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Estonia’s inflation hit 25% year-on-year in August, energy prices to blame
- qwerty456127 4y agoCan we be sure energy prices to blame alone, no serious contribution by the lockdowns?
- newaccount2021 4y ago
- gadders 4y agoNet Zero and allied green policies really are the gift that keeps on giving.
- nicoburns 4y agoIf we’d built out renewables more aggressively in the last decade we’d be a lot less reliant on fossil fuels, and energy costs would be a lot lower.
- gadders 4y agoWe physically can't build enough windmills to replace fossil fuels. They'd take up too much space. I'm all for having renewables when the technology is ready, but it's not and high energy prices will start killing old people that can't afford to heat their homes.
- JHer 4y agoWhat gives you that idea? Of course we can build enough windmills and other renewables.
- viraptor 4y agoThat doesn't even pass the napkin math test. "An average onshore wind turbine with a capacity of 2.5–3 MW can produce more than 6 million kWh in a year" (https://www.ewea.org/wind-energy-basics/faq/ https://www.ewea.org/wind-energy-basics/faq/) "Estonia is the total consumption of 8.80 billion kWh of electric energy per year". (https://www.worlddata.info/europe/estonia/energy-consumption.php https://www.worlddata.info/europe/estonia/energy-consumption...) Are you saying there's no space in Estonia for ~1466 wind turbines? That's before we include offshore wind, solar, geothermal, nuclear, hydro, and storage... Basically, you're spreading FUD.
- gadders 4y agoI was more thinking of more populated countries like the UK, but it's still a large part of the countryside. >> That's before we include offshore wind, solar, geothermal, nuclear, hydro, and storage... Basically, you're spreading FUD. Yeah, one of those is not like the other. Not sure how you slip nuclear in there given that Greens are against it. Storage isn't a solved problem either.
- ajsnigrutin 4y agoYep, and at the same time, the "greens" are against nuclear, the only thing that could actually replace fossil fuels and also works during windless nights.
- adrianN 4y agoNo, they don't. Try doing the math. You'll end up at single digit percentages of land used. You can easily do agriculture around wind turbines, so land use really is not problem at all.
- ratsforhorses 4y agoMaybe our economic systems have to be rethought? A tree is worth more dead than alive..... European economies have been accumulating wealth for centuries through colonization and exploitation of humans lifetimes... in the end what do you have? inflated real estate prices, overly mechanized agriculture producing basic junk foodstuffs, increasingly authoritarian political policies designed to restrict or bore people from contributing to civil society... this is leading to an existential crisis .... So many good films out there which capture the essence of the problem, that dreadlock guy who works? for Microsoft has a very good quote in "Social Dilemma" (1) One suggestion would be politicians to be chosen by jury, for periods of say a year to lock them out of having so many fingers in lobbyists pies... (1) https://files.fm/f/nm8vs6h5g https://files.fm/f/nm8vs6h5g
- djbebs 4y agoOf course, and im sure if the soviet union had just been more socialist we'd all be living in a workers paradise.
- hotz 4y agoLOL
- omginternets 4y agoWhere does the power come from on overcast and windless days? Renewables definitely have their place, but they are nowhere near being able to replace the continuous production of FF and nuclear plants. Moreover, the grids were neither designed nor built to deliver power from massively distributed, massively variable sources. There's a third problem too, which ecologically-minded people seem to overlook: renewables are only "renewable" if you consider the real estate they occupy to be infinite. Again, there is an important place for these technologies, but it is not the case that we simply should have built more.
- nprateem 4y agoTidal, geothermal, etc.
- omginternets 4y agoSee issues 2 & 3.
- adrianN 4y agoPower comes a) from another place in the European grid where it's sunny or windy, and/or b) storage. a) works decently well today, b) has room for improvement, but demand for storage is low, since we don't have a lot of surplus energy that we could put into storage. Right now it's pretty much always easier to turn down the fossil fuel plants when renewables are generating a lot, so that's what we do.
- nicoburns 4y agoMedium/long term we can solve this with storage and load shifting. For the time being it still comes from fossil fuels and nuclear as you say. But using renewables when sun and wind are available would still dramatically reduce are fossil fuel consumption, which would in turn dramatically reduce costs.
- omginternets 4y agoNo objection here. It's not one or the other; it's both.
- belorn 4y agoThe two data points that determine the market price in nord pool right now is the gas price and transmission costs. The revenue that renewable power plant owners get is determined through those mechanism rather than by what production cost those renewable plant owner has. As the economist here has reported in the news, more renewable energy doesn't translate to lower prices at this point in time. EU are considering capping the price roof in order to address this so that energy prices start to match that of production costs. The European grid also need overproduction if we are to have market forces driving down prices, and you need large and effective transmission lines in order to distribute the renewable energy without bottlenecks. We also need to have reduction in energy usage when renewable energy production is low, and we need to reduce the dependency on the quite aged hydro power installations in the northern parts of Europe. The water reserves at those hydroelectric stations is also in a historically low levels, likely caused by a combination of climate change and poor management. We need more of everything if we are to disconnect the Russian gas from European energy market.
- tehlike 4y agoESG is the other one.
- __alexs 4y agoHow has ESG increased prices for consumers?
- epistasis 4y agoThe argument is that fossil fuel companies are not beginning new starts, because ESG components from investors mean that the money isn't there. I doubt it, however. Even fossil fuel companies know we are transitioning away from oil over the next few years, and don't want to staff projects anyway. This is classic behavior at a tech switch.
- tehlike 4y ago"transitioning away from oil" is part of esg isn't it.
- deleted 4y ago[deleted]
- _njyk 4y agoIt started before the war. The cash that the governments printed via negative interests to give to the VCs and to real-estate owners really skewed the local market (increasing both prices and costs of producing). The Estonian gov has basically no tools to fight against the real estate bubble either or to bankroll the most fragile startups (and they may not be as strong as they seem), so we're basically fucked. Regarding energy, we had 4000 EUR / MWh prices a couple of weeks ago for an hour. Think of it as oven / sauna / air conditioner costing you 10 to 25 euros per hour (if I remember right, it didn't matter that much when you have no other choice than turning them off). For energy this is mostly because of the war, but ecological policies also affected (Estonia was known for "dirty" petrol, known as shale oil, and they are restricted there). The only retail companies that try hard to provide good prices are LIDL and IKEA, and in that regards, they are great. Other distributors have very poor logistics as they consider Estonia as the very end of their distribution chain (no matter if for Baltics, or for Scandinavia we are at the end of the West).
- Etheryte 4y agoThis makes no sense, the majority of the inflation is simply due to rising energy prices, what does the small Estonian startup scene have to do with any of this?
- _njyk 4y agoIt's a mix, but startups clearly skew prices higher. Salaries gets higher too because of much corporate cash, there is this nasty infinite loop of inflation -> salaries -> inflation -> salaries. This is why in the newspapers we occasionally see rants from the population that foreigners destroy the quality of life by pushing prices higher. One cause is that there is a limited amount of space in Tallinn but high attractivity for IT foreigners (due to low taxes and high startup funding). This means that good housing is though to find for a decent price (check kv.ee for example), and that there is not enough housing for everyone. Not enough housing means lot of construction needed. Lots of construction worldwide + scarce construction supply + abundance of money + lot of people = potential housing catastrophe. Concretly, for example, I wanted to buy a reasonably priced house in the countryside (500K EUR for 160m2 / 1700sqft), and someone who sold his Pipedrive or Transferwise shares (I don't remember) came and offered over 100K more than the list price. This is very broken (and I say that though I am also a startup guy, so I feel it's sad/wrong for the non-IT Estonians). The city also have 50K to 80K refugees that came in a few months. Where do you host them ? Well, you pay high price for rent.
- _xnmw 4y agoThe utter stupidity of thinking that sanctions could be an effective response or deterrent to military aggression boggles my mind. Force must be countered with force, nothing less. Anyone willing to expend soldiers lives is not going to be deterred by mere economic pain (the pain they've already chose, i.e. war, is much worse!). We don't impose monetary fines on murderers, we capture them and put them in jail, or kill them in the process. Furthermore, sanctions, by definition, hurt both parties. It is impossible to design a boycott that doesn't hurt both the buyer and the seller. The only question is: who gets hurt more? If Europe was so determined to "stand with Ukraine" then they should've put soldiers on the ground over there, not shot themselves in the foot with sanctions on goods that they need.
- idontwantthis 4y agoHow do you go to war with a country you also rely on economically? Would Europe keep buying Russian gas while killing Russian soldiers?
- skylabmelody 4y agoEurope is buying Russian gas at a premium through China and India.
- kubafu 4y agoCare to share a link to the source of this information?
- celticninja 4y agoNo it isn't. Citation required because there is no evidence of that.
- skylabmelody 4y agoBloomberg: "China is able to secure cheaper supply and resell shipments from more expensive exporters to utilities in Europe and Asia, while Russia can continue selling fuel at a profit." https://www.bloomberg.com/news/articles/2022-09-08/china-snaps-up-half-price-russian-lng-as-europe-shuns-supplies https://www.bloomberg.com/news/articles/2022-09-08/china-sna... Financial Times: "The world’s largest buyer of liquefied natural gas [China] is reselling some of its surplus LNG cargoes due to weak energy demand at home. This has provided the spot market with an ample supply that Europe has tapped, despite the higher prices." https://www.ft.com/content/1e20467a-5b53-42b7-ad89-49808f7e1780 https://www.ft.com/content/1e20467a-5b53-42b7-ad89-49808f7e1...
- wyuenho 4y agoAnd yet the EU keeps opposing an oil price cap
- deleted 4y ago[deleted]
- jostiniane 4y ago
- pydry 4y agoAn oil price cap is fundamentally little different to a ban.
- refurb 4y agoHow would that work? If it costs $250EUR to deliver a barrel of oil, and you cap it at 100EUR, what happens? If you were an oil company and the government says you can only sell your 250EUR barrel of oil for 100EUR, what would do?
- wyuenho 4y agoExcept that oil is nowhere near that expensive in reality, and oil companies aren't buying oil at anywhere near that price. The reason it's expensive in Europe now (for consumers) is because the EU lump oil and gas together into one price, and gas is expensive, so oil got expensive, but the oil companies haven't paid nearly that much to buy it in the first place. That's why they are having a massive windfall and the EU is going to tax them. These are all problem can be solved by capping oil price. Oil is a buyer's market, the US and Canada are producing so much of it, if OPEC+1 reduces output, it just amounts to a suicide for them.
- vintermann 4y agoI guess this time we can admit a supply problem is to blame and not the usual money printing/government spending explanation, since Estonia is well known for having a tiny debt to GDP ratio.
- markvdb 4y agoProperly managed, the Baltic states in particular will come out of this energy crisis as winners. Green energy is the very obvious answer for them, even more than for other countries. Cheap and reliable. They have all that's required to be self sufficient and even exporters in terms of energy: - little heavy industry - very low population density in rural areas - mostly centralised heating networks in urban areas - plenty of cheap biomass, mostly for use in winter - a fairly decent bit of sun, mostly for use in summer - plenty of hydro power [0] - fairly good hvdc interconnects - plenty of cheap EU cofinancing - a population largely ready to stick it to the godfather in Moscow [0] https://en.wikipedia.org/wiki/List_of_power_stations_in_Latvia#Hydroelectric https://en.wikipedia.org/wiki/List_of_power_stations_in_Latv...
- heavenlyblue 4y agoSo given there's plenty of hydro available in Latvia, why are they only using 3% of their generational capacity and instead are burning gas? Source: https://app.electricitymaps.com/zone/LV https://app.electricitymaps.com/zone/LV
- markvdb 4y agoThank you for the link. Really useful. I don't know the answer to your question for certain, but let me make an educated guess: - Some electricity production in Latvia is natural gas based cogeneration, meaning it needs to run for inhabitants to have hot water. - At Pļaviņas hydro station [0], the biggest in the Baltics with 894 MW, water levels were lowered from July 11 until August 20 for maintenance work. Production might not have resumed yet. - Latvia has an extremely large natural gas storage facility at Inčukalns [0]. This might have something to do with it. [0] https://lv.wikipedia.org/wiki/In%C4%8Dukalna_pazemes_g%C4%81zes_kr%C4%81tuve https://lv.wikipedia.org/wiki/In%C4%8Dukalna_pazemes_g%C4%81... (sorry, Latvian only)
- jve 4y agoBy the way, press 5 years on that historical graph and hydro is accounted for most generated electricity. Moreover, if you scroll knob to left to view more historical values. At 8 AM 26%+ came from hydro, but now 1,97%...
- ZeroGravitas 4y agoInflation that's not to do with wages seems a different problem to me. If gas or tomato prices are going up such that everything that uses gas or tomatoes goes up. You could say that's inflation because gas and tomatoes are so widely used. Or you could just say it's a price signal. You need to use less gas/tomatoes as they are in short supply. It doesn't seem to be as circular as the wage based inflation, where the higher wages and the higher costs are the same thing and recurse.
- QuarterReptile 4y agoIf your wages track inflation, then you were previously underpaid for your skill set. In reality, higher costs may eventually be followed by compensating higher pay, but in the interim everyone just works the same for the same (devalued) pay with a steep drop in discretionary spending because the step function to 'unemployed' is so painful that everyone would rather handle the price feedback through attrition. And in the meantime we get the shittification of all service that wasn't previously operating at high margins, because everyone is making do with understaffing. And, of course, tomatoes are ridiculous equivalency to attempt. Transportation, energy, and agriculture all lie directly downstream of oil/methane costs, to name a few obvious examples.