Europe’s energy crisis and ecological transition: State of the Energy Union

Europe is experiencing an energy crisis. However, its causes, as well as its consequences, remain largely unexplored. The underlying reasons for this crisis cannot be understood separately, instead they are a combination of events that have coincided in time: industry has resumed its normal activity after the pandemic, winter has arrived again – and colder than expected in the northern hemisphere – and consequently the demand for gas has increased. Although demand for natural gas during the COVID-19 pandemic was reduced by 1.9%, the International Energy Agency (IEA) has indicated in its GasMarketReportQ3-2021 that demand is expected to continue to grow to 3.6% this year, and up to 7% above pre-pandemic levels by 2024.

Nevertheless, this is not the only reason why energy prices have risen in recent months. European natural gas production has been reduced; some deposits such as the Dutch Groningen field appear to be drying up – in addition to the earthquakes that have led the Dutch government to design a plan to decommission this field by the end of next year. This leaves Europe heavily dependent on both Russia and Norway. In recent months, Russia has not supplied Europe with the gas it needed, claiming that it had to fill its own storage systems first and then export, following its post-pandemic recovery plan.

In this context, on Wednesday 24 November, Energy Commissioner Kadri Simson presented the annual report on the State of the Energy Union at the plenary session of the European Parliament in Strasbourg, to take stock of European energy policy. She revealed that since the last report the EU has made a lot of progress in political and legislative terms: the European Climate Law, was adopted in March 2021, committing to a 15% reduction in emissions by 2030; in April the first delegated act on green taxonomy was presented and in July a package of proposals for a path towards climate neutrality was introduced. However, she could not overlook the fact that this year’s report is being published against the backdrop of a sharp rise in gas and electricity prices, which she said, “raises doubts about the future of our climate agenda”. In line with Simson’s speech, four main points should be highlighted from the report in question:

  • Renewable markets have proved resilient during the pandemic: in 2020 for the first time renewables overtook fossil fuels as the EU’s main energy source.
  • There is still too much dependence on fossil energy, as confirmed by the energy crisis. The level of dependence on fossil imports is the highest in the last 30 years.
  • Market coupling is essential; it connects all Member States and provides a European platform for electricity – key to ending the current crisis. The report shows that those countries that are better interconnected and less dependent on fossil fuels are less vulnerable to rising energy prices.
  • The report is accompanied by a reporton thecompetitiveness of green companiesin Europe, which shows that the Union is still at the forefront of research in this type of energy, but in turn, states that public investment in clean technologies are the lowest of the major economies. More public and private investment is needed.

During the ensuing debate, the vast majority of MEPs agreed that the process of energy transition to renewables needs to be accelerated. Many of them also mentioned the need for social support during this process. The most difficult question was raised during the debate as well: should nuclear energy continue to be used? MEPs from the Greens have already spoken out against it.

The European Union advocates for the mainteinance of our leadership in R&D in the field of renewable energies, however, it is also committed to increasing both public and private investment in this type of energy, which will allow for a more sustainable and stable future.

Silvia Goya, European Public Affairs ATREVIA, Brussels Office 

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