Europe and the Winter Energy Outlook

It will be a miracle if they avoid blackouts. The Worst of Europe’s Energy Crisis Isn’t Over

I’m a glass half-empty kind of person. If anything could go wrong, I assume it will go wrong. And that’s the lens through which I look at the European energy crisis. Perhaps my biases cloud me, but I think we should all be skeptical of the emerging narrative that says the worst is over.

The winter is just getting started. Wind and solar may not be all that was hoped for as some meteorologists are predicting Dunkelflaute, literally the dark doldrums, which would mean little or no help from "renewable" energy sources.

Germany has restarted some coal plants, but France took a bunch of nuclear reactors offline for maintenance, making the outlook for electricity problematic.

Countries have been subsidizing energy costs, but that can't go on forever, and will only kick the can down the road because eventually those bills will come due in the form of taxes.

Last week, Thomas Schaefer, one of the most senior executives at Volkswagen AG, publicly said what many other business people and policy makers had only raised in private. “When it comes to the cost of electricity and gas, in particular, we are losing more and more ground,” he said, warning that unless prices fall quickly, investment in Europe will be “practically unviable.”

The reality is: Energy prices remain extremely high, the continent is at the mercy of the weather, the cost of subsidies is rising at an unsustainable pace, and companies are warning of deindustrialization. Call me a pessimist, but it doesn’t sound like the worst is over to me. That’s because it isn’t.

As for the deindustrialization of Europe that has already begun with the steel industry.

Civilization was nice while it lasted.