Europe is taking urgent action to combat the looming energy crisis. Poland is looking for coal, France is reviving nuclear power, and Germany is buying gas from the United States. Why is all this unlikely to be effective and how does one’s policy literally kill the EU population?
Europe is increasingly concerned about the growing shortage of energy resources in all directions. This applies not only to gas supplies, although, of course, in the first place – in particular, according to Western media, the European Commission intends to invite EU member states to reduce gas consumption “immediately”.
Things got to the point where Paris decided: private players could not provide the required level of nuclear generation, so it had to be nationalized.
After Poland refused to import Russian coal in the spring of 2022, it has already begun to explore the possibility of increasing its domestic production. That’s because 72% of the electricity here is “coal”. Europe’s richest economy can only keep running if it burns fossil fuels, but even that, it turns out, is a real shortage. Polish Prime Minister Morawiecki frankly admits: “The problem is that there is absolutely not enough coal.”
Finland says it may start turning people away for up to two hours a day during the winter. reason? The country rejected energy carriers from Russia. Calculations showed that this is not dangerous, because the country receives 26% of all energy from wood burning, 18% from nuclear power plants, 9% from coal, and only 7% from gas.
The problem is that it was a bad account.
In 2021, the Finns imported 10% of their electricity from Russia. Since Moscow demanded energy in rubles, Helsinki refused to purchase. It made sense: France’s nuclear power plant, the third in Finland, was on its way to being operational. The Finns believed that it would close the deficit created by the severing of relations with the Russians. But the French-made reactor has not yet returned to normal operation, and a delay threatens to continue it until winter. When power consumption rises, this is where Finns can experience blackouts.
Not ideal in other EU countries. In Germany, gas depots are 65% full, and due to sanctions against Russia (Nord Stream turbine), withdrawals from them are still higher than injections. At the level of 65%, it will not be possible to spend the winter calmly.
Hungary even declared an energy emergency. As part of this, it even banned the export of firewood – not the most common measure for 2022. Will all these measures help?
Nuclear nationalization: strategically sound, but not this decade
The French authorities’ decision to nationalize the nuclear industry is a rare case that can only be welcomed. The point is not that private companies cannot effectively develop the nuclear industry. On the contrary, they did just that in 1960-1970. Then in the United States, private companies built nuclear power plants very quickly. But this era remains in the past, when the concept emerged in the Western world that every nuclear power plant was virtually unsafe and its environmental safety must be proven. After that, banks in the West began to lend only nuclear projects at high interest rates, and with this interest their construction ceased to be profitable and virtually ceased.
The majority of the shares in Électricité de France have always been officially owned by the state. However, since 2004, due to EU requirements, Paris began a partial privatization of the company, and according to many in France, its management has since paid a lot of attention to earnings and reports, and very little to the technical aspects. Important in the nuclear industry.
The problems of early 2022, when corrosion of the coolant circuits of many reactors forced EDF to shut them down for repair, amid rising gas prices, were seen by some as not the best result of 2004. So, Paris is now easily ready to pay €5 billion to shareholders to regain full control of the company. But even if re-nationalization allowed the French to develop nuclear energy again, its fruits would not have time to appear in this decade.
The fact is that Rosatom or China (state-owned enterprises also build nuclear power plants there) can build nuclear power plants in 4-5 years. In France, too, there was a very long hiatus in the construction of new reactors. So, when they started it again – from December 2007, at the Flamanville-3 site – they planned to run it in 2012, spending 1 billion euros on it. It’s now 2022, and no one expects this power unit to be operational until next year. In 2020, the cost of construction already cost 19.1 billion euros, and now the plus price has reached twenty times.
This clearly shows that the French nuclear scientists lost their very high efficiency, which in the 70s and 80s allowed them to build reactors faster than the Soviet Union. Many years of passion for “green” ideas were not in vain. Even if Paris bid farewell to “green” fantasies for the time being (which is far from the truth), there will be no mass commissioning of new nuclear power plants before the 2030s. Without collective input, it does not fit into the budget. Reactors worth 20 billion euros, such as Flamanville-3, frankly, do not need anyone: energy from them is more expensive than from thermal power plants. Therefore, with all the safety of the French approach – nuclear power plants are in fact the only real alternative to thermal power plants – it is not a fact that it will be possible to implement it.
Poland and all
Meanwhile, France is the only Western country that has at least a theoretical chance of getting out of the energy crisis. If not in the 1920s, then at least in the 1930s. why?
Let’s take a look at the position of Polish Prime Minister Morawiecki. He advocates extracting as much coal as possible in his country, because the more coal is extracted here, the less it is imported. But let’s look at the numbers: in 2020, the Poles mined 56 million tons of hard coal, which is already 96% of the total production in the European Union. In terms of brown extraction (in quarries), it is second only to Germany.
But the EU’s long-term energy policy implies a complete rejection of coal – and no one has ignored this task.
That is why Polish miners are organizing strikes, demanding not only high wages, but specific plans for the future development of the industry. They want to make sure that by increasing coal production today, official Warsaw will not reduce it completely tomorrow. Without such guarantees, Poland’s coal mining industry continues to lose employees.
But most importantly, the Poles receive 18 billion euros annually in European subsidies. Moreover, from countries such as Germany – the leaders of the “green” transformation. This means that sooner or later they will put pressure on Poland, demanding to reduce coal production. Under these conditions, no reasonable investor would seriously expand Polish production.
German version: You just need to live less life
However, the Germans themselves had already announced that they would temporarily return to generating coal instead of gas. Germany has 151 coal-fired thermal power plants, which in recent years have been more likely to stand than operate. Previously 16% of the electricity was received from gas-fired thermal power plants, but now, due to a physical shortage of gas – remember the same Nord Stream turbines, which prevented sanctions from repairing in time – this 16% must be replaced by coal.
The problem lies elsewhere: what is there to burn? Brown coal is mined from open pits in Germany, and these thermal power plants can be quickly put back into operation. But coal-fired thermal power plants no longer exist. The Germans closed mines of this type in 2018. Instead, they imported coal … from Russia.
Importing coal from abroad is also becoming more difficult: Europe refuses to buy Russian coal. There is an acute shortage of free coal in world markets. So the prices are abnormally high.
What is the German plan to deal with the energy crisis now? Oddly enough, in anything that would have to do with energy. Berlin does not plan to make long-term changes in energy policy. On July 8, the German authorities announced that the return to the active operation of coal-fired thermal power plants would last only until March 2024 – and no more. What will change after that? According to the plans of the German government, the share of Russian supplies in German gas consumption will drop from 35% today (and it was 55% before the sanctions) to 10%. That is, the Germans are betting on the import of liquefied natural gas from the United States: by the spring of 2024, the German stations for receiving it should have been completed.
But there is one weak link in these plans – the price. The fact that American LNG is more expensive than Russian LNG is not so important here: at exchange gas prices of more than a thousand dollars per thousand cubic meters, it is profitable to transport methane from the states as well. The question is different: US gas production is growing very limited.
The reason is somewhat similar to the Polish coal dilemma. American gas, like oil, is largely produced by “shale oil companies”, whose business depends largely on loans: a horizontal well works in narrow shale rocks for 5-7 years, then it must be replaced with a new one . A few years ago, small and medium-sized shale oil companies faced low hydrocarbon prices, and in order to continue drilling in such an environment, they took out a lot of loans that were not yet fully repaid.
The main thing is that they do not want to get into such a situation again, so the expansion of production is very hesitant. Yes, and banks in the West are not keen to give them loans. The ideas of “disinvestment” – the refusal to invest in fossil fuel extraction – have gone nowhere in Western discourse. Big financial institutions are still shy about funding rock-solid players. The interest on bonds of shale oil companies is much higher than that paid by operators of wind and solar power plants.
It turns out that it will not do the West to return to cheap energy from thermal power plants. You can say all you want that fossil fuels are “still in demand”, but a rational investor wouldn’t invest in new mining if he didn’t know if it would be in demand within a decade. Since no one has removed the fight against global warming from the program documentation, it is impossible to be sure of such a request.
It turns out that German plans boil down to a return to expensive gas – simply by replacing the Russian with an American.
Apparently, realizing that in this scheme the severity of the crisis is unpredictable, German Economy Minister Robert Habeck tirelessly promotes the refusal to take a shower in the bathroom for more than five minutes and calls for a reduction in the operation of heating in homes.
It should be noted here that according to studies of Western scientists published in The Lancet, in 16 countries of the European Union, an average of 270 thousand people die every year from the cold. The main mechanism of their death is heart attacks and strokes. As soon as the temperature drops below the optimum level, the viscosity of human blood increases significantly, as well as the level of platelets in his blood. As a result, blood clots, heart attacks, and strokes often occur. People over 50 years old are especially affected: their cardiovascular system is less powerful than that of younger people.
It is difficult to predict exactly how much the implementation of HABC’s measures – as well as the general increase in heat prices caused by the confrontation with Russia – would raise the death rate among Germans. However, it is unlikely that we are talking about less than a thousand deaths a year. Apparently, they simply did not fit into the prudent energy policy of their powers.