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26 comments on The Start of a New Semester: Some Changes in My Energy Lecture Slides
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26 comments on The Start of a New Semester: Some Changes in My Energy Lecture Slides
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While Eastern Europe indeed does not have too many (cheap) options apart from Russian gas, casting the whole European gas supply purely as an inevitable "pipelines-from-the-east" future does not really paint the full picture - massive LNG terminal investments are being made in W-Europe, coupled with the development of new fields in North Africa (coupled with new pipeline and LNG infrastructure) and the transformation of depleted North Sea fields into strategic buffers do give Europe a few more options (although not cheap) than the current fatalistic we're-all-doomed-Russia-has-got-us-by-the-balls mood suggests.
Also, a lot of the projections of growing natgas demand hinge around the assumption of a big addition of gas-fired power generation capacity. But if a supply crunch (Russia-induced or otherwise) does hit and prices surge, these units will not consume anywhere near the projected amount and will be scaled back to peakshaving while cheaper (coal, hydro, nukes, wind) capacity will produce the baseload bulk of power demand. New fossil-fuel power plants are increasingly built as multi-fuel units (gas/coal/oil switchable), making demand more and more flexible (or unreliable, if your job is to project future demand). Gas demand for heating has also steadily declined per home over the last two decades as high-efficiency boilers, city heating and improved house insulation start to deliver the goods. Unless winters will get colder or many new homes are added to the grid, I don't really see the projected demand growth materialise.
The problem with trying to project into the future is that we are not just trying to estimate what is possible technically, but also what will happen politically. My next post will probably deal with this is a little more detail. However any change in the supply situation will take time, as the necessary facilities have to be built (with market justification for the investment) and that takes time to happen. My concerns are admittedly more short-term in that regard.