Prof. ST Hsieh
Director, US-China Energy Industry Forum
June 22, 2022
The following reports show how adeptly national leaders focused on solving problems without principle.
- These reports do not even mention “Ukraine War,” the root cause of this “bitter decision.” There is no explanation on re-start coal fired power plants in Europe will impact the strategy of fighting global climate changes. Where are those environmental activists roaming around the world calling the immediate ban of fossil fuels? Is coal clean now? Did anyone consult with Greta Thunberg?
- European nations should never point fingers to China, India, and other coal dependent nations for not stop building coal fired power plants. These national leaders do not have the luxury to make “bitter” decision, they have to make the decision: otherwise, things will get really tight every day!
- Russia’s state-controlled Gazprom cut capacity last week along Nord Stream 1, citing the delayed return of equipment being serviced by Germany’s Siemens Energy in Canada. German and Italian officials have said Russia was using this as an excuse to reduce supplies. We have to ask, why not turn on the Nord Stream 2? It was built and ready to go, but German shut it off early this year!
- All these policy moves sounded painful or bitter, and they are bad for the global environment. Should anyone focus on ending the Ukraine war? Then the threat of “cold winter” could be avoided. On the other hand, if Ukraine war drags on, there could be many future cold winters!
Germany takes ‘bitter’ decision to fire up coal power plants as Russia chokes off its vital natural gas supplies
Mon, June 20, 2022, 4:40 AM
- Germany has taken the “bitter” decision to fire up coal power stations as Russia throttles its natural gas supplies.
- Economy Minister Robert Habeck said it’s essential that Germany reduce its gas consumption ahead of the winter.
- Russia’s Gazprom last week cut supplies of natural gas via the Nord Stream pipeline by around 60%.
Germany has taken a “bitter” decision to fire up idle coal power plants to reduce its reliance on Russian natural gas, as Vladimir Putin throttles supplies to the country.
Gazprom, the state-controlled Russian energy company, cut natural gas flows through the Nord Stream pipeline to Germany by around 60% last week.
The German economy ministry said on Sunday that idle coal power plants are already being upgraded so they can soon start generating electricity again. It said emergency laws would allow Germany to boost the generation of electricity from coal for a limited period until March 2024.
“This is bitter, but it’s essential in this situation to reduce gas consumption,” Robert Habeck, economy minister and a senior member of the Green party, said in a statement.
Germany said it intends to cut the use of natural gas so it can fill its storage tanks ahead of the winter, when demand rises.
“The situation is serious,” Habeck, who is also vice chancellor, said. “We are therefore further strengthening precautions and taking additional measures to reduce gas consumption. This means gas consumption must continue to fall, so more gas must be stored, otherwise things will get really tight in winter.”
Germany’s decision to turn back to coal power, which is highly carbon intensive, underscores how Russia’s invasion of Ukraine and the subsequent surge in energy prices is threatening governments’ climate policies. The German parliament passed a law in 2020 to phase out the use of coal entirely by 2038.
Russia has said Gazprom’s decision to slash natural gas flows to Germany is the result of Canadian sanctions which have meant key pieces of equipment are stuck in Montreal.
But Germany has disputed this argument, pointing out that there are alternative pipelines that could be used.
The move has sent natural gas prices soaring and raised the prospect of shortages of the vital energy source during the winter. Germany imported around half of its natural gas from Russia in 2021.
Dutch TTF natural gas futures, the benchmark European price, were up around 5% Monday to 124 euros (or $130) per megawatt hour. That’s a more than 500% increase from a year earlier.
Germany’s economy ministry said the reintroduction of coal plants could boost production by 10 gigawatts. This would boost the country’s use of coal for electricity generation by up to a third, according to the Financial Times.
The ministry also said it would introduce an auction system to encourage industrial users to save gas, and government-backed loans to encourage the gas market operator to fill storage facilities more quickly.
Europe may shift back to coal as Russia turns down gas flows
Vera Eckert and Francesca Landini
Mon, June 20, 2022, 3:11 AM
FRANKFURT/MILAN (Reuters) – Europe’s biggest Russian gas buyers raced to find alternative fuel supplies on Monday and could burn more coal to cope with reduced gas flows from Russia that threaten an energy crisis in winter if stores are not refilled.
Germany, Italy, Austria and the Netherlands have all signalled that coal-fired power plants could help see the continent through a crisis that has sent gas prices surging and added to the challenge facing policymakers battling inflation.
The Dutch government said on Monday it would remove a cap on production at coal-fired energy plants and will activate the first phase of an energy crisis plan.
Denmark has also initiated the first step of an emergency gas plan due to the Russian supply uncertainty.
Italy moved closer to declaring a state of alert on energy after oil company Eni said it was told by Russia’s Gazprom that it would receive only part of its request for gas supplies on Monday.
Germany, which has also experienced lower Russian flows, has announced its latest plan to boost gas storage levels and said it could restart coal-fired power plants that it had aimed to phase out.
“That is painful, but it is a sheer necessity in this situation to reduce gas consumption,” said Economy Minister Robert Habeck, a member of the Green party that has pushed for a faster exit from coal, which produces more greenhouse gases.
“But if we don’t do it, then we run the risk that the storage facilities will not be full enough at the end of the year towards the winter season. And then we are blackmailable on a political level,” he said.
The Dutch front-month gas contract, the European benchmark, was trading around 124 euros ($130) per megawatt hour (MWh) on Monday, down from this year’s peak of 335 euros but still up more than 300% on its level a year ago.
FILLING INVENTORIES SLOWLY
Markus Krebber, CEO of Germany’s largest power producer RWE, said power prices could take three to five years to fall back to lower levels.
Russian gas flows to Germany through the Nord Stream 1 pipeline, the main route supplying Europe’s biggest economy, were still running at about 40% of capacity on Monday, even though they had edged up from the start of last week.
Ukraine said its pipelines could help to fill any gap in supply via Nord Stream 1. Moscow has previously said it could not pump more through the pipelines that Ukraine has not already shut off.
Eni and German utility Uniper were among European companies that said they were receiving less than contracted Russian gas volumes, although Europe’s gas inventories are still filling – albeit more slowly.
They were about 54% full on Monday against a European Union target of 80% by October and 90% by November.
Germany’s economy ministry said bringing back coal-fired power plants could add up to 10 gigawatts of capacity in case gas supply hit critical levels. A law related to the move goes to the upper house of parliament on July 8.
RWE said on Monday it could prolong the operation of three 300 megawatt (MW) brown coal power plants if needed.
RUSSIA BLAMES WEST
Austria’s government agreed with utility Verbund on Sunday to convert a gas-fired power plant to coal should the country face an energy emergency. OMV said on Monday Austria was set to receive half the usual amount of gas for a second day.
The Netherlands will remove a production cap at coal-fired energy plants to preserve gas in the light of Gazprom’s moves to cut supplies to Europe. Dutch energy minister Rob Jetten, who made the announcement on Monday, said the government had also activated the “early warning” phase of a three-part energy crisis plan.
“We have gas, it is ready to be delivered, but the Europeans must give back the equipment, which should be repaired under their obligations,” Kremlin spokesman Dmitry Peskov said.
Italy, whose technical committee for gas is expected to meet on Tuesday, has said it could declare a heightened state of alert on gas this week if Russia continues to curb supplies.
The move would trigger measures to reduce consumption, including rationing gas for selected industrial users, ramping up production at coal power plants and asking for more gas imports from other suppliers under existing contracts.