Europe’s biggest economy is a few months away from its biggest crisis in decades.
One consequence of the Russian invasion of Ukraine has been the disruption of Russian gas supplies to the European Union. While all European nations are reliant on fossil fuels in one form or another, energy mix varies greatly from nation to nation. France is approximately 70 percent nuclear, with a strong nuclear build program underway. Germany, however, has placed a moratorium on new nuclear construction, and is temporarily reinstating coal-fired generating capacity while stocking up on LNG for the upcoming winter. Will it be enough? And if it isn’t, what happens to Europe’s largest economy? Jim Anderton comments.
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Generally speaking, stereotypes are bad thing. But not always.
One of the stereotypes about Germany is that it’s a nation of hard-working, pragmatic people that hold engineering in high regard. Obviously, around here, that’s a good thing.
German engineering is enough of a global presence that the term is used as an advertising slogan in much of the world. And it is important that Germany likes engineering, because that nation is up against the toughest engineering challenge that the country has seen in decades, perhaps ever.
The Russian invasion of Ukraine has many consequences for European politics, but the most crucial one is the interruption of Russian natural gas supplies to much of the EU. Natural gas has been the mainstay of European fossil fuel derived energy for years, because it is generally regarded as cleaner than coal, readily available and cheap. European industrial infrastructure is built on the stuff, and for two decades Russia appeared to be a reliable supplier.
That is gone now, and like a heroin addict, cutting off the supply is going to have major withdrawal symptoms.
The irrationality of this move in the face of a major natural gas shortage now looks obvious to me, and the German government has announced that they will be firing up coal-fired power plants in an attempt to make up the shortfall. But natural gas does three things: it generates electricity, and it is a source of both process and space heat.
Electricity can be generated in many ways, and it can be bought from nations like France, but process and space heat are different. They have to be made close to the demand, and as anyone who has ever owned a home heated by electricity knows, electrons are a very costly way to generate warmth.
Even more strangely, the German government appears to have a relatively relaxed attitude about the real risk that gas shortages will pose to the German economy in the cold months of winter. The citizens might get used to a lower thermostat setting, like they did in the 1970s oil crises, but industry is a different matter. I would have expected that this looming crisis would have generated full-on national mobilization, on a wartime basis, with an eye toward installing extra capacity as fast as possible. LNG deals with Middle East nations such as Qatar have been made, and there is some movement toward adding LNG terminal capacity, but the timeframe that the Germans have to work in is measured in weeks now.
The legendary German industrial bureaucracy that Elon Musk encountered when building his Brandenburg Gigafactory is troubling. The situation is bad enough to require the restart of coal-fired power plants. It seems obvious that if the remaining German nuclear plants can be brought back online, they should be. But it won’t be enough, and at this moment, I have serious doubts about Germany’s ability to buy, store and distribute enough LNG to replace Russian gas.
If they fail, and their manufacturing industry has major disruptions, it will likely push the European Union to a serious recession, and it may take the rest of the world with it. The damage that the Green Party has done to Germany is apparent now, but this winter, “I told you so” won’t keep the lights on.
