Germany's contingency plan for energy

Investment Analysis Clubs Macro Economic Trends and Risks
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https://www.wsj.com/articles/germany-braces-for-less-gas-as-…

**Germany Braces for Less Gas as Russia Demands Ruble Payments**
**Country triggers early-warning stage of contingency plan to insulate against any reduction in gas deliveries**

**By Bojan Pancevski, The Wall Street Journal, Mar. 30, 2022**

**...**
**Germany’s economy minister, Robert Habeck, said Berlin has triggered the early-warning stage of a contingency plan that aims to insulate the country against any possible reduction in Russian gas deliveries, adding that Russian supplies continue uninterrupted.**

**The triggering of the early warning stage is a formality in Germany’s elaborate contingency plan for possible energy shortages. It means that a special government task force will be formed to monitor developments in global gas markets and intervene if needed....**

**Asked whether Russia’s demand for ruble payments was expected to take effect as of tomorrow, Kremlin spokesman Dmitry Peskov said: “No, absolutely. The payment and supplies are a lengthy process... This does not mean that all that will be supplied tomorrow should be paid for” in rubles....** [end quote]

The German contingency plan is a sequence of rationing, starting with non-critical industries. Germany is already whittling back its orders from Russia.
https://www.wsj.com/livecoverage/russia-ukraine-latest-news-…

The idea of forcing customers to pay in rubles is a clever way to support the ruble, but it’s also cutting off the Russians’ nose to spite their face if the customers refuse to pay in rubles. Cooler heads apparently prevailed because this is now a “lengthy process” threat and not an immediate requirement.

Necessity being the mother of invention, it’s likely that the Europeans will reconfigure their energy supplies for the long term. Germany may finally follow France’s safe use of nuclear power.

The Macro trend of moving away from fossil fuel energy will be boosted by the war in Ukraine. This will ultimately hurt Russia, even if they succeed in stealing the Ukrainian oil and gas fields.

https://www.nytimes.com/2022/03/29/opinion/ukraine-war-putin…

**What if Putin Didn’t Miscalculate?**
**By Bret Stephens, The New York Times, March 29, 2022**

**...**
**Suppose for a moment that Putin never intended to conquer all of Ukraine: that, from the beginning, his real targets were the energy riches of Ukraine’s east, which contain Europe’s second-largest known reserves of natural gas (after Norway’s).**

**Combine that with Russia’s previous territorial seizures in Crimea (which has huge offshore energy fields) and the eastern provinces of Luhansk and Donetsk (which contain part of an enormous shale-gas field), as well as Putin’s bid to control most or all of Ukraine’s coastline, and the shape of Putin’s ambitions become clear. He’s less interested in reuniting the Russian-speaking world than he is in securing Russia’s energy dominance....** [end quote]

The OPEC oil crises of the 1970s encouraged the development of more fuel-efficient cars. The Russian invasion of Ukraine in 2022 may have long-term Macro impact if it accelerates the move toward non-carbon energy sources.

Wendy

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He’s less interested in reuniting the Russian-speaking world than he is in securing Russia’s energy dominance… [end quote]

While the US sits here with the means to unilaterally, and peacefully, END Russia’s energy dominance… if we decide to do so.

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Word in the news, either NPR or NYT not sure which this morning, Western Europe definitely wont pay in rubles and Russia is rethinking the requirement. Russia needs Euros to buy anything. But ironically Europe wont accept Euros from Russia either.

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While the US sits here with the means to unilaterally, and peacefully, END Russia’s energy dominance… if we decide to do so.

So you are proposing the US nationalize US oil and gas fields/production?

If NOT, then the only ones allowing Russia to do anything are the US oil companies. Conflict of interest…?

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Jerry,

The War Powers Act or whatever the official title of it is, our oil producers can be ordered to produce oil…but the US government must see to proper payment.

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Wendy: Necessity being the mother of invention, it’s likely that the Europeans will reconfigure their energy supplies for the long term. Germany may finally follow France’s safe use of nuclear power.

The Macro trend of moving away from fossil fuel energy will be boosted by the war in Ukraine. This will ultimately hurt Russia, even if they succeed in stealing the Ukrainian oil and gas fields.

Other than the three nuclear power plants that are due to be shut down but could be kept open (?), building more nuclear would be a very long term process and the anti-nuclear forces would probably be strong enough to bring down the perpetual coalition government.

I just did a quick Google Earth Check on the three huge Lignite mines near Inden, Niederzier and Juchen (all not far from where I lived in Geilenkirchen) and they appear to be still operating but the Imagery Date is :3/23/2020. The one at Inden was shut down with great fanfare just before I moved back to Canada … then some months later quietly reopened as there wasn’t sufficient power available to meet demand.

Germany has long since used up their economically minable hard coal so they import it from Russia, US and Australia.

26%
As of 2020, around 24% of the electricity in the country is generated from coal. This was down from 2013, when coal made up about 45% of Germany's electricity production (19% from hard coal and 26% from lignite). Nonetheless, in the first half of 2021, coal was the largest source of electricity in the country.

I suspect it is going to be very difficult to replace Nat gas with far more expensive LNG from the US Golf coast especially without even having an LNG terminal!

This popped up on Canuck Business news yesterday but it will be 6-8 years before it can ship cargos to Europe. The distance would be much shorter.

It is hard to do very long term projects in half the time!

Anymouse

https://www.bnnbloomberg.ca/lng-project-in-canada-s-east-cou…

COMMODITIES Mar 28, 2022

LNG project in Canada’s east could be sped up to supply Europe
Robert Tuttle, Bloomberg News

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Germany may finally follow France’s safe use of nuclear power.

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Germany may keep it’s last 3 nuclear power plants operating for a few more years until they get their other fuel sources sorted out.

But electricity is not the major concern because Germany uses natural gas for heating/cooking in it’s businesses/homes while France uses electricity. So to get enough LNG to supply Germany until Germany can rewire businesses/homes to accept electrical heating/cooking will be a problem for next few years.

Jaak

P.S. - France is failing in its timely upkeep of it’s nuclear power plants that are getting old and worn out. They are shutting down reactors to fix all the corrosion in the piping systems. France is also failing at building new nuclear power plants on schedule and under budget.

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I don’t think that the US getting more heavily involved in fossil fuels is a great idea (whether for climate reasons, or for the fact the market is so volatile and hard to forecast long term). I think Europe would be best served to go more nuclear, more renewable, etc. and not depend on foreigners. Sounds like they might be going that way. Good for them.

The Captain keeps talking about smaller, more local power generation rather than the current model of fantastically huge power plants tens of miles away with miles of high voltage power lines. I also think that is a good idea. Will anyone do it?

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The Captain keeps talking about smaller, more local power generation rather than the current model of fantastically huge power plants tens of miles away with miles of high voltage power lines. I also think that is a good idea. Will anyone do it?

Anyone installing solar roofs or solar panels is doing it.

What is a microgrid?

A microgrid is a self-sufficient energy system that serves a discrete geographic footprint, such as a college campus, hospital complex, business center, or neighborhood.

https://microgridknowledge.com/microgrid-defined/

Your home can be a microgrid. My boat was a microgrid.

The Captain

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I don’t think that the US getting more heavily involved in fossil fuels is a great idea (whether for climate reasons, or for the fact the market is so volatile and hard to forecast long term). I think Europe would be best served to go more nuclear, more renewable, etc. and not depend on foreigners.

The Captain keeps talking about smaller, more local power generation rather than the current model of fantastically huge power plants tens of miles away with miles of high voltage power lines. I also think that is a good idea. Will anyone do it?

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I think for the short term us and other countries need to help Europeans ween themselves of Russian gas and oil. In the longer term US, Europeans and other countries need to ween themselves from fossil fuels. Coal and oil are by far the worst fossil fuels.

Distributed power means having community roof top solar panels, batteries and small wind turbines. That will happen once we get the the fossil fuel companies to stop fighting renewable energy, electrification of transportation and electrification of homes, businesses, government facilities and industry.

Nuclear power isn’t distributable power.

Jaak

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The Captain keeps talking about smaller, more local power generation rather than the current model of fantastically huge power plants tens of miles away with miles of high voltage power lines. I also think that is a good idea. Will anyone do it?

I personally think it is inevitable–at least on a modest scale, and will probably happen sooner than we think.

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I personally think it is inevitable–at least on a modest scale, and will probably happen sooner than we think.

As cost goes down and fuel prices soar the market for renewables grows. Businesses like Apple and Google have built solar farms to power their server farms…

Note the date! 14th October 2016

Why Apple and Google are moving into solar energy
By Chris Baraniuk
14th October 2016

Silicon Valley’s biggest companies are investing in renewable energy in a serious way – a sign, perhaps, of rapid changes in the energy market.

https://www.bbc.com/future/article/20161013-why-apple-and-go…

As cost falls home owners are adding solar and storage. In Spain excessive solar subsidies created a boom and bust. Too much of a good thing is not always good. Let the market do its job.

The Captain
recalls a time several decades ago when 4 operation calculators came with solar chargers

Remember When Everyone Was Using Solar Energy?

Solar-powered calculators may have familiarized a new generation with green energy. On the other hand, maybe they were just cool.

For 30 years, the technology that could help save the world has been in the hands of children.

Solar calculators were such a routine part of math class from the mid-1980s onward that they barely warrant any surprise or wonder today, even though a mostly solar-powered future is still decades away, if it happens at all.

https://www.nationalgeographic.com/science/article/160225-so…

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I used to have a dual powered (battery/solar) Casio calculator. I think the battery provided most of the “juice”. Had the device for years, only needing to change the battery every second or third year. Don’t know where I place the darn thing.

Went to the store and bought a new Casio scientific calculator, solar-powered. Device was a major disappointment. Daytime use - maybe 10-15 minutes, and screen blanked out. Could hardly use the device at night in a well-lighted room. Replaced calculator with a generic, brand (Caliber) calculator that has worked great the 15 months or so.

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Regarding Germany, with major natural gas infrastructure already in place, I think they just need to try one FSRU (Floating Storage & Regasification Unit) project. Basic requirements
a. One FSRU
b. Some port infrastructure
c. Ability to connect to the gas grid
Golar LNG (GLNG) have an FSRU available currently. Hoegh might also have an FSRU available. Germany could order a new FSRU, but it would probably take 2-3 years for delivery.

HohumYNWA
(Recently restarted a small GLNG bet. Having an available FSRU could pay off near term. But, more upside could happen with an award of a new FLNG project. I think the Russia-Ukraine war likely increases the viability of such an FLNG project)

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Germany may keep it’s last 3 nuclear power plants operating for a few more years until they get their other fuel sources sorted out.

Scholz Shoots Down Appeal to Reverse Germany’s Nuclear Exit
www.bloomberg.com/news/articles/2022-04-06/scholz-shoots-dow…

DB2

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Scholz Shoots Down Appeal to Reverse Germany’s Nuclear Exit
DB2

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Not a big deal. Nuclear supplies only about 11% of Germany’s electricity consumption. Renewables supply 41% and natural gas supplies 15%.

Jaak

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Not a big deal. Nuclear supplies only about 11% of Germany’s electricity consumption. Renewables supply 41% and natural gas supplies 15%.

Jaak

… und der Rest?

Odd how you leave out important details when it serves your purpose?

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… und der Rest?

Odd how you leave out important details when it serves your purpose?

Tim

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I was waiting for you to fill in the rest because of your obsession to be critical of Germany.

Jaak