The focus of European energy policy, for at least the last decade, has been the energy transition, with renewables playing a central role. Given the threats posed by climate change, this focus was understandable. However, such a policy is inadequate in an extreme crisis, when the priority is to secure a diverse range of energy sources to protect consumers, enable industry to function, and sustain military capacity.
Part of the inadequacy of European energy policy stems from the focus on renewables, which have their greatest impact on just one energy source, electricity generation. However, it only makes up approximately one-quarter of total final energy consumption in the EU. And even then, renewables account for under half of total EU electricity generation for final consumption.
There is a danger of the EU walking into the 2021-22 trap when the Union overlooked increasing supply dependence on the Russian pipeline. This failure to recognise it led to severe economic damage for consumers and industry and cost European taxpayers €500 billion in economic and social support payments. Unless energy policy is adjusted to deal with the crisis we are now facing, the costs, both economic and strategic, could be far greater.
At least since the onset of the full-scale invasion of Ukraine in February 2022, Europe’s overall security situation has increasingly darkened. We now have a full-scale state-on-state war on the European continent, which has been running for over three years. In those years, Moscow has built a war economy to sustain a long war and, despite immense losses, a larger and more battle-hardened army. The leadership of the Russian Federation aims, for all intents and purposes, to destroy the Ukrainian state. And they appear to have no desire to stop at Ukraine should Kyiv fall.
European states are grappling with wide-ranging physical and cyber sabotage from a range of Russian or Russia-supported actors. At the same time, the US appears unable or unwilling to sustain its traditional security commitments towards NATO’s European partners. Such a US policy position is only likely to further encourage Russian threats against European states. In this security context, governments across the continent are increasing defence budgets, with the German government lifting the debt brake, thereby enabling Berlin to deploy an additional €500 billion. In the same vein, the European Union is moving to provide funding for a further €150 billion.
In energy terms, these external threats require the Union and its member states to protect and secure all their energy sources and ensure those are available at a scale necessary to support a major defence build-up.
The Limitations
Modern European energy policy, focused as it is on delivering the energy transition, is not adequate for dealing with the security challenges we face. There have been significant strides in developing renewable power generation in the EU over the last decade. However, renewables (including wind, solar, hydro, and biomass) do not constitute a sufficiently secure source of energy in a crisis. While it may look impressive that renewables provided just under 50% of the Union’s electricity generation (with the balance being made up principally of natural gas and nuclear energy), this statistic overlooks the fact that electricity generation is slightly over 23% of final energy consumption. According to 2023 European Commission statistics, oil and other petroleum products accounted for 37% of final energy consumption; natural gas provided 20%, with direct renewables, largely biomass (for heating and transport) at 13%, derived heat from district heating systems at 5%, and coal at approximately 2%.
However, this overplays the role of renewables because wind and solar, which provide approximately half of the renewable electricity generation contribution, need natural gas as a backup. There is no cheap grid-level battery storage available to guarantee an alternative green backup. As a consequence, renewables, particularly wind and solar, are still subject to the geopolitical security pressures facing Europe.
In 2023, the EU imported just under 60% of its net energy needs. The US and Russia, by contrast, are rich in oil, gas, and coal; China has plentiful supplies of coal. An underlying fault in the structure of European energy policy is a lack of recognition of our key security weakness—i.e., resource constraint. We need to import almost all of our oil and most of our gas and coal. It is true that technological development may eventually transform the picture and provide new sources of energy and mechanisms to push forward the energy transition. However, in a security crisis, we have to operate from where we are, not where we want to be. It requires all European governments to focus on the risks by securing necessary energy supplies and, in particular, ensuring they are sufficient to support European rearmament.
Redirecting
The EU and its member states need to redirect European energy policy to deal with this incoming security crisis. Europe remains dependent on oil, gas, and coal imports. With the need to rearm, such fossil fuels are necessary at scale and at the lowest cost possible to underpin the rearmament programme. For instance, for the most intensive types of virgin steel, ultimately to provide heavy-duty military goods, one needs coal to run the blast furnaces.
Europe needs to secure as much import capacity as possible from as many diverse sources as possible. Ordinarily, these commercial arrangements do not involve the member states and the Union; however, in times of crisis, there needs to be at least a surveillance of our energy imports to ensure physical security and supply diversity. Securing such energy flows is not just about putting in place a set of long-term contracts, it is also likely to require sufficient naval protection for the main energy supply routes, which have to be integrated into any comprehensive European energy security strategy.
There are, nonetheless, both fossil fuel and green resources that can be developed within the Union and neighbouring countries. They are important because local land-based resources are easier to protect in an aggressive security environment than imports. The development of conventional gas, oil, and coal resources requires coordination and assessment of what can be achieved quickly. It will also inevitably entail the removal of regulatory and planning barriers.
A similar approach would apply to geothermal resources, which exist across the Union but so far have only been subject to marginal development. Potentially, biomass can play a greater role. However, the difficulty here is the competition between land use for food production and energy production. In a crisis, the Union also has to prioritise food security. While wind power is linked to fossil fuel dependence, that may not be necessarily true for domestic solar. While grid-level battery storage does not exist, we are getting close to the availability of low-cost and safe batteries for domestic solar and small, low-energy-intensive enterprises. One potential policy development could be the forcing forward of small-capacity, low-cost batteries for domestic consumption. Combined with cheap solar power, one can see how, particularly in southern Europe, even during a prolonged crisis, energy costs could fall and supply security be enhanced.
The other major energy resource in the North Sea, the EU and neighbouring states should seek to maximise production and develop new fields within a relatively short time to boost oil and gas production. Given the potential for sabotage, the North Sea resources with over 9 000km of pipeline also require significant protection to deter attacks. A further option could be to seek to work with resource-rich neighbours such as Algeria to increase the scale of proximate energy resources to the Union.
We also need to stop the closure and dismantling of any electricity generation systems. Clearly, while we may not want to use coal-fired power stations, having them as a backup in a time of crisis is advisable. More pertinently, there should be a moratorium on the closure of all nuclear power plants (NPPs), and an assessment of where NPPs can be brought back should be undertaken. It is noticeable that the Chancellor-Designate Mertz has called for holding all German NPPs in a single public utility company and then running them for the next 20 years. This surely is the policy that other governments should be adopting in this moment of crisis.
EU-Level Measures
There is a range of potential measures the EU institutions could promote. For example, the current minimum oil reserve stocks recommended by the International Energy Agency are to last 90 days. EU law could be amended to progressively raise this to 180 days to reinforce supply security. As the oil price is currently falling, this could be a good time to begin expanding oil stocks. At the same time, the stockholding locations should be secured against sabotage and other attacks.
In respect of natural gas, the EU could strengthen the common gas purchasing platform and organise common purchasing for the Union. This would allow the Union to maximise its common purchasing power and, in an emergency, avoid rising costs dramatically as states seek to outcompete each other for supplies. The Commission could also investigate the extent to which gas storage facilities are protected and develop common standards across all member states.
There is also a compelling argument to broaden the EU’s N-1 failure standard for the power grid. Currently, it focuses on an assessment based on partial technical failure of the grid and the capacity of the system to sustain supply despite that failure. It does not consider forms of political failure, such as the blocking of energy by a third state or the interdiction of supplies via ports or other transport facilities. The N-1 assessment could be expanded to include these threats.
The EU, together with the member states, could designate ‘energy security islands’ around defence production or energy facilities to protect such sites from sabotage and other threats. This would involve hardening of energy supply and ensuring diverse sources of fuel were always available for these islands.
Finding the Balance
To successfully re-arm, Europe requires the Union to redesign its energy policies. Cheap and plentiful energy is vital for rearmament itself, alongside access to diverse types and sources of energy to underpin security.
Some will be alarmed by the impact of this redirection on climate change objectives. However, as currently designed, European energy policy, even after almost two decades of effort, has had a limited impact on final consumption. In fact, under the stimulus of crisis, there could be a focus on secure green energy development, for example, in respect of geothermal and domestic battery-supported solar energy. A further crisis option would be to seek to expand electrification and digitalisation across the economy, which can offer an opportunity to strengthen Europe’s cybersecurity resilience. Such a broader electrification would mean that, at the end of the crisis, electricity would increase the share of final-user energy consumption, permitting renewables to have a more significant role in the economy.
The Union and its member states, however, have to recognise that focusing exclusively on the specifics of peacetime implementation of the energy transition is inadequate to address the threats to supply security we now face.
This article was written for the Lennart Meri Conference special issue of ICDS Diplomaatia magazine. Views expressed in ICDS publications are those of the author(s).