Russia’s invasion of Ukraine has created an energy crisis across the European Union. Now is the time for European governments to radically restructure their energy sectors, writes Judy Dempsey
As autumn kicks in, there’s hardly a household or company in Europe that has not been affected by the huge hikes in energy prices.
Now that Russia has stopped supplying gas to Germany via the Nord Stream gas pipelines, governments are rushing to buy expensive gas, attempting to fill their storage facilities ahead of the winter. The last thing they want are price-hike demonstrations and to lose support for Ukraine’s determination to defeat the Russian military.
There are several lessons in these price hikes and shortages that must be learned by all EU member states, and the first is the price of dependency.
Successive German governments and companies believed gas contracts with Russia were reliable and stable, but how many times did experts warn that Russia could one day use energy exports as a geopolitical instrument?
By cutting off energy supplies, Russian President Vladimir Putin is punishing the European opposition to Russia’s invasion of Ukraine in the form of sanctions and curtailed weapon supplies to Kyiv.
Putin’s goal hasn’t changed. He wants to divide the EU and give succour to populist movements that are often pro-Russian, anti-NATO and anti-American. That is why the West must stay the course over Ukraine. A Russian victory in Ukraine is a defeat for European security and stability.
The second lesson here is how the European Commission, despite its best intentions, did not liberalise energy markets enough to ensure that energy could, like the single market, flow across the EU.
The third concerns the failure to link up electricity and gas grids, from north to south—and to link the Baltic states to their western neighbours just as Russian gas transmissions had for decades been designed to flow westwards to Europe via Germany.
Fourth is the issue of solidarity, always a thorny issue if you recall the absence of solidarity during the 2015 refugee crisis. With regards to the energy crisis, EU member states have been trying to find their own national responses.
Yet, Germany—whose household energy prices are sky-rocketing—actually sells gas to France. Why? Because France, which uses nuclear energy as one of its main energy sources, has neglected the maintenance of its plants. Meanwhile, Denmark has a surplus of energy, but the grids to export this energy are not compatible with other EU member states.
The fifth lesson is that this energy crisis should be the catalyst for pushing forward renewable energy. Yet, in a bid to get through this winter, Germany’s Social Democrat-Green-Free coalition is re-opening coal faces. While the Greens support this very ‘un-Green’ development, the party is divided over whether the remaining nuclear power stations former Chancellor Angela Merkel vowed to close by this year should be kept open.
In short, Europe’s backing for reducing carbon emissions will be a challenge. In June 2021, the EU adopted a European Climate Law aimed at reaching net zero greenhouse gas emissions (GHG) across the bloc by 2050, with an intermediate target of 55 percent by 2040.
This commitment will be tested unless there is massive up-front investment and political commitment to forge ahead with making renewable energy the priority.
If not, Europe will be unable to break out of the dependency trap, unable to cope with another energy crisis, and unable to take another big step towards integration and embracing climate by connecting the different energy sectors.
Judy Dempsey is a Non-Resident Senior Fellow at Carnegie Europe and Editor-in-Chief of Strategic Europe