Becalmed days cause an energy storm for Europe

Balmy autumnal days Europe have brought with them a big problem: a lack of wind.

Wind turbines off the coast of Clacton-on-Sea, England. Picture: Getty Images

Balmy autumnal days in Europe have brought with them a big problem: a lack of wind.

Without consistent August and early September breezes the wind farms peppered along the Danish, Dutch, German and British horizons have been unable to generate reliable energy supplies or bolster stocks for the upcoming winter season. The timing could not be worse.

Just as British Prime Minister Boris Johnson is pushing for $100bn for climate initiatives and agreement at the COP26 conference in Glasgow next month for a halving of global emissions, the realities of renewable supply fluctuations are causing unrest across the continent.

Politicians are praying for a mild but blustery winter amid fears blackouts and soaring bills could force major industries to scale back to three-day weeks.

In August, when the wind over the North Sea was weak, renewables provided just 2 per cent of ­energy on some days, well down on that month’s average of 18 per cent. In Britain, these fluctuations are usually supplemented by local and imported gas supplies, most of which come from Norway, and 5 per cent from Russia.

Across the continent Germany, Italy, France, Hungary, the Czech Republic, Poland, Austria and Slovakia all draw deep supplies of gas from Russia, and some from Norway, to smooth their ­energy supplies too.

But with conditions becalmed, Russian President Vladimir Putin has tightened supplies of gas, with sharp repercussions across the continent.

The price of gas has gone through the roof. Putin may be having fun at various world leaders’ expense, raking in handsome profits or topping up his domestic gas supplies ready for winter. Or, as many believe, Putin has ­exploited the energy crisis with a geopolitical ploy to pressure Germany into fast-tracking final approvals for the controversial $US11bn Nord Stream 2 gas pipeline from Russia into Europe.

Last week Putin said he would increase Russia’s gas supplies to the West, easing some pressure on the skyrocketing gas price, but raising fears that Europe will be beholden to the whims of the Kremlin for manufacturing and heating certainty.

Gazprom has kept gas flowing, but for four months the company hasn’t booked any extra supply. Everyone is scrambling for what is available, resulting in soaring wholesale prices.

Some gas-reliant industries, such as fertiliser manufacturers, closed their doors when wholesale gas prices trebled, although one reopened when the British taxpayer stepped in. This is because Downing Street didn’t want food shortages compounding other domestic issues such as the lack of truck drivers leading to fuel shortages.

In Britain, the regulator Ofgen has allowed domestic price caps on electricity and gas to be lifted by 12 per cent, the second rise this year. That hasn’t stopped handfuls of small British private energy companies going out of business, unable to provide the gas and electricity at the guaranteed prices they had sold to consumers.

More than 1.5 million British households now face huge increases in their bills as they are put on deals reflecting the fact that wholesale gas prices have risen 500 per cent in nine months.

Spain’s government has moved to cap gas prices by regulating the profits of energy companies. Electricity costs in Spain and Germany have also tripled. Greece is looking to subsidise the price of gas. In Italy, the costs of electricity have also soared. “Last quarter electricity prices increased by 20 per cent, next quarter they will increase by 40 per cent,” Ecological Transition Minister Roberto Cingolani said. “This is happening because the price of gas at the international level is increasing”.

The cause of the gas shortage is blamed on the long, cold winter at the start of the year, which depleted supplies. Companies were then reluctant to pay the high wholesale price to bolster, but the low stock level situation was then exacerbated by the lack of wind power.

All the while liquid natural gas production was lower than expected; but demand, especially in China, Japan, Korea and India, has risen sharply as coal production is wound back, and shipments that could ordinarily be drawn upon by European nations were diverted to Asia. Nuclear production is also being wound back.

Such has been the pressure, and despite the race for renewables, British energy company Drax revealed it has been using coal-fired power stations to keep supplies stable.

Drax has been in the process of changing over to biomass to satisfy the government’s phase-out of coal within three years, but executives said this may be delayed because of current uncertainties. Drax said: “These (Drax) facilities have fulfilled a critical role in keeping the lights on at a time when the energy system is under considerable pressure”.

But any suggestion renewables are causing a problem gets short shrift from International Energy Agency executive director Fatih Birol. “Recent increases in global natural gas prices are the result of multiple factors, and it is inaccurate and misleading to lay the responsibility at the door of the clean energy transition,” he said, pointing out Russia has the capacity to increase supplies to the West by 15 per cent.

Germany, the industrial powerhouse of Europe, needs a stable and regular supply of energy and currently imports 90 per cent of its gas from Russia.

Yet Germany’s Green Party, the kingmaker to decide the ruling German coalition, wants to rip up the deal for the Nord Stream pipeline and reduce reliance on Russian gas.

In Britain, despite the uncertainties about the constancy of wind power, Johnson believes that by 2035 the entire country can be powered by renewables.

“By 2035, looking at the progress we’re making in wind power, where we lead the world now in offshore wind, looking at what we can do with other renewable sources, carbon capture and storage, with hydrogen potentially, we think that we can get to complete clean energy production by 2035,’’ he said.