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14 February 2022

Will the lights go out in Europe if Russia invades Ukraine?

Energy experts in Kyiv warn a full-scale invasion could push energy prices even higher and derail climate action.

By Philippa Nuttall

As fears grow over the likelihood of Russia invading Ukraine, the EU is scrambling to find alternative sources of gas. Europe won’t be plunged into darkness, but the argument that gas equals energy security looks increasingly shaky.

Europe is highly dependent on Russian gas. A decision by Moscow to invade Ukraine could reduce supplies, put extra pressure on energy systems already under strain and send prices spiralling further. 

In 2020, EU gas imports fell 9 per cent compared with the previous year, and Europe’s reliance on Russia decreased a little. Nonetheless, the country remained the bloc’s top supplier, accounting for 43 per cent of imported gas, followed by Norway and Algeria. The five biggest net importer countries were Germany, Italy, France, Spain and the Netherlands. Post-Brexit Britain imported 32 billion cubic metres of natural gas in 2020, slightly more than Spain – though the UK sourced less than 3 per cent of its gas from Russia last year.

In recent years, the EU has tried to diversify European gas imports to reduce reliance on Moscow with, for example, increased imports of liquefied natural gas from the US and from other countries such as Qatar. However, the European Commission is clear that breaking the gas addiction and switching to cleaner energy sources are, in the longer term, the sole viable option.

“The only lasting solution to our dependence on fossil fuels and hence volatile energy prices is to complete the green transition,” said Kadri Simson, EU energy commissioner, recently. “Renewables are already, in many places, the most affordable energy sources and that trend will continue as technology develops. Renewable energy is also, as a rule, local and comes with fewer security of supply risks.”

Julian Popov, a UK-based Bulgarian energy expert, still believes a full-scale Russian invasion of Ukraine is “unlikely”. But whatever happens, he doesn't believe the lights will go off. Moscow “would be crazy to cut gas supply lines. They are a vital source of revenue for Russia. It would be economic suicide,” he added. And once Europe starts relying on alternative sources for gas, they won’t go back to Russia, insisted Popov. However, an invasion would push up gas prices even higher, he acknowledged. "It will be expensive, but the European system can cope."

An energy and climate expert the New Statesman spoke to in Kyiv was less sanguine. “In any scenario, from full-blown war with the use of heavy weapons and extensive infrastructure damage to an orchestrated coup with the establishment of a fully pro-Russian puppet government, Europe’s energy security will suffer a heavy blow if the Russian invasion in Ukraine goes forward,” he said.

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Rather than losing ground, an invasion could see Russia expanding its influence on the energy markets, he suggested. “Losing access to high-volume seasonal gas storage facilities in Ukraine, which now are operated in compliance with EU legislation, will make gas markets in Europe more vulnerable to Russia’s hold on supply volumes and costs.”

[See also: Why green policies aren’t to blame for fuel poverty]

As for the electricity market, any invasion would interrupt the planned synchronisation of Ukraine’s grids with Europe’s, he said. “This will hold off the energy transition and a coal phase-out in the region. In the long run, the successful invasion and occupation of Ukraine will facilitate fossil fuel exports from Russia and bring more economic and political leverages for the Kremlin’s regime. This could derail EU’s declared ambitions towards climate action and the energy transition.” 

A prolonged crisis could have a significant effect on gas prices – not just in the EU and the UK but also globally, said Maria Pastukhova from E3G, a UK think tank. “It is safe to assume that political tensions and uncertainty over the world’s second-largest gas producer will drive prices higher in the short term and add to the overall volatility of the gas prices in the long term.”

With this in mind, it isn’t just Russian gas that the EU should be weaning itself off, said Popov. The climate imperative, today’s “crazy prices” and “the Russian story” should be sufficient reason for Europe to decrease dependency on gas, wherever it comes from, he continued. Fossil gas should become an energy source of “last resort” rather than the backbone of the bloc’s energy system, he believes.

Nearly half of the UK’s gas comes from the North Sea. The current situation is leading some to conclude the country should focus on building up domestic gas rather than on net-zero ambitions. Indeed, some Conservative MPs are even arguing that Britain should reinvestigate fracking as a way out of the crisis, even though only 17 per cent of people in the UK back the practice and it wouldn't materially cut prices.

As Pastukhova’s colleague Euan Graham said, even with domestic gas supplies, the UK can’t escape the fact it is part of an “interconnected global gas market”.

[See also: British homes among the worst insulated in Europe]

Instead, in the short term, the UK, like the rest of Europe, should focus on energy efficiency measures like retrofitting homes and insulating them to decease energy use, he argued. Such measures can be relatively quick to implement, bring down bills, reduce the overall amount of gas needed and slash emissions responsible for climate change. 

“If European nations especially Germany had committed wholeheartedly to the clean energy transition in past years and broken their dependence on imported gas, they would now be free to mount a proper foreign policy response while we would be enjoying cheaper energy bills,” commented Richard Black from the Energy and Climate Intelligence Unit, a UK think tank, on the situation between Russia and Ukraine. 

“That, logically, is one of the lessons governments must draw from this crisis,” he added, insisting the move to renewable energy systems was now a matter as much for foreign and defence ministers as for their climate or environment colleagues. And cooperation on energy between countries should not be limited to Europe, insisted Popov. The EU, UK, Ukraine, Western Balkans and North Africa should now all work together on a "declining gas energy security strategy", he said.

Whatever happens next, "we have now an opportunity and a duty" to reduce this reliance on fossil fuels, said the Ukranian MP Lesia Vasylenko. "War brings destruction, and destruction can bring creation."

[See also: How Europe is hooked on Russian gas]

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