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According to the German minister for energy Robert Habeck, "a ceiling to the prices of gas isn't correct". He said that we "must find some market mechanisms to reduce the prices", and we should "decouple gas prices from electricity prices".

A couple of observations to someone who apparently skipped a few classes of economics:

- Yes, capping the price of something is a slap in the face of the demand/supply mechanisms. And it also ignores supply constraints: if we cap the price of something whose supply is going down, while demand remains constant or it increases, then we're increasing the risk of supply shortages down the line - which means blackouts and rationing.

- However, we must also take into account that the supply, in this case, isn't going down for natural causes. It's going down artificially, because Russia has closed its pipelines and it's trying to send the prices up in order to get more funding for its war. So capping the prices is exactly what we need to do to ensure that Putin's income from gas exports gets cut.

- "Decoupling gas prices from electricity prices" is only possible if electricity is *NOT* generated from gas (and, preferably, no other fossil fuel). If you generate electricity from gas, then there's no way of decoupling their prices. It's like saying "we need to decouple the prices of wheat from the prices of pasta", ignoring that pasta is mostly made of wheat.

- "We need to find other market mechanisms" - if you have better ideas, I'm all ears. Any solution other than capping the prices involves burning less gas to generate electricity - something that the lazy Germans (and many other EU countries too) have always procrastinated on, because it's much easier to just burn whatever magically comes from a pipe under the Baltic, rather than installing new wind, solar or nuclear power in a country full of NIMBYs. The market solution is to cap prices. The proper solution is to stop using gas. I don't see anything else in between, so let's stop cheating people with these fairy tales, and just get something approved fast.

@blacklight
It is a fairy tale indeed as it does not really tackle the root cause and starts a change in the foundation of our energy supply.

I don't see anywhere changes in the ridiculous approval process for windparks (H10-rule). Where are the regulatory changes to enable more solar and wind parks. Why is there still no rule demanding all roofs of newly build houses need to have solar panels - and not just a single one but like 80% of the roof area? Where is the rule that demands solar panels on existing houses by 2030? Where is the stimulus package to re-build local solar panel industry? Something they have killed off years ago because decision makers got paid by the nuclear and coal lobby.

I don't see real effort in wanting a fundamental change in our structure. This is all too slow and we need a disruption now. Only then are people going to wake up and move their butts. We are so full and sluggish, we have forgotten how to actually change. We only react...

@lvdd_ I was actually awaiting a moment like this for a long time - fossil fuel prices skyrocketing to the point that they force change in our habits and lifestyle.

I was expecting such a moment to be the pivot in our migration to renewables: if we can no longer afford to do what we do in our homes and offices with gas and oil, then we have no more excuses to procrastinate on our migration to renewables (as if the climate disasters that we are already witnessing aren't enough to push people).

Instead, I'm really witnessing the worst that humanity can give. Populists all over Europe calling for a stop to sanctions against Russia because none of their voters is ready to take a single cold shower. Countries all over Europe bringing their coal plants back into operation. Market manipulation preferred over a good migration plan. Because politicians have been telling us the same absurd fairy tale for years (that the migration to renewables will be painless and won't require any of us to do any sacrifice), and they aren't ready to be responsible parents telling the truth to their kids amid fears of losing ignorant votes.

Installing solar panels on all new houses is a must that can be no longer postponed, as well as requiring energetic self-sufficiency and proper levels of insulation. But it's not going to be enough: it would only apply to new buildings, and we're in a continent where we don't build much anymore.

Also, plans about "solar panels everywhere" ignore that most of the European population is urban and lives in apartments (often rented): what this means is that more than half of the EU population can't install solar panels at all

Centralized energy generation must still be at the center. Nuclear, whether we like it or not, is indispensable to have a stable baseline - at least in this transient. Centralized solar stations and wind parks must be the new normal, and every single city should have their own. Plus, investment on batteries in indispensable to have storage capacity to deal with the natural swings of renewable energies.

The problem is that we live in a continent that is growing older and older, and old people tend to become grumpy and selfish NIMBYs who say no to the construction of anything new. Plans for constructions of new solar and wind parks, especially in Germany and the UK, get regularly hijacked by protests. Even plans for off-shore parks get jeopardized by local residents with excuses as absurd as "they ruin the view of the sea from my balcony"..

We need a political class who shows NIMBYs a big middle finger, and makes it clear that their narrow interests aren't compatible with the interests of the country as a whole.

Unfortunately, NIMBYs who like fairy tales about "somebody else" other than them taking the burden of the energy migration bring a lot of easy votes, and no politicians would ever say no to them. Especially as Europe becomes an older continent, and politicians court the votes of grumpy grandpa more than those of the young generations.

That's one of the reasons why I start to hate this thing called democracy: if the majority is dumb, then you can only expect a dumb ruling class. Today's populisms are just the natural degeneration of democracy. When left to self-regulate with no objective and technical oversight, and when the rights of the citizens aren't weighted by civic duties and a sense of shared responsibility, democracy simply becomes the tyranny of the selfish and the imbecile.

@blacklight I tend to agree with you but would add the point that even appartment buildings can be equipped with panels. It is up to the owners of those appartments to make that happen. But again they get stuck in discussion like who owns which piece of it and how they can trickle down the costs to the tenants and what to do if somebody cannot or does not want to participate in such a project. Nonsense-issues really.

Also there is currently a trend happening in germany with tiny solar panels that can be installed on balconies by the people and plugged into reular wall outlets. There might be real technical reasons but these little panels are capped in capacity as I suspect energy companies don't like the fact that people are looking to make them less important. I consider this a regulatory stupidity as every technical problem these panels might have, can be solved.

I also think existing nuclear plants need to run a couple month longer just to bring us over THIS winter. But they need to shut off after it (as planned) and cannot be considered next year anymore. Everybody suggesting new nuclear power plants should receive a castor container for their livingroom - no questions asked. We need to have a plan for the next winter in place and take all of next year to build alternatives wherever possible. We need to rush this to get off as much gas as possible.
I myself got overrun by the global development and still have a gas heating in my house. I doubt I will be able to switch to another system within the next year as there is a huge demand right now. At least I got my house insulated and my PV system up and running 3 months ago. I have electricity covered but heating will remain a challenge for this winter at least.
Agree with the democracy bit but still cling to it as I cannot imagine an alternative I'd consider better. I hope we agree that the "benevolent dictator" is also a fairy tale we should not let happen. We've seen to many cases where this has failed massively.

@lvdd_ as Churchill once said, "democracy is the worst possible form of government - except for all the ones we've already tried".

Any hints of "benevolent dictatorship" trigger a lot of alarm bells in me as well. But I also believe that we have to find a trade-off somehow. We want to have a form of government where an abusive or incompetent leader can be kicked out of office though elections. But we also want a form of government where delusional pipers don't have the power to sell pipe dreams to selfish and uneducated voters, eventually ending up with decisions that harm everyone.

The symbiotic relationship between NIMBYs and populist politicians is a toxic mix that is holding back progress and development. Those who oppose the construction of a wind farm, or of new solar centrals, or of new houses that would allow the younger generations to finally own a house, are harming the society as a whole. But, as Europe is aging, those people also represent a basin of votes that can't be ignored by politicians.

So what do they do? Do they take decisions that benefit society as a whole, and maybe even allow the next generations to have a planet where they can live? Or do they just court the easy votes of an increasingly large basin of voters, get into office just by amplifying their arguments, and eventually make the world a worse place for everyone else?

This is what I call the "tyranny of the selfish and the ignorant". We need to reform democracy and bring a new balance between civic rights and duties based on a new shared definition of "common good". We need to make it very clear that politicians are just like parents, and a parent who says yes to whatever their kid says is a bad parent. If we don't do that, then we're just letting democracy rot and die in its expected degeneration, while voters start behaving more and more like spoiled and selfish kids.

@blacklight

You seem to focus a bit on stupid politicians and our broken form of democracy. There is the phrase called "simulated democracy" which I kind of like

"We want to have a form of government where an abusive or incompetent leader can be kicked out of office though elections. "

We already do have that. The problem is that the voters seem to be not interested in change - as you have already said. So the "stupid" group is us - the voters - old or young the like. In germany the free democrats got voted into the coalition by mostly younger people. Look what happened - we have one of the most incompetent finance ministers in quite a while. Pushing his corporate financed agenda into federal politics.

How do you want to identify and exclude "selfish and uneducated voters" and who is going to decide what that actually is? You? Me?

@lvdd_ it's obviously not up to me or you to decide what are the right policies to implement. It should be up to a panel of experts who weigh political ideas against public good.

For example, opposing the construction of a new wind or solar farm (or some new houses) may gain you many NIMBY votes - and those people can be notoriously loud and throw their vote to anyone who supports their narrow-scoped ideas. So courting the NIMBYs is probably a good strategy to end up in office, especially in local elections. Similarly, promising voters to keep burning coal, oil and gas to produce electricity, so they won't have to experience a single cold day in their houses, may appeal a lot of people.

But are those decisions taken in the common good? Obviously not: they jeopardize our plans towards an energetically sustainable future, they keep us reliant on Putin's gas or Saudi Arabia's oil, they prevent younger generations from becoming home owners - and it's also funny that the same people who don't want anything to be built around them are also the same who complain about scarcity of jobs.

These are the kind of paradoxes that we need to sort out: when a majority or some very loud minority sends somebody in office on the basis of a program that harms the common good, can we really still call it democracy? When you get what you want but not what you need, can we really say that you're better off? I personally believe in a balance between democracy and technocracy. People should have their say, but on some issues we should just embrace what's objectively better. The scientific method should have priority over people's will. If you ask kids whether they prefer ice cream or soup, they'll ALWAYS say ice cream. But does it mean that they should always eat ice cream and the ice cream party should always be in power?

Italy has been a good lab for these things. Italians are notoriously populist to the core, they've voted for Berlusconi for nearly two decades, and then followed many other hollow pipers after him. Every now and then, they've been forced to get some technical governments to fix all the mess left by the previous populists. Wouldn't it be better if there was always a balance between democracy and technocracy, instead of electing hollow pipers into office for years, just to get technocrats every now and then to implement the reforms that populists never had enough guts or political depth to implements?

@lvdd_ on nuclear energy: it takes decades and millions in investments to start a nuclear plant. It's not something we can have "just for one winter". It obviously has its downsides (elephant in the room: where do we store the waste products of uranium?), but we must also be pragmatic: we currently live in a world that is being overheated by atmospheric CO2 and CH4, not in a world drowning in nuclear waste. So, between the two evils, I'd probably pick the one that doesn't threaten the existence of our own species right now.

I'm not a huge fan of nuclear energy, but I don't think we have much choice: wind and solar alone can't feed the world's demand for energy, unless we *really* scale up construction by a 10x factor right now (and I don't see politicians who have much appetite for that). And, even then, the natural swinging of sun and wind don't make them suitable candidates for centralized energy generation, unless we use huge batteries as buffers - and we don't have any such solutions working at the scales that we need.

I'm well aware that the construction of solar and wind plants that could really replace coal/oil/gas, as well as batteries that could really store the surplus for a whole city for days or months, isn't anything on the horizon for the next decade at least. In the meantime, we need solutions that work right now.

@blacklight We have wasted that decade (at least in Germany) with Merkel and her folks announcing the change but then actively blocking it from happening. We got screwed over for 15 years and many people still believe she did good.... so much for educated voters

@blacklight I know that regenerative sources will not fully be able to replace everything. But combined with learning to be more energy efficient and some modesty and less greed and carelessness we can make it work. And we have to start somewhere.

I agree. The fossil fuel lobby is is very powerful and tries to prevent this, but I'm completely with you.
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