Brussels is drawing up emergency plans to reduce the cost of energy, amid warnings from the boss of Shell that the gas crisis is set to last for several years.
Ursula von der Leyen, president of the European Commission, said the bloc needed an “emergency instrument” to cope with the crisis and would try to break the link between gas and electricity prices which amplifies the impact of gas shortages.
Why don’t we all go fracking? Poland, certainly, has lots. Austria some maybe? Anyone else?
Speaking in Berlin, von der Leyen said: “We have to develop an instrument which makes sure that the gas price no longer dominates the electricity price.
“We’re seeing now with these exorbitantly high gas prices that we must decouple.”
Ah, no, they mean to fiddle with paper rather than actually produce more energy. Ah well.
Iberia is, largely enough, not connected into the wider European energy market. Thankfully.
Have we here in the Pacific Northwest been using decoupling for decades, because otherwise simple supply and demand dynamics would drive prices negative?
We have to develop an instrument which makes sure that the gas price no longer dominates the electricity price.
So in typically eu response we will be raising the price of electricity.
which makes sure that the gas price no longer dominates the electricity price
Coal?
“Iberia is, largely enough, not connected into the wider European energy market. Thankfully.”
For now… At least in Spain, the politicos are trying to change that
Ah, no, they mean to fiddle with paper rather than actually produce more energy. Ah well
Let them eat bugs?
So in typically eu response we will be raising the price of electricity.
*Again.
Remember – it wasn’t Putin who decided to sanction Russia, and publicly boasted Europe would be ripping up its contracts by the end of the year. Wasn’t the Kremlin that stole Gazprom’s property in Germany. Europe did this to itself, under pressure from everybody’s favourite fortified democracy.
It’s going to be exciting, and maybe even in a good way, ultimately. We’ve been eating the seedcorn for quite a while now, and the results were Net Zero madness, widespread institutional failure and demographic collapse during a time of unprecedented prosperity.
Poverty rarely solves anything, but it might be a wake up call for a continent that’s been somnambulating towards extinction for decades. We’ll know things are moving in the right direction when people like Ursula de Vil are no longer in charge of anything.
We have to develop an instrument
Ukelele v.d. Leyen
“. We’ll know things are moving in the right direction when “…
People from shitholes stop coming?
(This references Rhoda’s Greater Shithole theory, which is self-explanatory.)
Rhoda – stranger things have happened.
Would you want to give some gangsters thousands of Euros to come here and shiver in the dark?
I don’t think Europe is going to be the land of free Nutella and Fiki-Fiki for much longer. Also, they’ll probably burn Paris to the ground.
So governments have imposed a system whereby the price of, (expensive), wind and solar has been dominating the price of energy for decades and utilities must buy energy from unreliables despite the fact that gas, coal and nuclear energy are much cheaper.
Now, thanks to the same governments’ idiotic policies – discouraging and almost criminalising investment in fossil fuels, as well as encouraging Putin’s follies – gas has shot up in price so therefore we must disconnect the price of gas from the price of energy?
Ah, the efficiency of governments interfering in the market.
From Statisches Bundesamt
Lignite 16.2%
Hard coal 7.5%
Natural gas 16.7%
So gas and electricity are not so closely coupled as I expected.
But did the old trout suggest any concrete way of replacing those gas fired generators, especially when they are needed to back up the 44.2% supplied by unreliables?
Of course not.
I’m old enough to remember German government officials openly laughing at Donald Trump for warning them about Germany’s over-dependence on Russian gas.
Ursula’s going to send some text messages then?
Oxygen larcenist
Here’s Trump’s warning;
https://twitter.com/nowthisnews/status/1044740334306058241?t=cyGtZQ_MBl2e6Z1CEG4FTA&s=19
rsm
Power in the PNW does go negative. Not frequently, but in freshet (spring run-off) there is a surplus of generation: all the small run-of-river guys are maxed-out, and the storage reservoirs are getting full. At this time of year it’s pretty temperate, both in the PNW and the south, so there isn’t a lot of load. If we get windy conditions the wind operators “have to” run – they only get the Production Tax Credit ($22/MWh, IIRC?) if they produce – so they will accept a negative price of up to $22/MWh (or a little less, if they are treating a portion of their maintenance as variable cost – which they should be).
Bonneville Power Administration lost a case brought by wind operators a few years ago because they used to preferentially maintain hydro generation: when (storage) hydro operators spill they can do harm to fish, so reducing spill was an environmental benefit. I can’t remember the exact outcome – whether BPA has to pro-rate constrained generation, or what. Other than that, though, I don’t know what sort of decoupling you think happens in the PNW – gas is still the marginal resource, and it sets the electricity price most of the time in the PNW, and in the rest of the WECC.
dcardno
《Revenue decoupling (RD) is generally defined as a ratemaking mechanism that is designed to eliminate or reduce the dependence of a utility’s revenues on system throughput (i.e., sales). It is adopted with the intent of removing the disincentive a utility has to administer and promote customer efforts to reduce energy consumption and demand or to install distributed generation to displace electricity delivered by the utility’s T&D system.》
In other words, isn’t electricity so overproduced, that the state steps in to explicitly decouple prices from simple supply and demand? Otherwise wouldn’t utilities be incentivised to get customers to buy more and more of their essentially limitless supply?
By the way, doesn’t the BPA graph of supply vs. load show glaring, persistent oversupply?
https://transmission.bpa.gov/business/operations/wind/baltwg.aspx
《You will see that the total generation is always greater than the total BPA load because most of the time BPA is a net exporter of energy. The BPA Load does not include scheduled energy to other balancing authority areas.》
rsm
Sure – if utilities have an “essentially limitless supply” then they have an incentive to sell as much of the stuff as they can. In this case, the state is stepping in because the economic incentives to the utility don’t match the policy preferences of the state. I’m not sure how that relates to the current European situation, given that they are not dealing with “a limitless supply,” but rather the opposite.
Yes, BPA is a net exporter: the PNW has a competitive advantage in creating electrical energy compared to California or Arizona – so they do. What of it?
One clarification – gas sets the wholesale price of energy; for the BPA, that’s the Mid-C price. Customer prices don’t necessarily follow.