Europe’s energy security expedited post-Ukraine

ONE of the European Union’s (EU) longstanding global goals is climate action, yet since the Ukraine war began there has been a remarkable new emphasis too on delivering energy security.

Energy security is defined by the International Energy Agency as the uninterrupted availability of energy sources at an affordable price. It has multiple aspects: long-term energy security mainly deals with timely investments to supply energy in line with economic developments and environmental needs; on the other hand, short-term energy security focuses on the ability of the energy system to react promptly to sudden changes in the supply-demand balance.

For Europe, embracing this agenda has seen a huge pivot away from Russian energy. For instance, Russia is no longer the main gas supplier to the EU, with its exports via pipeline to EU customers falling off a cliff from almost 146 billion cubic metres (bcm) in 2021 to around 61 bcm in 2022. Moreover, in the first five months of 2023, Russian gas exports fell further to only 10 bcm.

Correspondingly, the EU27 have embarked on a challenging pathway to diversify towards new energy sources. As set out in the RePowerEU strategy released around a year ago, this has been achieved, in part, by scaling up use of clean energy, while also saving almost 20 per cent of energy consumption.

Renewable successes in the last year include reaching a record of 41 gigawatts (GW) of new solar energy capacity installed; and increasing wind capacity by 16 GW. This helped generate, for the first time, more EU-wide electricity from wind and solar sources than from gas.

However, much as the EU has an appetite for such clean energy, this cannot yet get close to delivering the total amount of energy required to meet the continent’s needs. So, there has also been a large amount of effort put into agreeing deals with a wide array of nations, as detailed in the European Council on Foreign Relations (ECFR) Energy Deals Tracker, which was most recently updated last month.

The tracker shows that the EU27 have, in the first year and a half, been mostly focused on securing new gas supplies as a transitional energy source in the long-term movement towards clean energies. A very substantial chunk of the agreements that have been struck since 2022 relate to gas or liquefied natural gas.

The latest ECFR tracker also shows the geographical spread of countries that European nations have signed new deals with. Of around 120 new agreements between March 2022 and August 2023, the leading counterparties are the US and the United Arab Emirates (UAE), with 21 each. They are followed by Azerbaijan with 10, then Norway and Algeria with nine apiece. Qatar (8), Serbia (5), Egypt (5), Saudi Arabia (4), Japan (2), Israel (2), Namibia (2), Georgia (2), Angola (2), Namibia (2) and Libya (2) follow.

There is a much wider collection of nations which signed a single deal with the EU27.

Breaking this long list down into regions, it is noteworthy that the Middle East is by far the region that has signed the largest number of deals since March 2022. More than one-third of the EU’s energy agreements were inked with Middle Eastern nations, with the UAE leading the way.

Flipping this analysis, the EU powers which have signed these agreements are also interesting to focus on. By a mile, the country with the most deals is Germany, with 27. This is perhaps unsurprising given that it is the bloc’s largest economy and imported the most Russian gas before the outbreak of the war, but is not now receiving any Russian gas via pipeline.

Following on the heels of Germany are Italy (18), Hungary (14), Brussels negotiating EU-wide deals (11), Greece (8), France (6), Poland (6), Romania (4), Latvia (4), Austria (4), Bulgaria (4), Slovakia (3), Belgium (2), Czech Republic (2), Netherlands (2), and Estonia (2). Five nations have signed one deal: Spain, Slovenia, Portugal, Lithuania and Finland.

Beyond these individual treaties, examples of movement toward forging stronger European energy security include energy-sharing agreements in regional clusters, including those between Slovenia, Austria, and Italy; plus also those between the Baltic countries.

Other examples include joint infrastructural projects such as a deal between the French, Spanish, and Portuguese governments to construct an undersea pipeline to transport gas and green hydrogen across the EU; and also joint projects to invest in scaling up key sectors such as at the North Sea Summit in Ostend in April.

This frenetic European energy diplomacy has, over the last 18 months, gone a long way to help deliver energy security for the bloc. However, the tracker indicates that this success will complicate the EU27’s energy transition pathway in the years to come.

In part, this is because the new gas infrastructure that has been invested in will require a medium- to longer-term horizon to secure value for money from investments in gas infrastructure. Correspondingly, EU nations will need to do much more to invest in clean energy infrastructure if they are to decarbonise their economies sustainably in the next decade.

In the face of concern over this dilemma, the EU is therefore seeking to enhance its climate commitments ahead of COP28. There is even a possibility that the bloc could raise its 2030 greenhouse-gas-reduction target from 55 per cent below 1990 levels, playing catch-up with the UK, which has pledged to reduce its emissions 68 per cent below 1990 levels by 2030.

In part, this would be done by the EU to ratchet up pressure on other big emitters, including the US and China, to set stronger targets ahead of COP28. The US currently plans to slash emissions around 50 per cent below 2005 levels this decade, while China has said its emissions will peak before 2030.

One driver of the EU’s enhanced climate ambition is the RePowerEU plan, which will likely push the bloc past the 55 per cent level. Moreover, the European Commission last year also said that new rules for expanding the capacity of the bloc’s natural carbon sinks in particular would allow the bloc to reduce emission by 57 per cent by 2030 compared to 1990.

Taken together, the EU is trying to ensure that its huge new emphasis on energy security does not significantly undercut its climate commitments. The key leading indicator of whether it will be successful on this agenda, going forward, will be how much it now doubles down on investments in new clean energy infrastructure to sustainably decarbonise the bloc’s economy.

The writer s an associate at LSE IDEAS at the London School of Economics