Energy security and its challenges are among the most significant issues governing how policymakers and regimes deal with the rest of the globe. The International Energy Agency (IEA) defines energy security as “the uninterrupted availability of energy sources at an affordable price and examines it in the short and long terms”.
Europeans acknowledged that attaining an adequate amount of energy security was inescapable and could never be undermined, especially given the variety of risks that it faces, such as expanding geopolitical risks to major producers, severe price fluctuations of different energy merchandise, supply constraints from significant suppliers due to the political and other differences, and counterproductive environmental consequences that threaten sustainable development.
The European Union has been overreliant on a small number of energy providers, especially Russia. This has prompted an explicit European declaration of a new strategy aimed at diversifying their supply sources and being highly dependent on alternative energy sources as tools to counter such dominance.
The Union’s 2006 and 2009 gas crises due to Russian cut-offs of gas supplies through Ukrainian pipelines have substantially shaped the Union’s energy security debates. This has resulted in distrust and suspicion in their mutual energy dealings, exacerbating Russia’s threat to Europe. With Russia’s potential to control the EU’s energy supply and use the “energy weapon” to influence the EU’s political conduct, the EU has come to perceive Russia’s narrative as realistic and untrustworthy.
European Energy Security Status
European energy security is in grave jeopardy, especially in light of multiple international reports indicating a general trend of increasing European reliance on external energy sources. Moreover, the European Union imports half of the energy consumed. Its import dependence is highest for crude oil (90%) and natural gas (66%), with solid fuels (42%) and nuclear fuel (40%) coming in second and third, respectively, with a daily average import bill of more than 1 billion Euros.
Authorities from Europe have made no secret of their eagerness to confront these challenges, particularly the need to free themselves from Russian overdependence, which threatens their political and economic independence and political freedom. To create a highly resilient European energy infrastructure to potential crises, the EU encourages more variety of supply sources, such as a wider spread of renewable energy and energy storage systems, so that even if one source collapses, another can substitute.
Ensuring a reliable power supply for all Europeans is also no easy undertaking, considering that the EU’s electrical power infrastructure is one of the world’s largest and most complicated systems. Electricity networks, like gas pipelines, are highly integrated throughout Europe and beyond. A power loss in one nation might result in blackouts or supply shortages in other places and countries. Through a well-designed and operating energy market, the European Commission strives to ensure that our electrical supply is secure and dependable, ensuring that electricity is always accessible where it is required.
Challenges to European Energy Security
There are several difficulties facing European energy security, including those relating to their energy production capacity and stockpiles, as well as those relating to environmental considerations emerging from energy systems, as follows:
- The intensified competition among major international powers selling energy resources to Europe, particularly between the United States and Russia. The American LNG is somewhat less expensive since its pricing is based on the Henry Hub gas spot price in the United States, whereas Gazprom’s rates are based on the price of crude oil.
- In transit nations, there is either political stability or instability: Across Ukrainian territory, Russia provides around 30% of the energy resources to the European Union. As a result, the differences and political unrest between Russia and the Ukrainian government, which the US back, exacerbates a situation of political unrest that could jeopardise Russia’s energy security. Thus, it is a top priority for Europe to maintain an adequate, stable political system in Ukraine.
- Energy price fluctuations: Because the bulk of European energy supplies is imported from other countries, price variations and rises directly impact the economy.
Asia-Pacific Energy Research Center (2007) defines energy security as “the ability of an economy to guarantee the availability of energy resource supply in a sustainable and timely manner with the energy price being at a level that will not adversely affect the economic performance of the economy”. Five elements impact energy supply security, according to this definition.
- Availability of sufficient fuel supplies from both domestic and international sources.
- An economy’s capacity to attract supply to fulfil predicted energy requirements.
- The degree to which an economy’s energy resources and energy suppliers are diverse.
- Fuel resource accessibility results from other energy facilities and energy transportation systems being available.
- Geopolitical issues over the sourcing of materials.
Amid Russia-Ukraine War
Even before the heinous events in Ukraine, there were signs of energy issues. On the other hand, the battle sparked a global crisis, reminding the world that power is one of the most potent strategic tools. As energy security is combined with an acceleration in energy transition, this crisis will encourage much-needed expenditure on energy, both traditional and renewable. The major difficulty is that energy security and the transition will take decades and billions of dollars to achieve. We believe that the current market cycle’s dominating story and driver will be in tackling this enormous challenge.
The de-escalation of the Russia-Ukraine conflict and Europe’s capacity to discover new methods to deliver energy to residents will determine the outcome of the European Energy Crisis. This war exposed Europe’s reliance on Russia and encouraged the continent to develop more long-term, sustainable alternatives.
Demand for most commodities, particularly essential enabling metals for the energy transition, was outstripping supply, causing prices to skyrocket. Then followed the Russian invasion, and the crisis devolved into a full-fledged inflationary catastrophe.
Addressing energy security issues and the transition will require substantial development of strategic thinking. The market now has a clear objective to get Europe energy independent, expedite the energy transition, and strip Putin of his “power of power.” It will need at least $1.5 trillion in yearly capital investment in renewable and conventional energy to achieve this objective. Investment in renewables must significantly increase. This covers renewable energy sources such as wind, solar, nuclear, and hydrogen, as well as carbon capture and storage.
As the innovation process intensifies, we believe breakthroughs will be made that most experts today deem unattainable. It is necessary to have a rethink on nuclear power. The energy return on energy invested (EROEI) ratio quantifies the amount of useable energy provided relative to the total energy used in its production and is used to assess various energy systems’ performance and power concentration.
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About the Author
Being an avid reader, Akhilesh loves to explore new developments in Defence Research & Development. He is a voyager and loves writing poetry. He is currently pursuing a Ph.D. in Defence and Strategic Studies. He is an inquisitive and diligent soul hoping to make a change to reckon with. He is also affiliated with the Centre for Security Studies at Jindal School of International Studies as a Centre Associate. His main interests lie in Security Studies, Defence Technology, International Relations & World Politics.