How the invasion of Ukraine could accelerate the change of clean energy in Europe

How the invasion of Ukraine could accelerate the change of clean energy in Europe

In response to Putin’s actions, German Chancellor Olaf Scholz announced plans to halt the development of the Nord Stream 2 gas pipeline, designed to carry natural gas between Russia and the northern part of the country.

In addition, the European Union and the United States imposed sanctions that included strict restrictions to some state financial institutions and Russian elites. US President Joe Biden has vowed to take tougher measures against Russia “if it continues its aggression”.

He stressed that the administration is taking deliberate steps to ensure the conflict does not increase energy costs for U.S. consumers.

“We are implementing the plan in coordination with major oil-producing consumers and producers to ensure stability and a global energy supply,” Biden told the White House on Tuesday. according to CNN. “This will reduce gas prices. I want to limit the pain that the American people feel at the gas station. ”

There are several scenarios that could lead to price increases. International sanctions could directly or indirectly increase the cost of producing or distributing fossil fuels. The conflict itself could affect the functioning of the gas pipeline through Ukraine. And Russia could decide to slow down or even stop deliveries for strategic purposes.

While European nations could exploit other sources of oil and coal, tight global reserves and existing pipeline systems severely limit alternative options for natural gas. The complete closure of Russian natural gas to Western Europe, especially prolonged, would require a frantic effort to heat homes and online industries, according to recent analysis from Bruegel, the economic brain trust. These could include reducing energy demand, increasing domestic production, using emergency reserves, trying to find alternative suppliers, delaying the retirement of nuclear power plants and potentially returning some retired coal-fired power plants.

But deep interdependence between Russia and Western Europe would make such a worst-case scenario “very unbelievable,” said Laurent Ruseckas, executive director of IHS Markit, which focuses on gas markets in Europe and Asia.

Russia would lose a critical source of revenue and apparently antagonize Western Europe, forcing nations to take extreme steps to eliminate their dependence on those natural gas imports once and for all. It could also drag more countries into conflict and provoke even more expensive sanctions, some observers say.

For his part, Putin claimed that Russia will not interrupt the flow of natural gas to international markets.

But the situation still highlights Europe’s vulnerability, especially after months of already high energy prices. These increases have been driven by a combination of factors, including the recovery of the global economy as pandemic restrictions are lifted; particularly severe European winter 2020-2021. which has depleted natural gas reserves; Germany’s untimely decision to close many of its nuclear power plants; The growing use of liquefied natural gas in China; and less than the usual export of natural gas from Russia. Some have seen the state already cut supply as a strategic effort to raise prices or coerce approval Nord Stream 2 pipeline through Germany.

Some fear the events in Ukraine and possible energy security problems could distract European leaders out of their focus on meeting mid-century climate goals. Certainly, some politicians and members of the public will argue that climate policies and the shift to renewable energy sources are to blame for Europe’s insecure energy supply. They will point to the unusually low production of wind energy in the United Kingdom in recent months, due to weak winds in the region.

Ali Nikos Tsafos from the Center for Strategic and International Studies disputes these views and claims that any further jump in prices would only force the European Union to “double” the transition to clean energy. The EU has already adopted some of the world’s most ambitious climate policies, setting fast targets for the transition to carbon-free energy production and industrial practices. Most importantly, many of these measures also provide a buffer against restrictions on international fossil fuel supplies.

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