The ongoing Russian invasion of Ukraine has sent shockwaves across energy markets — most specifically in Europe, which depends on Russian energy imports for a high proportion of its energy needs.
Facing acute exposure to Russian energy imports, the EU set out to cut reliance on Russian gas by two-thirds by the end of 2022 and eliminate Russian fossil fuels by 2030. With LNG import capacity limited and vulnerable, the durable answer is accelerated renewables, nuclear and — crucially — energy efficiency. The REPowerEU plan put efficiency and clean generation at the centre, driving change faster than the industry has ever moved.
Although there have been calls to immediately halt all energy imports from Russia, the reticence of the EU to do this is driven primarily by the fact that such an action would push EU economies into chaos through widespread fuel shortages — causing mass hardship and decimating whole swathes of business.
As a result, the EU planned to cut its reliance on Russian gas by two-thirds by the end of 2022 and eliminate the use of Russian fossil fuels completely by 2030. The key question is: where will the EU source its additional energy requirements?
Moves have been made to import gas from other countries, particularly the United States, but the EU has a lack of large-scale LNG terminals — which take time to plan, build and commission. Work, however, has now begun.
This also moves reliance to regular supplies by sea from foreign refineries and terminals, which comes with another set of issues. The fire at a key LNG export terminal in Freeport, Texas on 8 June 2022 — shutting down operations for three weeks — illustrates how EU imports may come to rely on fragile, vulnerable infrastructure. As the resulting market reaction showed, uncertainty of supply, no matter where it comes from, does nothing to bring down prices.
Some longer-term help may well be at hand. The EU already has a sizeable and growing renewable energy market — as well as significant base-load capacity from nuclear — and strategic investment in more projects, at greater scale than ever before, may be a direct result of the move away from reliance on Russia.
We must become independent from Russian oil, coal and gas… The quicker we switch to renewables and hydrogen, combined with more energy efficiency, the quicker we will be truly independent and master our energy system.
Ursula von der Leyen, European Commission President
The REPowerEU plan for “affordable, secure and sustainable energy for Europe” is an initiative to find short-term alternative supplies while embarking on a longer-term programme of energy efficiency through behavioural change and accelerated adoption of clean energy through massive investment. Not only coordinated through the EU, but individual countries are accelerating their own renewable and nuclear programmes — through relaxed or accelerated planning, more international ventures for funding and operation, and crucially bringing energy efficiency into the public eye.
Energy efficiency is becoming equally as important, if not more so, than accelerating clean generation — achieved through ventures such as smart metering (with time-of-use charging making people acutely aware not only of how much energy they use but when) and large-scale retrofit programmes covering insulation and replacing boilers with more efficient or alternatively powered systems.
The energy industry is changing, at a pace now substantially faster than it has ever changed before — and that change is accelerating.
ResourceKraft was established to help organisations become more energy efficient through our Advisor energy analytics tool — so it is gratifying to see efficiency highlighted as a core principle of sustainability. The pace of change is driving new and innovative technologies across the energy system, and that is exactly where we work. These are positive moves in the right direction — and long may they continue, because our planet needs it.
From renewables to efficiency and smart metering, the pace of change is driving new technologies across the energy system. That's exactly where we work.