Europe's Energy Dependence and a Path to a Sustainable Future

Russia’s invasion of Ukraine has shattered the maxim, in vogue at the beginning of the 21st century, that we had reached the end of history with liberal democracy being the final form of government for all nations.

War in Ukraine is just the tip of the iceberg in a string of political, social, military and economic developments that have called into question the world order established after World War II.

The United States – once a champion of the free world – is ramping up efforts to reshore its industries to keep up with increased competition from foreign powers, who are now challenging its previously undisputed hegemonic role in the international order.

Meanwhile, deep internal rifts have polarised the nation, casting doubts over its long-term direction and capacity to act as an ally.

On top of this, demographics are in favour of Asia and the global South. Germany – today the most populous country in the EU – represents only 1% of world population. The EU countries altogether tally some 450 million people. Future trends, however, show many European states stagnating or even depopulating, while other countries of the globe continue to grow. The future of our world will be indeed one in which Europe is “the small countries”.

Since the 1990s, after the collapse of the Berlin Wall, the fall of the Soviet Union and the end of the Cold War dominated by the Russia-America bipolar world order, decades of hope for a better future ensued with democracy, free trade and innovation.

Today, we seem to have been shot back to some of the scariest points of the 20th century, with a renaissance of economic alliances, trade tensions, and aggressive industrial competition if not outright conflict that is uprooting the world we live in.

The values of the past decades are losing ground, with the good we saw in those decades now in retreat. Whether it be in the rise of autocracy, democratic backsliding, the politicisation of science, or the decline of free trade, the world is clearly on a new trajectory from the one of just 20 years ago.

At the same time, the energy transition as a weapon to combat climate change involves a shift from fuel-intensive to raw-material-intensive economies, embodying the shift in the Balance of Power. This concentration of supply chain control and the dependence on said supply chains, as Russia’s energy blackmail showed, can be a dangerous predicament to be in, and necessitates a paradigm shift from “just in time” to “just in case”.

Most of the equipment used for clean and renewable technologies today comes from China.

In 2022 before Russia’s invasion of Ukraine, Europe relied on Russian pipeline gas for 40% of its supply. Today the EU imports are well below 10% of that gas thanks to higher renewable ambition, energy savings incentives, supply diversification and gas storage efforts.

Europe’s future independence lies in energy security. For energy security, Europe must persist in the energy transition to power itself with homegrown clean and renewable energy while developing new storage technologies, robust electricity infrastructure, and flexible assets aimed at balancing variable generation.