8 ms·

This is nothing. If you want to panic, check the futures markets for the next 2 quarters, especially France. So I think short term we are pretty screwed. But I

This is nothing. If you want to panic, check the futures markets for the next 2 quarters, especially France. So I think short term we are pretty screwed. But I think if you can produce electricity at 1/10 or even 1/20 of the price, wouldn't you be adding new capacity now? The only fast option are renewables, so my wild guess is that there will be so much new capacity added in the next years, the bottleneck will not be production, but skilled labor to install it. That's the way a real market economy should react.

Toutouxc 4y ago
The thing about "short term screwed" is that in some countries the "screwed" is actually "people having to pay more than 100 % of their income for electricity". Theoretically, long term, this could all work out nicely and steer more people and governments towards renewables and decentralized generation, but the short term consequences are starting to look brutal.
- locallost 4y ago
  No, we agree here. I'm not trying to minimize the impact. Factories will shut down, leading to job loses, shortages which will again cause inflation etc. But we can't change that anymore. What we can do is build more capacity.
  - pclmulqdq 4y ago
    We can also change policy to make sure we don't get into this kind of situation again. We, as a world, don't seem to want to do that.
  - sofixa 4y ago
    > Factories will shut down, leading to job loses, shortages which will again cause inflation etc Not necessarily. The same thing (forced closures of factories) was handled gracefully without job losses during the pandemic through various unemployment schemes. I see no reason why the same can't happen again.
    - pclmulqdq 4y ago
      Those schemes are responsible for tremendous inflation which is part of the reason why energy prices are high compared to incomes today. There is no free lunch.
      - sofixa 4y ago
        They might have contributed, a bit (all they did was replace income from salaries with equivalent income in unemployment money, and cover some enterprise's expenses; the only monetary difference was coming from those who used to spend a lot of money going out to bars and stuff, who couldn't anymore), but let's not kid ourselves. The main reason for the booming inflation is Russia's invasion of Ukraine and resulting boom in prices of many raw materials, including very important ones like foodstuffs and energy, which are factored in the prices of pretty much everything. I don't understand the people who are hell bent on ignoring that and pinning all the blame on monetary policy. If you really want to blame someone, blame Putin.
        pclmulqdq 4y ago
        Several prominent economists at Harvard looked at inflation in countries that did and didn't send out stimulus checks. The numbers ranged from 4% to 8%, with stimulus checks strongly correlating with higher inflation. The math disagrees: there was going to be high inflation due to the pandemic and the Ukraine war, but stimulus policies accounted for the majority of the damage.
        sofixa 4y ago
        Do send out the study. The fact that you're talking about stimulus checks means either you or them are talking about the US, which couldn't be farther in how it handled the pandemic from the EU, which is the topic of the discussion. There are no checks here, we aren't stuck in the past. And all was handled at another layer by preventing layoffs by covering payroll and other expenses for companies instead of allowing layoffs and then sending checks through the mail like it's the 1950s. And yes, the delayed spending and the some extra money will result in inflation, of course. But the impact from the prices of all sorts of crucial raw materials is probably much higher.
  - origin_path 4y ago
    There is obviously another option that people don't want to point out - start buying Russian gas again. The idea they're resisting to sell it is wrong. There's a whole pipeline lying idle ready to go the moment sanctions are lifted. People are acting like this is a natural crisis. It's not, it's an artificial one created by political choices. This will lead to political extremism as voters realize they are freezing or bankrupted because politicians like "standing with Ukraine" more than they like their own citizens. Not every politician will be like that. Some will say, we send weapons and it's not our war anyway. Citizens first, foreigners second. And suddenly that will be mainstream politics.
    - anticristi 4y ago
      > start buying Russian gas again I'm afraid Europe bought a one-way ticket. Dependence on Russian energy is no longer a hypothetical issue, but a demonstrated concern. Freezing is not great, but giving the thermostat back to Putin is worse.
    - timeon 4y ago
      > There is obviously another option that people don't want to point out - start buying Russian gas again What I think is more likely is that coal is back on the menu.
- jillesvangurp 4y ago
  I expect some major support programs will be put in place to address this. And it will probably involve a bit of money printing. No sane government is going to let its citizens deal with going bankrupt because of massively higher energy prices. So Germany, France, etc. will do whatever needs doing to prevent that. The real problem will be industry having to shut down or minimize operations. They'll be the ones bearing the real cost. This winter will be brutal in terms of its economical impact on industry. The next one, countries will be better prepared. It's Russia that will be suffering the consequences long term. I doubt any country in Europe wants to ever be dependent on them again to the extent that they have in the past.
  - sph 4y ago
    > I expect some major support programs will be put in place to address this. And it will probably involve a bit of money printing. One of the two Tory lunatics^Hhopeful candidates for PM confirmed there's not much they can do to ease the energy price crisis without creating a massive hole in the British budget. But that's what countries will have to do, and it's not going to be pretty. The Western world just went on a massive printing spree two years ago because of COVID, a further temporary injection of capital and 2008 will pale in comparison to the next recession.
  - Sakos 4y ago
    I've seen a report or two talking about how fertilizer plants are being shutdown or run at reduced capacity across Europe because of gas costs. Electricity is the least of our problems.
    - chewz 4y ago
      Oh, It is much more then just fertilizer plants. Fertilizer plants stoped this week all over EU. (Yara Norway, Azoty Poland etc.) The moment you stop fertilizer plants you stop supplies of CO2 and NO2 industry gases and that stops dairy plants, meat factories, breweries etc... Basically you stop food production and distribution. And after cows get culled and you have 2-3 years before production can come back to initial levels. It is going to be rather tough decade for Europe.... And not just Europe... Europe’s Energy Crisis Threatens Glass Production https://www.wsj.com/articles/europes-energy-crisis-threatens-glass-production-11661598180?mod=hp_lead_pos10 https://www.wsj.com/articles/europes-energy-crisis-threatens... There’s a Carbon Dioxide Shortage, and Food and Drink Makers are Scrambling https://www.wsj.com/articles/food-beverage-companies-race-to-keep-plants-running-during-wide-co2-shortage-11661527088?mod=hp_lead_pos12 https://www.wsj.com/articles/food-beverage-companies-race-to...
boshomi 4y ago
Eye watering French power prices: * Baseload from nov22 to feb23 above 2000€/MWh * Peak Load nov22 to dec22 at 3000€/MWh * Peak Load Q1/23 at 2970€/MWh But the prices for other nations also went up steeply. [1] https://www.eex.com/en/market-data/power/futures#%7B%22snippetpicker%22%3A%22EEX%20French%20Power%20Futures%22%7D https://www.eex.com/en/market-data/power/futures#%7B%22snipp...
- andrepd 4y ago
  France has a shitload of nuclear capacity and low dependence on gas. Why is their energy rising so much?
  - konschubert 4y ago
    Because their nuclear power plants are currently going belly up one after another. Many of them are the same model, with parts from the same factory. That factory made some bad parts. They need to be exchanged. It takes a lot of time, many months.
    - paraboul 4y ago
      This is not entirely true. Some power plants are just coincidentally under planned maintenance.
    - jakewins 4y ago
      Also significant capacity loss from plants unable to run in droughts, since they rely on cooling water that has now dried up. Nukes reliant on Loire valley water are currently curtailing production.
      - sofixa 4y ago
        > Nukes reliant on Loire valley water are currently curtailing production. That's old information, the Loire is back up to normal levels after the last two weeks of rain, so nuclear power plants should be operating as before.
Tenoke 4y ago
Should I panic enough in Germany to be wise to consider moving away? Where as a European?
- andrepd 4y ago
  You should definitely not move countries due to a post in hackernews.
  - Tenoke 4y ago
    I'm hardly hearing about the electricity issue in Europe only from a single HN post.
- tuukkah 4y ago
  To a house that is not heated by direct electricity (nor by gas), or to one where you have installed some other source of heating such as heat pumps or district heating.
  - legulere 4y ago
    What do you think the heat pump and district heating runs on? Heat pumps still need electricity and district heating is often using gas.
    - tuukkah 4y ago
      Helsinki's utility company today announced its district heating prices for the winter: +30% increase compared to last winter. This is in contrast to market prices +400% for electricity and +300% for gas. https://www.helen.fi/en/news/2022/significant-increase-in-costs-impacts-the-price-of-district-heat https://www.helen.fi/en/news/2022/significant-increase-in-co... Last year, already 20% of the district heat by the utility was from renewables, and in 2030 it should be all carbon neutral. https://www.helen.fi/en/news/2022/helen-and-elisa-to-heat-homes-in-helsinki-with-waste-heat-from-a-data-centre https://www.helen.fi/en/news/2022/helen-and-elisa-to-heat-ho...
    - 4y ago
konschubert 4y ago
Actually for Sunday the day-ahead prices look quite low: https://energy-charts.info/charts/price_spot_market/chart.htm?l=en&c=DE https://energy-charts.info/charts/price_spot_market/chart.ht...
konschubert 4y ago
Bottlenecks are: - Planning permissions take too long - Solar panels and especially inverters are hard to get - Labour to install is scarce. Electricians give you appointments next year.
kkfx 4y ago
The only fast option is another: arrest those who control the current energy market for crime against humanity and re-nationalize the sector. Really. With them in jail FOR LIFE other like them will do their best to avoid getting equally in jails and States have nothing to deal with "prices". For instance in France more than half of the national NPP are offline due to needed maintenance the private owners postpone at maximum to maximize their profit. Arrange the result take time. Jail the aforementioned owners telling anyone in the private sector that if they committed criminal business they can choose to be silent and cooperative of face an equal fate will suffice. Private sector is THE SOLE responsible of the current prices, they do not came from war or natural scarcity. Telling them that "good times are passed" for them not for the Citizens at a whole as they want instead suffice for a quick U-turn since they know they are unarmed. Renewables can't be nor fast nor an option simply because the sole that can live on them at unbearably high prices in the actual market are single private NEW homes in places where p.v. is effective enough and climate is not that cold. In a city, a dense European one, there is no room for renewables to really produce energy, you can only make some show for commercial purposes. Oh, I say that as one who actually have built a new home five years ago, with p.v. and small lithium backup, so to speak. The quickest way is one: telling those who profit that revenge sentiments start to be in the air and they will FAIL to ride them to push a new hoax this time. However since people are not in that mood, actually many have thirst for blood but not for positive actions energy giants and their public friends are not startled at all. That's is.
jillesvangurp 4y ago
We're not screwed. We're just witnessing the accelerated death of the fossil fuel based power generation industry and it's making renewable power extremely lucrative. Prices are high because of gas prices. Except it's August and Europe is producing a lot of solar power and a fair bit of wind power. That's why there are no blackouts. There is no power shortage; just a gas shortage. Europe has plenty of reserves to generate power. It's just not going to be cheap to use those reserves. The current crisis is not a capacity crisis but a fuel cost crisis. Anybody who was complacent about renewables is going to be paying the price for that this winter. Anybody who wasn't is going to reap the rewards. High prices for electricity and no production cost for renewables basically means whomever produces using that is making a lot of money right now. More than 5x of what they could reasonably expect normally. Probably closer to 10x. That's great news because that will be invested in even more renewable power. Solar and wind are the closest thing to a perpetuum mobile that you can get right now. Electricity prices are high because all the gas and coal production is being kept at a minimum rate because of the high cost of fuel. Companies still in the business of burning that have to pay such high prices for fuel that it's cheaper for them to shut down operations. Unless they are absolutely needed in which case they'll charge for the fuel cost of course. However, most of Europe is relying on renewables and topping up gas supplies for the winter instead. E.g. Germany hit their 80% reserves target ahead of schedule a few days ago, So, any gas plant that doesn't absolutely have to be on right now has probably been idling for months. No reason to turn those on. The reason France has a tough few quarters ahead is that quite a few of their aging nuclear power plants are down for maintenance right now. They'll be importing power from abroad and probably at high rates. A perfect little storm of overdue maintenance and an international gas/oil market that suddenly shifted. They'll be fine. But it will cost them.
- badpun 4y ago
  > We're not screwed. Are you sure? Is Europe technically capable of importing enough gas to offset what is no longer coming from Russia? Our abilities to import natural gal from outside UE (LNG terminals and pipelines) have limited throughput - not to mention, someone needs to be willing and able to fill them with gas first.
  - 4y ago
Sevii 4y ago
No you would only add capacity if you thought the long term trends supported it. Building large power generation facilities is expensive and takes time. If prices go back to normal in the spring those new builds could end up as massive money losers.

Toutouxc 4y ago

The thing about "short term screwed" is that in some countries the "screwed" is actually "people having to pay more than 100 % of their income for electricity". Theoretically, long term, this could all work out nicely and steer more people and governments towards renewables and decentralized generation, but the short term consequences are starting to look brutal.

locallost 4y ago
No, we agree here. I'm not trying to minimize the impact. Factories will shut down, leading to job loses, shortages which will again cause inflation etc. But we can't change that anymore. What we can do is build more capacity.
- pclmulqdq 4y ago
  We can also change policy to make sure we don't get into this kind of situation again. We, as a world, don't seem to want to do that.
- sofixa 4y ago
  > Factories will shut down, leading to job loses, shortages which will again cause inflation etc Not necessarily. The same thing (forced closures of factories) was handled gracefully without job losses during the pandemic through various unemployment schemes. I see no reason why the same can't happen again.
  - pclmulqdq 4y ago
    Those schemes are responsible for tremendous inflation which is part of the reason why energy prices are high compared to incomes today. There is no free lunch.
    - sofixa 4y ago
      They might have contributed, a bit (all they did was replace income from salaries with equivalent income in unemployment money, and cover some enterprise's expenses; the only monetary difference was coming from those who used to spend a lot of money going out to bars and stuff, who couldn't anymore), but let's not kid ourselves. The main reason for the booming inflation is Russia's invasion of Ukraine and resulting boom in prices of many raw materials, including very important ones like foodstuffs and energy, which are factored in the prices of pretty much everything. I don't understand the people who are hell bent on ignoring that and pinning all the blame on monetary policy. If you really want to blame someone, blame Putin.
      - pclmulqdq 4y ago
        Several prominent economists at Harvard looked at inflation in countries that did and didn't send out stimulus checks. The numbers ranged from 4% to 8%, with stimulus checks strongly correlating with higher inflation. The math disagrees: there was going to be high inflation due to the pandemic and the Ukraine war, but stimulus policies accounted for the majority of the damage.
        sofixa 4y ago
        Do send out the study. The fact that you're talking about stimulus checks means either you or them are talking about the US, which couldn't be farther in how it handled the pandemic from the EU, which is the topic of the discussion. There are no checks here, we aren't stuck in the past. And all was handled at another layer by preventing layoffs by covering payroll and other expenses for companies instead of allowing layoffs and then sending checks through the mail like it's the 1950s. And yes, the delayed spending and the some extra money will result in inflation, of course. But the impact from the prices of all sorts of crucial raw materials is probably much higher.
- origin_path 4y ago
  There is obviously another option that people don't want to point out - start buying Russian gas again. The idea they're resisting to sell it is wrong. There's a whole pipeline lying idle ready to go the moment sanctions are lifted. People are acting like this is a natural crisis. It's not, it's an artificial one created by political choices. This will lead to political extremism as voters realize they are freezing or bankrupted because politicians like "standing with Ukraine" more than they like their own citizens. Not every politician will be like that. Some will say, we send weapons and it's not our war anyway. Citizens first, foreigners second. And suddenly that will be mainstream politics.
  - anticristi 4y ago
    > start buying Russian gas again I'm afraid Europe bought a one-way ticket. Dependence on Russian energy is no longer a hypothetical issue, but a demonstrated concern. Freezing is not great, but giving the thermostat back to Putin is worse.
  - timeon 4y ago
    > There is obviously another option that people don't want to point out - start buying Russian gas again What I think is more likely is that coal is back on the menu.
jillesvangurp 4y ago
I expect some major support programs will be put in place to address this. And it will probably involve a bit of money printing. No sane government is going to let its citizens deal with going bankrupt because of massively higher energy prices. So Germany, France, etc. will do whatever needs doing to prevent that. The real problem will be industry having to shut down or minimize operations. They'll be the ones bearing the real cost. This winter will be brutal in terms of its economical impact on industry. The next one, countries will be better prepared. It's Russia that will be suffering the consequences long term. I doubt any country in Europe wants to ever be dependent on them again to the extent that they have in the past.
- sph 4y ago
  > I expect some major support programs will be put in place to address this. And it will probably involve a bit of money printing. One of the two Tory lunatics^Hhopeful candidates for PM confirmed there's not much they can do to ease the energy price crisis without creating a massive hole in the British budget. But that's what countries will have to do, and it's not going to be pretty. The Western world just went on a massive printing spree two years ago because of COVID, a further temporary injection of capital and 2008 will pale in comparison to the next recession.
- Sakos 4y ago
  I've seen a report or two talking about how fertilizer plants are being shutdown or run at reduced capacity across Europe because of gas costs. Electricity is the least of our problems.
  - chewz 4y ago
    Oh, It is much more then just fertilizer plants. Fertilizer plants stoped this week all over EU. (Yara Norway, Azoty Poland etc.) The moment you stop fertilizer plants you stop supplies of CO2 and NO2 industry gases and that stops dairy plants, meat factories, breweries etc... Basically you stop food production and distribution. And after cows get culled and you have 2-3 years before production can come back to initial levels. It is going to be rather tough decade for Europe.... And not just Europe... Europe’s Energy Crisis Threatens Glass Production https://www.wsj.com/articles/europes-energy-crisis-threatens-glass-production-11661598180?mod=hp_lead_pos10 https://www.wsj.com/articles/europes-energy-crisis-threatens... There’s a Carbon Dioxide Shortage, and Food and Drink Makers are Scrambling https://www.wsj.com/articles/food-beverage-companies-race-to-keep-plants-running-during-wide-co2-shortage-11661527088?mod=hp_lead_pos12 https://www.wsj.com/articles/food-beverage-companies-race-to...

boshomi 4y ago

Eye watering French power prices: * Baseload from nov22 to feb23 above 2000€/MWh * Peak Load nov22 to dec22 at 3000€/MWh * Peak Load Q1/23 at 2970€/MWh But the prices for other nations also went up steeply. [1] https://www.eex.com/en/market-data/power/futures#%7B%22snippetpicker%22%3A%22EEX%20French%20Power%20Futures%22%7D https://www.eex.com/en/market-data/power/futures#%7B%22snipp...

andrepd 4y ago
France has a shitload of nuclear capacity and low dependence on gas. Why is their energy rising so much?
- konschubert 4y ago
  Because their nuclear power plants are currently going belly up one after another. Many of them are the same model, with parts from the same factory. That factory made some bad parts. They need to be exchanged. It takes a lot of time, many months.
  - paraboul 4y ago
    This is not entirely true. Some power plants are just coincidentally under planned maintenance.
  - jakewins 4y ago
    Also significant capacity loss from plants unable to run in droughts, since they rely on cooling water that has now dried up. Nukes reliant on Loire valley water are currently curtailing production.
    - sofixa 4y ago
      > Nukes reliant on Loire valley water are currently curtailing production. That's old information, the Loire is back up to normal levels after the last two weeks of rain, so nuclear power plants should be operating as before.

Tenoke 4y ago

Should I panic enough in Germany to be wise to consider moving away? Where as a European?

andrepd 4y ago
You should definitely not move countries due to a post in hackernews.
- Tenoke 4y ago
  I'm hardly hearing about the electricity issue in Europe only from a single HN post.
tuukkah 4y ago
To a house that is not heated by direct electricity (nor by gas), or to one where you have installed some other source of heating such as heat pumps or district heating.
- legulere 4y ago
  What do you think the heat pump and district heating runs on? Heat pumps still need electricity and district heating is often using gas.
  - tuukkah 4y ago
    Helsinki's utility company today announced its district heating prices for the winter: +30% increase compared to last winter. This is in contrast to market prices +400% for electricity and +300% for gas. https://www.helen.fi/en/news/2022/significant-increase-in-costs-impacts-the-price-of-district-heat https://www.helen.fi/en/news/2022/significant-increase-in-co... Last year, already 20% of the district heat by the utility was from renewables, and in 2030 it should be all carbon neutral. https://www.helen.fi/en/news/2022/helen-and-elisa-to-heat-homes-in-helsinki-with-waste-heat-from-a-data-centre https://www.helen.fi/en/news/2022/helen-and-elisa-to-heat-ho...
  - 4y ago

konschubert 4y ago

Actually for Sunday the day-ahead prices look quite low: https://energy-charts.info/charts/price_spot_market/chart.htm?l=en&c=DE https://energy-charts.info/charts/price_spot_market/chart.ht...

konschubert 4y ago

Bottlenecks are: - Planning permissions take too long - Solar panels and especially inverters are hard to get - Labour to install is scarce. Electricians give you appointments next year.

kkfx 4y ago

The only fast option is another: arrest those who control the current energy market for crime against humanity and re-nationalize the sector. Really. With them in jail FOR LIFE other like them will do their best to avoid getting equally in jails and States have nothing to deal with "prices". For instance in France more than half of the national NPP are offline due to needed maintenance the private owners postpone at maximum to maximize their profit. Arrange the result take time. Jail the aforementioned owners telling anyone in the private sector that if they committed criminal business they can choose to be silent and cooperative of face an equal fate will suffice. Private sector is THE SOLE responsible of the current prices, they do not came from war or natural scarcity. Telling them that "good times are passed" for them not for the Citizens at a whole as they want instead suffice for a quick U-turn since they know they are unarmed. Renewables can't be nor fast nor an option simply because the sole that can live on them at unbearably high prices in the actual market are single private NEW homes in places where p.v. is effective enough and climate is not that cold. In a city, a dense European one, there is no room for renewables to really produce energy, you can only make some show for commercial purposes. Oh, I say that as one who actually have built a new home five years ago, with p.v. and small lithium backup, so to speak. The quickest way is one: telling those who profit that revenge sentiments start to be in the air and they will FAIL to ride them to push a new hoax this time. However since people are not in that mood, actually many have thirst for blood but not for positive actions energy giants and their public friends are not startled at all. That's is.

jillesvangurp 4y ago

We're not screwed. We're just witnessing the accelerated death of the fossil fuel based power generation industry and it's making renewable power extremely lucrative. Prices are high because of gas prices. Except it's August and Europe is producing a lot of solar power and a fair bit of wind power. That's why there are no blackouts. There is no power shortage; just a gas shortage. Europe has plenty of reserves to generate power. It's just not going to be cheap to use those reserves. The current crisis is not a capacity crisis but a fuel cost crisis. Anybody who was complacent about renewables is going to be paying the price for that this winter. Anybody who wasn't is going to reap the rewards. High prices for electricity and no production cost for renewables basically means whomever produces using that is making a lot of money right now. More than 5x of what they could reasonably expect normally. Probably closer to 10x. That's great news because that will be invested in even more renewable power. Solar and wind are the closest thing to a perpetuum mobile that you can get right now. Electricity prices are high because all the gas and coal production is being kept at a minimum rate because of the high cost of fuel. Companies still in the business of burning that have to pay such high prices for fuel that it's cheaper for them to shut down operations. Unless they are absolutely needed in which case they'll charge for the fuel cost of course. However, most of Europe is relying on renewables and topping up gas supplies for the winter instead. E.g. Germany hit their 80% reserves target ahead of schedule a few days ago, So, any gas plant that doesn't absolutely have to be on right now has probably been idling for months. No reason to turn those on. The reason France has a tough few quarters ahead is that quite a few of their aging nuclear power plants are down for maintenance right now. They'll be importing power from abroad and probably at high rates. A perfect little storm of overdue maintenance and an international gas/oil market that suddenly shifted. They'll be fine. But it will cost them.

badpun 4y ago
> We're not screwed. Are you sure? Is Europe technically capable of importing enough gas to offset what is no longer coming from Russia? Our abilities to import natural gal from outside UE (LNG terminals and pipelines) have limited throughput - not to mention, someone needs to be willing and able to fill them with gas first.
- 4y ago

Sevii 4y ago

No you would only add capacity if you thought the long term trends supported it. Building large power generation facilities is expensive and takes time. If prices go back to normal in the spring those new builds could end up as massive money losers.