<\/p>\n\n\n\n <\/p>\n\n\n\n Over the last decade, energy experts repeatedly assured policymakers around the world that increasing the use of renewables, while shutting down nuclear plants, would make energy supplies more secure, while lowering prices. To make their case, experts pointed to radical declines in the price of solar panels, wind turbines, natural gas, and lithium batteries.<\/p>\n\n\n\n But those reassurances have come into question as natural gas prices have spiked around the world, resulting in street protests and contributing to inflation. \u201cThe sudden slowdown in wind-driven electricity production off the coast of the U.K. in recent weeks whipsawed through regional energy markets,\u201d reported<\/a> the Wall Street Journal <\/em>yesterday. \u201cGas and coal-fired electricity plants were called in to make up the shortfall from wind.\u201d<\/p>\n\n\n\n The crisis has shaken policymaker confidence in the rosy pronouncements by renewables advocates. High natural gas prices \u201ctook a lot of people by surprise,\u201d a senior energy economist at a leading analytics firm told<\/a> the Wall Street Journal<\/em>. \u201cIf this were to happen in winter when we\u2019ve got significantly higher demand, then that presents a real issue for system stability.\u201d<\/p>\n\n\n\n Overdependence on renewables isn\u2019t the only reason energy prices hit record-high levels in Europe. Post-pandemic economic recovery resulted in higher energy demand. A drought in Scandinavia meant less hydroelectricity<\/a> was available for export. And a decline in new gas prospecting after 2015, and too little natural gas stored on-site<\/a> after a colder-than-expected winter, and, both played a role. <\/p>\n\n\n\n But the heavy reliance on renewables in Europe and the United States has made electricity supply more vulnerable to a single commodity\u2019s volatility. Today\u2019s electricity grids mean that high gas prices cause energy price spikes and a return to the dirtiest forms of electricity production, including diesel and coal. <\/p>\n\n\n\n The return to coal was most dramatic in Germany. Electricity from wind was 20% lower in Germany<\/a> in the first half of 2021 than the first half of 2020, resulting in a 24% higher use of fossil fuels and 28% greater emissions from electricity. Coal was the number one source of energy for electricity in Germany in the first half of 2021, comprising 27% of total electricity.<\/p>\n\n\n\n But other nations faced the same problem. Last week, Ireland was forced to warn of blackouts <\/a>\u201cdue to a generation shortfall.\u201d Lack of wind in Britain led its electricity grid operator to ask French electricity giant, \u00c9lectricit\u00e9 de France<\/a>, to restart a coal plant in Nottinghamshire. And California regulators last week requested permission<\/a> from the federal government to violate air pollution regulations so fossil fuel plants, including diesel ones, can operate more than anticipated. <\/p>\n\n\n\n Wholesale natural gas prices in Europe are currently five times higher<\/a> than during the same period in 2019. High electricity prices resulted in Spanairds taking to the streets. Britain\u2019s energy regulators allowed utilities to raise electricity prices by 12%. And Germany\u2019s energy prices are at their highest level in 13 years<\/a>.<\/p>\n\n\n\n A similar dynamic is underway in Asia. \u201cWe see the market balancing by burning a lot more coal and oil than in recent years,\u201d said<\/a> one analyst. \u201cWe’re already seeing it in Asia, where gas prices are even higher than they are in Europe, countries like Bangladesh and Pakistan are already burning quite a lot of oil for generating power.\u201d<\/p>\n\n\n\n Now, energy market watchers fear that prices could rise even more during the winter. \u201cIf it is cold, then we\u2019re in trouble,\u201d said<\/a> an Italian gas company executive. The US State Department\u2019s special envoy for energy security last Friday warned<\/a> that Europe lacked sufficient energy supplies to survive the winter. Earlier this month Europe\u2019s Central Bank President, Christine Lagarde, described energy markets<\/a> as one of the key reasons for price inflation more broadly.<\/p>\n\n\n\n In response, renewable energy advocates have called for even more reliance on renewables. Doing so will, in the words<\/a> of the New York Times,<\/em> \u201cfree consumers from being at the mercy of global commodity markets.\u201d Meanwhile, wind industry advocates are claiming<\/a> that off-shore wind turbines will prevent blackouts in California. <\/p>\n\n\n\n But while solar panels and wind turbines can be said to be fuel-saving, they do not \u201cfree consumers\u201d from global commodity markets. In contrast to coal and uranium, solar panels and wind turbines require increased dependence on natural gas, which they need to handle their intermittent electricity generation. This hasn\u2019t been much of a problem for most of the last decade because natural gas prices have been at historic lows, thanks to technological breakthroughs in fracking and off-shore gas development, and heavy Wall Street investments in gas prospecting and drilling.<\/p>\n\n\n\n The gas boom allowed governments to add renewables to electricity grids at a relatively low cost, since gas is easy to switch on and off in response to intermittent sunlight and wind. Conversely, always-on nuclear plants were considered uneconomical because of their comparative inflexibility; it\u2019s more economical to run nuclear plants at 100% of their capacity, since reducing their output saves little to nothing in operations, but sacrifices revenue. <\/p>\n\n\n\n And in the short-term, the low cost of natural gas shielded rate-payers from the economic consequences of closing nuclear plants. In New York, for example, grid operators were able to increase<\/a> generation from natural gas by 14% in the first month after closing Indian Point, without significant backlash.<\/p>\n\n\n\n Some advocates of renewables and natural gas have claimed optimistically that new natural gas supplies will be available within a few weeks, but most experts say supplies will remain tight until 2024<\/a>. \u201cThere is no quick fix to the current situation,\u201d noted<\/a> one analyst. \u201cEuropean customers, therefore, hope the winter will be mild and favorable windy conditions mitigate rising costs this year.\u201d<\/p>\n\n\n\n All of that has changed now with skyrocketing natural gas prices, which are contributing to inflation economy-wide. \u201cEuropean energy pricing dynamics offer a glimpse of what is in store for other commodity markets, with widening deficits and depleting inventories leading to elevated price volatility,\u201d said a Goldman Sachs analyst earlier this week, adding that \u201cdemand destruction is the only option to rebalance markets.\u201d<\/p>\n\n\n\n The impact could be devastating for British manufacturing. \u201cThere is simply no way that the [steel] sector can absorb additional price increases and remain competitive,\u201d said<\/a> the CEO of UK Steel. \u201cWe have been urging the Government for years to take action on energy prices and provide us with a level playing field to operate on.\u201d<\/p>\n\n\n\n The Texas blackouts in February 2021 show just how serious the coming shortages could be. After several severe winter storms, a calm patch of cold air stretching across much of the US brought wind turbines to a halt while gas supplies dwindled and froze up. Texas endured four days of blackouts for millions of American citizens, leading to hundreds of deaths.<\/p>\n\n\n\n The Texas crisis was also a wake-up call for investors. The price of renewable energy exchange traded funds (ETFs)\u00a0boomed<\/a>\u00a0in 2020 at a rate up to 150% more than the S&P 500, and continued to boom in 2021 but crashed the week of the Texas blackouts and have persistently declined ever since. As of publishing, iShares Global Clean Energy has declined 25%, Invesco Solar has declined 30%, and one of the largest wind ETFs, First Trust Global Wind, declined 10%, since February 12, 2021.<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n High natural gas prices, and declining investor enthusiasm for renewables, increase the chance that governments will keep nuclear plants operating in the U.S., Europe, and Asia. Over the last five years, Environmental Progress has helped build<\/a> a global pro-nuclear movement<\/a>, and has pro-nuclear allies in over two dozen nations around the world. Yesterday, the Illinois legislature passed legislation, advocated by a pro-nuclear coalition led by labor unions, Radiant Energy Fund, and the Campaign for a Green Nuclear Deal, to keep two nuclear plants operating.<\/p>\n\n\n\n Now, support is growing for keeping nuclear plants operating in Belgium, South Korea, California, and even Germany. Although Korea\u2019s once-proud nuclear construction industry has been severely damaged and several reactors closed and cancelled, nuclear sentiment is high. In a poll earlier this month, 70% of South Koreans said<\/a> the country should maintain or expand nuclear electricity, including 80% of those under 30 years old. <\/p>\n\n\n\n New voices are speaking up for nuclear power in Belgium. Assita Kanko<\/a>, a charismatic and up-and-coming Member of the European Parliament for Belgium, has been speaking out<\/a> on television and social media for keeping all of Belgium\u2019s nuclear plants operating. Maarten Boudry, a professor at Ghent University, is circulating a petition<\/a> to save all seven of Belgium\u2019s nuclear plants. And on Saturday, 300 pro-nuclear activists rallied<\/a> at a \u201cStand Up for Nuclear\u201d event in front of the Brussels-Centraal Train Station. Emmeric Massaut<\/a>, an aerospace engineer who works for Belgium\u2019s rail agency, closed the event with an impassioned plea<\/a> to save nuclear plants around the world. <\/p>\n\n\n\n Meanwhile, pro-nuclear heads of state,\u00a0led by France and Hungary<\/a>, have been showing newfound courage to promote and\u00a0defend the technology from Germany<\/a>, supported by grassroots pro-nuclear activists.\u00a0\u201cPolling shows that there is now majority support among members of both the German Liberal Party (FDP) and the Christian Democrats (CDU) to keep nuclear plants operating,\u201d said Bjorn Peters, scientific director of the pro-nuclear Energy and Nature Activist Network (AKEN). \u201cWe are cautiously optimistic that the energy crisis will force politicians to reconsider the nuclear energy option.\u201d\u00a0If it doesn\u2019t, Germans may soon be forced to choose between a very cold winter and an increasingly coal-powered one.<\/p>\n\n\n\n <\/p>\n\n\n\n![\"\"](\"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2021\/09\/0https___bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com_public_images_8792dbc4-f231-48ce-ab7d-e4bcf125d2b8_2048x1365.jpeg?resize=723%2C482&ssl=1\")
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