Europe's Shift to Renewable Energy: Necessity, Strategy, and a Greener Future

The war in Ukraine, initiated by Russia in 2022, underlined Europe's dangerous dependence on Russian gas and the urgent need to develop alternative energy sources. New research by think tanks E3G and Ember brings into stark relief how wind and solar energy helped Europe avert €11 billion in extra gas costs since the Russian invasion began in February 2022. This growth in renewables also resulted in a saving of more than eight billion cubic meters of gas, a significant amount considering the UK consumed nearly 77 billion cubic meters of natural gas in 2021.

The conflict has triggered soaring energy prices, risking economic stagnation and a social crisis. These events have highlighted the essential role of alternative energy in the journey to decarbonization, necessitating an urgent strategy shift. It's important to remember that "surging renewable electricity has helped protect Europe from an even worse energy crisis," according to Dr Chris Rosslowe, senior analyst at Ember.

EU's ambitious goals, outlined in the European Green Deal, aim for climate neutrality by 2050 and a 55% reduction of emissions by 2030, compared to 1990. A quarter of the EU's electricity was generated by wind and solar from March to September 2022, its highest-ever level. These objectives predate the Ukrainian conflict but are now underscored by its outcomes and these recent developments in renewable energy production. In parallel, the Paris-based agency, International Energy Agency (IEA), has found that clean energy investment is projected to reach $2tn this year, outpacing the spending on fossil fuels by a significant margin.

In the short term, the quest for alternative energy resources is paramount. The skyrocketing prices for oil, gas, and coal necessitate leveraging all available indigenous energy resources, including nuclear power and LNG from diverse suppliers. However, the crisis calls for focusing on the medium- and long-term objectives of the Green Deal, keeping climate change at the forefront.

A robust approach includes doubling down on energy efficiency and renewables, making Europe more resilient and less dependent on energy imports. Governments should strive to eliminate bureaucratic barriers, promoting the electrification of heating, transport, and industry. According to E3G, the climate think-tank partnered with Ember for the research, Europe needs to reduce its costly exposure to gas prices by supporting the clean energy ambition of Brussels' RePowerEU initiative. This step is crucial, as it will offer people sustained relief and Ukraine sustained support against Russia.

Addressing social concerns is crucial, with escalating energy prices causing significant distress. Governments need to target support towards the most vulnerable, potentially encompassing a third or more of Europe's population. This could be financed through additional VAT revenues from energy products or windfall profits from energy companies.

Lastly, significant investments in low-carbon technologies are vital. The European Green Deal already champions climate-neutral technologies like green hydrogen, which can drastically reduce reliance on fossil fuels. Accelerating these initiatives and investing in infrastructure for electricity and hydrogen transport, as well as carbon capture and storage, are crucial steps.

Europe's energy security in the face of geopolitical turbulence requires a broad strategy, encompassing trade, climate, and development. While the EU won't be fully energy independent, it must balance work and cooperation, reducing over-reliance on any single country for energy or essential materials. Achieving this delicate balance is a complex task but central to ensuring a greener, more secure future.

Key Takeaways From the Experts

Fatih Birol, Executive Director of IEA

"Clean energy is moving fast - faster than many people realize. This is clear in the investment trends, where clean technologies are pulling away from fossil fuels. Five years ago global energy investment was $2tn, of which $1tn was for clean energy and $1tn was for fossil fuels. Today, $1tn is for fossil fuels and $1.7tn is for clean energy. This is a dramatic shift that will have consequences for the energy markets and climate change. In my view, it's very exciting."

Birol further highlighted that the clean energy boom is particularly apparent in solar power investment. For the first time in history, the amount of investment going to solar is higher than the amount going to oil production. It may be symbolic but it is very important because it shows the tide turning.

Viktar Prakapenia, Entrepreneur and Founder of VP Capital

Amid the current energy price surge due to Russia's actions, Viktar Prakapenia reminds us in his essay that crises often present unique opportunities for innovation and change. Drawing inspiration from David Bowie's visionary take on the internet's potential back in 1999, Prakapenia draws a parallel, suggesting that the current challenges might be a catalyst for substantial progress in green technologies and energy efficiency. 

Reflecting on history, he highlights how pivotal moments, such as the global response to the COVID-19 pandemic or technological advancements post-WW2, stemmed from crises. The energy crunch countries face today isn't unprecedented. The 1970s energy crisis, for instance, played a pivotal role in the birth of the renewable energy sector. Prakapenia subtly hints that, if approached with foresight, today's challenges could diminish the stronghold of fossil fuel-dependent authoritarian regimes and propel us toward a sustainable future.

Yossi Ron, VP of Energy & Strategic Projects at ICL

In 2023, AI and Big Data are anticipated to revolutionize energy efficiency, connecting decentralized energy production to consumers. Green hydrogen energy's development could change processes in industries like steel, cement, and transportation. "2023 will be the year that green hydrogen moves from idea to reality," says Mr. Ron. 

Hydrogen varies in environmental impact, with green being the most sustainable. Gray hydrogen, more common and made from methane, is seen transitioning to green in 2023. ICL plans to incorporate more renewables, with projects like Green Sdom aiming to offset 1 million tons of carbon. Recent global events emphasize renewable energy adoption and reduced energy dependency. Ron also forecasts electric vehicle manufacturers to establish battery recycling facilities and emphasizes extracting energy from waste.

Conclusion

In conclusion, the conflict in Ukraine has underscored Europe's risky dependence on Russian gas, necessitating a swift pivot to renewable energy. The crisis has not only emphasized the economic viability of renewables but also the urgent need for a strategic shift toward decarbonization. The ambitious goals of the European Green Deal, along with industry leaders' emphasis on the potential of green technologies, have the potential to reshape the future energy landscape. Amid soaring energy prices and social challenges, a comprehensive strategy that integrates trade, climate, and development aspects is crucial for ensuring Europe's energy security and environmental sustainability.