More than 70% of pubs do not expect to survive winter as energy costs soar | Hacker News Reader

More than 70% of pubs do not expect to survive winter as energy costs soar

theguardian.com

24 pointswalterbell16 comments

Ironically, here in Norway we're usually WELL covered as far as energy surplus goes. 95% of our energy comes from hydropower, and our electricity prices have usually been some of the lowest in Europe.

But just to be on the safe side, energy (transfer) cables to Europe were expanded - on the off-chance that we'd need to import energy during times like drought.

That, of course, backfired - right now energy producers in Norway are exporting power hand over fist, and half the country is stuck with energy prices which are 15-20x historical prices.

Norway is divided into five energy regions, the two northernmost regions have been shielded, for no other reason than that the transfer capability between North and South is too poor/low. Right now the most expensive region in Norway (around 580€/MWh) is paying over FOUR HUNDRED times more for energy, than the cheapest region (around 1.4€/MWh).

So luckily the government has stepped in, and subsidizes / caps the utility bill to private citizens, after a certain price. But that is not the case for businesses - where many, especially smaller business operate on spot contracts. The large and energy intensive industries tend to operate on long-term contracts, spanning over years, but it's worse for restaurants / pubs / mom'n pop retail stores / etc. that suddenly see a hundredfold spike in utility bills.

Winter is going to be absolutely brutal.

This comment followed an oddity I noticed in the article, of talking about "energy" rather than electricity specifically.

https://www.iea.org/countries/norway

This suggests half your energy is coal/gas/oil so why would you expect to not be paying more?

Especially if you export 90% of that and hit record exports in dollar terms last month. Someone in Norway is doing well out of the rising prices for oil and gas. I had thought they were one of the better countries for sharing that wealth fairly, but I guess even they're not as good as they could be.

> The government’s total net cash flow from the petroleum industry is estimated to be NOK 933 billion in 2022. The estimate for 2022 is NOK 645 billion higher compared to the net cash flow in 2021, mainly due to higher estimates for oil and gas prices.

Yes, when it comes to total energy production, we do have a lot of oil and gas - but that's mainly being sold / exported. Hydropower is by far the leading energy source for production of electricity - Seems like in 2020, 1.3 TWh of our electricity production came from natural gas - while 141 TWh came from hydropower. Wind at second place with 9.9 TWh.

Now, all energy production (AFAIK) here is owned by the Norwegian Government. So high exports would naturally mean more money to Norway - which they then "pay back" to the people by subsidizing high utility / electricity bills in unprecedent times like these.

The crux is simply that people in Norway have been used to very low electricity prices, for pretty much forever now. Seeing your bill increase by 3-6 times (even after the subsidies) has not been popular - especially not since many feel that this situation has been artificially created by the energy actors.

Worst case, we sell all our reserve electricity because prices are high, and experience rolling blackouts if we can't import enough come winter.

EDIT: In the first link you posted, you can see in the graph there's one indicator named "Electricity generation by source", you will see that Hydro absolutely dominates Norwegian electricity production.

Other countries are much more diversified in that area, but also considerably exposed to natural gas - which seems to be the driver behind this crisis, as there's a shortage in exactly that.

As far as I can tell there's no actual problem, Norway will in general 'win' from this situation. The only problem is the local right-wing parties trying to use this as an excuse to do really stupid things, like build more gas fired electricity plants, and stop electrifying things, and equally preventing the government from doing sensible things to help.

But it's astounding that high prices for oil and gas can be turned into a 'crisis' that the right-wing want to 'solve' by burning even more gas, even in Norway.

Meanwhile the actual 'right-wing' (if you interpret that as being based on sound business and economic principles rather than capture by fossil fuel interests) thing to do would be to sell when the price is high and use the profits to spend on things you need or want.

> In Norway ... 95% of our energy comes from hydropower,

Meanwhile, in the Uk, the current leader is AWOL, and as for the next one, well: https://www.independent.co.uk/climate-change/news/truss-suna...

> Winter is going to be absolutely brutal.

in the UK, agreed. English people don't usually take to the streets in protest, they prefer to stay warm at home watching TV, or go to the pub; but what will happen when people can't afford to turn on the heating and TV, and the pub is closed?

Color me skeptical. Demand for a pint isn't about to disappear just because energy costs are rising. Surely the more likely outcome is that pubs will pass along rising costs to consumers, who will absorb increased prices because: *A)* pubs are a centuries-old English social institution with no readily available alternative and *B)* alchohol is habit-forming.

Pubs have been slowly dying off in the UK for many years (decades?) now. The common line is that young people just don't like to go, although I personally think it's because they can't afford to go anymore, and not just because of rising pub prices, stagnant wages and ever rising house prices have a part too

Don't forget that it's not _just_ the pint that will be more expensive. The consumers, after paying double or triple the usual electricity/gas price this winter, and suffering from a inflation of more than 10%, will have to have enough spare cash to stomach an increase of the price of a pint.

There is absolutely no chance that the pubs will be able to have as many customers as before.

And for B) the answer is simple: they'll buy their alcohol at the shop and get drunk at home

This is crazy. Was the UK dependent on Russian gas too?

The world is dependent upon LNG at the margins. The UK is a net importer and therefore the marginal price rules.

China decided to go net zero and in their usual fashion decided to do it all at once. That shoved the price up last year.

Russia is just the icing on the cake.

The hedgers who backed the wrong horse are already bust. That took out half the gas retail sector. Now everybody's one year fixed prices are expiring and the chickens are fighting for scarce roosting space.

Never a good idea to back efficiency over resilience. We're about to learn why energy and food security can't be left solely to market forces.

As you can see from this map [1], there is a lot of pipeline capacity between Great Britain and neighbouring countries.

Currently, gas is being shipped to southern Britain where there are LNG terminals and piped to Germany etc -- Britain lacks gas storage, Germany has storage space but lacks LNG terminals.

Britain sources about 40% of gas from British bits of the North Sea and another 40% from Norwegian North Sea. I'm not sure if all the rest is LNG imports. [2]

[1] https://www.researchgate.net/figure/Colour-online-European-g...

[2] https://oeuk.org.uk/norway-is-now-uks-primary-gas-supplier-a...

It is a knock on effect.

We've been exporting some of our power / gas due to the companies being private, and the demand on the continent. We'll also have mainland Europe scrambling to buy the Norwegian supplies, so competing with our desire for it, hence pushing up prices.

Plus it seems there is now increased competition for LNG.

Basically our Governments over the last couple of decades have screwed up over energy policies, and especially in closing the Rough gas storage facility. So we have something like maybe 3 days gas storage capacity, and are then subject to market prices.

Since all of the Wind Turbines are backed by CCGT (and some OCGT) power stations, when the wind doesn't blow, we're burning gas for electricity.

This is not an uncommon occurrence over winter, and we can haves days to weeks without significant wind, as happened last winter.

Well, when Europe/Germany started buying gas from anywhere, gas prices went up (basic supply and demand...), even India is seeing price shocks because well, the ships carrying liquified gas suddenly turned around to deliver their goods to Germany.

Not really. We mainly rely on LNG so can get it from anywhere. Problem is the market has pushed gas prices up, also our interconnects are pushing electricity and gas to the mainland as fast as we can.

Slightly under 80% of gas used in Britain comes from the North Sea, split roughly evenly between British and Norwegian gas fields.

Fair point. I was trying to say we rely on LNG rather than russian pipeline gas for the balance of our gas.

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