Europe’s energy crunch

The energy sector has a habit of creating surprises. Back in the 1980s and 1990s, when oil prices touched $10 a barrel, and there was excess capacity in most European countries, nobody worried much about security of supply, and bothered even less about climate change.

All that changed at the end of 1999: oil prices started their continuous upwards growth, to peak at around $70 a barrel before falling back, power cuts periodically reappeared, and a number of European countries had very close shaves with their capacity margins. Aging assets, which had been sweated hard in the low price-excess supply world of the 1980s and 1990s, began to fail, most starkly with the British nuclear plants, but more widely outage rates started to go up. In refineries the asset sweating took its toll too, with the most dramatic effects witnessed in BP’s Houston plant.

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