70s Redux

Europeans are looking forward to a cold, dark winter. Natural gas is scarce and expensive, and the “green” energy in which European countries have invested many billions of dollars can’t produce reliable electricity. So panic is starting to set in. The Telegraph reports from the U.K.:

There is no question that Europe is gripped by an energy crisis as severe as any it has faced since the 1970s, and that the UK is right in the thick of it. Prices are soaring. Energy firms are going bust. There is talk of factory closures, three day weeks, and rolling blackouts.
The UK and Europe’s energy crisis has been years in the making. Over the course of the past year, wholesale gas prices have risen more than fivefold. On some days of frantic trading, prices have been soaring by 20 or 30 per cent in a single session, a sign of a market under severe stress. The reason? The switch to cleaner, renewable energy, while welcome in itself, has meant that demand for gas, viewed by policy-makers as a reliable, not-too-dirty transitional fuel, has been steadily increasing.
A lack of wind has meant that renewable energy has not been as plentiful as expected, and gas is being used as a back-up.

This reporter doesn’t seem to fully understand the relationship between “green” energy and natural gas. Wind turbines produce electricity around 40% of the time; solar panels much less often in a climate like England’s. So despite endless “green energy” investments, most of the time the energy source is not wind or solar, but rather natural gas. Why natural gas? Because you can start up and shut down a natural gas plant in response to the weather, in a way that you can’t start up or shut down a coal plant or a nuclear reactor. When people talk about using wind and solar energy, what they mostly mean is burning natural gas.

The Telegraph’s story is largely about the geopolitical power that Vladimir Putin now wields, as a result of Europe’s feckless devotion to “green” energy.

While the UK imports relatively little gas from Russia right now, the latter’s decisions to a large extent determine the global price, and that in turn determines whether Britain can buy the supplies it needs from anywhere. Even worse, right now, there is very little that anyone can do to get out of the situation. “On the supply side, there is not much Europe can do,” argues Simone Tagliapietra, a senior fellow at the Brussels-based Bruegel Institute.

Notice that no one suggests that the supply side solution is to build still more wind turbines and solar panels. When the chips are down, these sources of electricity are more or less useless. This chart shows how unreliable wind energy is:

Energy this unreliable is essentially pointless, and with fears rising of Britons freezing in their homes, no one is counting on wind or solar power.

We could see shutdowns, with heating and gas stoves turned off; pensioners could die of the cold, while the rest of us put on extra coats, and heat up our dinner in the microwave, assuming the electricity network is still running. In reality, it probably won’t get to that point. As a first option, the Government could start restricting supply to industrial users, which accounts for up to 20 per cent of overall demand. Industries such as chemicals, paper, packaging and building materials, all big energy users, could see factories put on three-day weeks. After that, schools and offices could also be put on a three-day week to save energy, and so could retailers (a shopping mall takes a lot of heating in winter), and then possibly closed completely. That would take a huge amount of pressure off the system. After that, there could be the kind of staggered blackouts we saw in the 1970s, designed to eke out meagre supplies through the winter. It wouldn’t be great. But it would mean the heating would keep running for most families.

So it may be back to the 70s, only worse. Meanwhile, here in the U.S. we have endless supplies of natural gas, but we also have an administration that wants to suppress production of the commodity for which the world is desperate. In theory one could imagine an administration worse than Joe Biden’s, but I don’t think I am up to the task.

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