November 8, 2023 - 7:00am
Based on its current storage, Germany looks set to make it through another winter without Russian pipeline gas, demonstrating that the fears of the past two years were unmerited. According to a new poll, Germans are no longer worried about potential gas shortages. Policy experts have come to hold the same view, provided the country isn’t subject to a combination of very unlikely factors, such as a complete halting of LNG imports or an enduring cold snap this winter. Alas, it would be premature to claim that the energy question has been finally resolved to Germany’s benefit.
If measured only through availability, it would be fair to say that Berlin has overcome its addiction to Russian gas. If, however, one takes into account the price the German economy will have to pay — and is already paying — for this victory, it may turn out to be a Pyrrhic one.
According to the energy consultancy FG Energy, “Germany’s industrial base, in particular its more energy-intensive industries, will find it challenging to recover to pre-Ukraine war levels.” Primary and final energy demand have hit a 50-year low, mainly due to demand destruction in the country’s industrial sectors. Rather than finding more efficient ways of providing its industry with energy, Germany simply allowed parts of it to disappear, thereby reducing gas demand — as well as economic output, paid wages and manufacturing. Real GDP growth has stagnated since 2017, and forecasts are not optimistic about a spurt anytime soon.
An additional Pyrrhic victory for the German economy is the exit from nuclear power, which almost overnight turned the country from a net exporter of electricity into a net importer. To add insult to injury, the national obsession with renewables caused an overproduction of electricity during sunny and windy days, forcing Germany to pay neighbouring countries to take German “green energy”.
In other words, whether there was too much or too little domestic electricity production, German taxpayers had to foot the bill regardless. Electricity and gas prices have been rising continuously, so while the supply has been secured, it now comes at a higher cost, making the economy less competitive and the average German poorer.
If the new standard of prosperity for a G7 nation is whether or not its people are resigned to the fear of freezing to death in the winter, Berlin can judge its policies a success. In the long run, though, it is unlikely the German people will accept the idea that being reduced from one of the wealthiest countries in the world to one which can barely afford heating is a sign of competent governance.
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SubscribeThe political class in Germany has not just shot the country in the foot but kneecapped it as well. Sure the country can hobble on but is that all the population desires?
It is indisputable that renewable energy, whether wind, solar, or biomass, is more expensive than fossil energy. And the ‘benefits’ due to calculated reductions in CO2 production are ephemeral as well. I
t takes more energy to produce a barrel of fuel from biomass than from oil. And in the end both are burnt to CO2. So, how can that reduce CO2 in the atmosphere? It doesn’t. What it does is keep the oil in the ground. For some reason these ‘green’ CO2 molecules are thought not to be as problematic as the ones from oil.
Nonsense on stilts. And the laptop class has completely fallen for it, and mandated that the masses pay for it.
PS. I have been working in the energy/chemical sector for 43 years.
There’s so much “alternative math” floating around the climate change catastrophe theory. They should be ashamed. But evidently, they’re not.
They’re actually quite smug, I’ve found.
In my view Germany has been hobbling along with strange fiscal events for years.
Undoubtedly they have enjoyed a couple of decades of seeming to be an industrial superpower but I think this has been biased by protectionist type rules.
One clear part of this is how German exports have benefitted by the international price of the Euro, to great export benefit but at the cost of financial problems in poorer Euro countries. Maybe all our VW, Mercedes and Bosch purchases should have been 20% or 25% higher if there had been a level export playing field?
On energy costs I read somewhere (but no real idea of the truth of this) that the electrical energy high use industries had a lower cost for their electricity historically? I remember this as there was discussions about UK steel plants having to pay a green premium, so more expensive electricity?
Germany has milked the benefits of the EU and Euro for 20+ years. I don’t blame them, I wish the UK had been equally “protectionist” and milked available “rules” to the UK’s benefit like Germany (and France). Maybe the false, hidden, “subsidies” are simply now crawling out of the woodwork.
Were I a German I would vote for any candidate who promised to stop the nonsense of Net Zero, secure the borders, stop inward migration, secure our energy supplies, restore order, and strengthen policing and the military. I wouldn’t give a toss what the rest of their policy was.
I’m not German, I’m English. And that’s exactly how I’ll be voting next time too. And I’ll tell you something else. It won’t just be me voting that way.
Those are fanatics. They were fighting for final victory in 1945 when the US tanks were rolling to Hannover, and the country was in ruins. Now they will be preaching green energy over blackouts and deindutrialization of Germany. As before they will not stop until they are stopped. Otherwise they will destroy the entire EU.
The US’ strategic imperative, as openly articulated, has always been to prevent a link-up between German industrial prowess and Russian raw materials. This strategic imperative has been achieved, at the cost of Germany (but what have US strategists ever cared about non-US).
Of course, the consequence is that both NATO and the EU have been destroyed.
But thinking beyond the next step has never been the Neocons’ strength.
Much of this can be laid at the door of the Merkel administration. The choice to start shutting down nuclear while ramping up dependency on Russian gas being the most egregious.
I seriously can’t decide if she was or wasn’t recruited by the KGB back in her East German days.