Source: New York Times
As we have written about previously, Russia’s attack on Ukraine has had a significant impact on the EU sourcing fuel, ultimately exacerbating the ongoing energy crisis. Many EU member states have benefited from relatively cheap natural gas from Russia for decades and at present, Europe as a whole imports roughly 40 percent of its natural gas from the country. According to the Oil & Gas Journal, Russia holds the world’s largest natural gas reserves at 1,688 trillion cubic feet.[i]
Source: Forbes, referencing European Union Agency for the Cooperation of Energy Regulators[ii]
This increasing uncertainty, plus surging prices putting pressure on consumers and businesses has led several EU countries to pursue energy independence strategies. EU states remain divided on the time scale, but European Commission President Ursula von der Leyen has said the bloc hopes to phase out its dependency on Russian gas, oil and coal by 2027.[iii] Given Russia’s dominance, (Bloomberg note that Russia pumps enough gas into Europe every day to cover a third of the continent’s consumption) in terms of global fossil fuel supplies, and the cleaner energy targets in place within the EU, member countries will undoubtedly need to consider alternative fuel sources in many cases.
Several major EU economies such as The Netherlands, France, Poland, Belgium, Germany and Italy are all ramping up their energy sectors, in some cases by expanding their wind, solar and nuclear energy options. Many energy strategies in the EU include increasing or switching to renewable sources.
Recently (April 6th) The German government presented a comprehensive revamp of the country’s electricity sector, outlining new frameworks for renewables, power grids and markets to set the country on track to reach climate neutrality. The ruling three-party coalition agreed to aim for 80% renewable electricity by 2030, with full carbon neutrality in the power sector expected to be reached by 2035[iv]. Fox News also reports that the country is aiming to end the use of Russian oil and coal in 2022, and natural gas by mid-2024.
Meanwhile in Italy, the country’s first offshore wind farm has been built, and Rome officials are working to end the import of Russian gas by 2025. Coming online at the end of April, the Beleolico project has 10 turbines, which produce a total of 30 megawatts of power. The wind farm could power nearly 20,000 households annually. It’s completion follows comments by Italian Foreign Minister Luigi Di Maio, who said Italy is determined to “speed up the installation of renewable energy and increase its share in the national energy mix.” Adding, “Offshore energy could help the green transition process, while securing economic opportunities for countries with large coastal areas, such as Italy, promoting local value chains and synergies between blue economy’s stakeholders.”[v]
Other solutions such as hydrogen energy, are being explored by EU members- TES is a green hydrogen company which plans to develop a green hydrogen hub at Wilhelmshaven in Northern Germany. Through this complex, it will supply green hydrogen and green gas to the mobility, industrial and power sectors. According to Forbes the plan was that: “by 2045 TES would supply 100% green hydrogen. Clean hydrogen will be utilized as a bridging fuel in the early years. By 2030 there will likely be a 50:50 split between clean and green hydrogen. In the initial phase, 25 terawatt-hours (TWh) per year of green methane, from which more than half a million metric tons of hydrogen can be produced, will be imported into Wilhelmshaven. That will increase to 250 TWh per year and more than five million metric tons of hydrogen in a final stage. The green hydrogen will be produced using exclusively renewable sources, mainly solar and in several cases, wind and/or hydroelectricity.”[vi]
However, worryingly not all are switching away from fossil fuel reliance. Greece is planning to accelerate its gas and oil exploration, in a move to reduce its dependency on Russian energy- at present 40 per cent of Greece’s annual demand for domestic needs is covered by Russian gas. According to the Financial Times, Greece aims to have a clear picture by 2023 of whether it has enough gas reserves that it could explore. The nation will investigate six onshore and offshore areas in the Ionian Sea and west of Crete in the southern Aegean. This will of course raise concerns relating to increased emissions; however, Greece is confident that the plans will not undermine its drive to cut carbon emissions by 55% by 2030, in line with the EU’s climate change targets.[vii]
“The acceleration of the exploitation of the national energy resources of our country will allow us to strengthen our energy independence, our energy security,” Kyriakos Mitsotakis, Prime Minister of Greece[viii]
We must note, all of these strategies will take time to implement and further, the opening of new oil and gas fields is a short-term solution, not to mention of concern regarding pollution and CO2 emissions.
As of yet, the EU has not outright banned Russian energy imports, however it is looking at a sanctions proposal which includes a phasing out of Russian crude oil, imports of Russian refined products by the end of 2022, and a ban on all shipping and insurance services for the transportation of Russian oil.
Whilst debate continues as to whether the EU will apply thes energy sanctions, Ursula von der Leyen, President of the European Commission, has urged European nations to act swiftly on their energy sectors and become "truly independent."
She has said:
“The quicker we switch to renewables and hydrogen, combined with more energy efficiency, the quicker we will be truly independent and master our energy system.”[ix]
With growing pressure on consumers as the cost-of-living crisis bites, and fears over what the next winter will bring, European governments are facing increased calls to quickly move away from relying on Russian energy imports. It also raises increased demand for countries to invest more in their own energy production and reduce risk and prices rises from external providers.
[i] International – U.S. Energy Information Administration (EIA)
[ii] Which European Countries Depend On Russian Gas? [Infographic] (forbes.com)
[iii] As EU eyes stopping Russian gas imports, Israel sees an opening (msn.com)
[iv] Germany unveils major electricity sector revamp, significantly boosting renewables goals – edie
[v] Italy inaugurates 1st offshore wind farm with Chinese expertise (bignewsnetwork.com)
[vi] German Clean Energy Hub Pivotal To Reducing Reliance Of Russian Gas (forbes.com)
[vii] Live news updates: Putin vows to achieve objectives in Ukraine | Financial Times (ft.com)
[viii] Ibid
[ix] Russia’s invasion of Ukraine sparks Europe’s hasty transition to energy independence | Fox News
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”
