A grim outlook was presented to European leaders and energy executives by the International Energy Agency (IEA) at its annual energy efficiency conference in Copenhagen on June 8th. Europe is unprepared for the coming winter. Governments across Europe have the difficult task of both finding the required energy for winter and relieving consumers of the burden posed by increases in gas and energy prices. Considering rising inflation, this is a Herculean task.
Europe’s ability to easily hoard gas and coal for the winter has been shakyd by record-breaking heat waves. The European Commission and IEA’s joint “9-Step Plan to save energy, Ukraine and the planet” attempts to reconcile unusually high summer energy demand, green initiatives, and inevitable spikes in winter energy demand. Germany has already declared an energy crisis and is poised to escalate this state of emergency. Businesses and the public are being requested to decrease their consumption, with some countries facing the threat of energy shut-offs. No wonder: Russia is closing Nord Stream 1, alleged for technical maintenance, and Nord Stream 2 is dead. Gazprom and Rosneft were supplying over 32% percent of German gas before the February 2022 Russian invasion of Ukraine started.
While Europe must plan, the 9-Step Plan’s focus on consumer energy use features suggestions like “Use public transport” and “turn down heating and air conditioning” does not inspire confidence. Asking consumers to sacrifice for foreign policy initiatives without a buy-in from the public is a dubious proposition as President Jimmy Carter can tell you.
Only when there is a rise in popular will confronting an existential threat to create a joint sense of action and sacrifice such as in London under Blitz, Israel besieged by its neighbors, or South Korea by the North, can such a strategy succeed. Even if it could succeed, only relying on consumers to change their habits and shoulder burdens for the winter is an abdication of responsibility. There is no choice but to boost the baseload production.
Germany has laid the framework for a “Gas Replacement Reserve” law which will move the country towards a hybrid system of rationing. This law combined with the reintroduction of coal power plants into the German energy network is intended to overcome the acute energy crisis in the winter, but also to allow gas storage tanks to increase their reserves now to reduce strain in the winter. This law officially signals Germany’s acknowledgment of coal as a bridge power source until Europe can build up new sources of gas, oil, and renewables. This policy shift will radiate from Berlin to other European capitals.
Europe’s winter will mean more than just cold homes. Higher energy prices and shortfalls in supply will inevitably impact industrial production and cause significant economic problems.
To tackle this threat and support consumers, varying approaches are being experimented on in Europe. Austria and France have introduced energy voucher systems, while Belgium and Germany have opted to cut energy taxes.
The UK has decided to embrace direct stimulus where all households will receive one-time payments of 400 pounds, although the energy price cap set by UK regulator Ofgem also increased, and is set to increase further this winter. However different these approaches are, the common denominator remains a desperate scramble to get more energy, even dirty energy, quickly.
However bad Western Europe’s energy situation is, it is far worse in Ukraine. With Russia indiscriminately attacking civilians, and its infrastructure geared towards national defense, the country is amidst a humanitarian catastrophe. 12 million Ukrainians have been forced out of their homes with 10 million currently in transient camps not suited for winter. A 50 drop in energy production combined with Russia’s longstanding ally, General Winter, will be devastating to Ukraine and the entirety of Europe if there isn’t better planning.
But planning properly is easier said than done. It is clear that there is no easy way out from this impasse. The return of coal to Europe be required due to imminent security concerns, but subsequent pollution may also deter the climate change policy and brings even more dirty energy usage. The obvious solution is nuclear energy. The German Green Party remains at loggerheads with the rest of its governing coalition, maintaining its fervently anti-nuclear stance even as the Green Party Energy Minister now begrudgingly imports coal. Even worse, Germany has only decreased its nuclear power capabilities by shutting down 3 reactors in Jan of 2022 with the final 3 still scheduled for shutdown by the end of the year. This avoidable impasse is all the more frustrating when one considers recent polling by German broadcaster RTL/ntv shows that 68% of Germans were in favor of reconsidering decomissioning nuclear power plants.
Having just emerged from a series of Covid lockdowns and a global economic recession amid war and future economic problems, is it wise for European adopted to take another hit for the climate if we don’t find a way to bridge the energy gap?
There is an old saying, “it is easy to be brave behind castle walls”. Europe is currently ignoring its energy policy failures but won’t have that luxury in a few months. The plans thus far presented are lackluster. Russian state media has already begun to beat the drum that winter will doom European efforts to support Ukraine. Only alternative bridge-energy solutions such as liquified natural gas (LNG), nuclear, and alternative suppliers such as Central Asia and Sub-Saharan Africa will help increase baseload production and enable Europe to survive the bad winter that is coming.