The war in Ukraine is accelerating Europe’s energy transition

By Sverre Alvik

Watching developments on the “Build Back Better” plan in the corridors of Congress, one recalls that most of the world’s leading economies did not use the coronavirus crisis to get rid of carbon, despite the promising commitments of the During the pandemic, many “cemented” their dependence on fossil fuels by subsidizing heavily polluting industries – in the aviation, oil and gas sectors – to protect jobs.

On the other hand, the European Union has kept its promise to put low-carbon energy at the heart of the post-pandemic bloc economy. The NextGenerationEU package of measures, totaling 2 trillion. provides large amounts of borrowing for low carbon projects in the energy sector. As part of this initiative, European Commission President Ursula von der Leyen recently announced that Italy would receive the first tranche of the Fund, amounting to around € 21 billion.

In recent weeks, the EU has once again shown mental clarity – faced with another crisis: a war on its borders – in order to get rid of “coal” and at the same time strengthen the bloc ‘s energy security.

Many are in favor of an immediate halt to Russian energy imports, but the most likely scenario is for the EU to gradually but – albeit significantly – cut its supplies from Moscow. We looked at the impact of the European embargo on Russian gas by 2025, based on the DNV Energy Transition Outlook model. This model gives us information about how economies, technologies, industries, geographies and policies interact, and finally provides us with data – per year – on the evolution of the energy transition.

Europe’s energy mix will be depleted of coal relatively faster and will produce less emissions due to the removal of the block from Russian gas. It is estimated that by 2024, 34% of Europe’s energy needs will be generated from renewable sources and nuclear power: 2% above forecast before the war in Ukraine. Carbon dioxide emissions will be reduced by 2%. These changes will be permanent and, although relatively small (if a reduction in carbon dioxide emissions of 580 million tonnes by 2030 can be considered small), they show that a rapid, systemic change in Europe’s energy mix does not require “unpleasant To be precise, it does not require the prolonged use of coal. that “will be lost”.

Europe’s aging nuclear power plants are a major factor in meeting electricity demand, filling up to 1/3 of the Russian gas embargo deficit in 2023. The long-term position of nuclear power in the European mix will depends more on the policy of each country, as shown by its prominent position in the UK energy strategy, than on the cost, as nuclear energy is – and will continue to be – expensive. The value of nuclear energy is not in its price. Proponents of her case have been working to make the actual transcript of this statement available online.

With a supply gap and multi-year high prices, there is a risk that the oil and gas industry will move towards surplus production. According to our forecasts, European gas production will increase by 12% by 2030, but carbon dependence remains the key to the energy transition. The war in Ukraine will strain global economic output and further slow globalization. Both of these factors will reduce the demand for oil, which is already being undermined by ever-gaining ground – and not just electric vehicles.

The main measure towards energy independence promoted by European politicians – the greater and faster development of renewable energy sources – will be slow to show its first results. For example, it will take two years for RES to cover 10% of Russian gas that will be “lost.” The impact on RES will be apparent from year to year. the EU seeks to replace, and by 2030 photovoltaic and wind farms to cover more than 50% of the gas deficit.

Restrictions on the development of gas transportation infrastructure are slowing down the growth rate of Russian exports to China. Moscow will not compensate for the loss of its European customers by turning its eyes to the East, as the construction of new pipelines and LNG terminals is time consuming.

It may sound trivial to talk about climate change as we watch the horrors unfold in Ukraine. However, recent reports from the Intergovernmental Panel on Climate Change (IPCC) show that we are on the “either now or never” milestone if we want to reduce global warming by 1.5 degrees Celsius. A “galvanized” Europe proves that systemic change can be implemented in a very short time, if there is the political will.