Energy prices in Europe are soaring to record levels – a consequence of both poor planning and sanctions against Russia.
The EU’s ban on Russian oil – to be phased in over the next few months – has made oil and oil products more expensive. European sanctions have also provoked what look like counter-sanctions from Russia. Since June, Russia has cut gas supplies to Europe drastically, prompting huge price spikes.
Assuming no deal is struck between the West plus Ukraine, and Russia, Europe is unlikely to buy much Russian energy for the foreseeable future. Russia may keep sending oil to Hungary (a “friendly” country), and may continue selling small quantities of gas at exorbitant prices. But apart from that, it looks like the country will cease to be Europe’s main energy supplier.
Which raises the question: where’s Europe going to get its energy from?
In the short term, it will have to buy a lot more oil from the Middle East, and a lot more LNG from places like Algeria, Qatar and the United States.
Although the Middle East has plenty of oil to sell, there will be some transitional costs associated with establishing new supply routes. However, the real problem comes with LNG: there simply isn’t enough to replace Russian gas.
As analyst Sarah Miller notes, “it’s unlikely that alternative gas supply in anything like the volumes Europe takes from Russia will ever materialize at affordable prices”. Consequently, “Europe’s choice is basically to keep buying Russian gas or make do with a lot less gas”. And since Russia may not keep selling Europe gas, that leaves making do with a lot less.
Of course, the EU’s long-term plan is to transition to renewables. But it’s exactly that: a long-term plan. And at the present time, renewables can’t work without fossil fuel back-ups due to the problem of intermittency (the sun isn’t always shining and the wind isn’t always blowing). Unfortunately for Europe, gas is the least polluting back-up.
So what about nuclear?
Investing in nuclear clearly makes sense, but there are several challenges. First, it takes at least five years to build a nuclear power plant. So nuclear isn’t going to help during what may be the most painful transition period.
Second, the cost of building nuclear plants has actually increased over time. Some people claim this is due to excessive regulation, but as economist Noah Smith points out, “it keeps happening in every country”. Which suggests that whatever is causing costs to rise is very difficult to overcome. Perhaps, as Smith notes, “the safety regulations imposed by governments are a common, stable political-economic equilibrium”.
Third, building a nuclear plant incurs huge up-front costs – to the tune of twenty or thirty billion dollars. This makes private investors reluctant to stump up the cash, since there’s a risk they won’t get it back. Even before “environmentalists started freaking out”, to quote Smith again, nuclear required massive government assistance.
If nuclear were a panacea, as some people claim, France would be enjoying much cheaper energy than most of its neighbours. (The country gets more of its electricity from nuclear than any other – about 70%, compared to only 15% in Britain.)
Yet French electricity prices are currently among the highest in Europe. There are several reasons for this, such as the discovery of “stress corrosion” inside plants, and the fact that Europe’s unusually hot summer has pushed up river temperatures, making plants harder to cool.
Now, this isn’t a wholly fair assessment of France’s energy system; in a typical year, the country is a net exporter of energy. But it does illustrate that relying on nuclear presents some challenges.
So while expanding nuclear capacity is clearly sensible, it’s not going to solve Europe’s problems. And certainly not in the next five years.
To join in with the discussion please make a donation to The Daily Sceptic.
Profanity and abuse will be removed and may lead to a permanent ban.
Good morning.I think due to the failure of Govt and market short termism we are all screwed short term .Ie its going to cost a lot more for power .
Longer term we need reliable sources of power ie constant and regular .
The current renewable options do not pass that basic test especially in our latitude in the winter .
So the only real options are going to be fossil fuelled and nuclear .Unless Fusion makes it commercially thats all we really have .So I think that the Rolls Royce type of small ,manufactured off site reactors are where we should be going.When I was 8 or so such Tennis courts sized units that could power a town were gracing the pages of a Modern Science book I had in the mid sixties. To my mind we have just pissed the future up the wall since then !!
It may well be part of a sensible mixture, but setting aside any risks to do with disposal of junk, and other risks, a random scan as to what the source of uranium is was interesting – e.g. https://www.worldatlas.com/articles/the-largest-uranium-reserves-in-the-world.html Thus there could be some transport problems for that as well.
Of course, the Coal Authority https://www.gov.uk/government/organisations/the-coal-authority is sitting on top of a lot of buried energy, which is not popular at present.
We solved nuclear waste disposal ages ago. It isn’t an issue.
And our coal might soon be popular once again; Thatcher was right – it hasn’t gone anywhere.
And shale, of course.
What you seem to be arguing for is something I wholeheartedly endorse, i.e. diversity of supply. Every type of electricity generation has benefits and drawbacks, and the correct balance between coal, gas and nuclear will vary from country to country depending on their own unique circumstances.
Nuclear has very high upfront costs compared to gas or coal, but lower day to day running costs. Nuclear also runs at constant output 24/7/365 (apart from interruptions during maintianence, whereas gas can be ramped up and down fairly quickly. Even without unreliable renewables demand will vary between day and night, weekday and weekend, summer and winter etc. Therefore the grid needs a certain amount of capacity that is only used some of the time. In the U.K. it makes sense for this capacity to be gas fired stations as we have lots of gas, especially if we start fracking. However France doesn’t have large gas reserves, but has better connections to the European grid than we do so can export a not of nuclear generated electricity when domestic demand is low. Therefore it would be a costly mistake for us to invest in too much nuclear power and end up with excess electricity that we can’t sell to other countries. What this means is the correct balance between nuclear and gas/coal is different for the U.K. and countries such as France. This doesn’t mean that the U.K. shouldn’t invest in new nuclear plants, but we shouldn’t invest as heavily as the French did. I’m hesitant to put actual figures on how much of our generating capacity should be nuclear, but no more than 40% would seem to make economic sense.
The merchants of doom are hereby politely asked to bag their stories and sell them elsewhere[*]. A really brilliant idea to save Europe (assuming it needs saving) would be to stop imitating the failing policies of largely failed states like the USA in every respect. Ie, do not privatize stuff when there’s no market for it just because people who are already stinking rich would like to get much stinkier richier by exploiting all kinds of state-granted or otherwise existing monopoly positions for their own benefit.
[*] This is really supposed to refer to all of them, be they Jehova’s witnesses, Save the planet! lunatics, communist apologists, Russian fifth-columnists, worshippers of the mighty Influenza etc, etc, etc. Same story, same people. Supposed motivations don’t matter.
What you described isn’t privatisation though, is it?
Privatised risk and privatised reward is what we need.
What you have described is crony capitalism (i.e. not capitalism at all).
Capitalism (that’s a marxist term, BTW) refers to an industrialized economic system where the means of production are privately owned. There’s no reason why this would need to be based on a market economy, it just usually is (to some degree).
Is is group think or simply evil? It is so obvious that “renewable” severely harm the environment and would need subsidies if they were“renewable”.
It all about control and bringing in worldwide Communism
Arctic Still Refuses To Melt As Ordered
https://www.youtube.com/watch?v=G-L_0Fj3FtU
Fourteen years ago today I wrote my first article exposing the global warming scam.
Tony Heller
Global Warming is the biggest and most obvious lie in history. Maybe people think “It sounds so ridiculous they could not possibly make it up.”
Yellow Boards By The Road Pancartas Amarillas
BUILD BACK FREEDOM … From Lockdowns to Digital Gulags
Ignore the Covid Industrial Complex.
Friday 19th August 11am to 12pm
Yellow Boards
A3095 Foresters Way &
B3430 Nile Mile Ride
Bracknell RG40 3DR
Stand in the Park Sundays 10.30am to 11.30am – make friends & keep sane
Wokingham
Howard Palmer Gardens Sturges Rd RG40 2HD
Bracknell
South Hill Park, Rear Lawn, RG12 7PA
Telegram http://t.me/astandintheparkbracknell
Nuclear is the answer. Germany will fail this winter. How was it allowed for this to happen.. ask goofy Ursula, the WEF puppet.
Be fair, of course Merkel had to take precautions against tsunamis in Bavarian Lakes wiping out German Nukes! Genius!
No wonder the brainless German politicians supported her! Not to mention their MSM and, certainly the clear majority of voters.
Meanwhile they ramped up mining and burning Lignite, the cheapest and nastiest type of coal. There, they did have a bit of common sense, ‘dirty’ or not.
All goes to show that all of us need some adults in government.
Any bright idea (Big Wind, Big Solar, Wave Power, Geothermal, Sunbeams from cucumbers, whatever, should be DEMONSTRATED to be practical and affordable BEFORE having taxpayer’s money hosed at it!
And those who promote useless, unaffordable technology MUST be held to account.
This article ignores the potential of SMRs. Smaller, cheaper and quicker to build, factory produced Nuclear plants. Available from Rolls Royce.
Lets get on with it!