The energy thread

[mapuc]

Danish EB writes

Electricity prices send families into poverty:
EU promises urgent action
EU Commission President now promises urgent action on rising energy prices in Europe

Since Russia's invasion of Ukraine, the term 'energy poverty' has sadly become a reality for many.

But now EU commission president Ursula von der Leyen is joining the fight for lower prices in earnest, calling for 'urgent action' at a speech in Slovenia.

Changing the pricing model
By all appearances, the EU commission's call for urgent action looks like a change to the existing electricity pricing model across Europe.

As the model stands, it is the rising price of natural gas that is driving the sky-high price of electricity. In concrete terms, this means that the crisis in one part of the energy market today is having a direct impact on another.

In addition to prices in one part of the market reflecting the other, it is also currently the most expensive price that sets the price framework.

Wind and solar electricity generators get the same price as natural gas-fired power plants, even though the latter have significantly higher costs these days.

Von der Leyen's pledge in Slovenia, however, does not reveal details of what the EU Commission envisages a crackdown might look like

Fear of closure
On Friday, electricity prices in France and Germany rose by 25%. This meant, among other things, that Germany's electricity prices hit a record high of €700 per megawatt hour.

The rising prices are due to Russia's state-controlled export monopoly Gazprom announcing it would halt the flow of natural gas through the Nord Stream pipeline for three days.

Officials say it is as part of necessary maintenance, but European energy market fears Russia will not open up the natural gas again.

Germany said no in the spring, but now the federal government in Berlin is refusing to change the pricing model for electricity in Europe.

Translated with www.DeepL.com/Translator (free version)

Markus

[Kapitan]

Originally Posted by Catfish

^ Additionally almost all companies ride the wave of raising their prices, even if not affected at all. "Reasons" range from corona, market changes, delivery chains, China, Russia, Taiwan, Russia, war to "others do it too".

[sarcasm]
We can be sure that prices will go down again when the crises are over.
[/sarcasm]

edit brexit has indeed some consequnces. Buying spare parts or even cars in England has become too expensive, apart from english companies raising prices "just so" you now have to pay value added tax (double), additional export and import taxes, and fight all kinds of new barriers, that really are old ones from the times England was not in the EU. A spare part recently bought that used to cost around 17 pounds, is now at 80. Not again, guess will sell all the stuff.
A lot of automotive Companies (including vintage cars and parts dealers) want to stop trade or have already given up.

Everything has had an impact for sure Covid, Brexit and Russia - Ukraine war.
On the logistical front Covid has been the biggest issue, to give you an idea there was at the peak over 100 ships at anchor waiting for a berth in Los Angeles and Long Beach which is the main west coast container port and responsible for 40% of imports to the USA.

China basically shut down which meant that the ports closed and all the ships piled up outside and now they follow each other to the next port and compound the issue whereas before they were nicely spaced out.
Couple that to lack of truck drivers they cant clear the ports fast enough and cant get empties back, so now there's a container shortage.

I was quoted over $20,000US to move a 40ft container from Dalin to Los Angeles on the spot market, considering it was about $1,750 for 40ft pre covid.

Brexit has indeed had some issues it never was going to be plain sailing, yes there's additional checks duties etc but that was to be expected in fact the RHA own poll in 2016 showed over 60% of companies favored leave.
The RHA published its own advice throughout 2017-2020 stating very clearly what was going on and what plans were afoot and also procedures / policies etc.
Unfortunately the companies that are mainly crying foul are the ones who didn't take notice or simply didn't prepare. (I had to dump 3 of my main contractors due to this)

Shortages on the whole were not unique to the UK, the USA, Canada, Australia and even Italy to name a few suffered major shortages (Italy actually addressed the UN on it) so while I get that some people do just want to lay the blame for everything on Brexit the fact is Brexit is only one component.

You made a good point about customs, taxes and duties there catfish, just want to ask were you aware that every truck that left or entered the UK while we were in the EU still had to clear customs?
(Now we run under the T4 form which is what you would use in Norway or Switzerland, TIR is unaffected)

And also any truck that runs through France Germany Spain Italy, BENELUX and others have to pay duties and road taxes all this whilst we were in the EU?

(Just want to note the UK never charged foreign HGVs while in the UK or enforced cabotage like they did in the EU)

I get that some of this has hurt the smaller business and some people but its the bigger picture, freight rates have increased as have wages in the haulage industry which has meant some products are more expensive I fully get that, but the truck driver who hasn't seen a wage rise only a decrease over the last 25 years has seen his capability to live on the wage he earns increase.

This isn't unique to just the UK either there's been a lot of changes this side of the pond with NAFTA, immigration that has seen similar turn of events.

As for used vehicles and parts a 2016 1 million KM freightliner cascadia truck in 2021 you could pick up for $18,000 roughly at the peak when no one could get hold of any trucks (Canada / USA have around an 18 months back log of orders for new ones) that same truck would fetch $60,000.

As for parts you just had to hope and pray it was something they could repair or had in stock.
Some of the companies I use had trucks in work shops for 2 nearly 3 months waiting for parts, others who were lucky either had to send the part by road or fly it in from the other side of the continent, and your now also paying not only double for that part but the transport costs as well.

I am soon to start shipping over some personal items of mine, these are items I bought and paid tax on years ago in the UK, I already know I am going to have to pay Canadian tax and import duties on my own personal effects which in some cases will be more than what I paid for the item (cant get them here hence why I have to pay up).

The war in Ukraine has caused major shortages in grain, Ukraine is one of the bread baskets of the world and supplies a lot of grain to the EU, Canada is now shipping grain to Europe to make up the deficit which has lead to commodity price hikes and also shortages this end.

Additionally almost all companies ride the wave of raising their prices, even if not affected at all. "Reasons" range from corona, market changes, delivery chains, China, Russia, Taiwan, Russia, war to "others do it too"

Indeed and that is exactly what were seeing across the board right now.

[sarcasm]
We can be sure that prices will go down again when the crises are over.
[/sarcasm]

pre covid fuel prices here were $1.09.9, during covid that slumped to 0.69.9 at its highest it has reached $2.37.9 and today as I filled up in its sitting at $1.63.9 (each province is different AB is currently on $1.39.9 and it never exceeded $2) prices per liter.

I think it will go down but there will be a new norm higher than before all this started.

[Skybird]

Add last years blockade of the Suez channel, the echoes of it still are heared in european harbours, they said on TV this summer, Rotterdam, Hamburg...

[Catfish]

Thanks Kapitan for the explanation, but there are some things that still do not add up. If taxes and treaties were not followed by England anyway during its time of membership in the EU, why did prices already rise that much before 2019 and corona?

in fact the RHA own poll in 2016 showed over 60% of companies favored leave.

What is the "RHA"? I doubt 60 percent of companies was favoring brexit. They knew what was coming, and a lot just did not make it. Maybe good for the surviving rest and bigger monopolies, but not for competition, economy and the people. Skyrocketing prices in England have a lot to do with brexit, the numbers are just not exact after all this other stuff happening and blurring the picture. A lot less people are buying in England, some companies have left, new companies think twice before settling in England or opening stores there.
Nothing to do with corona, and not with the war in Ukraine either.

pre covid fuel prices here were $1.09.9, during covid that slumped to 0.69.9 at its highest it has reached $2.37.9 and today as I filled up in its sitting at $1.63.9 (each province is different AB is currently on $1.39.9 and it never exceeded $2) prices per liter.

I think it will go down but there will be a new norm higher than before all this started.

I agree with the latter, crude oil prices have meanwhile fallen, but the prices demanded will of course never fall that much if people are willing to pay that.

[Skybird]

I have always considered the German Minister for Morals, Self-Pity and Energy Pricing to be a phony and a sentimentalist, a very pathetic little sausage, and I have often said so. The way he himself continues to dismantle his claim to seriousness probably proves me right. As a children's book author, he knows how to babble infantilely, and the German morons feel taken along with him, and they fall servilely and obediently in line to his commands. He has no idea about correct political craft - and always shifts the responsibility for his mistakes to others, and then he steals even more pity for himself, while he shimmies from one self-made desasster to the next. And always with a suffering, pitying facial expression and tone of voice that say that poor little Robert can't help any of this. It is disgusting. Pity for the German people is misplaced; they not only put up with it, but would even prefer to have Habeck as chancellor. Anyone who ticks like this deserves what Habeck is getting him into.



The Neue Zürcher Zeitung writes:

Robert Habeck's crisis is self-inflicted

First the German Minister of Economics claims that the country has no electricity problem, then his staff botches the planned gas levy: the high-flyer in the cabinet needs to close his knowledge gaps as soon as possible.

If Germans could elect their chancellor directly, a relative majority would vote for Robert Habeck. Certainly, at 26 percent, it would not be an overwhelming majority, and the figures are still from mid-August. Nevertheless, it is remarkable when, in the midst of an energy crisis, the politician who enjoys the greatest trust is the one who, in his own words, has "a responsibility for energy security in Germany" as minister for the economy and climate protection. This responsibility, says Habeck, "must be faced."

At present, the Green must face up to the mistakes that are being made in his ministry. And so far, he is hardly meeting this challenge. The high-flyer is turning into an underachiever.

Habeck wants to prevent free riding

At the open house in his ministry a week ago, Habeck was still singing the praises of the many experts and the "great people" with whom he was allowed to work. That's where the expertise sits, in the ministry's offices, "they do the core work here." Habeck downgraded his own role to that of an interpreter who publicly explains "what is decided there.

And now this: Neither the coalition partners of the SPD and FDP, nor the opposition parties, nor economists have a good word to say about the economics minister's planned "gas levy. As the minister contritely admitted, this is now to be quickly improved, preferably as early as this week at the cabinet meeting. Free riders, as Habeck calls them, i.e. energy companies that earn splendidly and do not need any help, are to be excluded from support.

A competent policy would have recognized and prevented these loopholes in time. In fact, the levy, in which all German gas customers are to participate from October at 2.4 cents per kilowatt hour, is a lex Uniper. The primary aim is to prevent the Finnish group from collapsing and thus the German gas market from imploding.

A decree for Uniper

This shift of responsibility from the company to all consumers is already delicate, especially since research by a business magazine has substantiated the suspicion that Uniper had a hand in writing the regulation. Habeck himself says ambiguously that the levy was "probably decided that way". Does he mean the SPD and FDP, who, despite all the subsequent outrage, supported the decision in the cabinet? Does he mean the "great people" in the ministry or the influence of Uniper? Either way, Habeck appears to be a man who is letting things slip.

The Green also doesn't cut a good figure when it comes to the two energy-saving ordinances drafted by his house; the first ordinance takes effect on September 1. Among other things, it contains a ban on illuminating buildings and monuments from the outside. Also, illuminated advertising installations may only be operated from 4 p.m. to 10 p.m. As recently as July, Habeck had claimed that Germany had a heating problem, but not an electricity problem. Even then it was foreseeable that the rapidly rising gas prices would also force up the cost of electricity.

Habeck's defiantly advocated Green Party line that the era of nuclear power plants is over and that at most a minimally extended remaining operating life is conceivable seems out of date. Foreign Minister Annalena Baerbock also talks like this. Worldwide, however, nuclear power is doing well.

Scholz and his cabinet are floundering

Consequently, former Transport Minister Andreas Scheuer of the CSU is now calling not only for the three still-active nuclear power plants to be kept running, but also for three more to be reactivated and three new ones to be built. And the CDU's Council of Economic Advisors is arguing that all coal-fired and nuclear power plants that can be operated should be connected to the grid, since their costs are lower than those of gas-fired power plants. Habeck suddenly appears to be an immovable ideologue.

The doctor of humanities and former children's book author can explain crises wonderfully, even those that he himself has brought about. In the future, however, it will be important to prevent crises. Otherwise, Berlin's "traffic lights" may be history even faster than nuclear power in Germany.
----------------------
Uniper is the center of energy supply in Germany, in a sense the black hole at the center of the galaxy. However, it is majority-owned by the Finnish state via a subsidiary.

[Skybird]

FOCUS writes:


There is a gas treasure in the Mediterranean - only Europe didn't want it

Billions and billions of tons of gas and oil lie at the bottom of the Mediterranean Sea, and the countries bordering it are racing to find and produce it, each against the other. International institutions had already proclaimed a new harmony there. But that was before the Ukraine war.

The law of the jungle may soon prevail at sea - this is a rather pessimistic view of the activities of numerous riparian states in the eastern part of that great body of water that the Romans called "mare nostrum," our sea, around which they built their empire. Possession did not exist, the legions of Rome would have been the answer.

At present, it is due to the hunger for energy and the dispute over maritime boundaries of posterity that there is only a most fragile peace in the vast area between Turkey and Greece, Israel and Lebanon, Cyprus and Egypt. Recognized maritime law and international agreements are being bypassed on a large scale.

The Russian invasion of Ukraine has shredded the finest visions and most promising plans of the EU and the Mediterranean states of North Africa almost overnight. As late as the end of 2021, one could read in thoroughly reputable sources about the loss of importance of the natural gas under the seabed, and about the resulting peaceful coexistence of neighbors, some of whom have been at odds for centuries. The key term for this was "renewable energies". Huge submarine cables were to transport electricity from the sun and wind from Egypt, for example, via Cyprus and Crete to Central Europe. Green hydrogen would satisfy the region's hunger for energy and light up Europe. The tiresome disputes over borders and nautical miles off the coasts would become meaningless.

The dream is over, and probably for the foreseeable future. Even before 2014, the EU had developed a strategy for using the gas deposits of the eastern Mediterranean as an energy source for Central Europe - with the far-sighted goal of reducing dependence on Russia's raw material. The plan disappeared into the drawers when the noble goal of decarbonizing Europe's energy supply was set. "Natural gas imports from the eastern Mediterranean are no longer considered particularly relevant," stated the Stiftung für Wissenschaft und Politik (SWP) in Berlin as recently as fall 2021.

Rarely have plans become wastepaper so quickly. In any case, the potential benefits of a sustainable energy supply lie far in the future. Nevertheless, they were pursued as a matter of urgency - and in the meantime, the focus on gas exploration was halted because it would take years to achieve a reliable supply. And then, it was believed, fossil fuels would no longer be needed. Israeli experts, on the other hand, whose country continues to produce natural gas, believe that the raw material will remain indispensable well into the next century. It could be that they are right.

Turkey is obviously pursuing visions of a completely different kind. Ankara is pursuing a shuttle course in the Ukraine conflict; no wonder, since almost half of its gas comes from Russia, and Iran is another important supplier. Both are countries that Ankara does not want to anger. Instead, Turkey would offer the possibility of forwarding gas via pipeline through Bulgaria or even Greece - the pipelines exist. The EU is skeptical, because this would create another indirect dependence on Russia.

Moreover, Turkey, a NATO partner like its arch-enemy Greece, is primarily a troublemaker in the eastern Mediterranean - at least from the point of view of most of the other littoral states. The Turkish drilling ship "Abdulhamid Han" has recently been searching "everywhere" in the eastern Mediterranean for new deposits, according to its own statements - an affront to Greece, whose own economic zones around the Aegean islands are not taken seriously by Ankara, although they are internationally recognized maritime borders.

Turkey is also active in the waters of Turkish-occupied northern Cyprus, a state that is not internationally recognized. This upsets the EU member Republic of Cyprus and worries Greece once again. Athens has its own experience with Ottoman traditions.

Without Turkey, however, neither peaceful resource extraction in southeastern Europe nor the use of future "green" energies is possible in the long term. Next year's elections are also casting their shadows: In view of a catastrophic economic development with dramatically high inflation, the autocratic President Erdogan is relying even more than he already does on unbridled national pride as a vehicle for winning over voters. This, by the way, is based on an idiosyncratic understanding of history not unlike that of Russia under Putin.

Amid this unpleasant mix, Israel and Turkey recently sealed the resumption of diplomatic relations. This could also at least help to dampen the conflicts in the energy sector. Israel already produces gas from two huge deposits off its coast - only the question of transporting it to Europe has not been a priority so far and is therefore unresolved. In the medium term, a solution could be found in agreement with Turkey.

What all projects have in common is that they do not seem suitable for the short-term alleviation of a dramatically tight supply situation. However, the EU's hastily abandoned gas-from-the-sea plans show that determined implementation in all the years since 2010 would bear fruit today. Today, when a way out of the predicament is urgently needed, and has not.
--------------

[Catfish]

Get rid of oil. This is getting ridiculous.
Oil is much too valuable to burn it. All kinds of plastics and medicine (from aspirine to paracetamol to high-end drugs) can be made of it.

Burning is oxidation. Combustion of fossil resources is oxidation.
Oxidation means you take oxigen from the atmosphere and bind it to solid stuff.
Burning the fossil carbohydrates reduces the level of oxygen in the atmosphere that has accumulated over millions of years, due to plants withdrawn from decay/oxidation, becoming fossil "fuel" under anaerob conditions.
If you burn it, it replaces oxygen with CO, the #2 greenhouse gas. #1 is methane! Like in the russian tundra or the gulf of Mexico, that will soon melt with rising temperatures. With catastrophic consequences.

Oil is made to 99 percent of ocean algae, again: that were witdrawn from oxidation.
The combustion of "fossil fuels" like oil (marine origin from algae) or coal (terrestrial origin from forests) replacs oxygen with CO2 in the atmosphere.

The earth's battery is being depleted, people are poisoning the earth's atmosphere, and humanity does not really need oil anymore, for energy.
This is basic stuff BEFORE high school.

Petty f'n wars for patches of land while destroying a planet's biological systems, by "leaders" who have neither education nor understanding. Get RID of them.

How dumb can humans be!

[mapuc]

I must say it came as a surprise for me-I thought the capacity was a lot higher than the 15 % mentioned in the article.

Scarcely a day goes by without more evidence to show why the Government's obsession with wind turbines, now at the centre of our national energy policy, is one of the greatest political blunders of our time.

Under a target agreed with the EU, Britain is committed within ten years — at astronomic expense — to generating nearly a third of its electricity from renewable sources, mainly through building thousands more wind turbines.

https://www.dailymail.co.uk/news/art...-scam-age.html

Markus

[Jimbuna]

Russia has completely halted gas supplies to Europe via a major pipeline, saying repairs are needed.

The Russian state-owned energy giant, Gazprom, said the restrictions on the Nord Stream 1 pipeline would last for the next three days.

Russia has already significantly reduced gas exports via the pipeline.

It denies accusations it has used energy supplies as a weapon of war against Western countries.

The Nord Stream 1 pipeline stretches 1,200km (745 miles) under the Baltic Sea from the Russian coast near St Petersburg to north-eastern Germany.

It opened in 2011, and can send a maximum of 170 million cubic metres of gas per day from Russia to Germany.

The pipeline was shut down for 10 days in July - again for repairs, according to Russia - and has recently been operating at just 20% capacity because of what Russia describes as faulty equipment.

The president of Germany's network regulator has said the country will be able to cope - if Russia resumes delivery in the coming days.
https://www.bbc.co.uk/news/world-europe-62732835

[mapuc]

This says it all

https://twitter.com/CandidCapitalCo/...24844604039168

Markus

[Catfish]

^ lol

[Jimbuna]

Europe's Energy Crisis Is Going to Get Worse. The World Will Bear the Cost

https://time.com/6209272/europes-ene...getting-worse/

[Skybird]

Power and Strawberries - the NZZ writes:
-------------------
Brussels is discovering what it means when prices are determined by supply and demand. Instead of ranting about "market failure" and "excess profits", EU Commission President von der Leyen should call on her compatriots to keep nuclear power plants online.

"The electricity markets are no longer functioning, they are not fulfilling their purpose": this is how EU Commission President Ursula von der Leyen commented this week on the volatility on the electricity exchanges.

Certainly, prices on the exchanges where electricity is traded in Europe have increased enormously since Russia's attack on Ukraine. This is hitting energy-intensive companies in Europe, and the bill will also be salty for some medium-sized companies.

But is this already a case of "market failure," as von der Leyen insinuates? The electricity market does not function according to some obscure rules, but like any other market. Let's take the market for strawberries: There's the farmer who's just getting his turn to meet demand. He will at least want to cover his costs, otherwise he would not sell. Any farmer who can offer cheaper than him will also sell her strawberries - at the price charged by the farmer who is just about to deliver the last unit in demand.

The farmer thus makes a nice profit, can invest in new fields and seeds, so that next year the strawberry harvest will be bigger and the price will tend to fall.

This "market design" was not forced on anyone, but is entirely voluntary. The situation is very similar in the electricity market. There, the "expensive farmer" is the gas-fired power plant. At present, gas-fired power plants often produce the last kilowatt hours that can still be sold on the market. Since the price of gas has increased more than tenfold, their production costs have risen sharply.

The counterparts to the "efficient farmer" in the example are nuclear power, hydroelectric power, and wind and solar power - they all produce much more cheaply, but receive the same price for the kilowatt-hour as the gas-fired power plants. After all, electricity is electricity.

High prices now signal two things: electricity consumers will pull out all the stops to curb their consumption. This may go so far as to cause certain companies to temporarily stop their machines. These savings will help us get through the winter.

But there is a second effect: the high price of electricity, which is expected to continue in the markets for the next few years, will also stimulate investments: in renewables, which are quickly amortized, but also in hydropower and perhaps - if the technology had not been locked out - even in nuclear power. In any case, supply will increase over time, which will put pressure on prices.

So far, so unspectacular, one would think. The market is working. But politicians are now flirting with price caps for electricity: some for the entire electricity market, the EU Commission for those types of generation that are cheaper than gas-fired power plants. In the latter case, to stay with the example, the cheaply producing strawberry farmer would be additionally taxed - it would be a kind of "excess profits tax."

In their working paper, EU officials speak of legal certainty for countries and consumers. But such ad hoc interventions in functioning markets are poison for the investment climate. In any case, the danger of intervention spirals is great. Those who set up power plants tie up their capital for the long term and need legal certainty. No one - not even Brussels - can conjure up away the basic problem that there is an enormous shortage of energy throughout Europe this winter.

The Commission President is shooting the messenger with her philippic and obscuring the causes of the misery. Incidentally, the nuclear phase-out in her home country of Germany has also contributed to this. One of the rare opportunities to increase the supply of electricity somewhat in the short term would be to allow the German nuclear power plants to continue running in 2023. That's what von der Leyen should be working toward - instead of ranting about alleged market failures and excess profits.
----------------

[mapuc]

Here in Denmark we have been told that we could run out of electricity and that some areas of Denmark would be cut off from the electricity grid due to lack of electricity. In the coming winter that lay ahead of us.

Markus

[Dargo]

Originally Posted by mapuc

Here in Denmark we have been told that we could run out of electricity and that some areas of Denmark would be cut off from the electricity grid due to lack of electricity. In the coming winter that lay ahead of us.

Markus

You will get electricity from other countries in Europe, that is how the electricity system works in Europe.