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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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IEA Head: Gas Producers Are To Blame For Energy Crisis In Europe

  • IEA's Birol: The recent price spikes in natural gas did not get good marks from millions of consumers around the world
  • Strikes at energy exporters—and Russia—have become something of a regular occurrence for Birol
  • Birol: Europe's energy crisis has nothing to do with the transition to renewable energy

“The deliberate policies of energy producers” are to blame for the soaring gas and electricity prices in Europe, the head of the International Energy Agency said at an industry event this week, in yet another lash-out at fossil fuel producers generally and Russia specifically.

Also, not for the first time, the IEA’s Fatih Birol made a point of saying Europe’s energy crisis had nothing to do with the transition to renewable energy. As before, Birol gave no explanation as to why he believed the crisis had nothing to do with the shift to renewables. It was “wrong,” he said as quoted by Bloomberg, to say the price spikes were the result of this shift.

Strikes at energy exporters—and Russia—have become something of a regular occurrence for Birol. Earlier this year, he said Russia could send more gas to Europe and thus “underscore its credentials as a reliable supplier to the European market.” Incidentally, in that very same statement, Birol also didn’t miss the chance to say renewables had nothing to do with the energy crunch.

“Recent increases in global natural gas prices are the result of multiple factors, and it is inaccurate and misleading to lay the responsibility at the door of the clean energy transition,” he said in October, again without providing any reasoning behind this statement.

This is interesting because one of the world’s largest turbine makers, Denmark’s Vestas, earlier this month cut its financial performance outlook for this year, citing continued supply chain constraints, higher costs, and lower wind speeds that led to lower output of electricity from wind parks.

Vestas wasn’t the only one, either. Its fellow turbine major Ørsted also warned on 2021 financial results, also citing “Additional burdens [that] resulted from below-average wind conditions at onshore wind farm locations in Northern and Central Europe.”

In other words, the world’s two largest wind turbine makers openly “blame” lower wind park output for their annual profits but the head of the International Energy Agency appears to see no link between this lower wind park output and the energy shortage Europe has been experiencing since September.

Incidentally, data from electricityMap, which updates constantly, showed in September that wind park output across Europe was very low indeed. Right now, as of the time of writing, Germany, the UK, France, Spain, and Romania are producing a lot more electricity from wind power than from natural gas. Why does the crunch continue, then?

Solar power generation across the continent appears to be zero. Indeed, winter is not the most productive season for solar farms. There tends to be a lot less sun during the winter months, and there is also the snow coverage factor, which greatly compromises the efficiency factor of solar panels. These can be cleaned, of course, but not immediately and not quickly if we’re talking about utility-scale solar plants.

In other words, much as the IEA’s Birol would not hear anything negative said about wind and solar, they do seem to have a role in the energy crunch gripping Europe. Indeed, reason and common sense would suggest they naturally would, exactly like natural gas—put very simply, the more you have of a resource, the better. The less you have of a resource, the worse. This seems to be a problem nobody wants to draw attention to in renewable energy circles.

“The recent price spikes in natural gas did not get good marks from millions of consumers around the world, including Europe,” Birol said in a thinly veiled reference to Russia. “I am not sure the current gas prices are in the benefit of the gas producers.”

Yet if current gas prices are not beneficial for “gas producers”, then Birol—and Europe—should be celebrating as excessive natural gas prices would likely speed up the buildup of renewable power generation capacity. Oddly enough, the head of the IEA seems to have missed this considerable advantage of high gas prices, unlike Energy Aspects’ Amrita Sen, who last month wrote in an op-ed for the FT that we should embrace higher oil prices as they would motivate acceleration in the shift to low-carbon energy.

Forbes energy contributor Llewelyn King put it more bluntly. “If Russia is to blame—which prima facie appears to be the case, as Europe gets fully half its natural gas from Russia—then the Europeans are to blame too,” he wrote earlier this week. “The gas buyers of Europe and their political masters bet that Russia needed their market more than they needed Russia’s gas. It was a gamble and Europe lost.”

One of the reasons those buyers may have thought Russia needed Europe more than Europe needed Russian might just have been a false feeling of security stemming from the massive wind and solar generation capacity in the EU. After all, what were the chances of a wind draught? As it happens, in this case they were a hundred percent.


Now, it’s low-sun season, and Europe would need every last MW of wind capacity to make up for the idling solar farms. It should have become clear by now the EU cannot expect Russia to boost gas supplies every time it wants it to and only because it wants it to. If renewables had nothing to do with the crunch, then a lightning-fast build up of more capacity should eliminate the chances of that crunch repeating. Also, it would reduce the EU’s gas dependence on Russia—a source of so much resentment in the union.

By Irina Slav for Oilprice.com

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  • Carlos Everett on December 01 2021 said:
    Over the last 20 years, all we have heard from Europe is how difficult it is the deal with its main gas supplier, Russia. Then you add Ukraine to the mix and it makes the negotiations a bit more difficult.

    So, Europe decides they need to firm up more gas supply, so what would any normal buyer, after considering the past with its main supplier, it decides to bet the farm that Russia will be more cooperative, when Europe needs more gas. All during this time, the U.S. is offering to diversify their supply by providing long term contracts, which would be a natural fit for EU. So the EU decides to double down and let the "wolf or more appropriately, the bear back into the hen house".

    In what will become, when future buyers for EU looks back on this time period, the biggest, overwhelmingly the most outrageous negotiation in the history of not only EU but will be compared to the Iran Nuclear deal made by John Kerry for the U.S, when they transported $1.5 billion dollars in cash in various currency to Iran.

    Now Angela Merkel will likely sign the deal and then leave office. Can anyone imagine how much money this lady has lost and all because Politicians for some reason think they know how to negotiate deals. I am not a Trump fan, but he could have negotiated this deal with one hand tied behind his back and it would have been a fair deal for both parties and when you think of the ramifications of NATO and then the EU is funding Trillions of dollars into their enemy's pocket and they wonder why Putin has a 100,000 soldiers on the Ukraine border, and Germany keeps asking when is the gas going to flow,, oh please Mr. Putin , please, please, please, will you sell us some more natural gas to keep us warm at night. You cannot make this type of story up for the film producers!

    By the way, fire the IEA guy, he does not understand the supply of wind not affecting natural gas prices-where do these people come from?
  • Mamdouh Salameh on December 02 2021 said:
    Either he is deluding himself or wanting to ingratiate himself with the European Union (EU) countries and with the Americans, the chief of the International Energy Agency (IEA) is again pontificating very erroneously on Europe’s energy crisis claiming it has nothing to do with the transition to renewable energy. He blames the gas producers for the crisis taking a stab at Russia in particular.

    The whole world except himself perhaps knows that the EU’s rash policies to accelerate energy transition at the expense of fossil fuels and the incessant pressure by environmental activists and divestment campaigners on the European oil and gas companies to divest of their oil and gas assets are the underlying reasons behind Europe’ energy crisis. These two damaging factors have been adversely affecting production of oil and gas and also investments without affecting the global demand for them thus creating an oil supply deficit and skyrocketing oil prices.

    Another reason is the EU’s politicizing of energy including using delaying tactics to delay the start of operation of the newly completed Russian Nord Stream 2 gas pipeline which is supposed to bring 50 billion cubic metres of additional Russian gas supplies under the Baltic Sea to Germany and the EU. Even Spain, a staunch member of the EU warned the EU Secretariat that its energy transition plans may not survive the test of sky-high electricity prices.

    The EU nations are going to feel the harsh cold this winter amid gas supply shortages and soaring prices without the extra volumes of natural gas that Nord Stream 2 will bring to them.

    Russia holds all the cards particularly with shortages of gas and LNG supplies around the world and soaring prices. Neither Qatari or American LNG shipments nor Norway gas shipments could satisfy the EU’s demand. Only Russia can. So a quid pro quo of certification of Nord Stream 2 for further Russian gas shipments is the only logical and practical answer.

    And to rub salt into injury, Russia has the option of switching additional gas shipments from the EU to China.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • One Second on December 03 2021 said:
    "If renewables had nothing to do with the crunch, then a lightning-fast build up of more capacity should eliminate the chances of that crunch repeating."
    Well, that is exactly what Germany's new coalition will be doing now. For 2030 the new goal is 80% of electricity coming from renewables and for that the buildout per year is going to be trippled starting next year. This year only 47 % of electricity has been coming from renewables in Germany.
  • DoRight Deikins on December 07 2021 said:
    Carlos and Dr Salameh, you both made excellent comments.

    "I am not a Trump fan, but he could have negotiated this deal with one hand tied behind his back ...", "You cannot make this type of story up...", and "By the way, fire the IEA guy, he does not understand the supply of wind not affecting natural gas prices - where do these people come from?" Obviously they come from the best schools that money can buy. And you have to understand that in Brussels with all the politicians and bureaucrats, there is no lack of hot air and wind.

    And their bet is that with all the money they are saving on 'free' energy, they will be able to buy enough fossil fuels to get them through some temporary tough spots. What? that 'free' energy is costing them far more than the fossil fuels they replaced? Well, its not their money and you can fool the people who have to pay for it as long as one needs. Right?

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