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 NewsA 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.
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
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.
There’s only one adult in the world’s political room
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.
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!
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.
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.
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?):
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.
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 (;
Yes
Modern monetary theory writ large
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
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.
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’?
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
Maybe if NOAA alters more USHCN data, then the earth will get even warmer and there will be no need for coal or oil.
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.
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.
the links in red have stopped working!
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/