EU to ‘Head Off Multiple Crises’ by Cutting Oil and Gas, Boosting Renewables

Compiled by Mitchell Beer
Max Pixels - EU

June 3, 2022

With the Trudeau government continuing to tout liquefied natural gas (LNG) exports to help Europe free itself from dependence on Russian supplies, a new report says the continent is poised to boost renewable energy and reduce fossil fuels to just 18% of its electricity production by 2030, with the biggest importers of Russian oil and gas leading the way.

“Europe is responding to a new geopolitical environment, paving the path for governments worldwide,” the Ember energy think tank and the Centre for Research on Energy and Clean Air (CREA) conclude in a report released yesterday.

“Russia’s aggression and [the] corresponding volatility in global electricity prices have underlined the need to phase out fossil fuels and accelerate decarbonization,” the two organizations state in their executive summary.

“The electricity transition is not solely an issue of climate concerns, but also one of ensuring stable supplies of energy for European households and businesses,” they add. “This is especially obvious for the biggest importers of Russian fuels, with Germany, Italy, and the Netherlands scaling up wind and solar ambitions, France subsidizing housing insulation, and others ramping up heat pump installations and electrifying transport.”

The research summarizes changes in policy since the 27 members of the European Union adopted their National Energy and Climate Plans (NECPs) in 2019—before the pandemic, the gas supply crisis, and Russia’s war in Ukraine. Before factoring in EU-wide commitments, it shows the countries cutting fossil-fired electricity generation 31% by 2030, boosting their combined renewable energy target from 32 to 45% and their renewable electricity share from 55 to 63%, and aiming for a 13% reduction in energy consumption by 2030, compared to a pre-war target of 9%.

“The EU has put the energy transition on turbocharge, with governments getting serious about cutting out costly fossil fuels,” said Ember Senior Energy and Climate Data Analyst Paweł Czyżak. “There’s a consensus that ramping up wind and solar power quicker can help the EU head off multiple crises.”

“Europe now recognizes that fossil fuels equal volatility,” said CREA analyst Erika Uusivuori. “The current energy landscape is unprecedented, but a jump in ambition to cut fossil fuel dependence is now putting countries on a path to more security.”

The analysis shows 19 of the 27 EU countries announcing new policies over the last two years that will speed up decarbonization.

“Under the new plans, by 2030 four countries will generate close to all of their electricity from renewables: Portugal, the Netherlands, Austria, and Denmark,” Ember and CREA writes. “A new 80% [renewable energy standard] target puts Germany close behind, while Italy, Ireland, and Greece all increased their ambition up to a 70% share of renewables in electricity production.”

In particular, “the top importers of Russian fossil fuels—Germany, the Netherlands, and Italy—are putting forward some of the most ambitious plans to replace Russian dependency with wind and solar energy.”

Meanwhile, “a hesitant rethink of planned gas investments is also starting to simmer in both Poland and Belgium, the two countries that planned the largest gas in power expansion under their 2019 NECPs,” the report adds. “Gas is also driving high electricity prices in countries like Spain and Italy, who are accelerating RES deployment to cope with the economic impacts of fossil fuel dependence.”

The report looks at what it will take to deliver on the EU’s increased renewable energy ambition and how the transition will be funded.

The Ember/CREA analysis is just the latest indication that Europe is moving swiftly to wipe out the natural gas demand that Canadian fossil companies and federal cabinet ministers seem intent on supplying. In an exclusive report two weeks ago, The Energy Mix revealed that the timing of two potential LNG export schemes receiving loud support from Natural Resources Minister Jonathan Wilkinson and, in one instance, Prime Minister Justin Trudeau are likely to founder on Germany’s strategy to free itself from all fossil fuel demand—not just Russian fossil fuels—by 2044.

With that timeline, experts told The Mix, would-be Canadian exporters like Calgary-based Pieridae Energy would not likely be able to build a project, then run it for long enough to turn a profit, without federal subsidies.

The torrent of news surrounding the Ember/CREA report traces a geopolitical crisis in which the EU’s trading relationships with Russia are continuing to fracture, and countries are moving to develop their own gas supplies while getting new renewable energy generation in place. In the last week, the EU agreed to cut off the large majority of its Russian oil imports over the next six months, while allowing a temporary exemption for product that arrives by pipeline, rather than by sea.

“The EU estimated that could mean around 90% of Russian oil is banned by the end of the year,” The Associated Press reported late Monday.

That decision is forcing the EU “to rewire an economy that is geared to run on cheap Russian fuel—and threatens to deprive Moscow of revenue from its most valuable export,” the Wall Street Journal commented. “The EU also is set to agree on a ban on insuring ships that carry Russian oil, officials and diplomats familiar with the measure said, a move designed to strangle Russia’s access to international oil markets.”

Meanwhile, news reports had the Netherlands and Germany jointly opening a new gas field in the North Sea, Britain approving a new North Sea gas field proposed by colossal fossil Shell, and Norwegian state fossil Equinor developing a cluster of gas and condensate sites in the Norwegian Sea, while Nordic countries laid plans for a shared subsea power grid to connect future offshore wind projects and boost energy security.

“European nations have announced pledges to build dizzying amounts of offshore wind farms, spurred partly by the need to cut heavy reliance on Russian oil and gas in the wake of its invasion of Ukraine,” Reuters reported yesterday.

“The more interdependent we become in Europe, the more independent we will become from Russia,” European Commission President Ursula von der Leyen said earlier in May. “We all know green power generation is great. But if you really want to use it, you need a grid, and there, we have to step up.”

The day after the EU announced its oil import ban, Russia retaliated by halting gas supplies to customers that refused to accept payment in roubles, throttling deliveries to the Netherlands, Denmark, and Germany.

[Top photo: Max Pixels]