4/30/22

Natural gas is the main source of UK electricity production again

 After a few days of strong wind in the UK (and this is strange for an island), the weather is back to no-wind condition. The figure below shows the current status of electricity production split between green and fossil sources. No good news for green energy. This is a good reason for the future natural gas price surge. Considering the possibility of the reduced gas supply from Russia, the european natural gas market is vulnerable. 




4/13/22

To rouble or not to rouble?

The time is coming when European countries have to pay for natural gas from Russia received in April. The new mechanism requires a euro/rouble exchange in Russia. The tension is growing and the most dependent on the Russian gas supply countries have to mitigate the risks of the gas absence on a one-year horizon - time to fill underground storage. Some countries try to talk to Putin. For example, the Austrian Chancellor Nehammer visited Moscow in a desperate attempt to fix the problem masking it with the discussion on Ukraine. Austria has a very poor position in the center of Europe and any gas supply except Russia will leave it without gas in the case of an overall shortage. LPG comes by sea and thus Austria has no influence on this supply chain.  Gas from Norway and Algeria passes so many countries that the case of COVID-19 vaccine supply just a year ago is still a painful story. 

There are European countries rejecting even the idea of euro/rouble exchange. They are going to pay in euros risking initiating the "Force Majeure" clause in the contracts. Euro and dollar have no value in Russia anymore and this type of currency exchange in Russia has large difficulties - there is no euro and dollar demand at all. It is hard to get roubles since the euro is not a currency. This makes the mechanism proposed by Putin likely available only on a "the first to come" basis. The second to come may have nothing instead of natural gas. Then the gas demand will spike and even a small amount of gas will cost more than now. Russia will get money anyway.

The choice is: To rouble or not to rouble?

4/12/22

Consumer price inflation in the USA - 8.5%, with 32% for energy

March 2022 was a successful month for consumer price inflation in the USA - 8.5% for the overall consumer price index, CPI. This is a result of pumping money into the US economy started two years ago. Trillions of dollars are now seen in the prices and the most aggressive growth was observed in consumer energy - 32% and food - 8.8%. Other expenditure categories demonstrate lower than average growth. Effectively, poor people are more prone to the energy and food components of the overall CPI growth since their budgets have larger shares of these two components. For them, inflation is much larger. Interestingly, the medical care price grew by 2.9% between March 2021 and March 2022. It seems that the linear growth of the medical price is still underway. Medicine does not depend on the economic state - it is decoupled from any perturbations in the real economy. 

4/7/22

PM Johnson drops the green energy plan: when politicians run a technical process it always fails

Boris Johnson dropped the UK plan to double the number of windmills and plan to build 7 new nuclear reactors instead (see Daily Mail article). Considering the low-wind conditions observed in 2021 and 2022 it is clear that no number of new windmills can fight against zero wind speed. Oil and gas extraction is also back to the energy big game despite they are DIRTY.

This decision was well expected as the politicians in developed countries (led by an uneducated student Greta the Great) run a complicated technical process (who were the experts for their decision?). In reality,  any technical project of such a size has a lot of hidden problems nobody knows about. A wise specialist would conduct a small-scale experiment (for example, a UK size) during a period of time to reveal all or the majority of hidden problems and investigate all options to create a multi-step plan to introduce green energy into the worldwide energy system. Green energy is an extremely good thing and deserved careful handling. However, it is fully compromised by the ignorance of western politicians. The EU is still following the great myth of the green world. The UK is more pragmatic. It seems that Brexit was a good choice for the UK.

4/4/22

Пресс-папье Путина Песков - позор!

То, что говорит Песков, вызывает странное ощущение отсутствия рационального сознания у российской власти. Либерасты всех мастей так глубоко проникли во власть, что даже пресс-папье Путина должно выражать собственные эмоции. Может ограниченную операцию нужно было сначала проводить не на украине? 

4/2/22

Wind electricity production in the UK goes down again

There were just a few hours with high wind speed and a significant increase in the share of renewables in the total electricity balance. The Figure below (borrowed from this website) shows that wind energy production increased to 12.95 GWH between 00:00  and 00:30 on April 1 and then started to decrease to the current level of  2.61 GWH (9:00, April 2). This is approximately a variation by a factor of 5. Natural gas is the remedy against such variations. And it works.