{"id":351843,"date":"2024-11-21T09:03:46","date_gmt":"2024-11-21T08:03:46","guid":{"rendered":"https:\/\/climatescience.press\/?p=351843"},"modified":"2024-11-21T09:03:48","modified_gmt":"2024-11-21T08:03:48","slug":"german-industry-is-failing-due-to-lack-of-russian-gas","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=351843","title":{"rendered":"German Industry Is Failing Due to Lack of Russian Gas"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

<\/p>\n\n\n\n

From The Daily Sceptic<\/a><\/p>\n\n\n\n

By\u00a0Noah Carl<\/a><\/p>\n\n\n\n

The German economy is in crisis. Plants and factories are shuttering. Industrial production is down. And overall GDP hasn\u2019t risen since 2019. According to Andreas R\u00fcter, a corporate consultant\u00a0interviewed<\/a>\u00a0by the\u00a0Financial Times<\/em>, the present crisis is of a \u201ccompletely different order of magnitude\u201d from the dotcom bust, September 11, the financial crisis, the euro crisis and the Covid pandemic.<\/p>\n\n\n\n

\"\"
Real GDP in Germany.\u00a0Source.<\/a><\/figcaption><\/figure>\n\n\n\n

In the latest piece of bad news, the car manufacturing giant Volkswagen announced<\/a> that it may have to shut down several German factories for the first time in its 87-year history.<\/p>\n\n\n\n

Everyone agrees<\/a> that a major cause of Germany\u2019s economic troubles is high energy costs. Indeed, the price that industry pays for electricity is about three times higher<\/a> in Germany than in the US. But why<\/em> have energy costs risen?<\/p>\n\n\n\n

Many people on social media blame the Energiewende<\/a> (Energy Transition), a policy that involves expanding solar, wind and hydroelectric power, while phasing out the country\u2019s remaining nuclear plants.<\/p>\n\n\n\n

There can be little doubt that energy costs would be lower in the absence of the Energy Transition. However, it can\u2019t explain why the economy is suddenly<\/em> in so much trouble. The Energy Transition was formally announced in 2010 and has been implemented in various stages since then. Yet as the chart above shows, Germany enjoyed robust growth between 2010 and 2019. In fact, industrial production reached an all-time high<\/a> as recently as 2018.<\/p>\n\n\n\n

A related claim is that energy costs have soared because of the decision to close three nuclear plants in April of 2023. But this doesn\u2019t fit the facts either. The chart below shows the price of electricity for non-household users in band IC<\/a> from the first half of 2010 to the first half of 2024. As you can see, practically all of the increase happened before<\/em> the three nuclear plants were closed. (Charts for other consumption bands tell a similar story.)<\/p>\n\n\n\n

\"\"
Price of electricity for non-household users in band IC.\u00a0Source.<\/a><\/figcaption><\/figure>\n\n\n\n

Indeed, most<\/em> countries in Europe saw a sharp rise in energy costs at exactly the same time, including France, which relies heavily on nuclear power.<\/p>\n\n\n\n

The chart below plots the same quantity as above but with taxes and levies included. Here the increase is much less steep, which suggests that fiscal policy has actually been making energy cheaper<\/em> over the last few years, relative to the period before the increase.<\/p>\n\n\n\n

\"\"
Price of electricity for non-household users in band IC, including taxes and levies.\u00a0Source.<\/a><\/figcaption><\/figure>\n\n\n\n

The main reason<\/a> energy costs have soared is that Germany is no longer buying large quantities of cheap Russian gas. Indeed, practically all of the increase happened between the first half of 2022 and the first half of 2023 \u2013 the exact period in which the price of gas spiked owing to the drastic reduction in Russian gas flows. (Europe still gets about 20% of its gas<\/a> from Russia, as compared to 45% before the war.)<\/p>\n\n\n\n

In the medium-term, there are things Germany can do to bring down energy costs, like building more LNG terminals, reversing its phase out of nuclear power and shifting to less energy-intensive industries. But in the short-term, there\u2019s nothing it can do to replace large quantities of cheap Russian gas. So, the country\u2019s economic troubles will continue for the foreseeable future.<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

The German economy is in crisis. Plants and factories are shuttering. Industrial production is down. And overall GDP hasn\u2019t risen since 2019. According to Andreas R\u00fcter, a corporate consultant interviewed by the Financial Times, the present crisis is of a \u201ccompletely different order of magnitude\u201d from the dotcom bust, September 11, the financial crisis, the euro crisis and the Covid pandemic.<\/p>\n","protected":false},"author":121246920,"featured_media":351844,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","_crdt_document":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[691831594,691831593,691830528,691831595,691818589,691820695],"class_list":{"0":"post-351843","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-uncategorized","8":"tag-cheap-russian-gas","9":"tag-energiewende-energy-transition-2","10":"tag-german-economy","11":"tag-lng-terminals","12":"tag-nuclear-plants","13":"tag-volkswagen","15":"fallback-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/11\/00Gas-Field.jpeg?fit=1024%2C682&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-1twT","jetpack-related-posts":[{"id":285292,"url":"https:\/\/climatescience.press\/?p=285292","url_meta":{"origin":351843,"position":0},"title":"Country On Green Transition\u2019s Leading Edge Will Fire Up Coal Plants To Meet Demand This Winter","author":"uwe.roland.gross","date":"10\/27\/2023","format":false,"excerpt":"A country on the forefront of the green transition will put several mothballed coal-fired power plants back online ahead of the upcoming winter, Bloomberg News reported Wednesday, says The Daily Caller. 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