Industrial production in Germany is higher than industrial production in France and Italy combined. However, the self-inflicted demise of German industry is having profound and serious consequences for entire the EU.
Germany’s energy disaster continues, as France bounces back. Although Germany is still Europe’s industrial champion, albeit faltering, its energy situation is disastrous and worrying. It has recently gone from being a net exporter of electricity to a net importer.
However, a byproduct of Germany’s industrial decline is that emissions in the EU are falling, down by 4% in the first quarter of 2024, compared to the same period of last year.
Another, combined with the rise in renewables and mild weather, is that European gas demand in 2024 (if it continues its current y-o-y trend for the next few months), will be the lowest since 1984.
European gas demand in 2024 is down by approximately 25%, compared to 2023 and more compared to a 5-year average. EU gas generation is also down by 33% since July 2019.
Germany is being criticised as a country with industry from the last century, grotesque overregulation, desolate infrastructure, lack of innovation and green paranoia.
In 2011 its GDP was about twice as big as the GDP of California, but now they are about the same.
US
Across the Atlantic, there are more than 5,000 data centres throughout the US, with energy demand growing faster than supply.
A study has found that US emissions of planet-warming methane gas far exceed estimates. Amazingly, US fossil fuel extractors emit enough methane to meet the annual energy needs of more than half of American homes.
The US military is revising its national defense strategies to address climate change. It sees this as a threat multiplier, with implication for US defense and global security.
The US LNG industry is under pressure as challenges and uncertainty mount. As a result, American export projects are facing growing hurdles.
Presidential challengers Kamala Harris and Donald Trump have significant differences in energy policies that could have a crucial impact of long-term US climate policies, with Trump vowing a 180o turn on President Biden’s energy and climate policies.
China
China is a global leader in the entire range of renewable energy manufacturing, with 70% global market share in solar panels, 50% in wind turbines, 80% in lithium-ion batteries and 60% in the manufacture of electric vehicles (EVs).
As a result, China has achieved its renewable power target six years early.
But despite this, China has issued guidelines to ramp up green transition of economic, social development. The goal is to establish a green, low-carbon and circular development economic system by 2035.
We must not mistake China’s success on green energy for a global one. Net additions increased by 7GW in the rest of the world, but by 168GW in China.
China has just approved the construction of a total of 11 new nuclear reactors, bolstering its energy security.
China’s natural gas consumption, production, and imports all increased in 2023 and are still growing.
Climate
Even though the renewable energy growth rate has exceeded that of global energy consumption, its absolute growth has so far been less than that of consumption, because it started from a low base. While this is happening, the world still needs to grow all its energy sources.
Despite the global boom in renewable energy, fossil fuel consumption reached new record highs in 2023, driven by increased coal and oil use in China, in response to increases in energy demand.
The world added a historic 510 GW of renewable power capacity in 2023, up 50% from a year before. Under current policies and market trends, global renewable capacity is set to be 2.5 times higher by 2030. But it is still insufficient to balance the growth in global energy demand.
Bloomberg says coal is still king of the global energy system. It still powers the world and talk of its demise is greatly exaggerated.
Despite all the solar panels, all the windmills, all the EVs and all the government incentives to go green, the world has never used as much coal as it’s burning this year.
The IEA says that since 2010, battery costs have fallen by more than 90%, offering opportunities to cut emissions in road transport and electricity.
A study has shown that existing gas pipelines would need massive retrofit or crippling de-rating to carry hydrogen, rendering them mostly unusable.
Many nations have embraced burning wood pellets to produce electricity, under the assumption that it is carbon neutral. But research shows this approach can boost greenhouse gas emissions and threaten the health of local communities.
The global picture on methane is troubling due to higher emission levels from fossil fuel production and wetlands releasing more methane. Failure to slash such emissions will likely keep Paris Agreement temperature goals out of reach.
An unprecedented number of record heatwaves has plagued the world this year, with weather extremes growing more frequent.
Germany’s top clean energy source, wind power, is set to a slow growth pace in 2024 due to low wind speeds. Intermittency is still a problem, inevitably compensated by an increase in fossil fuel generation.
Ørsted has scrapped its flagship European green fuels project. It says that the market for e-fuels is developing more slowly than expected. Ørsted has joined companies including Shell and Fortescue in either abandoning, pausing or scaling back renewable energy projects.
Geopolitical, financial and technical headwinds have slowed energy transition progress, but ever-tighter climate regulation continues to drive change.
The green transition is facing teething troubles. Some sectors have balked at the rising costs of the green transition and in some cases are even doubling down on fossil fuels.
Dr Charles Ellinas is Senior Fellow at the Global Energy Center, Atlantic Council
X: @CharlesEllinas
