Europe's energy strategy: A tale of competing priorities - Thomas Mattusek

European Union policymakers took action this week to accelerate the bloc's transition away from fossil fuels, voting in support of a deal to raise the share of renewables in the EU's energy mix.

The bill, adopted by a large majority, plans for a bolstered renewable energy target of 45 percent of total consumption by 2030.

Despite this expanded commitment to clean energy, some policymakers have sought to remind European leaders of the precarious balance between energy sustainability and energy security.

EU energy commissioner Kadri Simson recently argued that Europe cannot drop its guard in efforts to secure natural gas supplies for winter, calling on member nations to prepare for "all eventualities."

While this message may seem to conflict with Europe's move towards clean and renewable energy, Simson is expressing a reality that many in Europe have embraced, including Germany.

In September last year, a historic energy security agreement was signed between chancellor Olaf Scholz and the president of the United Arab Emirates, Sheikh Mohammed bin Zayed al-Nahyan, for the supply of Liquefied Natural Gas (LNG) to the German utility RWE.

This groundbreaking deal symbolised a broader European policy shift away from dependence on Russian energy sources, a transformation orchestrated under the REPowerEU platform, a crucial coordinator for EU actions and negotiations with external gas suppliers.

In the year following the signing, the tangible outcomes of this deal have become increasingly evident.

February of this year witnessed the initial shipment of LNG from the Middle East to Germany, marking a major milestone as the first-ever LNG shipment of its kind to reach this region.

The significance of this deal, along with similar agreements, cannot be overstated. Its importance extends beyond enhancing energy security as it represents a vital cornerstone in establishing a sustainable and economically viable pathway toward global decarbonisation.

Landscape in flux

The European energy security landscape has undergone a profound transformation in recent years, driven by several critical factors.

Foremost in Germany is the pressing need to reduce Europe's historically heavy reliance on Russian energy sources, a vulnerability that has never been as precarious as it is today.

Data shows that Europe imported approximately 155 billion cubic meters (bcm) of natural gas in 2021, of which 45 percent, a significant portion, came from Russia.

This reliance inevitably left Europe susceptible to geopolitical tensions and supply disruptions.

Another significant factor contributing to this shift in Europe's energy security is the surging demand for LNG. Frequently lauded as an essential transitional fuel, LNG offers numerous advantages.

Not only is it a cleaner alternative to other fossil fuels, but its liquid state facilitates sourcing LNG from multiple regions without the need for extensive pipelines. This characteristic reduces dependence on a single supplier and substantially enhances the diversification of energy supply sources.

Diversification

The quest for energy security in Europe is not just about safeguarding against geopolitical risks. It also plays a pivotal role in the global fight against climate change and decarbonisation.

Recent statistics from the International Energy Agency (IEA) highlight that global carbon dioxide emissions in 2022 reached approximately 37 gigatonnes. This underscores the urgency of transitioning to cleaner energy sources.

Transitioning to cleaner energy through LNG is part of this multifaceted endeavour, acting as a vital bridge fuel. By ensuring a stable supply of LNG, Europe can expedite its shift away from high-emission fossil fuels, effectively reducing carbon emissions.

Europe's energy security efforts are fortified by the growing exploration of alternative fuels such as hydrogen and ammonia.

The European Hydrogen Strategy aims to scale up hydrogen production and use, with an estimated investment requirement of €180-470bn by 2030.

These emerging energy sources offer versatile and sustainable power generation and transportation options, further diversifying the energy mix and reducing dependency on conventional fossil fuels.

And enhancing energy security empowers European nations to invest confidently in renewable energy sources such as wind, solar, and hydroelectric power.

Eurostat indicates that the share of renewable energy in gross final energy consumption in the EU reached some 22 percent in 2022.

A secure energy supply ensures the seamless integration of these intermittent sources into the energy grid, supporting decarbonisation objectives.

Europe's diversification of energy sources also elevates its standing in the global energy market, offering opportunities to leverage influence for the promotion of sustainable and environmentally friendly energy practices on a global scale.

As Europe leads by example, the world is poised to follow suit in the pursuit of a greener, more secure energy landscape, and a sustainable future for all.

Secure future

Europe's commitment to bolstering energy security is about more than safeguarding against geopolitical risks. It's a pivotal driver in the global fight against climate change and decarbonisation.

Agreements, like that between the UAE and Germany, exemplify the much-needed shift away from Russian energy dependence and present a major step in Germany's energy transition.

The global energy sector has many opportunities ahead of it — from ADIPEC to COP28 — to further build upon transition and decarbonisation plans, and these must be seized and acted on.

Not just to enhance security, but also to align with the urgent need to reduce carbon emissions globally.

Diversification, whether it be through LNG or renewables, will not only enhance Europe's global influence but it will also pave the way for a greener and more secure energy landscape worldwide.

Thomas Mattusek is a former German ambassador to the UK, the UN and India. He also headed the political department of the German foreign ministry in Berlin. He is a senior advisor at the consulting company Flint Global.

Source: EU Observer