Solving the Energy Transition Puzzle in Europe
Europe spent years negotiating, innovating and planning to solve its net-zero energy policy puzzle by 2050. Will Russia’s war on Ukraine reshape the future of energy in the continent?
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Saving the planet from the ravages of extracting, transporting and burning fossil fuels was never going to be easy. Cooperation at the continental level has been a complex puzzle to solve, particularly in assigning and agreeing on each country’s roles in reducing the use of polluting fuels and achieving the energy transition to clean, renewable sources.
The EU challenged its constituent nations to work together on the energy policy puzzle to get to a carbon-neutral Europe by 2055. The problematic pieces of the jigsaw (coal, oil, natural gas and nuclear) need to shrink as the future energy sources (wind, solar and hydro) are explored, expanded and nurtured through green new deal investments. But just as member nations were putting the final components into place, Russia invaded Ukraine, flipping the table and sending the carefully placed pieces flying.
ENERGY TRANSITION: A MOVING TARGET
Across the planet, the demand for power continues to grow, led in part by some of the very things developed to reduce reliance on fossil fuels – most notably, electric vehicles. From mining the rare earth minerals used in batteries to the additional drain charging those batteries put on the power grid, several issues have made a smooth and speedy energy transition difficult to achieve. As a result, the EU has had to make concessions to certain member states, allowing them to continue using nuclear power and fossil fuels beyond previously agreed end dates.
The future picture has been further jumbled by the ongoing war in Ukraine. Russia is the leading supplier of natural gas for all of Europe, with several pipelines snaking across the continent to ensure continuous supply. Worldwide embargoes on Russian exports were a natural consequence of the country’s unjustifiable invasion of Ukraine, causing immediate spikes in fuel costs. US oil prices jumped substantially, but with less than 3% of US natural gas being provided by Russia, the price surges in fuel were limited to crude oil. China has long been on a two-pronged path of reducing fossil fuel consumption and securing energy resources both within and beyond its borders, so whatever its stance on Russia’s military actions, access to Russian fuel is not really an issue there.
REVISITING AND RE-FOCUSING THE ENERGY POLICY
For the EU, enforcing embargoes necessitated nuanced, region-specific approaches to address this geopolitical and climate-critical quagmire. First came immediate course reversals that could drastically reshape the future of energy, with extensions granted to Hungary and Slovakia for eliminating dependence on (mostly Russian) natural gas. These concessions could jeopardise the Fit for ’55 package adopted by the EU, and workarounds for rules of the embargo had to be constructed so that member countries could continue to purchase Russian fuel without directly paying for it in roubles.
And while most of the world is working towards closing nuclear power plants, the future of nuclear power is looking brighter in some EU countries that are increasing their nuclear capacity, gambling that the relatively non-polluting energy source can be managed safely while they work on phasing out fossil fuels and scaling up clean, renewable energy sources.
It may look like Russia has the EU over a barrel regarding energy supply, but Ukraine could prove a valuable resource and ally in overcoming dependence on Russian fuel. Its energy sector is now war-tested and stable, even after being (likely permanently) disconnected from Russia’s supply. Nuclear power plants provide 55% of Ukraine’s electricity, which is a scary prospect for a country under siege, but it also boasts impressive levels of wind- and solar-generated power – and has the potential to scale these up further. Europe could reassemble the puzzle, taking pieces from un- and under-explored clean energy sources. Russia has made the puzzle harder to solve, but the pieces are still there, and if placed correctly, Europe could still achieve its Fit for ’55 goals.
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