Energy Crunch

[scawsby steve]

Tony Blair must be one of the worst war criminals of all time; his actions caused the deaths of thousands of innocent Iraqis.

[BillyStubbsTears]

You think Bush would not have invaded Iraq without Blair?

[SydneyRover]

You can see with the drone strike that killed at least 10 Afghan people (7 kids) that the US have a knee jerk response button that they press all too often.

[River Don]

German power plant runs out of coal.

https://www.bloomberg.com/news/articles/2021-10-01/energy-crisis-forces-german-power-plant-to-halt-on-lack-of-coal

[River Don]

From the Telegraph.

Russia’s state gas company Gazprom may have to buy natural gas from European trading hubs this winter to meet contractual supply obligations amid lower pipeline flows, according to Goldman Sachs analysts.

The analysts, including Samantha Dart, wrote in a note: “This could potentially create a squeeze at the physical hub, further exacerbating the upside to gas prices well above” the bank’s $32 per million British thermal unit soft-ceiling scenario.

Futures based on the Dutch Title Transfer Facility hub surged to a record, hitting €100 a megawatt-hour on Friday, or $33.90 per MMbtu, as concerns mount of the possibility that Russian shipments to northwest Europe will disappoint just as winter starts, Goldman said.

Gazprom has been overwhelmed with demand both at home, where it needs to fill storage sites for winter and in its key export market Europe, where inventories are the lowest in more than a decade for the time of year. 


I'm not sure how this is supposed to work, TBH.

[River Don]

Energy problems in Scandinavia too.

Where as the UK has not had enough wind of late, they have not had enough rain. That's affecting their hydroelectric plants.

https://finance.yahoo.com/news/europe-power-crisis-moving-north-040000046.html

Oh, and the price of crude oil is now moving up too.

https://www.ft.com/content/14d4980b-8163-4359-bc4a-fb2b7f7d2c27

[River Don]

And more.

European gas stocks are lower then expected at this time of year.

https://www.bloomberg.com/news/articles/2021-10-04/europe-gas-stocks-show-first-signs-of-decline-as-crisis-worsens

Everywhere you look its bad news on the energy front, things are going to become unaffordable this winter.

[River Don]

Petrol prices hit an 8 year high.

Brent crude has gone through $80 a barrel today, so pump prices have more to rise.

[River Don]

EUROPEAN ENERGY CRUNCH: European natural gas prices hitting fresh record highs, with UK NBP and Dutch TTF up >13% on the day to the equivalent to ~$38 per million Btu.  In turn, European electricity prices are jumping this morning too.

To put the rally in European natural gas prices into context, at current prices gas is trading above $215 per barrel of oil equivalent. Yes, that's not a  typo: triple-digit starting with a two.

[KeithMyath]

We live in an area of Cornwall as does most that relies on oil for fuel, prices are going up and since the beginning of September no one to deliver it. We know people who have non at all, and are been told it could take upto 4 weeks to get more, oil theft is on the rise and the non existent Cornwall police haven’t got the personnel to stop it. It’s vastly becoming a crisis.

[SydneyRover]

You've certainly blown the 'escape to the country' view of Cornwall out of the water with your various updates KM, it's appalling.

[KeithMyath]

I’m sure we are not the only county to have this issue. Funnily enough Boris was asked about the 100 million shortfall that Cornwall council has this year due to the eu funding stop, the EU paid that out as Cornwall is the  poorest region in the British isles (hard to believe from the tv shows promoting it, enticing people to move here and pricing Cornish families from living here where we badly need their labour). He said yesterday it would be be “replicated”…. By which he means… we are going to replace that with £3 million, which you have to apply for, and it’s not guaranteed, but think of all the other fantastic benefits that Brexit will offer you going forward….

[SydneyRover]

But at least you can wake in the morning and smell the sovereignty Keith.

[KeithMyath]

He, the bag of custard , also said that he wouldn’t ban 2nd homes in Cornwall even though we are at crisis point with housing. To be fair housing is going up everywhere, relatively cheap and affordable just to offset the damage from 2nd homes. And I will hold my hand up I moved down here several years ago to purchase and run holiday homes. We live in our house and I have 2 holiday let’s. I’m part of the problem, but I would hazard a guess all these people buying 2nd homes etc won’t exactly know of the issues Cornwall faces as nor did I. The recent price rises in property here has gone through the roof. Our house which we have owned for 3 years is now worth, 55% more than we paid for it. One of my holiday let’s is worth, 68% more. Great for me but not for the locals on minimal wage that provides the service economy to this county. Anyway rant over, would I move back to Donny… probably not but…. But if I am honest the gap is closing.

[KeithMyath]

But at least you can wake in the morning and smell the sovereignty Keith.

I bask in its glow everyday… knowing I’m better than those in Europe…. Who have fuel/food/reasonable priced energy/freedom of movement/working governments  etc etc

[River Don]

Well, I'm sorry to keep banging on about this but today the Nat Gas price is up again. The equivalent of $290 a barrel of oil. Spitting distance of 300. That's ten times the longterm average before the Great financial crisis.

I'm surprised it isn't really making front page headlines TBH.

"Yesterday, a UK industry body representing energy intensive sectors including steel, chemicals and fertilisers called for more help from the government to ensure they could continue to operate this winter.

Without emergency measures, there could be shutdown at essential industries, they warned.

[River Don]

The Guardian is carrying a story about it now.

https://www.theguardian.com/business/2021/oct/06/uk-industry-could-face-shutdowns-as-wholesale-gas-price-hits-record-high

[Filo]

Remember when we used to be able heat our homes and supply our power stations with good old British Coal, before we started getting ripped off by overseas suppliers

[River Don]

Remember when we used to be able heat our homes and supply our power stations with good old British Coal, before we started getting ripped off by overseas suppliers

Right on cue.

Putin has stepped in and made a statement that Russia will stabilise the European gas market. Promising to increase supplies through Ukraine and of course promoting the new Nordstream 2 gaspipeline into Western Europe.

This has instantly calmed the market.

It's very clear who we are dependant on now.

[selby]

  Yes Filo, and lot's of the old lads were right when they said eventually the country would pay the price and still had collieries.
  I can remember when we had North Sea Gas, coal and oil, and were told we were the only country in Europe with a supposed surfeit of energy; we sold it, shut it, and now buy it.

[River Don]

The crystal clear demonstration here is just how utterly dependant we still are on fossil fuels.

Renewables are one thing but intermittancy is a massive issue.

The UK urgently needs to build some gas storage, since we are reliant on it. We also need more nuclear capacity, as unappetising as that is. Taiwan and Hong Kong demonstrates that we don't really want Chinese Nuclear technology either.

And we need to get to work on developing some effective systems to store excess energy generated by renewables.

Edit: this is quite a clever idea. Use hydroelectric power in storage tanks on the seabed below offshore windfarms.

https://www.energie.fraunhofer.de/en/events-trade-fairs/allianz-energy-storage_2019/stensea-offshore-pumped-hydroelectric-storage-c1.html#:~:text=The%20lower%20reservoir%20is%20formed,turbine%20to%20the%20generator%20drive.

Not seen this before.

[big fat yorkshire pudding]

Disagree the answer is nuclear plus renewables. That we haven't pioneered more effective nuclear power is poor judgment.  Coal and gas are not the answer, part of transition yes but not the answer.

[albie]

Nuclear is completely uneconomic, compared to declining cost technologies like renewables.
Storage for excess renewable generation is now available at falling costs because of the battery revolution.

No private sector investor will touch it, unless it receives massive subsidies from the public purse.
The guaranteed price for Hinkley point power is way above the market rate strike price for offshore wind and solar, both of which are falling.

Reliance on nuclear means much higher prices for consumers than the alternatives, which makes fuel poverty more of an issue.

[silent majority]

Why Is Everyone Talking About a Global Power Shortage?
Contributors: Stephen Stapczynski
Updated on September 28, 12:52 AM EDT
What You Need To Know

There is a worrying shortage of energy from Europe to Asia, caused by supply restraints from the world’s top producers, and that’s poised to shutter factories and boost power bills. While there is no single reason for the shortage — things like customer demand, technical problems and a lack of investment are all playing a part — the crisis is threatening to spread to more nations and upend the global economic recovery.

The price of natural gas and coal, used to power factories and heat homes, has surged to multi-year highs as the post-pandemic rebound collides with supply constraints in the run-up to the Northern Hemisphere winter.

The crisis has forced some fertilizer producers in Europe to reduce output, while Chinese power grids are rationing supplies to factories, which will curb production. What’s worrying is that it isn’t even cold yet. Energy consumption usually peaks when frigid temperatures boost demand for heating.

Already, China is looking to adopt measures to try to cool sky-high coal prices and ease its own power shortage, while utilities around the world are working tirelessly to try to secure more fuel supplies.
Key Coverage

    Why China Is Facing a Power Crunch and What It Means
    Europe’s Energy Crisis Is Coming for the Rest of the World, Too
    Why U.K. Gas Suppliers Are Going Bust, and Who Pays

By The Numbers

    1,300% The surge in European benchmark natural gas futures since May 2020
    $100 per million British thermal units Natural gas in Asia and Europe could surge to this price in the event of a particularly cold winter, or roughly a four-fold increase from current levels, according to Citigroup
    2017 The year China’s seasonal coal inventories were last at such a low level, according to Morgan Stanley

Why It Matters

Even a normally cold winter in the Northern Hemisphere is expected to exacerbate the shortage and drive up energy prices across the world. Since the world runs on fuel and electricity, the energy crisis threatens to touch every corner of the global economy, squeezing supply chains and even increasing food prices, all of which means a jump in inflation.

In a worst case scenario, Europe could face blackouts and China’s industrial users, including chip makers and aluminum smelters, may shut factories, with repercussions echoing around the globe. Economies that can’t afford the fuel — such as Pakistan or Bangladesh — could simply grind to a halt.

A crisis that’s largely playing out in industries could soon spread to the political arena, as higher utility bills and the price of goods could trigger public unrest. Lower hydroelectric power output in Brazil, for example, has forced the nation to increase dependence of pricey natural gas, boosting power bills for households, which could hurt President Jair Bolsonaro’s chances in next year’s election.

[silent majority]

Nuclear is completely uneconomic, compared to declining cost technologies like renewables.
Storage for excess renewable generation is now available at falling costs because of the battery revolution.

No private sector investor will touch it, unless it receives massive subsidies from the public purse.
The guaranteed price for Hinkley point power is way above the market rate strike price for offshore wind and solar, both of which are falling.

Reliance on nuclear means much higher prices for consumers than the alternatives, which makes fuel poverty more of an issue.

Nuclear only contributes 15% to our daily demand, so we're hardly reliant on it.

[albie]

SM,

The point is that some argue we should renew the UK nuclear capacity, but the economics is against this.

I assume you mean that 15% of UK energy is from domestic nuclear capacity.
We have also previously imported electricity from Cap De La Hage in Normandy to boost domestic supply.

[big fat yorkshire pudding]

My point is more around why we aren't seriously looking at developing it and making it cheaper.  We could push r&d heavily in the energy sector and pioneer technology, or we could rely on the French to provide it poorly?

[albie]

Pud,

The levelised cost of energy index shows nuclear to be a rising cost industry, at a time when renewable costs are falling.

Here is a summary from Prof Dave Elliot;
https://renewextraweekly.blogspot.com/2021/09/energy-economics-fiddling-with-figures.html

The difference between the two is rising, and the new "Contacts for Difference" auction in December will widen the cost gap.

[SydneyRover]

In the not to distant future as solar panels improve in efficiency, almost every dwelling/factory (as selby pointed out) will have them on their roofs plus a back up battery.

panel efficiency

https://www.cleanenergyreviews.info/blog/most-efficient-solar-panels

[River Don]

Albie,

As I understand it, the largest battery storage power plants are only cable of releasing relatively short bursts of power, a few minutes or an hour or so.

How far are we off having battery storage plants that might provide long lasting high levels of energy similar to what a natural gas fired powerstation might?