanks or other such system… or pay Russia to store excess gas in-country.

To ask any gas company to scramble because the politicians screwed up is simply unfair… and they ought to charge more if they have to scale up operations at the last minute for unplanned for demand.

John H
Reply to  Krishna Gans
October 17, 2021 8:18 am

Fulfilled all the long term contracts but does not sell on the spot market. Now the spot market is currently priced over long term prices by a significant factor, so why no releases to spot as all the profit is there.

R Taylor
Reply to  John H
October 17, 2021 8:33 am

Because the Russians are doing what is good for them, unlike the Europeans. Fantasies have costs.

D. J. Hawkins
Reply to  John H
October 17, 2021 3:20 pm

By not selling into the spot market, they keep upward pressure on the price. Long term contracts come up for renewal all the time, so a high spot market price keeps the contract prices up also. Sacrifice short term gains for long term lock-ins; who wouldn’t?

Joe Crawford
Reply to  D. J. Hawkins
October 18, 2021 10:20 am

“Sacrifice short term gains for long term lock-ins; who wouldn’t?”

Answer: Most business managers here in the U.S. They’ll take short term gains over long term solutions every time… anything to make the quarterlies look good.

Gary Pearse
Reply to  John H
October 17, 2021 4:10 pm

John, the EU didn’t build plant and distribution to receive liquified gas which is the only way you can receive “spot”. Russia tried to sell them a longterm gas contract which they turned down.They thought they would be burning up with global warming and besides how would it look when you are supposed to be weaning from fossil fuels.

🎼♪♫♬ There,’ll be some changes made dooby doo.

Observer
Reply to  Krishna Gans
October 17, 2021 1:31 pm

Europe played along wth US’ anti-NS2 games and is now paying the price.

No sympathy.

Steve Case
October 17, 2021 2:09 am

IEA’s annual World Energy Outlook warns clean energy and infrastructure need a $4 trillion a year investment.
Such an outlay would mean the world could limit the rise in global temperatures to 1.5 degrees above pre-industrial levels, as agreed in Paris six years ago.
__________________________________________________________

Such an outlay would really fatten up the wallets of the rent seekers involved in the Climate Change industry. However it wouldn’t do anything about global temperatures as if something needs to be done which it doesn’t.

Curious George
Reply to  Steve Case
October 17, 2021 7:48 am

And the U.S. Congress is haggling over a measly $3.5 trillion.

October 17, 2021 2:12 am

So, having more turbines will make wind blow

Right

Alan the Brit
Reply to  fretslider
October 17, 2021 3:49 am

Of course it will, don’t you know nuffink bout scientifcky thingamajiggybobs???

Reply to  Alan the Brit
October 17, 2021 6:40 am

I’m, er, old school – heat rises rather than sinks etc

Reply to  fretslider
October 17, 2021 3:54 am

A phase change may help 😀

Nick B
Reply to  fretslider
October 17, 2021 6:21 am

Brilliant idea!
One turbine produces wind for the second one.

bonbon
October 17, 2021 2:27 am

There is complete panic breaking out in financial circles. Even Larry Summers, who actually handed finance over to central bankers as Treasury Sec in he 1990’s, correctly identifies these with their Woke ESG as the the inflation culprits.
Anyway Prince William will present an Earthshot Nobel-like Prize at Glasgow, hubris anyone?

Alan the Brit
Reply to  bonbon
October 17, 2021 3:50 am

PW is yet another Royal scientific expert in all things, just like his father!!!

DMacKenzie
Reply to  bonbon
October 17, 2021 9:10 am

“Earthshot”….I can’t believe they paid someone to come up with that….sounds like something one is forced to do in a campground that has insufficient latrines.

Graham
Reply to  bonbon
October 17, 2021 3:08 pm

I will put forward my 2 cents worth and some of you will jump on me .
The only solution to Europe’s energy crisis that does not include using fossil fuels is NUCLEAR.
Wind and solar will never provide guaranteed electricity 24/7.
Of course this will never happen as Europeans are closing down nuclear power stations .
Europe will gradually get poorer and Asia will increase coal fired power plants and manufacture most of the worlds heavy equipment plus a lot of consumer goods for the rest of the world .
We have the same dumb government policies here in New Zealand .
Our Coal and gas fired Huntly power station sits above a large coal field .Guess what happens? NZ imports 1 million tonnes of coal to feed Huntly to keep our lights on .Our present government is anti nuclear but we have very good hydro power stations built by previous government but new hydro station are outlawed.

Tim
Reply to  Graham
October 17, 2021 7:00 pm

The first step should be to push for lower regulations and red tape around existing nuclear plants then push for new plants. One of the downfalls of current nuclear plants is the lack of ability to swing to meet increases and decreases of load, coal and gas (and hydro) have this ability. This swing flexibility is crucial for grids that have solar&wind which are intermittent.

Josualdo
October 17, 2021 2:30 am

Mr. Putin will be very, very glad to send all the gas the EU needs, as long as the EU pays for it. TINSTAAFL

Reply to  Josualdo
October 17, 2021 2:51 am

Didn’t Putin agree to sell it to China?
This IEA boss doesn’t appear to have dementia … must be something else

Hasbeen
Reply to  Martin Clark
October 17, 2021 5:26 am

Have you noticed that many of these failed authorities are headed by a female academic? Might that be the problem?

R Taylor
Reply to  Hasbeen
October 17, 2021 9:07 am

As with other Turks named Fatih, Mr. Birol is male, and he is not failing: He does rather well thanks to his Quango.

Ron Long
Reply to  Josualdo
October 17, 2021 3:21 am

Looks like Putin is the winner here, he is offered a doubling of price of Russian gas without any more costs to him. The EU has nobody to blame but themselves and Putin gets richer.

Alan the Brit
Reply to  Ron Long
October 17, 2021 3:52 am

“The EU has nobody to blame but themselves and Putin gets richer.”

AND the richer he gets the more readies he has to buy & or develop greater military hardware to achieve the Communists goal, total world domination, but they’ll have to take on the Islamists, their only competition in that particular arena!!!

Richard Page
Reply to  Alan the Brit
October 17, 2021 10:46 am

I think you’re a bit out of date old chap – these days the Russians are practical capitalists: thanks to the gas and oil export revenues, most Russians enjoy a far better standard of living than their communist grandparents and they are not about to change that for the worse.

michael hart
Reply to  Richard Page
October 17, 2021 11:34 am

I also think the Russians are not particularly bothered about world domination any more, just keeping up appearances like the British managed end-of-empire. They have scaled back their ambitions to just defending Uncle Vladimir’s Back Yard (admittedly, a large yard to manage). They just can’t afford anything else.

There is only one strategic geo-competitor to the USA, and it ain’t based in Moscow. We have known this for more than two decades now.

Gary Pearse
Reply to  Richard Page
October 17, 2021 4:18 pm

And today, Europe is considerably left of Russia.

Lrp
Reply to  Alan the Brit
October 17, 2021 11:38 am

Putin s not interested in communism or in taking over the world either.

Richard Page
Reply to  Lrp
October 17, 2021 1:39 pm

He will, however, take over anywhere that isn’t securely nailed down and has oil or gas deposits!

AndyHce
Reply to  Alan the Brit
October 17, 2021 7:03 pm

You are forgetting the UN.

October 17, 2021 2:56 am

“A billion here, a billion there and pretty soon you are talking real money.”

Those were the days!

Barry James
October 17, 2021 3:02 am

How do people with so little understanding of energy infrastructure and why unreliables are such a destructive force get to make statements like this on the world stage?

drednicolson
Reply to  Barry James
October 17, 2021 3:54 am

Their solution to a sinking ship is to pour in more water.

Abolition Man
Reply to  drednicolson
October 17, 2021 5:30 am

drednicolson,
She’s rearranging the deck furniture on the Titanic!
Actually, sabotaging some life rafts might be more apt!

Lrp
Reply to  Barry James
October 17, 2021 11:42 am

They say what’s required to say from their lofty positions.

Philip
October 17, 2021 3:58 am

$4 trillion/year could pay off a lot of European nation(s) national debt. Which would be far more beneficial to Europe than paying out $4 trillion/year to reduce Europe to distinctly, the haves and the have nots.

Abolition Man
Reply to  Philip
October 17, 2021 5:39 am

Philip,
Modern Monetary Theory claims that such spending is harmless; especially when compared to the horrors of an unmitigated Climate Apocalypse! Bai Den claims it has a “$0.00” price tag!!
Many politicians who espouse MMT seem to believe that most of their voters will believe them until it’s too late for correction! I mean, why encourage production and fiscal responsibility when there’s a good chance of getting away with bilking the taxpayers completely!?

Pat from kerbob
Reply to  Abolition Man
October 17, 2021 9:13 am

Many Canadians have been sucked into believing MMT and it will work great right up until it doesn’t. The real issue is that 90% of this borrowing is not going to assets that produce value and pay for itself.
All lies all the time.

Abolition Man
Reply to  Pat from kerbob
October 17, 2021 9:57 am

Pat,
MMT seems like just another Ponzi scheme; this one designed by really, really edumacated people to con politicians and/or their constituents!
The elite and their talking heads don’t even realize that Trump just gave us an example of how to actually grow an economy and reduce debt! You $h!tcan regulation, encourage production (especially in the energy sector) and punish foreign countries engaged in unfair trade practices with tariffs! Oh, I almost forgot, you also lower corporate taxes to make us more competitive with the rest of the world! Taxes revenues reached their highest levels ever; and the rich and large corporations paid more taxes as they brought capital back from overseas to profit in the US market boom!
Right now the idiots in the Bai Den Regime are reversing EVERYTHING Trump did to get the economy growing! Instead of rising wages, the American worker can now look forward to soaring prices and shortages as inflation goes out of control, and the administration ineptly tries to fix supply chain problems! They remind me of a homeowner who tries to fix a backed up toilet by shoving more stuff down the drain, rather than calling in a plumber!
Hey, but at least Mayor Pete got two months maternity leave to deal with the trauma of adopting two children; that’s sure showing women great respect!

Bill
Reply to  Abolition Man
October 17, 2021 6:06 pm

Modern Monetary Theory claims that such spending is harmless…

That is Keynesian Theory. Monetary theory states that the supply of money controls economic activity through pricing, thus affecting inflation/deflation.

The conclusion one draws from these theories is that Keynesian theory recommends government intervention into all markets via government spending through fiscal policy while Monetary theory recommends limited government intervention and affecting inflation and stimulating an economy by increasing or decreasing the supply of money.

Scissor
Reply to  Philip
October 17, 2021 5:40 am

Or, if that $4 trillion/year were actually printed, burning bills directly could keep a lot of people warm.

Peta of Newark
October 17, 2021 4:01 am

Thank you Fati

Isn’t this a true joy:
Quote:There are three suppliers offering tariffs not subjected to Ofgem’s price cap. These deals can be pricier as they support production of renewable energy and prices are likely to rise for these customers due to the ongoing crisis”
here

Thus folks using the abundant free and getting ever cheaper Renewable Energy are seeing their prices rise bigger and faster than the old silly old denialist pharts stuck on fossils.
what am I missing here – dementia possibly?

Back to Fati – does that quote not say that you are already getting the money you ask for yet there is still A Crisis

<enquiring mind mode> What created the ‘ongoing crisis
Easy. Some ‘other crisis’ created it
OKaaaay
What created that crisis?
etc etc etc

What is the Real Crisis that’s unfolding.
haha – You know me!!! 😀
You know exactly what the craic is

Thankfully Auntie Beeb comes to your rescue on the off chance you don’t, or the pasta, beer and doughnuts have trashed your mind. Yes Fati, I’m looking at you.
See the real stars of the ongoing crisis in this video from the BBC

(Where’s RGB of Duke these days? He hated those creatures with as much vehemence as I do – and as we all should. They, along with their Ovine cousins, have turned 33% of Earth’s Land Surface to desert and are running ever greater riot)

Notice how the Magically Thinking BBC gets Cause & Effect more wrong than A Really Wrong Thing could ever ever be?

ho hum, that’s Climate Science innit

Zig Zag Wanderer
October 17, 2021 4:33 am

4 trillion here, 4 trillion there, and pretty soon you’re talking real money.

But seriously, this green revolution will destroy everything built since the Egyptians.

Reply to  Zig Zag Wanderer
October 17, 2021 6:58 am

This has really put the makers of the Monopoly board game in a bind.

The highest denomination (UK) is £500

It’ll never be enough.

Current owners, Hasbro, should develop a green energy version complete with a £500 billion note or three….

Zig Zag Wanderer
Reply to  fretslider
October 17, 2021 3:30 pm

Maybe there’s a ‘woke’ market for adding wind turbines be solar panels for property instead of hotels? That way the rents could be increased exponentially!

Alex
October 17, 2021 4:35 am

European Schmarotzer

bill Johnston
October 17, 2021 5:48 am

And dare I ask just where they think that $4 trillion dollars is coming from?

Reply to  bill Johnston
October 17, 2021 7:00 am

Think about the quantitative and then put your mind at easing.

Richard Page
Reply to  bill Johnston
October 17, 2021 10:54 am

No idea but the good news is neither does anyone else! It should (if there was any justice) be redirected from University research grants into climate change and renewable energy subsidies – in one fell swoop nobody would be interested in building wind or solar plants and the idiots that have been screaming for them will be too busy looking for a real job. I think everybody here knows just how unlikely that particular option will be.

Zig Zag Wanderer
Reply to  bill Johnston
October 17, 2021 3:31 pm

And dare I ask just where they think that $4 trillion dollars is coming from?

Once again, I believe that a mirror could come in handy to answer this question.

tomo
October 17, 2021 5:48 am

Let us not forget that Fatih Birol is

Chairman of the World Economic Forum (Davos) Energy Advisory Board

  • he’s one of Klaus Schwab’s minions….

what’s not to like?

Abolition Man
Reply to  tomo
October 17, 2021 6:27 am

tomo,
When did real life Bond villains decide it was safe to come out from the shadows?
I guess with so many politicians stuffed in their pockets they feel well protected!

tomo
Reply to  Abolition Man
October 17, 2021 9:57 am

I know …..

As far as films are concerned I’ve found myself going back to Brazil….

Jackie Pratt
October 17, 2021 6:22 am

wow. $ 4 , 0 0 0 , 0 0 0 , 0 0 0 , 0 0 0 .

only $ 5 0 0 for every person on earth.

how can any of you be so selfish to not want to SAVE OUR PLANET for such a measly contribution?

Reply to  Jackie Pratt
October 17, 2021 7:02 am

how can any of you be so selfish “

It isn’t hard when you know how easy it is to spend other peoples’ money

If I gave to all the NGOs currently advertising for £3 per month, I’d have to take out a mortgage.

Get emotional and you lose all objectivity in an instant.

Abolition Man
Reply to  fretslider
October 17, 2021 10:00 am

fretslider,
I think you encompass the entire purpose of our “modern” schools in your last sentence! Emotions over objectivity; especially anger, fear, and envy!

Reply to  Abolition Man
October 17, 2021 10:24 am

That was the key to the success of Greta’s creators

We Don’t Have Time

JeffC
October 17, 2021 6:47 am

So the way to fix a broken leg is to break the other one?

MarkW
Reply to  JeffC
October 17, 2021 6:57 am

That’s post modern medicine

Lrp
Reply to  JeffC
October 17, 2021 11:54 am

Yes, you can crawl better

Abolition Man
Reply to  JeffC
October 17, 2021 12:55 pm

I didn’t know that Kathy Bates was even working in this maladministration! My bad!

Reply to  JeffC
October 17, 2021 3:13 pm

A man found a brass lamp, and rubbed it.A genie appeared “‘Your wish is my command”

“I’d like a doing that touches the ground!”

“Your wish is muy command” and with a mighty swipe of his scimitar he cut the man’s legs off…

Giordano Milton
October 17, 2021 7:05 am

How many calories do they get by burning 4 trillion in scrip? Can’t they use wood instead? Probably about as much as they’ll get from what they’d buy with it, given the degree of inflation that would result.

2hotel9
October 17, 2021 7:26 am

When are the people of Europe going to rise up, drag these lie spewing scumbags into the streets and hang them? Is it going to be the same as Hitler, we have to go do it?

Richard Page
Reply to  2hotel9
October 17, 2021 10:57 am

The difference being that you have the same problem in the USA.

2hotel9
Reply to  Richard Page
October 18, 2021 4:25 am

Ain’t that the truth! Speak out against the left and you are labeled a domestic terrorist. Funny, that is the same thing King Georgie did in 1775. Look how that turned out.

James F. Evans
October 17, 2021 7:50 am

The solution: more oil & gas… and wait for it… coal.

Net “zero” emissions equals rationing.

Marxists & communists are drooling at the prospect.

Gary Pearse
October 17, 2021 7:53 am

“Russia is also to blame for the recent energy crisis for not sending more gas.”

Brussels dorks refused to sign long term contracts because of the signal it would send re Crisis Global Warming. The head of the IEA is clearly not trained in energy matters if they don’t realize that a supplier can’t make the giant investment needed for just a temporary stop gap supply

“IEA: Green energy needed to avoid turbulent prices”

‘GangGreen energy’ IS the cause of ‘turbulent’ prices. You are selling energy from tech that doesn’t work! You know you need to twin renewables with gas or coal sources of electricity for backup and you want this to be a secret! This winter is going to be a stern teacher for hitherto ineducable designer-brain morons.

“If you invest in the clean energy, you can make handsome profits.”

Yes, indeed, but the heyday is over. Most of your ‘GangGreen’ energy companies have gone broke. The reverse Robin Hood formula for supplying power turns out to be bad for investors and customers alike. BTW, with investors going broke, where did the Trillions the taxpayer/customer forked over go?

Richard Page
Reply to  Gary Pearse
October 17, 2021 10:59 am

Exactly – Russia needs the contracts to ensure the idiots in Brussels don’t just flip-flop as soon as they get over the worst.

Olen
October 17, 2021 8:12 am

The solution is simple, lock up the not vaccinated workforce that will shut down industry and business and the need for energy will be reduced. Fables without the animals. And build a second pipeline from Russia.

ResourceGuy
October 17, 2021 8:12 am

The great synthetic energy crisis continues.

Pour it on, the serfs must suck it up and row harder…with fossil fuels.

Paul Johnson
October 17, 2021 8:16 am

You can’t fix stupid with more stupid.

Reply to  Paul Johnson
October 17, 2021 8:21 am

But you can augment it

Chris Nisbet
October 17, 2021 8:20 am

They keep using this word “investment”, which tends to imply it’s a good thing, and that maybe we’ll see a benefit from all this “investment”.
Meanwhile, in reality-land, we’re learning that some “investments” are enormous money pits, and the people investing our money aren’t our friends.

Tom Abbott
Reply to  Chris Nisbet
October 17, 2021 12:15 pm

“They keep using this word “investment”, which tends to imply it’s a good thing,”

Yes, that’s why they use that description. It’s psychological warfare.

daniel houck
October 17, 2021 8:29 am

The key phrase is “reduce European dependence”. So five bucks would likely also “reduce”. In other words, if no one says how much reduction, then the statement is likely true, but also meaningless.

n.n
October 17, 2021 8:45 am

Planned population and an intermittent/renewable blight. It sounds like an episode of The Outer Limits. That, or an X-Files. Perhaps the Europeans should have their leaders tested.

willem post
October 17, 2021 9:02 am

The article seems to imply Russia is at fault regarding gas supply to the EU.

However, Russia PROVED, with system gas flow operating data, it has provided MORE GAS to the EU, than required by long-term contracts.

EXCERPT from:

HAVING FUN WATCHING WIND AND SOLAR FAILING TO STEP UP TO POWER THE WORLD ECONOMY
https://www.windtaskforce.org/profiles/blogs/having-fun-watching-wind-and-solar-failing-to-step-up-to-power/edit

INTRODUCTION

Europe is seeing major increases in the SPOT prices of gas/1000 m3, coal/metric ton, and oil/barrel.
This will have an adverse effect on prices at the pump, etc. The price increases happened due to several reasons.

Serbia, Hungary and Turkey had recently signed long-term contracts with Russia at about $3/million Btu.
Those countries were vilified by EU bureaucrats and the handmaiden Media.

Subsequently, SPOT prices of gas started to increase, and the three countries are smiling.
EU SPOT prices of gas increased to about $40/million Btu
US SPOT prices increased to about $5/million Btu, much less than Europe, due to an abundance of domestic gas. See below image.

The EU SPOT price surge is entirely the fault of EU bureaucrats in Brussels, which have urged EU countries NOT to sign long-term gas supply contracts with Russia, because it would send a “the wrong signal regarding fighting climate change”. 

NOTE: Often prices are stated as $/1000 m3 of gas
1000 m3 contains 1000 x 35.315 ft3/m3 x 1000 Btu/ft3 = 35,315,000 Btu
$3/million Btu would be 3 x 35.315 = $105.94/1000 m3
$40/million Btu would be 40 x 35.315 = $1412.6/1000 m3 

REASONS FOR SPOT PRICE INCREASES

1) EU bureaucrats had urged EU countries not to sign long-term gas supply contracts with Russia, because electricity from wind, solar, etc., would increase, and signing long-term contracts would “send the wrong signal”, plus it would give “evil” Russia more clout in EU energy markets.

2) However, EU bureaucrats did not take into account the vagaries of wind and solar. In that regard, they are far from unique.
From April, 2020, to the present, there has been significantly less wind than in prior years.

Even though more onshore and offshore wind turbine capacity, MW, was installed in the UK, Ireland, Belgium, The Netherlands, Germany and Denmark, that did not result in as much of an increase in wind electricity as predicted, due to less than average winds.

3) As a result, the shortfall of wind electricity had to be made up by burning more gas and coal, which rapidly increased SPOT prices of gas to $40/million Btu, and also increased the SPOT prices of coal. 

4) Then, people became aware, the EU winter storage of gas was very low, compared to prior years, which meant energy markets began to bid up the SPOT prices of gas for future, i.e., winter, delivery.

5) At first, EU bureaucrats tried to hide their lack of planning ability, and blame the shortfalls on market manipulation by Russia.
However, Russia proved, with gas system operating data, it had been transmitting gas to the EU, IN EXCESS of long-term contract requirements; in case of Ukraine, the excess transmission was 10%. Various EU countries, that receive a steady supply of low-cost gas from Russia, chimed in to support Russia. See Note.

NOTE: If the Ukraine gas transmission had been any quantity less than per contract, Ukraine would have cried “Russia is using gas as a weapon” to its EU, US, and NATO protectors. 
Ukraine does not buy gas directly from Russia. Instead, the gas flows through a transmission line, and Ukraine takes some of that gas for its own use. 
Ukraine calls that gas “reverse-flow supply”, as if it came from EU countries, i.e., a charade. 
Ukraine pays these EU countries about 20 to 30 percent more, than if Ukraine had bought the gas directly from Russia. 
Because of Ukraine’s habit of not paying for Russian gas in the past, Russia requires Ukraine to pay for a year’s supply, up front, in cash.
Ukraine could not be such a bad commercial actor with regard to the EU, as otherwise, it would never be admitted to NATO and the EU.
https://tass.com/economy/1350397

BIDEN’s 30,000 MW OF OFFSHORE WIND SYSTEMS   
 
Biden’s OFFSHORE wind systems will have an adverse, long-term impact on US electricity wholesale prices, and the prices of all other goods and services, because electricity permeates all economic activities.

The Biden administration announced on October 13, 2021, it will subsidize the development of up to seven offshore wind systems (never call them farms) on the US East and West coasts, and in the Gulf of Mexico; a total of about 30,000 MW of offshore wind by 2030. 

All systems would have 800-ft-tall wind turbines, which would need to be located at least 30 miles from shores, to ensure minimal disturbance of night-time strobe lights. 

Any commercial fishing areas would be significantly impacted by below-water infrastructures and cables.

Total production would be about 30,000 x 8766 h/y x 0.45, capacity factor = 118,341,000 MWh, or 118.3 TWh, which is about 100 x 118.3/4000 = 2.96% of all generation loaded onto US grids. That load would increase due to many millions of future electric vehicles and heat pumps.

The turnkey capital cost for wind systems and grid extension would be 30,000 MW x $5,000,000/MW = $150 BILLION; Biden’s inflation rates may increase that cost. 

The all-in wholesale price of the offshore electricity would be about 18 c/kWh, without cost shifting and subsidies, and about 9 c/kWh, with cost shifting and subsidies. This compares with the average New England wholesale price of 5 c/kWh, during the 2009 to present period. 

Cost shifting and subsidies did not materially affect this price, because the percent of new RE (mostly wind and solar) on the NE grid is very small, after 20 years of subsidies. See URLs

https://www.windtaskforce.org/profiles/blogs/high-costs-of-wind-solar-and-battery-systems
https://www.windtaskforce.org/profiles/blogs/wind-and-solar-provide-50-percent-of-future-new-england
http://www.windtaskforce.org/profiles/blogs/cost-shifting-is-the-name-of-the-game-regarding-wind-and-solar

BENEFITS TO EU COMPANIES

Almost the entire physical supply of the offshore wind systems would be provided by EU companies, because they have the required expertise and the domestic onshore and seagoing facilities, due to building at least 25,014 MW (end 2020) of offshore systems, during the past 35 years.

Duplicating the EU onshore and seagoing facilities in the US, PLUS implementing 30,000 MW of offshore wind systems in less than 8 years, 2022 to 2030, would be totally impossible.
https://www.windtaskforce.org/profiles/blogs/high-costs-of-wind-solar-and-battery-systems

willem post
October 17, 2021 9:16 am

EXCERPT from:

Soaring gas prices in Western Europe due to mistaken reliance on wind and solar systems 
Russia on track for record gas exports in 2021 – Putin
https://www.rt.com/russia/537357-soaring-gas-prices-in-eu/
 
A surge in the cost of gas which has seen bills shoot up for households and industry is down to a shortfall in electricity generation, and not because Russia is somehow squeezing supplies, President Vladimir Putin has argued.
 
Speaking as part of a keynote address at Russian Energy Week on Wednesday, Putin said that a fall in output from wind systems meant electricity prices shot up, having a knock-on effect on demand for gas. Wind power makes up an increasingly large share of Europe’s energy generation, particularly in the west of the continent, he went on.

“The rise in gas prices in Europe was the result of a shortage of wind electricity, and not vice versa,” the president insisted.

Putin went on to accuse Western leaders of “trying to cover up their own mistakes,” following a series of claims that the situation is because Russia is withholding supplies. He added that “proper analysis of the gas supply situation is often replaced by empty political slogans.”

ALSO ON RT.COMMoscow’s EU envoy advises Brussels to improve relations to avoid gas issues as top eurocrat admits bloc may buy more from Russia

According to the Russian president, an exceptionally long winter drained the continent’s energy reserves and disrupted pricing. Now, “the invisible hand of the market” is at play, Putin said.

Contrary to Russia seeking to worsen the crisis, Putin insisted that the country could well see record levels of exports in 2021, as Moscow works to meet the growing demand. That said, though, he claimed that the Kremlin doesn’t relish the prospect of shortages and that “the high price environment can have negative consequences for everyone, including producers.”

ALSO ON RT.COMRussia supplying additional gas to Europe using all available routes – Gazprom Export

Some countries have seen gas prices rise by as much as 250% in recent days, with a knock-on effect being felt in the industry. Homeowners also face higher heating bills with winter fast approaching. Several energy companies in the UK, which has seen some of the sharpest increases, have entered into talks with the government to prevent them from potentially going bust.

Last month, Putin’s spokesman, Dmitry Peskov, said that the state energy firm, Gazprom, is already fulfilling all of its contracts and no customers have been denied deliveries.

According to him, “nobody has any grounds to claim otherwise,” and Gasprom is making preparations to 1) strike new, long-term gas supply deals, and 2) after those deals are concluded, increase the gas volumes flowing westwards.

Lrp
Reply to  willem post
October 17, 2021 12:04 pm

There’s only one adult in the world’s political room

Robert of Texas
October 17, 2021 9:37 am

No one seems to be able to learn from the mistakes of green investment. Somehow, it is just spun as “more investment is needed”. I really wish I could understand how elected officials and the people that voted for them can be so dense. Maybe they just do not have an adequate IQ to understand the problem, or maybe they are just too lazy to try and understand it. In any case, it will require multiple disasters killing voters to get their attention.

Abolition Man
Reply to  Robert of Texas
October 17, 2021 1:04 pm

Robert,
I think you’re not looking quite deep enough!
Many of the elected officials are likely getting kickbacks; oops, I mean campaign donations from the RE crooks!
I’ll bet a lot of their kids get summer intern jobs for a few 100K as well! Just think of Hunter Biden as the prototype; the ruling elite runs on corruption and nepotism! The laws on the books are only for the plebes, not the nobility!

markl
October 17, 2021 9:53 am

How far down the renewable energy rabbit hole will countries go before they realize it can only compliment and not replace fossil fuels without going nuclear? I’m betting China, India, and Russia won’t get sucked into this pipe dream beyond efforts that are nothing more than virtue signaling.

Joel
October 17, 2021 10:03 am

Anybody old enough (I am 75) to remember the Arab Oil embargo? The USA asked Norway to increase oil production and export more oil. They refused. I don’t recall the Norwegians being villified and blamed for the high price of oil.
The Europeans blaming Russia for not shipping more natural gas are beyond stupid. Europe refuses to develop its own gas resources. Let them freeze in the dark.

dk_
October 17, 2021 10:17 am

Of course a couple billion would solve the problem. Then next year, Vlad will only charge ten billion EU. Then, the next year, it will be fifteen…

Since we’re all seeing Russian agents everywhere, why can’t we just recognize that the Green movement has always been about economic subjugation of the West?

How to “make the EU great, for once” (funny how “again” won’t work in that slogan, ain’t it?):

  1. Go for energy independence through gas, syngas from coal, North Sea oil, and nuclear.
  2. As the one truly internationalized land mass, we can exile the green goons to Anarctica (tell them it is advanced University environmental study, and that they’re saving the penguins).
huls
October 17, 2021 10:27 am

I live in Europe. It is pathetic the way these morons go about things.
Also: you need a special type of brain disease to use renewable and stabilise in one sentence.

The revolution will be here soon and the guillotine will be doing overtime. It won’t be the first time in Europe.

Enginer01
October 17, 2021 10:54 am

If a 2.5 mega watt wind field is only averaging 0.5 megawatt, and losing money, to get what they promised you need to build five more and bring in more money (;

Pat from kerbob
Reply to  Enginer01
October 17, 2021 11:29 am

Yes
Modern monetary theory writ large

Pat from kerbob
October 17, 2021 11:28 am

I think I’ve used this before but is still the absolute best final statement on such thinking

https://m.youtube.com/watch?v=b97zJxKEqAk

October 17, 2021 12:42 pm

More renewables? Deathwish or extreme stupidity.

Of more relevance is the major announcement of a nuclear power commitment led by France 🇫🇷 and 8 east European countries – that is, countries in the EU willing to defy Germany and go nuclear:

https://www.euractiv.com/section/politics/short_news/nine-eu-countries-join-france-in-a-nuclear-alliance/

Nine EU countries have signed a joint statement backing the future use of nuclear energy to fight against climate change effectively. According to the joint statement, nuclear energy represents a reliable energy source to secure a low-carbon future. The statement has been signed by a group of countries, including Czechia, Bulgaria, Croatia, Finland, Hungary, Poland, Romania, Slovakia and Slovenia.

We’re it not for a lukewarm attitude to nuclear at WUWT, this would be a post in its own right. It’s the most important current development in European energy policy. A major act of defiance of Germany, which is to be applauded.

Richard Page
Reply to  Hatter Eggburn
October 17, 2021 1:48 pm

What ‘lukewarm attitude’ to nuclear at WUWT? There has been little or no coverage of nuclear programmes in the news so not much to comment on. The comments in other topics, however, have been overwhelmingly positive towards nuclear.
If you feel it should be a post in it’s own right, then write and submit it rather than complain that nobody has posted anything.
What was the recent comment about ‘all talk and no do’?

Pat from Kerbob
Reply to  Hatter Eggburn
October 18, 2021 10:04 am

I detect no lukewarm attitude to nuclear, what i see is constant affirmation that nuclear is the only path forward for those who think the world is ending due to co2

October 17, 2021 2:05 pm

Maybe if NOAA alters more USHCN data, then the earth will get even warmer and there will be no need for coal or oil.

Tim
October 17, 2021 6:43 pm

Have over 30 years of O&G experience. IEA was never great on forecasting or understanding market forces, but they have become partisan lib tank. The most disturbing comment is them saying government should pick winners for investors, not the market or fundamentals. This is scary departure from capitalism and a nose dive into socialism. It’s bad enough that ESG funds are trying to guilt people into investing in them.

Eric Vieira
October 18, 2021 1:01 am

The only things that should be “renewed” are the green illusions in a lot of people’s minds.
But in the end, reality has always and will finally come through.

David Roger Wells
October 18, 2021 8:49 am

the links in red have stopped working!

Mike Maguire
October 18, 2021 1:49 pm

Solution to the crisis?
Double and triple down on doing what caused the crisis?

The authentic science and energy dynamics are unfolding in the real world and serving as lessons to use for adjusting the fairy tale promises of the fake green energy schemes(fossil fuels greening up the planet are the TRUE green energy).

The response should be…………….to learn something!

https://wattsupwiththat.com/2021/10/06/eia-renewables-no-longer-expected-to-be-1-by-2050/

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