A perfect storm has sailed up where high energy prices are about to become a political bomb and a threat to climate change.
When it hits your own wallet, sacrifices for the climate are no longer as obvious.
When countries compete for scarce resources, the level of conflict increases.
What is happening now is a premonition that climate change will be expensive and that it is largely the ordinary consumers who are expected to pay.
The price of electricity has risen sharply in recent weeks. The price of natural gas has increased by over several hundred percent and petrol prices are ticking steadily upwards. All in all, it is a substantial bill that must be paid.
There are a number of factors that work together in an unfortunate situation.
The basis is the rapid corona pandemic recovery when the restrictions are lifted in the country after country. It is not only in Europe that is starting it takes place in Asia and North America.
What happening is that the demand for more fuel, gas and electricity takes place at the same time as production is largely stagnant at old levels.
OPEC, the oil producers’ interest group, does not want to increase its production but rather sees prices rising. They have also been told that much less oil will be needed in the future and have therefore reduced their investments. In addition, no banks want to lend money anymore for the extraction of fossil energy.
There are divided opinions as to why Russia is not increasing its gas production. Some suspect that Vladimir Putin would like to intimidate Europe with high prices in order to get approval more quickly from Germany to start sending gas through the new Nordstream II pipeline, which is completed but not yet in use.
At the same time, Russia is alleged to have production problems that make it difficult for them to sharply increase their gas exports.
A group of more than 40 EU parliamentarians has requested that the European Commission launch an investigation to see if the state-owned Russian company Gazprom is trying to manipulate the market and violate EU competition rules.
In response, President Putin has promised that Russia would increase its exports, which immediately caused the price to turn down. At the same time, this shows how dependent Europe is on Russian gas. A clear security policy risk.
It is not just Europe that is affected. In China, companies have been forced to close at short notice due to a lack of energy. The country’s First Deputy Prime Minister Han Zheng has given state-owned power companies orders to secure fuel for the winter at all costs. India has also suffered from energy shortages.
When everyone competes for scarce energy resources, the risk of real conflicts increases. Energy equals prosperity.
Part of the reason is that gas stocks in Europe are at an unusually low level after last year’s long winter. The stocks are only 75 percent full, which is the lowest figure in ten years. The average before the pandemic was almost 88 percent.
To achieve the climate goals in the Paris Agreement, many countries are now phasing out coal and instead switching to natural gas, which emits only half as much carbon dioxide. It will also be more profitable as the price of emission rights has risen sharply.
Consumers get the bill
The energy must come from somewhere when the renewable energy sources are not yet sufficiently developed to be able to cover the gap. For many, gas is the only option, which has caused the price to increase by 360 percent in less than a year. Which in turn makes environmentally friendly coal more attractive again.
The idea is that the use of renewable energy will increase sharply at the same time as fossil fuels are being phased out. The problem is that it has blown less in the last six months than expected, so wind power does not deliver as it should.
The water levels in the reservoirs in Norway and northern Sweden are unusually low after a rainy winter. Thus, the price of electricity rises.
Of course, the high energy prices affect companies. But they can compensate by raising prices. Consumers are the ones who ultimately have to pay. Both in the form of higher electricity and petrol bills and more expensive goods.
Even if there is a will in people to stop climate change, it becomes a completely different thing when their own wallet is affected. How many are prepared to really and without a knot lower their standard to benefit the climate?
Demonstrations have already taken place in southern Europe against the sharp price increases. Protests that will grow avalanche-like if prices continue to rise. It creates pressure on politicians to either compensate citizens for the high prices or to slow down the pace of climate change in an attempt to bring prices down.
The governments of Italy, Spain and France have realized what is happening and have already promised compensation to the worst-affected citizens.
Several heads of government accuse the European Commission of being behind the crisis. The system of emission rights in which all energy companies must participate forces price increases when fossil fuels are used. Brussels is always a grateful target for shifting focus from its own failures.
A positive effect of rising energy prices may be that it becomes more profitable to invest in wind and solar. The problem is still that these sources are neither predictable nor that long-term storage of wind and solar energy has been solved. In many countries, including Germany and Sweden, there is increased resistance to large wind farms polluting the landscape and creating noise.
A constant struggle is going on between conflicting interests.
The experts claim that the price increases are temporary. As soon as the effects of the corona pandemic begin to subside properly, gas and oil production will increase again. They have been wrong before and a severe winter can overturn their forecasts.
At Cop26, world leaders are supposed to take new decisive steps to reduce climate emissions. Something that becomes much more difficult when the governments of the countries feel the pain from angry citizens who have their standards lowered by high energy prices.
The fact that the situation has arisen is also due to the fact that politicians have not previously started investing in renewable energy sources. Now the world has run out of time. It is extremely urgent to reduce emissions in order to reduce the long-term harmful effects on the climate, while at the same time, the need for energy is constantly growing.
Shallow dive: The dialogue is very much the same as big companies are going to try to own the wind, water, solar. As heating is costing a lot for many northern countries, the focus should be on an energy box that house and apartment owners can purchase and own and governments should make sure to subsidize the energy box. what is an energy box, it is a contained box that consists of either solar, wind or in some part geo terminal renewable sources.