The invasion of Ukraine on February 24 and the nearly five months of war that have followed have reminded many European countries of the stark reality of their energy dependence on Russia. For ten days, western Europe has sweated on the resumption of gas supplies through the Nord Stream 1 pipeline into Germany, which Russia closed down on July 11 for maintenance. Many in Berlin and Brussels feared it would not come back online as scheduled after the outage.
The flow of gas has resumed – but fears remain that the volume of supply will be far smaller than before. Even before the supply was shut down in order to send one of the turbines for repair in Canada, the gas flow was reportedly 60% below peak flow levels.
European countries are struggling to fill their energy reserves ahead of next winter, which could be a very difficult one with high energy prices and emergency measures to reduce energy demand and consumption. The Paris-based intergovernmental International Energy Agency (IEA) has encouraged European leaders to “do all they can right now to prepare for a long, hard winter”. It has proposed a programme for a more coordinated, EU-wide approach spanning from minimising gas usage in the power sector to bringing down household electricity demand.
At EU level, the European Commission is calling on member states to prepare for a “sizeable risk” of a complete halt of Russian gas supplies. The EU has legislation in place, such as the 2017 Gas Security of Supply Regulation, which should help navigating these uncertain times – but it will be interesting to see if the regulation will stand the test of an energy crunch.
So far, only six bilateral solidarity agreements between EU member states have been signed, committing to mutual support in using natural gas storage facilities, diversification of natural gas supply and transit, in the event of a gas shortage. These include Germany and Denmark; Germany and Austria; Estonia and Latvia; Lithuania and Latvia; Italy and Slovenia; Finland and Estonia. There are some other particularly worrying signals. Hungary, for instance, has declared a “state of energy emergency”, announcing that it would halt gas exports to neighbouring countries to conserve its own stocks.
Energy diplomacy
The EU has also been intensifying its diplomatic efforts, trying to secure energy from non-Russian sources. On July 18, for instance, the president of the European Commission, Ursula von der Leyen signed a memorandum of understanding with Azerbaijan’s president, Ilham Aliyev, on “a strategic partnership in the field of energy”, which aims to compensate EU countries for the shortage of Russian gas by doubling the amount the country already supplies to “at least 20 billion cubic metres of gas
annually by 2027”.
On the other hand, individual EU member states are going ahead with uncoordinated attempts to secure energy from non-Russian sources or to increase domestic energy production via sources such as nuclear or coal. Earlier this week, for instance, the Italian prime minister, Mario Draghi – despite a serious domestic crisis which might mean the end of his government – travelled to Algeria to secure a major energy deal.
France is planning to fully nationalise the energy giant EDF (in which the state already owns 84%), giving the government more control under the current difficult circumstances. In order to face serious disruptions of gas supply from Russia, several countries, including Austria, Germany, the Netherlands and France are planning to put their coal industries on standby.
EPA-EFE/Filip Singer
In both cases the commission and various EU member states are taking steps which seem to be in contrast with the aim of the European Green Deal, the overarching energy and climate framework proposed by the current commission to make the EU carbon neutral by 2050. Rather than speedily and decisively moving towards more renewables, the EU and its member states seem to be emphasising non-Russian fossil fuels as the more immediate solution to the current energy crisis.
It is also important to remember that few weeks ago the European parliament did not object to the inclusion of nuclear and gas in the EU’s taxonomy – its list of environmentally sustainable economic activities. If the European Council – which sets EU policy – does not object either, the taxonomy might become law by January 2023. This news has been met with strong criticisms by the public and investors as well as across green parties across the EU.
How might this play out?
What we might see in the near future, therefore, is the simultaneous development of two apparently contradicting trends. On the one hand, member states will try to secure any possible source of non-Russian oil and gas available in the market (and also of Russian gas if again available in the market). At the same time, those who can rely on domestic production or on other sources will do so, be it nuclear or coal. Extraordinary times call for extraordinary measures.
On the other hand, there is a risk that decarbonisation and transition away from fossil fuel will become more of a long-term – almost dormant – ambition, left in the background at least until next winter. Decarbonisation will remain the main narrative – but, in the meantime, states will just grab every opportunity to fuel their economies.
While preparing for the worst, however, we should also hope for the best. As noted by two Italian scholars writing a letter to the Financial Times, “the European energy crisis can help boost a much-needed EU integration”. The current energy crisis – they argue – could be an opportunity for the EU to strengthen its architecture, to improve political integration and strengthen solidarity.
The IEA has also noted that, in facing the current crisis: “Europe may well be called upon to show the true strength of its union.” The EU has often been depicted as being limited in its energy policy by disagreements among member states – particularly over security of supply. The latest crisis, while a test for EU solidarity, is also an opportunity to work together towards better energy security.
