While this information is a couple of weeks old, it should have come as no surprise to anyone, especially those in the energy industry. This deal has been in the works for years, but with little success - until now. It is no small coincidence that the deal gets agreed to so soon after Crimea. With Europe and the US working together to apply economic sanctions to Russia, the Russia/China deal will allow Russia to diversify their customer base. This should render the sanctions meaningless, when the pipeline is completed. And it should worry Europe. As I have mentioned in previous blogs, Russia has and will likely use its gas supplies as leverage on Ukraine and Western Europe. With Europe responding to Fukushima Daiichi by shuttering some of their nuclear power plants, there is an increasing likelihood that they will have to reverse such actions and restart those nuclear power plants. What most electrical power consumers do not know, is, over the years each country has developed their electrical power grid based on those natural resources that were abundant and cheap.
Please refer to the table below. Each country has its own unique mix of energy sources. For France, it nuclear power. For Norway, it is hydropower. For Spain, it is a blend of natural gas, nuclear, wind and hydropower. For the UK, it is a blend of their production of coal, oil and natural gas.
When the world gets a collective conscience and moves and functions as one, you begin to destroy the economic advantage that each country enjoyed with its unique resource mix and abundance. The demand moves in the same direction for the same energy source. Should Russia capitalize on its natural gas resources and begin to divert an increasingly larger share of natural gas to China, prices in Europe will begin to rise, as they did in Japan when Japan completely shuttered its nuclear power generations. Liquified natural gas (LNG) skyrocketed to all time highs in Japan. A similar situation could occur in Europe. This would force them back into nuclear power, if they have continued to maintain the power plants. If they have not been maintaining them, then the result could be rolling brownouts or blackouts.
| Breakdown of Electricity Generation by Energy Source |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Percent |
Coal |
Oil |
Gas |
Nuclear |
Biomass |
Wind |
Hydro |
Other |
Total |
| Austria |
9% |
|
20% |
|
10% |
|
55% |
6% |
100% |
| Belgium |
5% |
|
28% |
54% |
7% |
|
|
6% |
100% |
| Denmark |
37% |
|
17% |
|
14% |
29% |
|
3% |
100% |
| France |
4% |
|
4% |
79% |
|
|
8% |
5% |
100% |
| Germany |
44% |
|
14% |
18% |
|
8% |
|
16% |
100% |
| Italy |
11% |
26% |
39% |
|
|
|
13% |
11% |
100% |
| Poland |
88% |
|
3% |
|
5% |
2% |
|
3% |
101% |
| Spain |
|
|
35% |
20% |
|
16% |
11% |
18% |
100% |
| UK |
25% |
8% |
40% |
18% |
|
|
|
10% |
101% |
| Finland |
20% |
|
|
31% |
15% |
|
17% |
17% |
100% |
| Norway |
|
|
3% |
|
|
1% |
95% |
1% |
100% |
| Sweden |
|
|
|
39% |
8% |
4% |
44% |
5% |
100% |
| Netherlands |
21% |
|
60% |
|
8% |
5% |
|
6% |
100% |
|
|
|
|
|
|
|
|
|
|
| TWh |
Coal |
Oil |
Gas |
Nuclear |
Biomass |
Wind |
Hydro |
Other |
Total |
| Austria |
6 |
|
12 |
|
6 |
|
33 |
4 |
61 |
| Belgium |
4 |
|
23 |
46 |
6 |
|
|
5 |
84 |
| Denmark |
13 |
|
6 |
|
5 |
10 |
|
1 |
35 |
| France |
21 |
|
19 |
420 |
|
|
45 |
29 |
534 |
| Germany |
258 |
|
82 |
103 |
|
47 |
|
91 |
581 |
| Italy |
40 |
93 |
139 |
|
|
|
46 |
40 |
358 |
| Poland |
133 |
|
5 |
|
8 |
3 |
|
4 |
153 |
| Spain |
|
|
94 |
55 |
|
42 |
30 |
48 |
269 |
| UK |
91 |
29 |
146 |
66 |
|
|
|
36 |
368 |
| Finland |
14 |
|
|
22 |
11 |
|
12 |
12 |
71 |
| Norway |
|
|
4 |
|
|
1 |
120 |
|
125 |
| Sweden |
|
|
|
57 |
12 |
6 |
66 |
7 |
148 |
| Netherlands |
23 |
|
65 |
|
9 |
5 |
|
7 |
109 |
| Total |
603 |
122 |
595 |
769 |
57 |
114 |
352 |
284 |
2,896 |
| Total as % of Total |
21% |
4% |
21% |
27% |
2% |
4% |
12% |
10% |
100% |
|
|
|
|
|
|
|
|
|
|
| Source: The Shift Project Data Portal (data sources
are from EIA and The World Bank), 2011 |
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