How the Ukraine war could spell the end of fossil fuels
In this edition, the war spurred an energy crisis but it may also have sped up a global green energy transition.
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If there has been one fallout of the war in Ukraine that nearly every country across the globe has experienced, and nearly every country has discussed, it is the spike in energy prices. So widespread and adverse has the impact been that the rise in energy costs accounts for the food production crisis, the cost-of-living crisis, worldwide supply chain wrangles and a global economic slowdown.
At the COP27 climate conference in Egypt in November 2022, European delegates spoke urgently about the Kremlin’s “use of energy as a weapon of mass destabilization.” Exploring and exploiting relatively new fossil fuel reserves in Africa appeared to be at the top of the European Union’s agenda, with most of the projects in African countries geared toward export and funded by multinational companies.
But in Japan, on April 16, the G7 group of wealthy nations reiterated their commitment to achieving net zero carbon emissions and finding global solutions to the climate crisis. Last year, the G7 had said that investing in liquefied natural gas was a necessary response to the war in Ukraine. But evidence from new research suggests that the war, while causing energy panic and affecting supplies particularly for poorer countries, might also be accelerating the adoption of alternative energy sources and green technology.
A country like Iceland, having made the transition from being dependent on fossil fuels to generating enough energy to meet 85% of its own power needs through renewable sources, has become a model for how to escape the fossil fuel trap. When I visited Gudlaugur Thor Thordarson, Iceland’s minister of the environment, energy and climate, at his office in Reykjavik in January, he told me that Icelandic experts were in great demand. “There is a bigger interest,” he said, “especially since the war in Ukraine, in Iceland’s geothermal and hydroelectric energy infrastructure.”
Last month, Ukraine’s Minister of Energy German Galushchenko met with a delegation from Iceland to discuss energy cooperation. He noted that a decisive shift to renewables “will allow us to make our energy system more resilient and decentralized in times of war.”
WHY IT MATTERS
In October 2022, Fatih Birol, the executive director at the International Energy Agency, said the war in Ukraine could lead to “a historic and definitive turning point towards a cleaner, more affordable and more secure energy system.” Energy think tank Ember released its annual “Global Electricity Review” this month and announced that “electricity is at its cleanest,” with renewables and nuclear energy generating 39% of global electricity. Wind and solar energy alone generate about 12% of global power.
Russia’s invasion of Ukraine caused energy prices to spiral, making low-income households across the world more vulnerable. An overreliance on Russian energy led to a global increase in energy poverty. Studying energy costs in 116 countries, academics writing in the journal “Nature Energy” in February estimated that as many as 114 million people could be pushed into extreme poverty in part due to energy costs. In June 2021, according to data from the European Network of Transmission System Operators for Electricity, the average cost of electricity in the EU per megawatt-hour was about $94. By August 2022, the price reached an average of $596 per megawatt-hour.
Iceland’s decision to move away decades ago from dependence on fossil fuels and to reduce its vulnerability to price fluctuations and international crises should be a model for sub-Saharan African countries that are currently looking to export fossil fuels to Europe. The investments are better made in creating an infrastructure for transitioning to renewables and green energy.
According to a report from the International Energy Agency, the war in Ukraine on the EU led to a 6% rise in coal-fired power generation and the highest carbon emissions since 2003. Long term, though, the war has forced Europe to unlink itself from Russian energy.
Iceland has hosted delegations from around the world since the war began, energy industry representatives in Reykjavik told me. “We see quite a lot of interest from Central Europe,” said Horour Arnarson, the CEO of Landsvirkjun, Iceland’s national power company. From his office, with expansive views of Reykjavik, Arnarson told me that the war in Ukraine meant people wanted to hear about hydropower and geothermal power from experts in Iceland.
Angeliki Kapatza works as a geothermal expert at the Geothermal Exhibition, a showroom on the grounds of the Hellisheidi Power Station, the world’s eighth largest geothermal power station. She told me that delegations from the Philippines, the United States, Indonesia and Japan had in recent months come to visit the station. “It’s nature’s energy,” Kapatza said, as she spoke of the need for countries to find their own resources to harness and to commit to decarbonization.
It might be optimistic, Thordarson, Iceland’s environment minister, said but he believes the war in Ukraine will accelerate the green transition. “If we had spoken before the war,” he told me, “this wouldn’t be part of the discussion.” Russia’s invasion of Ukraine caused an energy crisis, but it may also have driven the world toward speeding up the transition to green energy. Iceland made its green transition because it decided it could not afford to become dependent on the volatile market for fossil fuels. Russian aggression will have helped other countries come to the same conclusion.
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