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Germany is building 10GW of new natural gas power generation capacity. This will cost 16 billion euros. The news was announced earlier this week and marks a key moment in the EU’s transition efforts, acknowledging that not everything is going according to plan. And Germany just last month recorded its highest gas electricity generation rate in two years.
Two years ago, after Russian forces invaded eastern Ukraine, Germany immediately pledged to give up Russian gas. The Russian side helped realize the plan by drastically reducing the flow of gas through several key routes, citing technical problems.
What clinched the deal, of course, was the Nord Stream sabotage in September 2022, which completely cut off the flow of gas through the pipeline, which supplied Germany with 55 billion cubic meters of gas each year. . Incidentally, a Swedish investigation into the incident concluded this week with the conclusion that Sweden does not have the authority to conduct such an investigation.
While Swedish investigators worked towards that conclusion, Germany coped with US liquefied natural gas support and remained steadfast in its planned phase-out of nuclear power. They were dealing with it with the help of coal. Despite plans to phase out the most polluting hydrocarbons, Berlin was forced to reconsider amid concerns it could run out at a time of high demand.
Finance Minister Christian Lindner summed up the situation well last November in his comments on the Scholz government’s plans to phase out coal use by 2030. Related: The role of nuclear power in a sustainable future
“The dream of phasing out coal-fired electricity in 2030 should end until it becomes clear that energy is available and affordable,” Lindner said, adding that Chinese government officials I agreed with the repeated statement. The same China is building gigawatts of new coal power generation capacity.
Lindner’s remarks may be a harbinger of changes to come for Europe, even as record renewable energy output is reported for January. This is against the backdrop of an increase in hydroelectric power output as well as an increase in the output of solar power generation facilities. Change is coming because the transition to clean energy is not working as envisioned by decision-makers in Brussels and the capital. The news about German gas production is just the latest confirmation of this fact.
The vision in question also included tens of gigawatts of wind and solar capacity, some batteries, and, at the time of the last COP, nuclear power, except in Germany. But building those tens of gigawatts has proven more difficult than expected. First, the cost was higher than expected. Second, demand has been disappointing, and third, utility-scale batteries are still too expensive to replace hydrocarbons.
This is why Germany has decided to invest €16 billion in new gas power plants, along with the addition of an LNG import terminal. Also, the reason why gas-fired power generation hit a two-year record in January was “as power companies ramped up output to compensate for the closure of domestic nuclear reactors and meet increased demand for heating due to last month’s cold snap.” is also here. According to Reuters.
Germany has become a symbol of transition, thanks to the significant resources it has committed to realizing its vision. Now, cracks are appearing in the vision that energy security once again trumps utopia. And it’s not just Germany where they’re active.
Belgium had the same plan to phase out nuclear power as Germany, but withdrew it in December last year. The Netherlands, which had previously announced the closure of its Groningen gas field due to its impact on seismic activity in the region, reduced production to minimal levels in December in anticipation of increased demand due to the typical weather conditions at the time. It has restarted. This year’s.
Spain, which has legitimate access to vast solar and wind resources, topped the list of Russian LNG importers in the EU last year, despite calls from Brussels to reduce those cargoes. The same goes for Belgium, with both countries importing 50% more liquefied gas from Russia in the first nine months of 2023 than in the same period last year.
The German-led European Union is doing everything it can to abandon hydrocarbons, on which it has relied for more than a century and was the basis of its sustained economic power in the decades after World War II. Replacing this infrastructure with other energy sources that are considered better for the environment is a major undertaking and has its drawbacks.
These have been ignored for years for fear that talking about them would weaken the commitment to transition. However, ignoring the problem does not make it go away. The more you ignore it, the more pressing the problem will only become. This is what the wind industry discovered the hard way last year. The sooner these shortcomings are addressed through a more pragmatic attitude towards hydrocarbons, the better for everyone in Europe.
Written by Irina Slav for Oilprice.com
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