Bloomberg: Global Energy Crisis Is the First of Many in the Clean-Power Era

How does an article like this not contain the word nuclear?

The next several decades could see more periods of energy-driven inflation, fuel shortages and lost economic growth as electricity supplies are left vulnerable to shocks.

 

The next several decades could see more periods of energy-driven inflation, fuel shortages and lost economic growth as electricity supplies are left vulnerable to shocks.

By David R Baker

 

The world is living through the first major energy crisis of the clean-power transition. It won’t be the last.

The shortages jolting natural gas and electricity markets from the U.K. to China are unfolding just as demand roars back from the pandemic. But the planet has faced volatile energy markets and supply squeezes for decades. What’s different now is that the richest economies are also undergoing one of the most ambitious overhauls of their power systems since the dawn of the electric age -- with no easy way to store the energy generated from renewable sources.

The transition to cleaner energy is designed to make those systems more resilient, not less. But the actual switch will take decades, during which the world will still rely on fossil fuels even as major producers are now drastically shifting their output strategies.

 

“It is a cautionary message about how complex the energy transition is going to be,” said Daniel Yergin, one of the world’s foremost energy analysts and author of The New Map: Energy, Climate and the Clash of Nations.

In the throes of fundamental change, the world’s energy system has become strikingly more fragile and easier to shock.

Recipe for Volatility

Take the turmoil in Europe. After a colder-than-normal winter depleted natural gas inventories, gas and electricity prices soared as demand from rebounding economies surged too fast for supplies to match. Something similar probably would have happened had Covid-19 struck 20 years ago.

 

But now, the U.K. and Europe rely on a very different mix of energy sources. Coal has been cut back drastically, replaced in many instances by cleaner-burning gas. But surging global demand this year has left gas supplies scarce. At the same time, two other sources of power -- wind and water -- have had unusually low output, thanks to unexpectedly slower wind speeds and low rainfall in areas including Norway.

 

In other words: A strained global gas market triggered Europe’s record-setting spike for electricity prices -- and the transition amplified it.

The pain hitting Europe is an ominous sign of the types of shocks that could strike more of the globe. Even as solar and wind power become increasingly plentiful and cheap, many parts of the world will for decades still depend on natural gas and other fossil fuels as backups. And yet, investor and company interest in producing more of them is waning.

 

That’s a good recipe for volatility, Nikos Tsafos with the Center for Strategic and International Studies, wrote in a recent analysis.

 

“You’re definitely moving into a system that’s more vulnerable,” Tsafos, the center’s James R. Schlesinger chair for energy and geopolitics, said in an interview.

 

To be clear, the transition itself -- imperative for the planet -- didn’t cause the squeeze. But any big, complex system can become more fragile when it’s undergoing major change.

 

All this is happening at a time when power consumption is projected to increase 60% by 2050, according to BloombergNEF, as the world phases out fossil fuels and switches to cars, stoves and heating systems that run on electricity.

 

Continued economic and population growth will also drive consumption higher. And as the world moves even more into all things digital, it will mean that this heightened vulnerability comes at a time when people need reliable power more than ever.

The surge in electricity demand combined with fuel-price volatility means the world could be in a for a rocky few decades. The consequences will likely range from periods of energy-driven inflation, exacerbating income inequalities, to the looming threat of power outages and lost economic growth and production.

The planet’s energy systems are interconnected, so the crisis and its spillover are being felt across the world. The crunch has had knock-on effects across industries, obstructing  silicon production, disrupting  food supplies and snarling supply chains.

 

In the U.S., natural gas futures have already more than doubled this year, before the peak demand that comes with the winter cold. With 40% of the country’s electricity now generated by burning gas, those higher prices will inevitably push up electricity and heating bills.

China's power usage outpaces coal production in past years

 

In China, even as the government pushes to ramp up renewable power, the industrial economy still relies heavily on fossil fuels: coal, gas and oil. And when its factories started humming again during the pandemic rebound, the country simply didn’t have enough fuel. Chinese manufacturing contracted in September for the first time in 19 months, suggesting that soaring energy costs have become the biggest shock to strike the economy since the beginning of the pandemic.

 

China’s government is now vowing to stabilize the situation by procuring more overseas coal and liquefied natural gas. That puts the nation in direct competition with Europe, threatening to starve the continent of fuel and worsen that crisis.

 

There will be an inevitable fight over what exports are available, leaving some developing countries such as India and Pakistan worried they can’t compete.

Tighter Fuel Supplies

 

As major Western producers from BP Plc to Royal Dutch Shell Plc work to reduce emissions and America’s shale drillers take a step back from expansion, the finite amount of exportable supplies is growing tighter.

 

Jeff Currie, global head of commodities research at Goldman Sachs Group Inc., points to underinvestment in fossil fuels as a big part of the problem.

Investors seeking the big returns that come from new businesses have been pouring money into alternative energy stocks rather than fossil fuel companies. Others are actively dumping coal and oil stocks, seeing them as a risk while the energy transition accelerates. And some fossil fuel companies have themselves started directing investments into the low-carbon future rather than focusing solely on their old role of finding, pumping and delivering more oil and gas.

 

“In many parts of the world, you’ve overbuilt wind, you’ve overbuilt solar,” Currie said in an interview on Bloomberg TV.

 

“The new economy is over-invested and the old economy is starved.”

U.S. drilling activity remains below pre-pandemic levels

 

Wind and solar power production have soared in the last decade. But both renewable sources are notoriously fickle -- available at some times and not at others. And electricity, unlike gas or coal, is difficult to store in meaningful quantities. That’s a problem, because on the electrical grid, supply and demand must be constantly, perfectly balanced. Throw that balance out of whack, and blackouts result.

 

So far, natural gas plants have served as the stable backup that wind and solar power need. That interdependence works fine, so long as gas prices aren’t going through the roof.

Storage Solutions

 

One of the biggest obstacles ahead will be storing power generated by intermittent wind and water sources. Solutions do exist, but it will be years before we have them at the scale on which they’re needed.

 

“The transition is both the challenge and the opportunity,” said Amy Myers Jaffe, managing director of the Climate Policy Lab at Tufts University.

 

Australia and California are plugging massive batteries into the grid to keep power supplies steady when the sun sets on solar plants. That deployment is just in nascent stages, and the batteries themselves are limited, usually supplying electricity for about four hours at a time...........................

Continue reading here:

https://www.bloomberg.com/news/articles/2021-10-05/global-energy-cr...

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Comment by Willem Post on October 10, 2021 at 11:20am

This article barely mentions, there was little wind in Ireland, the UK, Belgium, the Netherlands, Germany and Denmark from April, 2021 to the present.

As a result more gas was, and is being used from already-depleted gas storage levels, to generate electricity.

Blaming Russia was not an option, because Russia had been supplying gas to Europe, per signed contracts, as even EU bureaucrats had to admit. 

The EU countries failed to sigh additional long-term contracts with Russia, mainly because bureaucrats are forcing the EU to “decarbonize”, to set a good example.

BTW, Fossil Fuels Supply 84 Percent of World Primary Energy, and Other Eye Openers from BP’s Annual Energy Review
https://www.windtaskforce.org/profiles/blogs/wind-and-solar-provide
 
Coal, 27%; Natural Gas, 24%; Oil, 33%, a total of 84%, plus Nuclear, 4%; Hydro, 6%; Renewables, 5%, after more than 20 years of subsidies.
Some of the primary energy, about 10%, is used for exploration, extraction, processing and transport to produce primary energy to users. That 10% of primary energy is often called “upstream energy”.
 
For example, to produce ethanol from corn requires a very significant quantity of primary energy to produce a gallon of ethanol for blending with gasoline; the combustion CO2 of ethanol is not counted, as is the CO2 of burning biomass, because they are “renewable”, per international agreement.
https://www.forbes.com/sites/rrapier/2020/06/20/bp-review-new-highs

These idiot EU bureaucrats think more wind, solar, and batteries are the answer to NIRVANA, i.e., “saving the world from ruinous climate change”
https://www.windtaskforce.org/profiles/blogs/high-costs-of-wind-sol

At present, EU gas storage levels are at about 30% from where they should be at this time of year, with no extra gas available to increase storage; A RECIPE FOR A LONG-LASTING DISASTER AND ECONOMIC STAGNATION, IN CASE OF A STRONG WINTER.

If additional gas contracts were signed right now with Russia, it takes a while, several weeks at least, for Russia to ramp up production, and then transmit the gas to users, to alleviate shortages in Europe, and simultaneously increase storage in Europe. Yikes!

This predicament is the result of Socialist-style, government-mandated “planning” by EU bureaucrats, who do not know their ass from a hole in the ground regarding energy systems; New England is similarly affected by such bureaucrats.

Instead, European countries relied on the SPOT MARKET, which always is only a small fraction of the CONTRACT MARKET.

As a result natural gas prices increased, from about $300 to $2,000 per 1000 cubic meter, and coal prices increased in Europe; at present gas is about $1,200/1000 cubic meter.

This did not happen in the US, because the in-the-basement, recently opened-borders, dysfunctional-Biden-RE-wind/solar idiocies, and the $3.5 TRILLION SOCIALIST, REMAKE BOONDOGGLE, fortunately have not yet been implemented, and may never be implemented.

The US does not need such EU idiocies.

The US has no trouble being energy independent, plus that energy is low-cost, as proven by Trump before the 2020 Election.

Unfortunately Trump was ousted by the infamous 2020 Dem/Prog coup d’etat.
https://www.windtaskforce.org/profiles/blogs/state-senate-hearings-...

BTW, Bloomberg, a financial services/media conglomerate, earns a lot of fees from cajoling wealthy investors into buying various tax shelters, including wind and solar systems.
http://www.windtaskforce.org/profiles/blogs/cost-shifting-is-the-na
 
Bloomberg would never mention any lack of wind, because that would rain on its own wind/solar parade.

LESSON: Now we all know, how we are being brainwashed by the self-serving Media purveying incomplete, distorted, and untruthful “news articles”, to sell TV programs, newspapers and ads to survive.
 
The same self-serving Media shenanigans were, and still are, used regarding the 2020 Election 
https://www.windtaskforce.org/profiles/blogs/state-senate-hearings-

Comment by Penny Gray on October 9, 2021 at 6:43pm

It's very grim that nuclear isn't mentioned.  Not once.  Critical thinking and science based energy solutions will be the only things that pave the way toward an increasingly energy dependent planet. The current mindset seems incapable of incorporating anything more powerful than sailing ships into our future.  If people don't smarten up, I really do fear for the vulnerable.

Comment by Thinklike A. Mountain on October 9, 2021 at 6:29pm
Comment by Dan McKay on October 9, 2021 at 5:41pm

The adults are finally realizing what CTFWP has been saying for a decade

Hannah Pingree on the Maine expedited wind law

Hannah Pingree - Director of Maine's Office of Innovation and the Future

"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."

https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/

 

Maine as Third World Country:

CMP Transmission Rate Skyrockets 19.6% Due to Wind Power

 

Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.

Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT

******** IF LINKS BELOW DON'T WORK, GOOGLE THEM*********

(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/

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