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Europe is on a wartime mission to ditch Russian oil and gas

Europe is on a wartime mission to ditch Russian oil and gas

After decades of planning and preparation, the continent’s energy supply networks, which provide electricity to more than 440 million people, are now being put into high gear, thanks to unprecedented pressure. Government policy is shifting in real-time, as political leaders in capitals throughout Europe take new views on a day-to-day basis and missiles fall on the Ukrainian capital.

The Russian deputy prime minister threatened to halt natural gas flows through the Nord Stream 1 pipeline, which supplied 38 percent of the gas imported into the European Union last year. Meanwhile, policymakers in Brussels were putting the finishing touches on a new plan to reduce Russian gas imports by more than two-thirds over the next nine months. The United States and the United Kingdom, meanwhile, declared restrictions on Russian oil on Tuesday, without waiting for their European partners to follow suit. The EU’s largest economy has altered dramatically in the course of the crisis, with Germany investing 200 billion euros to accelerate its target of using 100 percent renewable energy by more than a decade.

If Europe had a long-term political ambition to transform its energy resources by the middle of the century in response to global warming before World War II, the energy challenge is now much more urgent: So, what can be done by next winter and beyond in order to completely shut off the Russian economy from its most important source of export revenue? Maybe as soon as next month if Russian President Vladimir Putin follows through on promises to retaliate against European Union and the United States sanctions with an energy embargo of his own?

It has already been shown in the Ukraine conflict that the contemporary financial system can be weaponized in ways that have never been seen before. Now, it’s possible that the same is true for the energy transition. Europe is about to put to the test what it is possible to do on a war footing, in a hurry that is practically unparalleled in living memory, given that the World War II generation is almost completely gone. What follows is a guide to the new variety of options available for making a quick change away from Russia’s fossil-fuel-based energy sources.

Phasing Out Russian Fossil Fuels

Purchasing coal, natural gas, and oil from Russia costs Europe up to $1 billion every day, indirectly fueling the war machine that is now raging through the country’s eastern regions.

On Monday, Frans Timmermans, the EU’s climate czar, informed members of the EU’s environment committee that “there are no taboos in the decisions member states may make” as a result of what is occurring in Russia. To determine whether or not they will make up for the increased use of fossil fuels in the near term by increasing investments in renewables, he left it up to each individual nation. In actuality, both will occur an increase in coal, oil, and natural gas imports from non-Russian sources, as well as a drive to boost solar, wind, and nuclear power generation capacity.

Even with coal prices reaching $400 per ton, coal is the most straightforward issue to fix. According to Brian Ricketts, secretary-general of Euracoal, a trade association representing the European coal sector, the United States and Australia can collectively replace 70 percent of the Russian coal now supplied into the EU. According to the International Energy Agency, operating existing coal plants at full capacity and delaying the closure of others might help Russia cut its reliance on imported natural gas by 15 percent this year. According to projections based on current pricing for coal and carbon emissions in the EU, obtaining coal from other sources would likely boost Europe’s expenses by roughly 20 billion euros ($22 billion) as compared to purchasing Russian supply, according to the European Commission.

Oil is more difficult to deal with politically, but in a global market, it is just an issue of where to purchase and how much to pay. Russian oil shipments to Europe might potentially be compensated for within months by spare capacity in Saudi Arabia, the United Arab Emirates, and Iraq, according to some estimates. However, the first two nations have made it clear that they are not interested in increasing output. Because Russian oil has been removed from key markets, prices are expected to continue to rise, with traders expecting a barrel of oil would be worth $200 by the end of the month.

Despite the fact that shale could ramp up production at a quicker rate than it already does, U.S. producers have said on several occasions that they would prioritize sustaining profits above increasing output. According to on how far Western powers are ready to go, oil from sanctioned countries such as Iran and Venezuela might be reintroduced into international markets. According to persons familiar with the trip, a couple of top U.S. officials traveled to Caracas this weekend to discuss relaxing oil sanctions with members of Venezuelan President Nicolas Maduro’s administration.

With natural gas, however, this is not the case. Plans to increase the use of alternative sources of the fuel that is used to heat millions of European homes would entail the construction of infrastructure that will lock in gas usage for decades, while other nations may attempt to extract more gas from their own domestic reserves.

According to the International Energy Agency, Europe may be able to reduce its reliance on Russian gas imports by a third or possibly half by next winter. This will need the purchase of additional piped natural gas from Azerbaijan, Norway, and Algeria, as well as the purchase of more liquefied natural gas cargoes and the repair of broken pipeline infrastructure. The last phase would also aid in the reduction of methane emissions, which are a significant driver of global warming.

Bruegel, a Brussels-based think tank, went even farther, claiming that if all Russian pipeline supplies were stopped, the EU would be able to survive the winter of next year, albeit it would need unpleasant measures such as electricity rationing. According to Aurora Energy Research, filling gas storage tanks with natural gas from sources other than Russia would cost between 60 billion euros and 100 billion euros.

Neither of these proposals for the near future of natural gas is as ambitious as what the European Union is now considering, which is to replace around 102 billion cubic meters of natural gas it would have bought from Russia this year. The concept is primarily reliant on being able to purchase LNG instead, putting Europe against big importers such as Japan and China, which is the world’s largest importer of liquefied natural gas (LNG).

Despite the high figure, it is less than the amount the EU expects to spend yearly on energy infrastructure in order to implement its Green Deal strategy.

Will Energy Cutbacks Weaken Putin?

When European Europeans watched Russia’s war on Ukraine develop in brutal, sad detail on social media and television, a frequent reaction has been a desire to provide a hand. Across Europe, people have taken to the streets to show their support for Ukraine. In practice, however, there is only one real option for the common citizen to undermine Putin’s military forces: by reducing their usage of natural gas to heat their homes, oil to power their cars, and coal to create electricity.

According to the International Energy Agency, lowering European thermostats by 1 degree Celsius (approximately 2 degrees Fahrenheit) would reduce demand for Russian gas by 7 percent this year. It is possible that increasing the rate at which existing gas boilers are replaced with heat pumps, which operate on electricity and are three times more efficient, could reduce gas demand by an additional 2 percent when combined with policies to rapidly increase the number of homes that receive upgraded insulation.

A number of politicians have already begun to argue that people would be required to have a role in reducing energy use. The energy minister of Luxembourg, Claude Turmes, suggested on an online panel last week that “if you don’t want to act on dropping one degree lower for climate change, do it against Putin.” It was used during the 1973 Arab oil embargo, and it was also used throughout the Second and Third World Wars.

However, it will need more than just individual efforts to achieve success. Policies relating to Europe’s Green Deal, such as subsidies for heat pumps or rules for renovating existing buildings, will need to be implemented faster than they have been in recent years. It is possible that governments will be forced to use rationing in the most catastrophic case. During the oil crisis of the 1970s in the United States, this took the form of only permitting automobiles with even-numbered license plates to fill up on even-numbered days at gas stations. Following World War II, British citizens were given gasoline vouchers based on the demands of their occupation, with physicians receiving the highest allowances of all.

It was understood at the time that sacrifices would be required on the home front in order to be successful on the battlefield, says Meg Jacobs, a research scholar at Princeton University. “The imposition of rationing came as an understanding that you need to make sacrifices on the home front in order to be successful on the battlefront,” Jacobs says. It contributes to “establishing a relationship between sacrifices and the preservation of democracy.” That is precisely what Ukraine’s President Volodymyr Zelensky has accomplished.

EU’s Quick Green Solutions

The European Union is constrained by the regulations of the global energy market when it comes to the use of fossil fuels. Clean energy, on the other hand, has a wider range of options. Solar panels and wind turbines are also becoming more expensive, albeit not be quite the same magnitude that the rise in demand for fossil fuels has caused. In addition, clean-energy growth is consistent with existing policy frameworks. Efforts to reduce carbon emissions in the EU by 55 percent by 2030 were expected to cost the EU 350 billion euros per year in energy infrastructure investment. Total, it would be sufficient to lower the company’s overall gas use by 30 percent.

According to Michael Bradshaw, professor of global energy at the University of Warwick, “the longer-term solution is to diminish our dependency on fossil fuels as rapidly as feasible.”

One major stumbling block is the process through which permits for large-scale projects are awarded. Regulatory agencies in most European nations provide licenses for solar farms, after which corporations find out how to connect the electricity to the grid. Alternatively, grid operators should map out areas where they have the capacity to accommodate large-scale projects before soliciting bids from developers to complete the process. “Assign sites where it’s evident that they’re OK,” Chase advises. “Increase the quantity of grid you put in locations where you get a good deal more bang for your money.”

It will be more challenging to expand wind energy capacity ahead of plan. Turbine construction takes far longer than solar panel construction since the enormous blades must travel great distances. According to Gary Bills, regional director for Europe, the Middle East, and Africa at energy consulting firm K2 Management, the sector is already experiencing substantial supply chain delays.

However, according to Bills, altering the European approach to wind licenses may still make an impact in the long run by increasing wind energy deployment by as much as 20 percent in the long run. Developers are still required to submit written applications to their local planning office in many parts of Italy, which may cost tens of thousands of euros in just the paperwork alone. According to Viktoriya Kerelska, director of lobbying at the industry association Wind Europe, “they just need to be digitized in some way.”

Nuclear power facilities take at least a decade to construct, but wind farms may be completed in as little as two years. According to Yves Desbazeille, director-general of the Brussels-based nuclear industry group FORATOM, the most urgent solution would be to extend the life of Europe’s current nuclear fleet. Extending the operating lifespan of three nuclear reactors that are scheduled to shut down by the end of 2022 might reduce Germany’s overall gas consumption by around 3% over the following two years.

This would be a significant break from Germany’s long-standing commitment to eliminating its nuclear power. Following the conflict in Ukraine, the German government temporarily pondered extending the life of nuclear power plants and perhaps reactivating reactors that had been put on hold in the last several weeks. That procedure would need the procurement of uranium, which would be a challenging undertaking if the aim is to restore nuclear capability by next winter, particularly with Russia no longer being a viable supply.

According to Nicolas Wendler, a spokesperson for the German nuclear industry association Kerntechnik Deutschland, facilities scheduled for deactivation will theoretically keep their operational licenses until the end of the year, but will most likely be subjected to safety inspections by state authorities.

Long-Term Clean Energy Plays

European leaders will need to invest in new technologies, in addition to short-term steps to increase the use of zero-emission energy, if they want to quickly phase out all fossil fuels and therefore weaken the influence of Russia over the EU. Because they provide critical backup power when the wind isn’t blowing and the sun isn’t shining, both natural gas and coal continue to play a part in EU power systems. In recent years, batteries have gotten more affordable and are starting to replace the need for fossil fuels by absorbing surplus renewable power that can be discharged during peak demand periods.

A major concern is that more than 80 percent of the lithium-ion batteries manufactured each year in the globe are used in electric vehicles rather than on electrical power grids. In the absence of a significant increase in the number of batteries on the grid, “we simply will not be able to install enough renewables because the grid itself will not be able to support it,” says Alex O’Cinneide, chief executive of London-based renewables investor Gore Street Capital. “Having a greater proportion of our cell manufacturing dedicated to energy storage rather than electric vehicles, both for environmental and geopolitical reasons, has a considerably greater effect.”

When it comes to grid batteries, Europe lags behind states such as California and Australia, among others. However, those instances demonstrate that operators may add a significant amount of storage provided government regulations are supportive. It is important to note that grid-scale batteries do not have to be limited to lithium-ion technology. Batteries may become even more appealing in the future if new and upcoming concepts that make use of less costly metals like iron are implemented.

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