2022 was a catastrophic year for energy in Europe, with skyrocketing household energy bills, closed industrial plants, bankrupt firms, and exorbitant costs for electricity and natural gas for both individuals and businesses. The ruling elites of Europe have taught us that relying solely on imported natural gas, wind, and solar energy is a costly and dangerous energy strategy. You cannot increase the wind and solar power in the event of a low-wind year, a harsh winter, an embargo, or a conflict.
European nations have been increasingly reliant on a mix of sporadic solar and wind energy as well as natural gas throughout the past 20 years due to the closure of conventional power plants and legislation supporting renewable energy. Thirty in Germany and thirty-four in the United Kingdom were among the more than a hundred nuclear facilities that had shuttered or were slated to close. Twenty-three countries declared they would phase out coal at the same time. By 2021, natural gas, wind, and solar energy accounted for 48% of Germany's electricity production, and 63%, 64%, and 78% of the electricity used in Italy, the UK, and the Netherlands.
An increasing amount of the energy on the continent came from imports. By the year 2000, Europe was producing 44% of its petroleum and 56% of its natural gas. However, rather than employing hydraulic fracturing to increase oil and gas production, the area decided to invest in solar and wind power. By 2021, only 37% of Europe's natural gas and 25% of its petroleum were produced domestically. Furthermore, a significant dependency was generated by growing imports from Russia.
The European Commission published a research in 2017 that found 49 European shale formations having either natural gas or oil, with significant shale potential found in Bulgaria, France, Poland, Portugal, Romania, Ukraine, and the United Kingdom. But instead of breaking any of these fields, Europe decided to rely on sporadic imports of natural gas, solar energy, and wind power.
Europe had a 20–30% decrease in wind-generated electricity in 2021 compared to historical averages. In order to make up for the decrease in wind power, utilities burnt gas to provide energy. Natural gas reserves were abnormally low by year's end, and gas prices were rising.
In 2019 and 2020, the average price of natural gas in Europe was between 13 and 18 euros per megawatt-hour (€/MWh). As the economy began to recover and wind power generation decreased in 2021, prices skyrocketed to 80 €/MWh by December of that same year. Prior to the invasion of Ukraine, electricity prices also experienced a significant surge, increasing by a factor of six by the end of 2021.
Numerous energy supply companies went bankrupt due to the crisis. Thirteen UK natural gas companies, providing service to two million people, have ceased operations by February 2022. These companies were compelled by price controls to sell gas for less than their wholesale buying price. Due to the conflict in Ukraine, Russian gas giant Gazprom had to stop supplying gas, forcing Uniper SE, the biggest natural gas supplier in Germany, to purchase gas at outrageous costs.
Energy-intensive sectors were severely hit by high energy prices. Ammonia, which is required to generate urea and fertilizer containing ammonium nitrate, can only be produced with natural gas. In 2022, over 50% of Europe's output of ammonia and 33% of its nitrogen fertilizer was discontinued. Producers of metals were hammered, and half of Europe's output of zinc and aluminum had to shut down. Europe seems to be entering a new phase of deindustrialization as a result of energy policies.
While some countries are retreating from green initiatives, Net Zero and the shift to renewable energy are nevertheless supported by European elites and politicians. Gas prices have dropped to around 30 €/MWh, still double the price of 2020, and electricity prices are still almost triple that of 2020.
Notes: Above summary and brief video is based on this excellent article.