- European governments ramped up their shift to clean energy, but some still rely on coal power to fill the energy gap.
According to Bloomberg article published on January 12, 2023, after Russia invaded Ukraine in February, European governments vowed to slash their dependence on imported natural gas and speed the shift to clean energy. Almost a year into that effort, there’s been some success. Renewable power installations are booming, but countries are also relying on polluting coal power to fill the energy gap. And the most difficult challenges may lie ahead.
As 2023 begins, pipeline supplies of gas to Europe have plunged because of the closure of Russia’s Nord Stream network and could halt entirely if a remaining line through Ukraine is shut off.
Before the war, the European Union imported some 155 billion cubic meters (5.47 trillion cubic feet) of gas from Russia annually, about enough to satisfy 40% of its overall demand for the fuel. The vast majority of that arrived directly via pipelines, the cheapest way to move gas. Throughout last year, gas prices in Europe soared and fell on news of how much fuel would flow in the pipelines.
For months, Russia said that a need to do critical maintenance was crimping supplies and that sanctions inhibited the transport of key equipment, making it harder to complete the work. In September the country’s state-owned Gazprom PJSC said it wouldn’t reopen the Nord Stream pipeline. A few weeks later it was hit by explosions, ending any prospect for a resumption of flows.
So Europe turned to gas that’s liquefied and shipped in special vessels from producers in the US, the Middle East and even Russia. Europe’s share of the global LNG market swelled in 2022, a trend that’s set to continue in 2023 and will be critical to European nations securing enough gas for next winter.
One big unknown, though, is how much additional supply China may need as it lifts its Covid-19 restrictions. “Next winter’s a totally different ballgame,” says Arun Toora, an analyst at BloombergNEF.
In 2023 the EU may come up short by about 27 billion cubic meters, according to the International Energy Agency. If it can’t find enough supplies, it may force rapid cuts in consumption.
In some member countries, such as Germany, shifting away from gas has meant burning a lot more coal. Although that should be temporary, it will require Europe to move faster in future years to keep its climate goals on track.
At the same time, the soaring prices of scarce fossil fuels in 2022 were a boost for renewable power, particularly solar. That will likely only increase this year as constraints on supplies of solar panels and other equipment ease.
“The demand on all levels, from utility-scale, commercial and residential market solar, has just been overwhelming,” says Matthias Taft, chief executive officer of BayWa r.e. AG, one of Europe’s largest solar wholesalers. “From now on, the demand will remain on a very high level.”
Another Oily COP
The annual climate conference known as COP (for Conference of the Parties, in United Nations-speak) will take place from late November to mid-December in Dubai. At the 2022 edition, held in Sharm el-Sheikh, Egypt, oil giant Saudi Arabia was an unmissable presence, with two large domed pavilions stationed next to the venue. Hundreds of fossil fuel lobbyists were also at the summit, promoting the message that reducing emissions and pumping hydrocarbons can go hand in hand. Many climate advocates disagree, saying the strong fossil fuel influence at the talks prevented more ambitious target-setting. Expect a similar dynamic to play out at COP28, with the United Arab Emirates as host, and for oil and gas producers to get a receptive hearing again if the global energy crisis drags on.
