Hitting an Energy Cost Wall

The UK and EU countries are struggling to provide enough energy to its economy. The problem is not in every energy source, in gasoline the price hikes have been largely accepted. In gas and electricity they are developing. We see a true price shock when it comes to domestic electricity. A kWh now costs .70 Euro where it cost .20 for the longest time. Not great if you run your whole houshold on electricity.

Russia is meanwhile burning gas because it can’t just throttle down wells and shut them. Shutting down a gas well can mean it will not start again, and it is pretty difficult anyway, Statoil had a competition to find solutions to its many leaking (supposedly closed) gasswells. There will be so much methane soon it won’t matter really.

But as the EU tries to starve Russia of cash, Russia tries to crash the EU and make it suffer in the winter. All because of a silly expansionist (or restorist) vision that Putin got indoctrinated with by Dugin (the fascist philospher, yes why not try hard core fascism again!). This is a crisis that is desirable from a CO2 emissions perspective, but the transition will be chaotic, and it seems the bank/fossil lobby is gaining power by it, not losing it. We have too little alternative energy sources!

The lakeys in the right wing parties meanwhile have no solutions, although plenty of renewable energy sources are being built and you can now borrow to install renewables with many banks. But what can they do about a tripling of the power bill. Not much apparently. They always listend to banks, and banks had to always do what the fossil industry liked, and the fossil industry is now failing. The sugar high has to end, there’s not enough sugar!

The focus is still on those with low wages, but a descent household of 2 kids in a well to do home will not like to see so much money evaporated. Companies also pay energy bills. What use is a lot of computers, lights, in a room when your clients suddenly have no money. People are losing a year’s savings or more in some cases. This will men less spending. Deflation of prices until production is depleted and then again inflation, in the EU at least.

At the same time people want to spend on insulation. Some people live in the new homes that are build to require zero energy. Because the grid is used as a buffer even they now have to pay more for electricity they take from the grid than they get for the electricity they give to the grid. The energy system is simply not prepared and has to little storage either for heat or electricity.