Guest post from Andrew McKillop
Death Cross Mix for European Energy : No Future
by Andrew McKillop 29-03-2014
Play With the Toy Until it Breaks
Commentators have begun to focus on the “moving average” of always-unrealistic energy policy and programs in the European Union, easily finding that they signal a “bearish outlook” for future energy supply in Europe – but certainly not for energy prices. In fact not only the poster child victim of the EU’s mix and mingle of often-extreme policies – electricity, but also increasingly gas and then oil – faces a supply outlook that almost inevitably has to be down. This is despite, or because of, ever-rising energy prices, led by electricity price rises! Prices are driven up by a death cross convergence of political, economic, financial, technical and even cultural “life style” factors. In the poster child country for European “energy transition”, German household electricity prices are around 25 euro cents per kiloWatthour in early 2014, pricing their power at an oil equivalent (1600 kWh per barrel) of around $540 per barrel equivalent. Can we be surprised that German electricity consumption is falling?