The Dutch Learned Nothing from the Tulip Mania and Fell for Electrification to "Save the Planet." This Time the Hurt Is Real.
Many readers will recall reading about the Tulip Mania that took place some four centuries ago in the Netherlands. For those who don’t recall, I give you Wikipedia’s description:
Tulip mania was a period during the Dutch Golden Age when Tcontract prices for some bulbs of the recently introduced and fashionable tulip reached extraordinarily high levels.
The major acceleration started in 1634 and then dramatically collapsed in February 1637. It is generally considered to have been the first recorded speculative bubble or asset bubble in history.
In many ways, the tulip mania was more of a then-unknown socio-economic phenomenon than a significant economic crisis. It had no critical influence on the prosperity of the Dutch Republic, which was one of the world's leading economic and financial powers in the 17th century, with the highest per capita income in the world from about 1600 to about 1720.
The term tulip mania is now often used metaphorically to refer to any large economic bubble when asset prices deviate from intrinsic values.
Forward markets appeared in the Dutch Republic during the 17th century. Among the most notable was one centred on the tulip market. At the peak of tulip mania, in February 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled artisan.
There is little to distinguish the Netherlands’ net zero obsession from the Tulip Mania. Both involve the same socio-economic-psychological phenomenon of a public wanting to get in on the game until it realized the whole thing was all a scam. Both resulted in foolish investments and had to come to a sad end sooner or later.
That end appears to be now approaching rapidly for the Dutch energy transition, based on an article in the Financial Times, a few excerpts of which are provided below (emphasis added):
More than 11,900 businesses are waiting for electricity network connections, according to Netbeheer Nederland, the association of Dutch grid operators. On top of that are public buildings such as hospitals and fire stations as well as thousands of new houses.
Dutch officials and companies said lengthy waits for connections were holding up economic growth and could force businesses to rethink their investment plans. Despite efforts to invest in new cables and substations, new connections in some areas of the country will only become available in the mid-2030s, according to network operators.
Although the bottlenecks in the Netherlands are particularly acute, analysts say it is a harbinger of what is likely to occur in other EU countries, as the speed of electrification increases to meet the bloc’s ambitious decarbonisation targets…
The Netherlands is among the countries in Europe to have moved fastest to electrify critical parts of the economy after it in 2023 ended production at its giant onshore gasfield, Groningen. More than 2.6mn Dutch homes now have solar panels on their roofs, Netbeheer Nederland figures show. Companies also accelerated their move away from gas after the EU’s energy price crisis in 2022…
The Netherlands already has some of the highest electricity costs in western Europe because of the grid bottlenecks. Monthly prices are, for example, roughly €30 per megawatt hour higher than they are in France this year, according to data from the think-tank Ember.
To cover the necessary investment, tariffs are expected to increase each year until 2034 by an average of between 4.3 and 4.7 per cent in real terms, a presentation from Tennet said.
To free up capacity, Tennet and regional grid operators have started to offer contracts to households that discount electricity used at non-peak times, such as between 11am and 3pm, and other flexible contracts that allow users to pay for electricity in time blocks.
From April 1, operators could offer contracts where large industrial users are barred from using their connections at all during certain busy hours in exchange for lower tariffs…
In the meantime, the Dutch energy ministry and network operators are looking at ways to safely increase the load on the grid without causing blackouts like the one across the Iberian peninsula in April.,,
Eefje van Gorp, spokesperson for Tennet, said that other countries should beware. “Belgium is in trouble. The UK is in trouble. In Germany there’s lots of trouble because in Germany all the wind is in the north and the demand is in the south.”
The EU is consulting on legislation addressing the need for grid upgrades and to further accelerate permitting for grid infrastructure projects before the end of the year.
But analysts fear this will offer little immediate relief.
What a complete and completely cruel joke on the Dutch people. The problem is the intermittent unreliables that have replaced reliable baseload energy such as coal, natural gas, and nuclear energy. It is not the lack of infrastructure to deliver electricity, but the lack of real power plants that can provide the electricity needed. And, the only things overtaxing the grid are the EV mandates and other examples of electric mania that are being pushed on the public in a pointless, irrelevant attempt to rid the planet of the very thing that sustains it — CO2.
Hat Tip: C.A
#Netherlands #NaturalGas #Coal #Nuclear #Electrification #Infrastructure #Unreliables #GridIssues
