Prof. ST Hsieh
Director, US-China Energy Industry Forum
August 9, 2022
The war in Ukraine is a man-made disaster with no end in sight, it is unfortunate that Europe is backtracking on its pronounced commitment to reduce CO2 emission in such a short time. There is no credibility left for EU nations on managing global climate changes anymore. It looks like all you need to change course is for the Europe Commission, which is a political body managed by inept politicians, to give a “absolution” then one can reverse course anytime. The shame on these politicians is when they made the pledge to world that “they are holier than thou” and demand every other nation to follow their steps on stopping using coal. But when these nations now are using coals for power generation to save the “energy crisis,” there is not even a blush on these politicians’ face: it is just business.
Another shameless excuse for these politicians is to blame their energy crisis pointing their fingers to Putin: he is the evil troublemaker. Of course, Putin did start the military actions in Ukraine. But Europe’s energy crisis is by and large caused by US led EU sanctions against Putin. Specifically, these sanctions against Russia energy export to Europe backfired and Europe is scrambling now.
It is time for those EU leaders who designed and implemented the failed sanction policy to take some responsibilities so that new ideas can be explored. For example, should someone seriously work on ending the war in Ukraine, rather than sending more and more military equipment and ammunitions every day?
From Coal To Gas And Back: How Europe Is Easing Its Energy Crisis
Editor OilPrice.com Tue, August 9, 2022 at 3:00 PM
Last year in November, the UK, together with key partner Italy, hosted the COP26 climate summit, an event many believed to be the world’s best last chance to get runaway climate change under control.
A key outcome of the summit was that dozens of nations pledged to end deforestation, curb CO2 and methane emissions and also stop public investment in coal power. Specifically, regarding coal, a total of 46 countries signed the Global Coal to Clean Power Transition statement, promising to “accelerate a transition away from unabated coal power generation” and “cease issuance of new permits for new unabated coal-fired power generation projects.”
But less than a year later, all those promises have gone to the dogs, with developed countries now scrambling to resume coal-based energy generation after the Ukraine crisis triggered a global energy meltdown.
According to a report by the Observer Research Foundation, energy supply disruptions triggered by Russia’s war on Ukraine took LNG prices even higher leaving coal as the only option for dispatchable and affordable power in much of Europe, including the tough markets of Western Europe and North America that have explicit policies to phase out coal.
According to the Washington Post, coal mines and power plants that closed 10 years ago have begun to be repaired in Germany. In what industry observers have dubbed a “spring” for Germany’s coal-fired power plants, the country is expected to burn at least 100,000 tons of coal per month by winter. That’s a big U-turn considering that Germany’s goal had been to phase out all coal-generated electricity by 2038.
Other European countries such as Austria, Poland, the Netherlands and Greece have also started restarting coal plants.
The situation has led to soaring global coal consumption that could reach levels we haven’t seen in a decade, though there will be a limit to growth considering that investment in any new coal-powered plants has stalled. But that only makes the coal market tighter, pushing the energy source into an outperforming category.
Thermal coal, which is the variety used to generate power, has seen a 170% rise in price since the end of 2021–most of those gains made following Russia’s invasion of Ukraine.
The German Dilemma
Germany is among the hardest hit by the growing energy crisis after effectively boxing itself into a corner with its energy policies. For decades, successive governments in Berlin have pursued a policy of maximizing the country’s dependence on Russian oil and gas, and almost completely ditched nuclear energy with the final two functional reactors set to be turned off in 2022. As a result, Germany has become heavily reliant on natural gas, with the fuel accounting for 25% of the country’s total primary energy consumption. Although Germany has substantial supplies of natural gas of its own that could be accessed by fracking, Berlin has banned the technology, meaning it has to import 97% of its gas mainly from Russia, Netherlands and Norway.
Germany’s woes are partly excusable. The dramatic nuclear phase-out is as much part of the country’s Energiewende (energy transition) as the move towards a low-carbon economy. Natural gas is cheap and reliable, produces only half as much emissions as coal, and is a critical input in many sectors. In Germany, 44% of gas was used for heating buildings in 2020, while industrial processes consumed 28%. Gas is the best and cheapest feedstock for the manufacture of synthetic nitrogen fertilizer, of which Germany is a critical supplier. Gas is also used in refining, the production of chemicals, and many other types of manufacturing. All these are difficult–if not impossible–to completely replace with green energy anytime soon.
With a calamitous energy crisis unfolding, Germany will join the bandwagon of nations rolling back their climate goals by increasing its use of coal, which overtook wind to become the biggest input for electricity production globally in 2021. Indeed, Germany is left with little choice than to burn lignite in its power plants–widely regarded as one of the dirtiest fossil fuels and extracted in vast open-pit mines that litter the German countryside. The European Commission has already given its absolution to countries replacing Russian gas with coal and producing higher emissions as a result.
By Alex Kimani for Oilprice.com
Germany’s Economy Faces A €260 Billion Blow As Energy Crunch Persists
By City A.M – Aug 09, 2022, 3:00 PM CDT
- Russia’s invasion of Ukraine has sparked a dramatic rise in energy prices, especially in Europe.
- Germany’s economy is on track to lose as much as €260 in added value by the end of the decade.
- Germany’s price-adjusted gross domestic product will be 1.7 percent lower next year in comparison with expectations of a peaceful Europe,