Russia’s attack on Ukraine has severely imperilled EU energy markets and security. To resolve its dependency on Russian energy imports, Germany is implementing an ambitious renewable energy reform to ensure its national energy security.
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Europe is experiencing its darkest hours since the Second World War. At dawn on February 24, Russian President Vladimir Putin announced a “special military operation” in Ukraine. The decision came shortly after the official recognition of the separatist republics of Donbas and Donetsk located in Ukrainian territory. Russian missile strikes began to hit Ukraine’s capital Kyiv and multiple other cities. It soon became clear that Putin’s ambitions went beyond the control of the disputed eastern regions; he has been orchestrating a military occupation of the entire territory.
In Ukraine, Putin’s troops met very determined resistance. Citizens in Russia, and around the world, have taken to the streets to protest Moscow’s invasion, despite severe personal risks. The conflict has caused thousands of casualties, and as of March 16, over 2.5 million Ukrainians –mostly women and children– to flee their homes and seek safety in neighbouring countries. In addition to the human costs of the crisis, Europe fears the consequences for energy supplies and prices, which since the beginning of the year have registered dizzying increases. Over the past decades, Europe has grown over-reliant on Russia for its energy resources. Germany, Europe’s largest economy, sources approximately 55% of its gas from Moscow, as well as 50% of its hard coal and 30% of its oil. To reduce its dependency on Russia, Germany is implementing drastic changes to its energy policy: the government aims to achieve a 100% renewable power supply by 2035.
Germany’s Russian Sanctions: A Break From Convention
The international community has mobilised to support Ukraine with military aid and sanctions that could devastate the Russian economy. For the first time in its history, the EU will finance military support to a country under attack, committing EUR€500 million. Likewise, Washington has allocated USD$350 million in weapons for Ukraine’s defence, totalling over USD$1 billion in the last year.
We have also witnessed a historic shift in German foreign and defence policy. The European country reversed its ban on lethal weapons exports to conflict zones and agreed to a major delivery of armaments. The Ukraine crisis has deeply alarmed European security analysts, pushing Germany to abandon its reluctant approach to self-armament. German Chancellor Olaf Scholz allocated EUR€ 100 billion to the Bundeswehr – German armed forces – and committed to increasing the annual defensive expenditure by over 2% of national Gross Domestic Product (GDP).
Germany further moved away from its previously cautious and measured foreign policy approach by supporting unprecedented punitive actions against Moscow. After some hesitation, Scholz agreed to block access to the Swift international banking payment system for several Russian banks. Russia will no longer be able to make and receive payments for trade and financial activities, potentially resulting in an economic collapse. More significant was Germany’s decision to halt the certification of the controversial Nord Stream 2 pipeline. The undersea pipeline was designed to transport natural gas from western Siberia to northern Germany and is owned by Russia’s state-backed energy giant Gazprom. The gas pipeline across the Baltic Sea faced fierce opposition from Central-Eastern European governments, including Ukraine. The United States also opposed the project, having been vocal regarding the dangers associated with Europe’s growing dependence on Russian natural gas exports.
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Diversifying Energy Reliance with Renewables
Being largely dependent on energy imports, Germany is implementing a series of measures to diversify its sourcing. In light of current events, the German government will increase the volume of its natural gas reserves by 2 billion cubic metres (bcm) via long-term options and coordinated EU purchases on the global market. Additionally, it is planning to build two liquefied natural gas (LNG) terminals on the coast of the North Sea. The project is unlikely to satisfy short-term demands, however, as it may take between two and five years to be approved. Moreover, concerns remain regarding the environmental impact associated with LNG. Its usage could also slow down the country’s transition towards 100% renewable energy.
Despite insinuations to the contrary, Germany will persist in phasing out coal and nuclear power. The country’s three remaining nuclear power plants will cease operation in December 2022 while coal-fired power generation will terminate in about a decade. In 2020, Germany adopted the “Coal Phase-Out Act” aimed to gradually reduce and eventually end the use of coal-powered energy by no later than 2038, potentially as early as 2035.
The invasion of Ukraine exposed the dangers associated with energy dependence on countries with a high geopolitical risk profile and highlighted the critical role that energy self-sufficiency plays within national security. In response, Germany is planning to speed up the timetable for its “Renewables Energy Act”, which came into force in January 2021. According to the law, both electricity supply and consumption must become carbon-neutral before 2050, and 65% of electricity must come from clean sources by 2030. The new law would require the country to produce 80% of its energy from renewable sources by 2030, and 100% by 2035. Acknowledging the need for greater energy independence, the German government allocated about EUR€200 billion for investments in decarbonisation. The widespread usage of renewable energy sources could allow Germany to meet its energy needs and abstain from relying on energy sources outside its borders.
Europe’s precarious position on energy security has left Germany limited room to manoeuvre during this crisis. In the interim, Berlin is choosing a precautionary approach with Moscow. Despite calls to stop the importation of Russian gas and oil – which contribute to financing Putin’s war on Ukraine – Germany and other European countries have rejected a complete ban. Energy imports represent the Kremlin’s main revenue source. However, Scholz’s government fears the repercussions that an energy embargo may have on its national economy and society at large. Russia itself threatens to cut Europe’s natural gas supplies in retaliation for sanctions.
What’s Next
There is much to be seen on how this situation will play out, but it can be said with certainty that the transition to renewable energy is imperative within the near term. In addition to their obvious environmental advantages, renewables also ensure a nation’s energy security at a time when not all global suppliers are reliable geopolitical actors. Finally, greater self-reliance through the development of renewable resources would prevent energy needs from getting in the way of countries’ moral obligations.
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