Russia was expected to be Germany’s supplier of choice for natural gas. Things have changed.
Episode Summary:
With the outbreak of the first serious European war in 75 years, Germany finds itself in a situation similar to that faced in World War II: an energy crisis. Then, it was due to failure to secure the oil resources of the Caucasus; today, Russian fossil fuels are similarly at issue. The invasion of Ukraine is likely to end the era of Russian-supplied natural gas to Germany. As Europe’s largest economy, the outcome of a transition to alternate sources and technologies is important. What will they do? Jim Anderton comments.
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Transcript of this week’s show:
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Not long ago, Germany—the biggest and most important economy in Europe—had a robust and reliable source of energy. It had several, in fact, including natural gas from one of the world’s biggest suppliers, Russia. With one major gas pipeline in place and a second, Nord Stream Two, on the verge of completion, the shift of Russia from Cold War adversary to commercial supplier and business partner seemed complete. It was a bright future.
All that, of course, has changed with the Russian invasion of Ukraine. It goes without saying that a country imposing economic sanctions on Russia can’t expect to purchase a critical natural resource from Russia at the same time. So, I expect that barring a sudden shift in Russian government, Nord Stream Two is dead, and eventually all other Russian natural gas imports, too.
Take a look at this chart of German electricity production by source. Fossil fuel use has been trending down in the face of a significant rise in renewables, notably wind and solar—but nuclear has fallen off a cliff, to approximately half its peak in the early 2000’s.
But look at the gap between the combined output of renewables and nuclear and overall demand. Fossil fuels aren’t going away anytime soon. Natural gas is used for process and space heat, as well—and the EU uses a lot of gas. Exports from Russia last year into the EU were 6 ½ trillion cubic feet, dwarfing Russian gas exports to the rest of the world combined, including China. 40 percent of the natural gas burned in Europe comes from Russia.
This is a crisis, and in response to the crisis, the European Commission has tabled an emergency plan to make Europe independent from Russian fossil fuels before 2030, starting with gas.
The plan is short on details, but it is ambitious. According to the REpowerEU document, diversified gas supplies, renewable biogas and the replacement of gas in heating and power generation with alternates could reduce EU demand for Russian gas by two thirds before the end of this year. The plan also proposes that EU gas storage facilities be filled to the 90 percent level by the 1st of October in preparation for next winter. Price controls, direct aid and tax breaks will be implemented to shield consumers from high prices.
The EU concept is either visionary, or breathtakingly naïve, depending on your point of view. Diversified supplies including liquefied natural gas, renewable energy in multiple forms and reduced demand through increased energy efficiency are predicted to reduce EU fossil gas demand by 30 percent by 2030. This would on paper eliminate the need for Russian gas entirely.
Like all political documents, the plan is notably short on engineering. Dramatic improvements in energy efficiency will be difficult to come by. Energy was already expensive in Europe, and efficiency has been in the forefront of European engineering for decades. Renewables are growing, but they too are dependent on fossil fuels throughout their supply chains, and costs are rising. And of course, global supply chains have been disrupted by both Covid and the Ukraine invasion.
Notably absent from any plan on solving the critical German part of the EU equation is nuclear. Nuclear has been a political football in Germany for decades. In stark contrast to France where upwards of 70 percent of electricity is generated by reactors, only three operable reactors are online now, and were scheduled to be shut down this year. 33 reactors have been shut down, representing a capacity five times greater than the slightly over 4 MW currently available from Germany’s three remaining reactors.
Reactor decommissioning has been a staple of German coalition government policy since the 1998 federal elections, and decommissioning went on steroids after the 2011 Fukushima Accident in Japan. It is possible to defer the shutdown of the remaining three reactors, but not to reverse 20 years of destruction of the German nuclear industry.
In the available timelines to replace Russian gas, there simply isn’t enough of a nuclear industry left in Germany to make an appreciable difference. A crash program to develop some form of small modular reactors could produce power by the end of the decade, and considering the large amount of German investment in very successful advanced reactor technology, this would be a feasible way forward. Yet despite the looming energy crisis caused by the Ukraine invasion, nuclear power in Germany remains a dead issue.
The deferral of the planned shutdown of the existing three reactors is likely, as is a delay in the decommissioning of coal-fired power plants, but alternates and conservation are clearly the choice of European politicians. It’s poor planning, questionable engineering and it’s unlikely to produce a Europe free of reliance on Russian energy by 2030.
I can’t imagine what the German research teams that developed advanced pebble bed and gas cooled reactor technology must be thinking now. Safe, reliable, low cost and carbon free energy, made in Germany—and German politicians don’t want it. I keep saying this, and I wish I didn’t have to: this is what happens when we let politicians do the work of engineers.
