The view I got on electrical power prices in Europe is that this is mostly a home made crisis, where Putin only plays a minor role in it. It's a chain of events, where many countries just relied always on the market to provide enough cheap energy when needed without building enough power plants on their own to be able to satisfy their own demands domestically.
Sadly this story is rarely told in press coverage, which is no wonder, because it is quite embarassing for a lot of European countries. The European power grid roughly connects 42 countries, and delivers electrical power to 520 million people. Please be aware about that a grid is just that, a grid, so it cannot save energy. Demand and supply must always match, otherwise there are going to be big problems.
This here is the major fundamental problem of European electrical power supply, which I peeled out from below Twitter thread:
As you can see there are only a few countries which really produce more energy than they do consume: Germany and France are by far means the biggest net exporters (all numbers in red are bad), Czech Republic and some others. In total the European power grid relies on power imports, because there is not enough power produced domestically. This power is mostly imported from the UK, Norway and Sweden. Note there are also some countries which heavily improved their situation, like Spain, Belgium or the Netherlands.
Especially Italy is quite shameful; they are really overrelying on the grid. They have scrapped a lot of their own power plants in the 90s, but never bothered to construct new ones, Austria and Hungary are then 2nd and 3rd worst. Although Hungary now announced construction of a new nuclear power plant - Russian design by the way.
So the main reason for potential problems is this above: the power grid relies heavily on imports. Internally this power was mostly then sold by Germany and France to the countries in red, aside the external imports.
Now in 2022 we have got a few issues, which really made the fragile system above break:
1. Germany shutting down nuclear power plants due to the Energiewende, which is basically that Germany wants to move away from using fossil energy sources to create eletrical power completely,
2. France's and the UK's reactor output levels are pretty low due to a) water shortage, and/or b) many of them being in heavy maintenance right now (France)
3. Norway's water reservoir levels were really low due to the drought, and water power is a big thing in Norway,
4. Grid integration of the Ukraine.
2 and 3 are self explanatory, meaning much less power generation there as normally due to
climate change - either severe shortage of (cooling) water or having to abide enviromental protection laws on heating up rivers - resulting in a bigger gap. 4 is an engineering problem, but solvable.
Point 1 needs explanation: Angela Merkel announced in 2011 that Germany will abandon nuclear power completely again (ironically about one year after Merkel discarded the decision of the previous government to pull out of nuclear power) within roughly 11 years time frame. From the originally 17 operational power plants in Germany only 3 are still in service. These normally should shut down end of 2022, but life span has extended by now.
The problem with nuclear power pulling out when adding so much wind and air power to the grid like Germany is that renewables are high volatile sources of energy, which do work pretty well in summer but during winter at least solar power does not so much. So you've got to find ways to fill the gap between summer and winter in solar power. This gap is covered by conventional power plants at the moment, since large scale energy storage facilities for unused renewable power are still missing completely.
And since Germany wants to get rid of nuclear power as well coal based power plants, the plan here was to close this gap with gas power plants instead. This worked well enough in normal times. But now since gas prices are on the high this means that, well, electrical power is on the rise as well. And as another consequence out of service coal power plants are being reactivated again.
And since France really struggles with its old nuclear reactor flotilla, they might even become for a first time since decades in 2022 a net importing country.
So to make it short: for many years the vast majority of countries connected to that grid heavily relied on France and Germany to cover up their asses. This worked well enough, but now due to climate change with very long droughts and summers, high gas prices and poor decisions made in Germany the system finally failed to maintain cheap power prices, exposing its structural problems to the broad daylight.
And as added problem on top of that just think about the potential increase of electrical power consumption due to electrical vehicles becoming more common day by day. This really requires that many of the red countries should invest in nuclear power plants again, especially Italy, Austria and Greece!
The whole thread starts here:
www.thetimes.co.uk
aaronrupar.substack.com
www.wsj.com
www.stuttgarter-nachrichten.de
www.cnbc.com
