Putin Delivers Germans Valuable Lesson: Forget About Running On Sunshine & Breezes
Germany’s so-called wind and solar ‘transition’ – the ‘Energiewende’ was in strife before Vlad Putin invaded Ukraine; post invasion, it’s a diabolical mess. German households and businesses are already suffering Europe’s highest power prices; since Putin’s Ukrainian adventure began, German power prices have rocketed, further still, recently hitting a record 40 US cents per kWh.
In September 2018, when Donald Trump warned Germany’s delegation to the UN General Assembly that Germany would soon become totally dependent on Russian energy if it didn’t immediately change course, those delegates laughed like know-it-all school children. Well, the joke’s on them, now.
Experience has a great way of displacing ignorance, albeit with a costly pricetag.
And with Putin delivering Germany’s energy wonks a very valuable lesson about the lunacy of attempting to run on sunshine and breezes, it appears that their arrogance is making way for new-found humility.
Greg McLean takes a look at what’s next in the curriculum for Putin’s energy pupils.
Energy ignorance on display in Canada and Germany
28 July 2022
Sixteen months ago, I met with Germany’s ambassador to Canada to discuss energy policy — specifically, prophetic warnings about the risk of continued reliance on Russian fuel and the role Canada could play in diversifying Europe’s energy supplies. Those issues are even more pronounced today but unfortunately we do not have time — or government policy — on our side.
The meeting was motivated by the German government’s interest in Canadian green hydrogen and an indication of a “commitment” to contract for the import of Canadian liquified natural gas (LNG).
A solidified commercial contract would have been a real impetus for LNG development in Canada, but my take-away was that the “commitment” had more “optionality” than I had understood.
My input to Ambassador Sabine Sparwasser was that approval of the Nord Stream 2 pipeline (bringing more natural gas from Russia) would put her country in a precarious position where a significant portion of their gas would arrive from one, potentially hostile foreign power. I raised the notion of “moral hazard” and the potential outcomes to the economies of Europe if the worst was to unfold. From a national interest perspective, I pushed on the need to advance the supply of LNG from Canada. If Germany would become a committed buyer of our resource, it would advance development. Of course, while Russian gas from Nord Stream 2 would have been cheaper than LNG from Canada, the price would have been more than made up for by the security and reliability of purchasing from a trusted NATO ally.
This is an illustration of how governments need to consider the long-term outcomes of their short-term narratives.
Germany’s policy of “Energiewende” was never viable. Although renewables constitute upwards of 50 per cent of Germany’s power supply, at other times, it is less than 2.0 per cent. Other sources, such as nuclear and fossil fuels, are needed to ensure reliable baseload power. Energiewende specifically targeted exiting nuclear power production — requiring doubling down on fossil fuels and offshoring their production.
Despite hundreds of billions of euros spent on renewable energy, Germany has become an energy-insecure nation.
When Germany started accepting natural gas from Russia in the ’70s, it “committed” to never grow that source to more than 10 per cent of its deliveries. As with “commitment,” “never” seems to have multiple meanings. Eighty per cent would be a far cry from 10 per cent. The moral hazard is now obvious.
As a result of the situation Germany has found itself in, the Canadian government has decided to renege on our commitment to impose sanctions on Russia. The return of Russian turbines for the delivery of Russian gas to Germany, and the decision to continue to maintain and repair such turbines, is an about-face that furthers our slide towards irrelevance on the world stage.
Russia will continue to manipulate its flow of natural gas. Our decision to return the turbines emboldens that position. This will lead to the continued flow of European cash to Russia to fund missiles that are destroying Ukraine. Canada is now complicit in this debacle.
At the same time, the Canadian government is doubling down on its own aimless and divisive energy policies, despite the obvious threat to our own energy security. It’s a worldwide shame that this charade is being played out at the expense of Ukrainians fighting for their lives and their nation’s existence.
Canada’s government chose to support a G7 country and NATO ally as it faces energy insecurity of its own design. The fact that we can’t deliver needed energy to our allies is our own policy failure. Worse still, the current Canadian government seems oblivious to the consequences: capital flows to a hostile regime; manipulation of resource flow and pricing; Canadian diplomatic irrelevance.
Our friends in Germany may be able to have hot showers this winter, Vladimir Putin willing. But will our friends in Ukraine even have homes?
If we are to be seen as a serious country, we need to start making better decisions and stop disregarding the consequences of our energy ignorance.