Pause Net Zero, Tory voters advise next prime minister
1) Net Zero Britain: UK Energy bills forecast to hit £3,615 amid worsening cost-of-living crisis
The Herald, 2 August 2022
Households across Britain have been warned they could face an annual energy bill in excess of £3,600 this winter.
Energy consultant Cornwall Insight said a regular gas and electricity bill in England, Wales and Scotland could reach £3,615 in the new year, which is hundreds of pounds more than previous predictions.
In May, the Government announced an energy costs support package – worth £400 per household – in response to predictions that bills would rise to £2,800 for the average household in October.
Last month, Cornwall Insight predicted that annual energy bills would typically rise to £3,244 from October and £3,363 from January, but circumstances have changed significantly since then.
The company told BBC Breakfast that such a bill is now likely to rise to £3,358 from October and £3,615 from January.
Cornwall Insight’s principal consultant, Craig Lowrey, said surging gas prices and concerns about Russian supply had prompted the increase.
“However, while the rise in forecasts for October and January is a pressing concern, it is not only the level – but the duration – of the rises that makes these new forecasts so devastating,” he told the programme.
“Given the current level of the wholesale price, this level of household energy bills currently shows little sign of abating into 2024.”
Dr Lowrey joined other experts in saying Government support will “only scratch the surface” for households.
“While the Government has pledged some support for October’s energy rise, our cap forecast has increased by over £500 since the funding was proposed, and the truth is the £400 pledged will only scratch the surface of this problem.”
Full story
2) One in eight Britons have nothing left to pay for energy when prices jump further
Daily Mail, 1 August 2022
One in eight Brits have said that they have nothing left to cut back on to help pay for energy when prices jump further.
And there are warnings that the cost-of-living crisis is increasing regional inequalities across different parts of the country and putting the Government's levelling up agenda at risk.
Research from Legal & General found households in Yorkshire and Humber, the South West and Northern Ireland were particularly worried about their finances in the face of soaring bills.
The firm's latest Rebuilding Britain Index found that one in eight respondents, or 13 per cent, feel they would have nothing left to cut back on when energy prices jump further in the autumn.
It reported that more than 25 per cent of households earning less than £20,000 per year are worried about being unable to manage the rising cost of bills.
And 69 per cent of households said they are making additional cutbacks to their budgets due to recent rising costs, in order to make mortgage and rent payments.
Nigel Wilson, chief executive at the pension and investment firm, welcomed the Government's £400 financial package for households but stressed that the state needs to help 'address the root of regional inequalities' with a longer-term strategy.
He said 'greater collaboration between public and private sectors' is needed to address issues across various parts of the economy, including energy, health, housing and jobs.
'Many households across the UK are currently facing very tough financial choices. For some, those choices seem impossible,' Mr Wilson said.
'However, what is most concerning is that the impact of the cost-of-living crisis is being felt more severely in some parts of the UK than in others.
'This threatens to widen the existing demographic and geographic inequalities that the levelling up agenda was designed to address.'
It comes as the possibility of inflation reaching 12 per cent this autumn looms ahead, with fuel costs and food prices bumping inflation to 9.4 per cent in June - marking a 40-year high.
And Brits are preparing for energy bills to hit up to £3,850 per year from January - three times the price at the start of this year.
The firm's latest Rebuilding Britain Index also showed significant regional differences regarding how comfortable people are currently feeling about their financial position.
In Yorkshire and Humber, the South West and Northern Ireland only 49 per cent of households said they are confident of being able to maintain their current lifestyle over the coming 12 months.
Full story
3) Hit pause on Net Zero, Tory voters advise next prime minister
The Daily Telegraph, 2 August 2022
Poll shows six in 10 of those who voted for the Tories at the 2019 election would support climate policy rethink
A big majority of Conservative voters want the next prime minister to pause and review the push for Net Zero, a new poll has revealed.
The findings will pile pressure on leadership hopefuls Liz Truss and Rishi Sunak to toughen their stance on the cost of the green transition.
Both have committed to keep the pledge to eliminate carbon emissions by 2050 but said they will revisit how the UK is set to achieve it.
A new poll by YouGov found 59 per cent of Tory voters want Net Zero frozen, which rises to 70 per cent when don’t knows are excluded.
In contrast, only 30 per cent of Labour and Lib Dem backers would like to see the climate target suspended by the next prime minister.
The survey showed that support for a review of the green policy is strongest among over 65s, almost one in six of whom are in favour.
Overall, the public are narrowly in favour of such a move by 52 per cent to 48 per cent when those who expressed no opinion are excluded.
Working-class voters are more likely to be sceptical of environmental targets than middle-class people, the results of the poll show.
They also reveal that backing for a rethink is highest in the Midlands and Wales and lowest in London and Scotland.
Ms Truss, the frontrunner in the Tory leadership race, has pledged to temporarily scrap green levies on energy bills to help with the cost of living crisis.
The Foreign Secretary has said she will look again at how Net Zero is delivered, insisting “what I don’t want to see is ordinary households penalised”.
Mr Sunak has pledged to build more offshore wind farms but has also insisted hitting green targets “can’t mean neglecting our energy security”.
The YouGov survey of 1,797 Britons was carried out last Wednesday and Thursday, and was commissioned by Net Zero sceptic group CAR26.
It comes after a separate study by the pollster found only four per cent of Tory members think the green policy should be a top policy priority.
Lois Perry, director of CAR26, said the results “give an excellent steer to our next prime minister” on how to approach climate policy.
“Net Zero policy is a luxury we cannot afford and should no longer be looked at in isolation as a mere virtue signal without assessing the costs and benefits, if indeed there are any benefits,” she said.
“Net Zero needs to be considered in light of security and energy independence. How much safer and cheaper would our energy be now if we had not stopped fracking years ago?”
Full story
4) Sherell Jacobs: A catastrophic energy crisis will fuel a revolt against our failed elites
The Daily Telegraph, 2 August 2022
Politicians cannot shirk responsibility now for the extreme hardship millions of people are about to face
This is the summer before the storm. Make no mistake, with energy prices set to rise to unprecedented highs, we are approaching one of the biggest geopolitical earthquake in decades. The ensuing convulsions are likely to be of a far greater order of magnitude than those that followed the 2008 financial crash, which sparked protests culminating in the Occupy Movement and the Arab Spring.
The gathering crisis could prove even more catastrophic than the oil shock of the 1970s, which wrecked the administrations of three British prime ministers, presaged 40 years of American entanglement in the Middle East, and (due to the oil glut that followed) ultimately triggered the Soviet Union’s collapse.
Carnage has already arrived in the developing world, with power outages from Cuba to South Africa. Sri Lanka is just one of a cascade of low-income countries where leaders face being driven out of power in an ignominious blaze of petrol droughts and loan defaults.
But the West is not going to escape this Armageddon. In fact, in many ways, it looks set to be its epicentre – and Britain, its Ground Zero.
In Europe and America, a technocratic elite system built on mythology and complacency is crumbling. Its founding fable – which prophesied the nation states’ glorious enmeshment in world government and supply chains – has metastasised into a parable of the perils of globalisation.
For all the attempts to depict the Ukraine war as a black swan event, a spike in basic commodity prices in a volatile world was perfectly predictable. People are left wondering why their leaders failed to make contingency plans, given that they sit on vast untapped reserves of gas, oil and coal. The EU was supine in the face of Putin’s bid to keep the region’s market divided and dominate its more compromised powers.
Nor is there any explanation for this fiasco apart from decades of failed assumptions and policy missteps by our governing class. In the wake of the financial crash, the establishment just about managed to convince the public to submit to the purifying rigours of austerity, persuading voters that we all shared the blame for the crisis and must all play a role in atoning for the country's mistakes. This time, elites cannot shirk responsibility for the consequences of their fatal errors.
Put simply, the emperor has no clothes. The establishment simply has no message for voters in the face of hardship. The only vision for the future it can conjure up is net zero – a dystopian agenda that takes the sacrificial politics of austerity and financialisation of the world economy to new heights. Actively campaigning for boiler bans, 15mph speed limits, and speculative green bubbles may seem like madness. But it is a perfectly logical programme for an elite that has become unhinged from the real world.
There are several countries where we might see the first signs of a resulting populist revolt. The Germans must swallow national humiliation along with higher energy bills, as their political leaders are taunted on the world stage for their naive bid to prioritise economic harmony and trade links over security. According to some analysts, France, which is no stranger to protest, could be the first in Europe to experience blackouts despite its sizeable nuclear industry. But it is Britain where things could truly blow.
The UK may well be the tinderbox of Europe. With the ousting of Boris Johnson and his imminent replacement by a politician who will not have led his or her party into power via a general election, the political context is particularly febrile. Even more so given disillusionment at the waste of the past two years and the failure of the Government to capitalise on Brexit to renew the country.
Moreover, Britain’s consumers look set to be clobbered harder than most. We already have the highest inflation in the G7. But a succession of fatal policy mistakes – from the closure of gas storage facilities to the failure to exploit our domestic oil and gas reserves – mean that we will remain unnecessarily vulnerable to sky-high international energy prices for years to come, with all the pain that will bring consumers.
Despite this, Britons are set to receive less assistance from the Government than their counterparts in other Western countries. The 5p cut in fuel duty has been estimated as the second smallest in Europe. While our politicians pontificate about insulating more homes at some point in the distant future, Spain has made many train journeys free until the end of the year. France has vowed to fully nationalise the energy giant EDF, which it had already forced to cap consumer bills.
A civil disobedience movement, inspired by the poll tax revolt, has already been launched here in the UK. The Don’t Pay campaign, which is urging people to join a “mass non-payment strike” when the energy price cap is raised in October, has gained thousands of online supporters.
And if it does take off, what are the authorities going to be able to do about it? Such is the scale of the coming price rises that millions may simply be unable to pay their bills – including pensioners and families hitherto part of the middle classes. The risk is that, bogged down with leadership hustings, the Tories realise too late that they need to act. The predicament we face is likely game-changing. We have barely begun to grasp how unpredictable the next few years are likely to be – and how poorly prepared we are to face the consequences.
If weaning ourselves off Russia – a comparatively small economy – is this painful, how are we to end our addiction to cheap goods from China? If we do manage to achieve a greater degree of energy self-reliance, how will we contend with the collapse of petrostates in the Middle East and the migration crisis that is likely to follow?
This may sound like a grim prognosis, but particularly in Britain it does feel as if we just may have entered the final act of an economic system that has patently failed. It is clearer than ever that the emperor has no clothes and has no more stories to distract us with.
5) Andrew Montford: Energy cost crisis - Is reality starting to dawn?
The Conservative Woman, 1 August 2022
RISHI Sunak and Liz Truss have both suddenly decided that fracking for gas could restart if communities support it. Surprisingly, criticism has been rather muted, and one can’t help but wonder if members of the Green Blob have belatedly started to come to terms with the scale of the disaster they have unleashed upon the country.
Fingers are going to be pointed at a lot of environmentalists, politicians, academics and journalists this winter.
It remains unclear whether the Tory leadership candidates’ volte face is genuine. Are they just telling party members what they want to hear? Or is there now a recognition that things are going to have to change?
The shake-up that is needed if the energy crisis is not to become a permanent feature of life in this country is profound. For a start, any investor thinking of backing a shale gas project in the UK is bound to be very cautious. Successive governments have made it plain that they expect fossil fuels to disappear from our energy mix in the near future. Who would put money into an industry that has already been condemned to death? Changing that perception is a major task for the incoming Prime Minister.
Even if financial backers can be found, it could still take years before we see any gas flow from UK shale beds. Planning permissions for most of the projects have lapsed, so years of bureaucratic wrangling are in prospect. Once that is behind them, developers will once again need to deal with the protesters who prevent them going about their business and the disinformation campaigns: taps on fire, earthquakes, poisoned water, the whole mendacious kit and caboodle, all faithfully retransmitted by the corrupt mainstream media.
That’s before they even start drilling. Once they do, there is the absurd ‘traffic light’ system, which forces them stop work if there is even the slightest trembling in the ground. Shale gas is the only extractive industry which has to deal with such foolishness, and it was clear from its inception that it was a measure put in place by cowardly politicians as a means to kill off the industry.
Domestic shale gas is not going to help us this winter, and probably not the winter after that either. Nevertheless, the new PM is going to have to get to grips with the issues, and soon. Emergency legislation will probably be required.
Is there anything that can be done in the short term? The answer is not much. Removing VAT from energy bills might bring relief of a kind, but without commensurate cuts in spending, it’s really just hiding the problem – dealing with symptoms rather than causes. It’s the same story with removing green levies from electricity bills. If they end up in general taxation instead, households still have to foot the bill for the largesse that we hand out to windfarm operators.
However, that largesse is an area the new PM could address. It is within the power of the Government to reduce the value of the subsidy paid per unit of electricity under the Renewables Obligation, right down to zero. Since windfarms are earning such spectacular sums in the open market – perhaps ten times what they earned a year ago – paying a subsidy on top is a considerable insult to consumers. Cutting the subsidy to zero would save consumers £6billion-plus, more than £200 per household.
Further gains could come from cancelling all the green spending programmes – subsidies for EVs and EV chargers, for heat pumps and so on. Suspending the Emissions Trading Scheme could save a lot more – perhaps another £200 per household. Whether any of these measures are possible is unclear. The web of green measures that are quickly strangling the economy and driving households into penury were put in place in response to the Climate Change Act. Any attempt to reverse them would therefore be open to challenge in the courts. Repealing the Act may therefore be the single most important step for the new administration.
Whether the Conservative Party has the will to do so remains to be seen, but until it happens, the Climate Change Act will continue to grind British families into the dust. And when those fingers are pointed this winter, many of them will be directed at its authors: Tony Blair, Ed Miliband and Baroness Worthington.
6) Dominic Lawson: Even Britain's most respected eco-scientist said we should frack. So why won't Liz Truss or Rishi Sunak commit to it?
Daily Mail, 1 August 2022
Here's something you won't have read in the many obituaries of James Lovelock — best known for his 'Gaia' hypothesis that the Earth is a living organism — who died last week on his 103rd birthday.
In 2010, he told the Guardian that 'the UK should be going mad for fracking', declaring that our untapped reserves of shale gas were essential for the country's energy security. This was despite the fact that he had been one of the most apocalyptic prophets of the risks to human existence from global warming caused by man-made CO2 emissions — calling it 'Gaia's revenge'. But Lovelock also believed claims for the reliability of renewable energy — intermittent wind and solar power — were exaggerated.
He was above all a practical scientist: he worked as a sort of 'Q' figure for MI5 into his 90s and was the inventor of both the microwave and the electron capture detector, which first identified the presence of man-made gases in the ozone layer. (He never profited from either, as he didn't take out patents.)
Lovelock saw Britain's vast shale gas reserves as the ideal secure, transitional fuel source. 'I lived through the Second World War and there was no way in 1939 that we could beat the Germans,' he said. 'But we were just bloody lucky to live on an island. That gave us time to pull our forces together so that we could hit back. We are in a very similar position now. Fracking buys us some time and we can learn to adapt.'
Absurd
Now that there is another war in Europe, and Russia is using its grip on the continental gas-supply market to threaten the livelihoods of hundreds of millions of citizens at the end of its pipelines, his metaphor seems much less far-fetched.
So, as the energy price cap is forecast to hit an average £3,500 by October because of the gas supply shortage, what do the two candidates to replace Boris Johnson as Conservative leader say when asked if they would drop the moratorium their own government has imposed on land-based gas exploration and production?
Interviewed on TalkTV last week, Liz Truss and Rishi Sunak gave an identical answer: 'Yes, if local communities support it.'
On hearing this, I called Natascha Engel. The former Labour MP for North Derbyshire had been given the job of the UK's first 'Shale Gas Commissioner', but resigned in April 2019 in disgust at the Government's refusal to change its absurd requirement that any subterranean tremors caused by the hydraulic fracturing of the shale-bearing rocks should not exceed 0.5 on the Richter scale.
The Government claimed this was the advice of those most qualified to judge, but it was nothing of the kind. No fewer than 49 geo-scientists had written a public letter, pointing out that the 0.5 limit was not just 'so low as to threaten the potential development of a shale gas industry in the UK' but 'far below the levels set for comparable industries in the UK, such as quarrying, mining, and deep geothermal energy'.
In the U.S., where shale gas development has made that country not just entirely self-sufficient in (cheap) gas, but also the world's largest exporter of liquefied natural gas, the limits on seismic disturbance are between 2 and 4.5 on the Richter scale, depending on location.
Note that the Richter scale is logarithmic, so a 0.5 magnitude tremor is more than 3,000 times smaller than one of magnitude 4. Yet there has not been a single casualty from the seismic vibrations caused miles underground by the fracking process in the U.S.
Natascha Engel launched a broadside against the then Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, after he refused to change the regulation: 'A perfectly viable industry is being wasted because of a government policy driven by environmental lobbying rather than science, evidence, and a desire to see UK industry flourish . . . We are also depriving the Treasury of huge tax revenues, which could be spent on schools or the NHS.'
Do last week's qualified words of encouragement from Truss and Sunak give Ms Engel hope that this 'paralysis' — as she put it — will now end? No, she told me: 'It won't happen because the Government has no long-term strategic approach — even now. They will back down at the first burst of protest, and will only be thinking of how to save as many seats as they can at the next election. They won't change anything, until the lights go out.'
Damning
Which, indeed, might happen — and would probably mark the extinction of the chances of a fifth successive election victory for the Conservatives. They should remember that the principal reason for the party's removal from power in the general election of February 1974 was that Ted Heath's government had mismanaged the coal industry, leaving millions of homes in the dark during winter.
It's true that it will take years rather than months to funnel into our homes the shale gas detected by geologists (about 50 years' supply of total national demand, assuming just 10 per cent of the estimated reserves are extractable).
But that amounts to an even more damning verdict on the many years that have been wasted by government dithering and pandering to the likes of Extinction Rebellion and Friends Of the Earth: the latter has become little more than an anti-fracking protest group.
Incidentally, Friends of the Earth had in 2017 been ordered by the Advertising Standards Authority (ASA) to withdraw its leaflets claiming that 'the fluid used in fracking contains chemicals dangerous to human health and that there is an established risk of the chemicals concerned causing cancer and other conditions in the local population'. After 14 months' investigation, the ASA determined that these claims were entirely without foundation or evidence.
But you can be sure the same false claims will be made, if the Government were to lift its effective moratorium on such gas exploration. And those locals in favour of such developments will, once again, be demonised by paid protesters (Extinction Rebellion has a large budget to make sure that its shock troops aren't out of pocket).
This was made clear by Lorraine Allanson, a Yorkshirewoman who in 2014 set up a group called Friends of Ryedale Gas Exploration (FORGE), since she welcomed the jobs and industry that would be brought to her area.
Propaganda
In her book, My Story — One Woman's Battle Against The Environmental Army, Allanson recalled: 'National activists who protest as a profession descend on communities and take over the narrative. They used scaremongering propaganda to intimidate and silence my community from having a voice. I was personally targeted by activists and had to fight hard to save my business . . . they want to de-industrialise our country so we end up importing everything.' Most notably, gas.
And if any reader of this article asks if I would like to live near an extractive industrial site, my answer is that our home in beautiful East Sussex is little more than a mile from the county's largest reserve of calcium sulphate, used to make plasterboard. The miners run a round-the-clock operation, conducting controlled explosions 300ft or so below the surface. I've never met a local who is bothered by this, but many who welcome the employment.
The exceptionally high temperatures in the UK on two days a fortnight ago will doubtless be cited by protesters against onshore gas extraction. But for those who still have open minds, I draw your attention to a letter in the Times last week from three academic experts: Professor Peter Edwards, Professor Peter Dobson and Dr Gari Owen.
They point out that on that hottest recorded day in the UK, 'solar energy output contributed only 7 per cent on average towards our energy requirements according to National Grid data. On that same day, natural gas contributed an average of 44 per cent, remaining the mainstay of the UK energy mix'.
They point out that solar panels work well when it's sunny, but not when it's blisteringly hot: high surface temperatures on the panels 'significantly reduce their efficiency'.
Who knew? James Lovelock did.
7) Europe’s energy crisis threatens to slow green transition
The Wall Street Journal, 1 August 2022
The Ukraine war has spurred many countries to lean more on fossil fuels in the short term while pledging to move away from them faster in the future.
Now, a deepening energy crisis, a global heat wave, soaring prices, supply-chain snarls and worries about an economic downturn are threatening to delay those longer-term promises to transition to lower-emission energy sources as well.
The situation is particularly acute in Europe, where the prospect of severe fuel shortages this winter is focusing leaders’ attention on immediate problems, investors and economists say.
European wholesale natural-gas prices rose sharply last week, as Russia cut flows via a key pipeline to the region. They have more than doubled this year, straining households and businesses, and increasing fears that a global recession is on the way.
A searing heat wave, a shortage of hydropower and corrosion problems at French nuclear reactors are making the energy situation on the continent even more dire, energy experts say. Low water levels on the Rhine, a river that serves as a key shipping route in Europe, have also spurred concerns about more disruptions to the supply of key commodities.
In response, governments and companies have been scrambling for supply solutions involving more fossil fuels, not less. Many are locking in contracts for liquefied natural gas from the U.S., the Middle East and Africa. Shell PLC said last week that it was going ahead with a big natural-gas development in the North Sea that had previously been rejected by U.K. regulators on environmental grounds.
Shell’s CEO, Ben van Beurden, last week told reporters that Europe is bidding LNG supplies away from other countries, which he said will help drive China and others to rely more heavily on dirtier fossil fuels like coal.
Green-energy supporters say the Ukraine war and high fuel prices could help accelerate the continent’s transition, forcing painful shifts away from oil and gas, and changing consumer habits that otherwise might have stayed entrenched.
“The ongoing war in Ukraine has further highlighted the importance of electrification and renewables,” said Francesco Starace, chief executive of Italian utility Enel SpA, which is building solar-manufacturing facilities and other green projects.
But many market watchers say that Europe’s green-energy plans are taking a back seat to efforts to tackle the effects of the Ukraine war, higher inflation and post-lockdown strains on supply chains. French energy giant Schneider Electric SE says it is experiencing delays of up to a year for its renewable-energy projects in countries such as Spain, the Netherlands and the Nordics, largely because of supply-chain issues and higher transport costs.
The U.S. is facing the same problems as Europe in terms of rising costs and snarled supply chains for renewables, delaying projects.
Some European efforts to secure energy in the wake of Russia’s invasion of Ukraine entail sizable, long-term investments that will lengthen the region’s reliance on fossil fuels, critics say. In July, European Union lawmakers voted to include natural gas in the bloc’s list of green investments, a move that could help it procure needed supplies but also open the door to using the fuel longer.
European states are starting to roll out policies to support renewables deployment, and some investment is following. Germany, for instance, last month passed a renewables law that includes higher wind-power targets and improvements to permitting, according to industry group WindEurope.
The European Investment Bank, the lending arm of the EU, last month announced a loan of €550 million, equivalent to $561 million, to Spanish utility Iberdrola SA to fund wind and solar projects in Spain during the next year and a half. The European Commission is providing €118 million to help fund an Enel solar-panel factory in southern Italy. SolarPower Europe, the continent’s main solar trade group, said last month that installations were on track to surpass the group’s rosiest projections this year.
But much more money and action is needed to shift away from fossil fuels at the pace needed to keep emissions—and global warming—in check. Those steps would be daunting to implement, even without the recent economic and energy turmoil, analysts say.
“There’s the sense that [money to scale up renewables] will have to come later now, given the crisis,” said Susi Dennison, director of the European power program at the European Council on Foreign Relations, a think tank. But “if we don’t make the investments that are needed now on green energy, then what we’re seeing as short-term measures will just become the longer-term measures,” she said.
In May, the European Commission proposed to increase its already ambitious renewable-energy target to 45% of the bloc’s 2030 power mix from 40%. That includes plans to more than double the bloc’s solar capacity by 2025.
To do all that, Europe needs to roughly double its current level of renewable-energy investments to around €66 billion a year, said Alessandro Boschi, head of the European Investment Bank’s renewable-energy division. That in turn requires European governments to implement measures such as streamlining renewables-permitting processes and encouraging the market for clean-energy contracts, Mr. Boschi said.
European governments also need to push energy-saving measures and drop their attempts to shield consumers and businesses from the higher costs of energy, said Simone Tagliapietra, a climate and energy-policy expert and senior fellow at economic think tank Bruegel. Between September 2021 and May, European nations allocated at least €187 billion in funding for such subsidies, a Bruegel study found.
8) Climate goals take a backset as Germany is firing up 21 old coal plants
The Washington Post, 1 August 2022
France, Italy, Austria and the Netherlands have all announced plans to reactivate old coal power plants. But nowhere are the plans as extensive as in Germany, which is allowing 21 coal plants to restart or work past planned closing dates for the next two winters.
The last coal pits around Bexbach closed a decade ago, leaving the power plant puffing plumes of pollutants as a relic of a dying regional industry.
But now plant equipment is being repaired, contractors have come out of retirement, and manager Michael Lux is faced with a novel prospect: expanding the head count.
“It’s a good feeling to be hiring,” he said, as he sat down to discuss plans to transition Bexbach, in the southwestern German state of Saarland, from “reserve” status back to full capacity. By winter, Lux expects to be burning a minimum of 100,000 metric tons of coal a month, in what some in the industry have dubbed a “spring” for Germany’s coal-fired power plants.
It’s part of a pan-European dash to ditch Russian natural gas and escape President Vladimir Putin’s energy chokehold. While the war in Ukraine has simultaneously turbocharged the European Union’s race to renewables, fossil fuels still provide the quickest fix.
France, Italy, Austria and the Netherlands have all announced plans to reactivate old coal power plants. But nowhere are the plans as extensive as in Germany, which is allowing 21 coal plants to restart or work past planned closing dates for the next two winters.
That means a scramble for an industry that has been in its death throes in Germany. The country will have to import more coal from producers such as Australia and South Africa, even as those countries face pressure to cut back on coal-burning at home. And some experts warn the coal revival may make it harder for Germany to meet its climate goals.
Horst Haefner gestured toward the stacks of coal in Bexbach’s storage yard: “Everyone wants to get rid of it, but they can’t do without it.”
Haefner, 70, agreed to come out of retirement to work at Bexbach, checking plant machinery he last inspected back in 2004. It beats puttering around in the garden, he said, as other workers took a break in the shade.
With temperatures hitting 91 degrees Fahrenheit, the day was so unusually hot for the region that the local beer garden had closed early for a “heat day.” It was a reminder of why countries have pledged to cut their carbon dioxide emissions from fossil fuels such as coal — and what’s at stake if they don’t.
More coal, more emissions
As Putin puts a squeeze on natural gas flows to Europe — in what E.U. officials claim is retaliation for their support of Ukraine — Germany is trying to conserve energy. It is also urgently seeking replacement sources of power. And it has few options.
Russia’s Gazprom to slash gas to Germany, as Putin fosters uncertainty in Europe
Ramping up renewables takes time. New liquid natural gas terminals are not yet finished. The government is considering keeping the last three nuclear power plants online beyond their planned end-of-year close date, but those account for a relatively small portion of the county’s power generation.
The German government, which includes Greens as part of its coalition, has described the coal revival as a painful but necessary move — and assures it will be temporary.
Germany has simultaneously committed to a new target of 80 percent of power from renewable sources by 2030 — double the current contribution. It has begun to ease the permitting process for windmills and to invigorate a renewables rollout that many analysts say stagnated under former chancellor Angela Merkel.
This push, the government maintains, will help the country stick to its climate goals and end the use of coal by 2030.
“If it was happening in a vacuum and we didn’t have all this other legislation paired, then I’d be worried,” said Ysanne Choksey, a policy adviser for fossil fuel transition at E3G, a climate think tank.
But some experts voice concern about the short-term increase in emissions for Germany — and about whether it will be harder for the country to meet that 2030 target: cutting emissions by at least 65 percent of 1990 levels.
To get there, emissions in the power sector need to be reduced “substantially and as soon as possible,” said Simon Müller, Germany director of Agora Energiewende, a climate-focused nonprofit.
Yet Agora estimates that the fossil fuel plants that have been revived or allowed to stay open will add between 20 million and 30 million tons of greenhouse gases annually, equivalent to about 4 percent of Germany’s total emissions.
Full story
9) Germany has three months to save itself from a winter gas crisis
Bloomberg, 1 August 2022
Olaf Scholz’s government was slow to react when Russia squeezed gas supplies. Now cities are cutting back on lighting and hot water in a bid to avert disaster.
Germany’s presidential palace in Berlin is no longer lit at night, the city of Hanover is turning off warm water in the showers of its pools and gyms, and municipalities across the country are preparing heating havens to keep people safe from the cold. And that’s just the beginning of a crisis that will ripple across Europe.
It might still be the height of summer, but Germany has little time to lose to avert an energy shortage this winter that would be unprecedented for a developed nation. Much of Europe is feeling the strain from Russia’s squeeze on natural gas deliveries, yet no other country is as exposed as the region’s biggest economy, where nearly half the homes rely on the fuel for heating.
Chancellor Olaf Scholz’s administration has been slow to address Germany’s vulnerability, only recently laying out targets to cut demand as efforts to secure alternative supplies fall short. With Moscow continuing to tighten deliveries and France struggling to export electricity to its neighbors, little respite is expected and the risks go beyond this winter.
“The challenges we’re facing are enormous and they affect significant areas of the economy and society,” Robert Habeck, Germany’s vice chancellor and economy minister, said after unveiling a plan to pass on cost increases from energy companies to consumers. “But we are a strong country and a strong democracy. These are good prerequisites for overcoming this crisis.”
The Kremlin is likely to keep vital gas flows to Europe at minimal levels as long as the standoff over Ukraine continues, according to people familiar with the leadership’s thinking. That means shortages for the region will likely persist, with gas prices for every year through 2025 having already hit a record this year.
Rationing and recession are looming for Germany, and authorities have voiced concern about social unrest if the energy shortage spins out of control. The country can’t even count on France, where faulty nuclear reactors are compounding the gas crunch. Electricity prices in Europe’s two-biggest economies surged to records last week.
Russia — historically the European Union’s biggest gas supplier, covering about 40% of demand — has gradually reduced deliveries in evident retaliation against sanctions. The EU’s challenge is to keep energy flowing across borders in a test of the bloc’s unity and its resolve to resist President Vladimir Putin’s aggression.
“Russia’s policy has always been to divide because then they are stronger,” said Martins Kazaks, governor of the central bank of Latvia, the former Soviet Republic that’s now part of the euro area. “If we allow ourselves to be divided, then we will get weaker,” he said in an interview.
Russia’s latest move came last week, when Gazprom PJSC blamed a turbine issue for reducing flows on the key Nord Stream pipeline to about 20% of capacity. In the fallout, gas prices jumped over 30% last week and electricity prices broke one record after another.
Habeck, who oversees energy policy, called Gazprom’s rationale “farcical,” but acknowledged that the situation is serious and renewed his plea for companies and consumers to step up savings efforts. To bridge the gap, his ministry has allowed the revival of mothballed coal-fired power plants in a setback for climate efforts and recommends that Germans install efficient showerheads and wash clothes at cooler temperatures.
If measures to re-balance supply and demand fail, the government has the power to declare a gas “emergency,” which would involve the state taking control of distribution and deciding who gets the fuel and who doesn’t.
While households and critical infrastructure like hospitals are protected from cutoffs, there’s no guarantee room temperatures will be as comfortable. Germany’s biggest landlord already announced plans to reduce heating during the night, and public buildings including the Reichstag in Berlin are turning down thermostats.
The cost increases, which will start filtering through in earnest this fall, add to pressure on the poor. Already around one-in-four Germans has slipped into energy poverty, meaning costs for heating and lighting affect the ability to cover other expenses, according to the Cologne Institute for Economic Research. The government is now working on aid programs for low-income households.
Cold snaps across Europe and Asia would force energy companies to battle for already-tight supplies of liquefied natural gas. The price surge from such a scenario could prompt companies to halt facilities this winter and destroy some 17% of industrial demand for the fuel, according to Penny Leake, a research analyst at consultancy Wood Mackenzie Ltd. “If Nord Stream flows remain at 20%, we are getting close to the danger zone,” she said.
With storage facilities 68% full and top-up rates likely to drop after last week’s pipeline cut, Germany risks falling short of the government’s target of 95% by Nov. 1. The country’s network regulator says reaching that level is hardly possible without additional measures.
The corporate sector is already reacting. A survey of 3,500 companies by business lobby DIHK showed that 16% of industrial firms are considering reducing production or giving up certain operations because of the energy crisis.
BASF SE is one of those. The chemicals giant plans to cut gas-intensive production of ammonia — a key component for fertilizer — after surging costs rendered the business unprofitable. It’s also planning to partially switch power and steam production at its main site in Ludwigshafen to fuel oil, which would help free up gas to sell back to the grid.
It’s not just Germany. High energy prices have prompted fertilizer producer CF Industries Holdings Inc. to announce it would shut one of its UK plants permanently. Cargill Inc., the world’s top crop trader, also closed a British oilseeds processing plant, while in France, supermarkets including Carrefour and Monoprix agreed to reduce energy consumption.
The International Monetary Fund estimates that Germany is at risk of losing 4.8% of economic output if Russia halts gas supplies, and the Bundesbank has pegged the potential damage at 220 billion euros ($225 billion). While it’s sure to be a painful hit, the fear in Germany is that a structural loss in competitiveness will soon follow.
Energy-intensive industries will likely gravitate to regions with reliable renewable-power resources like Germany’s windy coast or solar-rich areas in the Mediterranean, potentially hollowing out industrial regions along the Rhine and in Germany’s south, according to a senior executive at a major German manufacturer. Some chemical-industry executives say production could move to Turkey where there’s access to Azerbaijani pipelines.
“Our economic system is in danger of collapsing,” said Michael Kretschmer, the premier of the state of Saxony from the opposition conservatives. “If we aren’t careful, Germany could become deindustrialized,” he told Die Zeit newspaper, reiterating his call to “freeze” the war in Ukraine and effectively accept Putin’s military advances.
Most Germans support Ukraine — about half say the government should continue backing of Kyiv despite rising energy costs, according to a Policy Matters poll for Die Zeit — but critics like Kretschmer could gain traction as temperatures drop. That would heap even more pressure on Scholz.
Despite being months into the crisis, his administration just started publicly communicating a goal to cut demand by as much as 20%. And in a sign of the growing urgency, it recently raised its minimum target for gas storage — now 15 percentage points higher than EU-wide levels.
Shortly after Scholz’s government took power in December, dozens of newly-elected politicians in his coalition of Social Democrats, Greens and pro-business Free Democrats had considered talk of Germany’s gas risks a conspiracy theory, but then they saw the facts: reserves at the time would last about 10 days if a cold snap set in.
It was the beginning of a reality check. For decades, Germany’s leadership under Gerhard Schroeder and Angela Merkel argued that cozy energy relations with Russia were an asset rather than a liability. In last year’s campaign, Scholz called US criticism of German policy “false” because it didn’t take into account the entire energy mix. The thinking across much of the country’s political spectrum was that if Russia didn’t cut supplies during the Cold War, it wouldn’t during a conflict with Ukraine.
But with Europe shifting toward renewable power and away from the fossil fuels Russia provides, officials underestimated Putin’s willingness to take advantage of the leverage while he still had it. They also missed a key red flag.
Before the war, a unit of Gazprom controlled about 20% of Germany’s gas-storage capacity, had a significant stake in an Austrian site and held rights to stash away large amounts of fuel in the Netherlands. But the state-run gas giant didn’t rebuild inventories ahead of last winter, a sign that preparations for weaponizing energy had taken place under Europe’s nose.
“If we look in hindsight, we see that months before the war broke out Russia kept gas supplies intentionally as low as possible,” said Ursula von der Leyen, European Commission president and a former German defense minister. “Russia is blackmailing us.”
Scholz realized Germany had a real problem in the frantic days before Russia’s Feb. 24 invasion, according to people familiar with his thinking. During a trip to Moscow on Feb. 15, the chancellor sat at Putin’s famous long white table, putting him about 6 meters (20 feet) away from the Russian leader for talks aimed at defusing the standoff.
But signs of tension were clear. Despite Putin’s assertion that the Nord Stream 2 pipeline — which was completed and awaiting approval to start operation — was “strictly a commercial project,” Scholz indicated he was prepared to reverse his support in case of an attack.
Only a few days later, Scholz killed the project after Putin dashed hopes for a peaceful solution by recognizing Russian-backed Luhansk and Donetsk in Ukraine’s east as independent states. The halt of Nord Stream 2 prompted Putin’s allies to issue chilling warnings, and soon after that, tanks started rolling toward Kyiv.
But even after hostilities broke out, Germany struggled to react, hemmed in by a longstanding policy of engaging with Russia and industry’s reluctance to give up cheap gas, according to officials involved in EU discussions. That era is over.
“Gazprom, with the disruptions and reductions of supply, has destroyed trust in Russia as a reliable supplier of energy for Europe,” said Mario Mehren, chief executive officer of German oil company Wintershall Dea AG, urging consumers to wear sweaters instead of cranking up the heat. “That is very depressing news.”
Germany now needs support because it didn’t follow EU guidelines to diversify energy sources, threatening to reopen old fault lines in the bloc. Memories of the financial crisis, when Berlin lectured southern member states about their debt, are still very vivid, said the officials, who asked not to be identified because the discussions are private.
Like Germany, Italy was reliant on Russia for more than half of its gas supplies, but it moved quicker to secure alternative sources from countries such as Algeria and Qatar, and its terminals to import LNG shipments gave it flexibility. Ecological Transition Minister Roberto Cingolani said Italy can get through the winter with only minor cuts to its consumption even if Russia completely halts flows.
Germany, by contrast, is in a much tighter situation because of the amount of heating and industrial demand, and its lower storage levels. The country is only now developing LNG infrastructure, but the first floating terminal won’t be ready in time to help this year as the government had hoped, according to German energy giant Uniper SE, which is investing in the facility and is getting a 17 billion-euro rescue package to prevent its Russia-induced struggles from spilling over to the wider economy.
Still, there are hopeful signs. Mercedes-Benz Group AG said the sprawling Sindelfingen plant, where the company makes the S-Class luxury sedan, can now function without natural gas, a fuel typically used in the paint shop. The carmaker might even have enough excess to help cover shortages elsewhere.
Europe’s solidarity is also holding. A political agreement was reached by EU countries to cut gas use by 15% through this winter if Russia turns off the tap. While there are certain exceptions, the plan makes the reduction mandatory in an emergency situation.
In Ludwigshafen, an industrial hub on the Rhine river, officials are reviewing what critical infrastructure can be kept open in the worst-case scenario. They’re also considering transforming a municipal arena, which normally hosts events from concerts to dog shows, into a “warmth oasis,” with space for hundreds of people to escape the cold for hours at a time.
“We are aware that many people are worried at the moment, and we take these concerns very seriously,” Jutta Steinruck, Ludwigshafen’s mayor, said. “Everyone can already do something of their own accord and save energy wherever possible. Every kilowatt hour we save now will help us in fall and winter.”
10) Francis Menton: Great idea for U.S. energy policy: Let's follow the German example
Manhattan Contrarian, 30 July 2022
So what is the U.S. energy strategy going to be under the new Senate bill just negotiatied by Manchin and Majority Leader Schumer? The answer is, it’s basically the same as the German strategy.
As readers here well know, Germany has long sought the mantle of world leader in the march to save the planet by eliminating fossil fuels from the production of energy. This has been the strategy: induce, via large government subsidies and tax credits, the construction of vast amounts of wind turbines and solar panels to generate electricity; and as more of those come online, gradually phase out facilities that use fossil fuels, and also phase out nuclear.
Unfortunately, the Germans have been so blinded by their religious fervor to save the planet that nobody bothered to figure out how much energy storage would be needed to back up these intermittent technologies and keep the grid functioning 24/365 in the absence of fossil fuels and nuclear. Now Germany has an excess of wind and solar facilities that, however, are incapable of providing reliable power on their own; and it has inadequate back-up other than natural gas from Russia. Thus Germany is facing an imminent energy disaster.
Meanwhile, back here in the U.S., the word is that the Senate Democrats have finally gotten their black sheep Joe Manchin on board with a big “green energy” bill to take the U.S. to its own energy nirvana via a big reduction in carbon emissions. And how will that be done? Basically, we’re now going to follow the strategy of Germany! Lots and lots of tax credits and subsidies to build more and more wind turbines and solar panels, without any serious consideration of what will be needed in the way of storage to provide back-up for the intermittency and build a fossil-fuel-free grid. Is anybody around here paying attention to what is going on in the world?
Let’s check out the latest news from Germany on the energy front. On Wednesday, July 27, the Guardian reported that Russia had reduced the flow of natural gas to Germany via the Nord Stream pipeline to 20% of capacity. It’s still July, and we’re several months from heating season, but Germany is rapidly realizing that its energy jig is up. Just one day later, on July 28, the Guardian had another article reporting that the energy rationing in Germany has already begun:
"Cities in Germany are switching off spotlights on public monuments, turning off fountains, and imposing cold showers on municipal swimming pools and sports halls, as the country races to reduce its energy consumption in the face of a looming Russian gas crisis."
Meanwhile, Germany in June adopted an “energy emergency plan” that involves jacking up consumer prices to force less usage:
"[A]n energy emergency plan initiated in June enables utility firms to pass on high gas prices to customers. . . . On Thursday, Germany’s government confirmed that a planned gas surcharge on customers could be much higher than previously expected, to save energy companies from going bankrupt in the coming months."
And Spiked on July 27 reports on various other energy rationing measures that Germany is adopting, well in advance of peak energy usage in the winter:
"Germany is already having to make drastic cutbacks to energy use. Town councils are dimming or turning off street lights and even traffic lights. Large landlords and housing associations have started turning down the heating on their residents and rationing their hot water. Some local authorities are considering setting up ‘warm rooms’ for elderly people to gather in the winter."
But hang on a second. After more than a decade of a crash program to build wind turbines and solar panels, doesn’t Germany have more than enough of them to supply all of the electricity it could ever possibly use? You would think so, but unfortunately it doesn’t work that way. According to the U.S. Energy Information Agency, in 2020 (latest year given) Germany used 500,000 GWh of electricity, which would mean that its average usage (divide by 8760) was about 57 GW. Its peak usage (according to Montel) is about 100 GW. So if it had dispatchable generation resources (fossil fuel, nuclear, hydro) of about 120 GW, Germany should have a more than sufficient 20% margin and plenty of electricity. Instead Germany has vastly more generation capacity, 248 GW (again from the U.S. EIA for 2020). Of that, 54 GW is solar and 62 GW is wind, a total of 116 GW between those two, well more than its entire peak usage, and more than double average usage.
But you can’t count on any of it when you need it. The small amount of nuclear (8 GW) is on the way out. So they can’t get rid of the natural gas as backup, and with fracking banned in their own country and also throughout Western Europe, they are left completely dependent on natural gas from Russia.
The price to German households for electricity at the end of 2021 stood at an average of 32.16 cent per KWh, which is before any further recent increases. That is about triple the average U.S. consumer electricity price. For that you get shortages and rationing.
So what is the U.S. energy strategy going to be under the new Senate bill just negotiatied by Manchin and Majority Leader Schumer? The answer is, it’s basically the same as the German strategy. In a few words, massive subsidies and tax breaks to incentivize the construction of vast amounts of wind turbines and solar panels. From E&E Daily, July 28:
"Huge win for clean energy. . . . Clean energy tax credits are the centerpiece. Under the deal, existing renewable credits would be extended. After 2025, they would become technology neutral and based on greenhouse gas emissions reductions."
Is there any deeper thinking behind this than just that wind and solar are “clean” so we should build more of them? Doesn’t look like it. So give us a few years of this, and we’ll be right where Germany is: vast excess capacity of wind and solar panels, none of which is there when you need it, and electricity rates tripled to pay for the redundant excess capacity and subsidies to the people who built it. At least so far we have our own natural gas for the backup, but they’re trying to shut that down too.
11) Stuart Gootlieb: Biden’s climate plans are unsustainable
The Wall Street Journal, 1 August 2022
The current White House agenda is so unrealistic it risks a backlash that will hurt the cause for decades.
In the field of environmentalism, one of the most important concepts is “sustainability.” Coined in the 1970s, the term means that the resource-intensive needs of economic growth now mustn’t compromise the needs of future generations. Over decades, slow but steady progress has been made on sustainability in such areas as fishing, forestry, farming and, more recently, curbing carbon pollution from fossil fuels.
Ironically, the greatest threat to this progress—particularly in the critical realm of climate—comes not from such emerging mega-emitters as China and India, although they certainly play a role. It comes from the energy and climate initiatives promoted by the Biden White House, which are themselves unsustainable—so aggressive and unduly optimistic that they risk a backlash that would set back the cause of environmental sustainability for generations. To avert this, the administration must shift to a more pragmatic set of policies. Encouraging more natural-gas production and a moon-shot approach to fusion energy would embolden America to lead the world toward a green future.
But the administration first needs to reckon with the peril of the moment. America’s announced climate goals seek a transition to 100% clean electricity by 2035 and net-zero emissions by 2050. This aggressive timeline is increasingly at odds with three hard realities: economic, geostrategic and political. Each sets a major hurdle for climate action, and together they expose the unsustainability of the Democratic Party’s climate agenda.
To begin with, the agenda is economically unsustainable. According to the federal Energy Information Administration, global demand for energy will rise nearly 50% by 2050, with fossil fuels still accounting for roughly 75% of world supply. Though many Democrats insist this simply proves the urgency of making the transition, there are no economic models showing how that could occur without causing massive harm to the underlying economy. A McKinsey & Co. report shows that achieving net-zero emissions by 2050 would require nearly $6 trillion in new spending globally every year for the next 30 years—roughly equal to one-third of all tax receipts by every government in the world. Even if that were possible, it wouldn’t resolve the severe economic costs of energy-supply volatility throughout the transition, particularly for the poor.
The current agenda is also geostrategically unsustainable. It is increasingly clear that both Russia and China view aggressive Western climate commitments as an opportunity to increase their power and influence. We have already witnessed what Europe’s reliance on Russian natural gas has wrought: unacceptable dependence on one of the world’s vilest governments.
Meanwhile, China is seeking to dominate Western markets for renewables (wind turbines, solar panels, lithium batteries) while enjoying its own right as a developing country, conferred by international conventions, to keep burning cheap fossil fuels as it powers its rise toward passing the U.S. as the world’s largest economy.
And the current agenda is politically unsustainable. Without committed action by the Group of Seven nations—the U.S., Canada, France, Germany, Italy, Japan and the U.K.—there is little hope for real climate progress in coming decades. Yet these are also the world’s leading democracies, accountable to their publics. There is a real danger that voters in these countries will rebel against climate policies that ramp up energy prices, hinder economic growth and even lead to rationing and blackouts. According to a July New York Times/Siena College poll, only 1% of U.S. registered voters (and only 3% of Democrats) rank climate change as the country’s most important issue, far below inflation and the economy. Even for voters under 30, only 3% rank climate change first in their concerns. Growing populist discontent in France, Germany, Italy and elsewhere confirms that many climate-friendly Western governments risk being ousted in the name of fossil-fuel-driven energy security.
President Biden’s only answer has been that the promised “clean energy future” will arrive “as soon as possible.” That answer is wholly inadequate. It is also wholly unnecessary: The U.S., which sits atop massive natural gas reserves and has the world’s most innovative economy, is perfectly positioned to lead a realistic green transition.
The administration should announce that U.S. natural gas will become the world’s vital bridge to an eventual carbon-free future (which will have the added benefit of undercutting Russia’s gas dominance in Europe and elsewhere). This may send shock waves through the left of the Democratic Party, but there is no realistic path forward without it.
The U.S. should also deploy its tried-and-true methods for producing history-bending commercial advances by offering targeted subsidies to private companies competing with China on lightweight, high-capacity next-generation lithium batteries for electric vehicles. And we should forge a public-private partnership to streamline creation of mass-marketable, carbon-free fusion reactors.
Such steps would reinvigorate America’s economic and technological prowess. They would actually make possible the goal of net-zero global emissions by 2050. For policies to be sustainable, they have to be practical.
Mr. Gottlieb teaches American foreign policy and international security at Columbia, where he is a member of the Saltzman Institute of War and Peace Studies.
|
|
|
|
