Putin might have just kick-started Europe’s green energy revolution—too bad Germany doubled down on natural gas

February 25, 2022, 6:36 PM UTC

Europe may be ready to move on from Russian gas exports after Putin invaded Ukraine this week, but Germany’s dependence on Russian gas leaves the continent in a vulnerable position.

The invasion sent global markets reeling on Thursday, none more so than Europe’s energy market. Europe receives 40% of its natural-gas supply from Russia. But most of that flows through a pipeline managed by a Russian state-owned company that runs directly through Ukraine.

Neither Russia nor Europe have cut off the natural-gas link yet, but energy prices on the continent have already surged. If nothing else, the Ukraine crisis has underscored how reliant Europe is on Russian fossil fuel imports.

Europe has options, including expanding nuclear and renewable energy infrastructure. Efforts by Germany and Nordic countries in recent months to expand the continent’s wind power capacity might accelerate, and some officials see the potential breakaway from Russian gas as an opportunity to pivot toward energy independence.

“The complete West will turn away from Russia,” German Vice Chancellor Robert Habeck told the Associated Press after news of the invasion broke on Thursday. “We will diversify our energy system. We will not buy Russian coal and gas in such an amount in the future.”

But even if Europe as a whole intends to kick-start a green energy revolution, the decisions that different countries have taken on nuclear energy mean that the continent might take diverging approaches should Russian gas imports cease.

Germany’s unwinnable situation

Germany’s pledge to shut down all coal-powered plants by 2038, and a decades-old decision to aggressively phase out nuclear energy, have made the country reliant on Russian gas, which has been cheaply flowing toward German shores for decades. 

Natural gas makes up 25% of Germany’s total energy consumption, and the country relies on Russia for 55% of its gas supply. If these imports were to suddenly cease, the EU’s largest economy and most populous country would find itself in dire straits.

Before the Ukraine invasion broke out, Germany had been planning on increasing its Russian gas imports through the Nord Stream 2, an $11 billion natural-gas pipeline that would run under the Baltic Sea, despite criticism that the project would make the country even more energy-reliant on Russia. But German Chancellor Olaf Scholz ultimately abandoned the plan shortly before Russia invaded Ukraine.

Shelving the Nord Stream 2 pipeline is a first step for Germany to wean itself off Russian gas, but in all likelihood it will take decades before the country is able to claim energy independence. 

Germany has set itself a goal of hitting carbon neutrality by 2045. This will involve a massive ramping up of its renewable energy infrastructure, which in 2021 accounted for 46% of Germany’s power consumption, more or less on par with gas, coal, oil, and nuclear combined.

But it will be years before renewables are able to completely replace more traditional energy sources. In the interim, Germany will likely need to figure out how to make do without the cheap Russian gas it has enjoyed for decades.

Where can Germany get its energy?

Russia has cornered the natural-gas market for years, but its dominance may soon come to an end, as there are other major suppliers.

Qatar and the U.S. are also major natural-gas producers. Qatar and the U.S. mainly produce liquefied natural gas (LNG), a form of natural gas that has been cooled and is easier to transport at volume by ship, but also usually more expensive. In January, U.S. LNG exports to Europe exceeded Russian pipeline deliveries for the first time.

But it is unlikely that these two countries will be able to make up the potential energy gap in Germany and Europe anytime soon.

The Biden administration has been pushing hard to find a replacement natural-gas provider for Germany and Europe in recent weeks, but officials are not optimistic that the void can be filled so easily.

“Russia [provides] I think 30% to 40% of the supply to Europe. There is no single country that can replace that kind of volume,” Qatar’s Energy Minister Saad al-Kaabi said at a recent gas conference in Doha. “Most of the LNG are tied to long-term contracts and destinations that are very clear. So to replace that sum of volume that quickly is almost impossible.”

Not everyone needs Russian energy

Other European countries that are less reliant on foreign gas and oil imports are poised to fare better than Germany, and might be able to soften the impact on the continent to a degree. 

France, which unlike Germany is still very much invested in nuclear energy, recently announced a massive buildup of its nuclear power potential, which would help keep it and its neighbors insulated from changes in Russian gas imports.

Gas reserves in Europe are high enough that Germany and other countries will make it through the winter and next few months even if Russian imports stop, a recent analysis found. But Germany, long considered Europe’s economic engine, will need to spend this time understanding how to stay in line with its environmental goals while weaning itself off a reliance on foreign imports.

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