Russia’s invasion of Ukraine in February 2022, and the subsequent EU sanctions against the country, shed a merciless light on Europe’s reliance on foreign powers for energy. Three years later, as policymakers still grapple with how to cut the cord, the idea of an energy union is having a moment in the sun.
Initial emergency measures and the RePowerEU programme succeeded in reducing — but not entirely eliminating — Europe’s dependency on Russian energy. Most recently Estonia, Latvia and Lithuania disconnected from the Russian energy grid and hooked up to the EU’s, bringing the bloc a step closer to centralising its energy network.
Now, the European Commission is trying to finish the job. Building on the Energy Union strategy, which dates back to 2015, the EU executive outlined an Affordable Energy Action plan in February as part of the proposed Clean Industrial Deal, where completing the Energy Union appears as one of the four key pillars.
The aim is for member states to co-ordinate within the European single market to enable the free flow of energy across national borders. This, it is hoped, will give EU consumers — both households and businesses — access to secure, sustainable, competitive and affordable energy.
The need was made clear this week with a day-long blackout across much of Spain and Portugal. The French grid operator RTE channelled 700 megawatts of electricity to Spain as it recovered.
Gas dependency risks repeating mistakes
Progress towards an energy union has been slow. Even since Russia’s invasion of Ukraine, member states have continued to pursue cheap energy imports. Now, with US President Donald Trump pressuring the EU to buy gas from the US in exchange for easing tariffs, Europe risks swapping one dependency for another.
The EU imports 58% of its energy, the majority of which is in the form of fossil fuels, according to Eurostat — a habit the EU has been trying to kick since the Green Deal launched in December 2019.
“Until the moment we can reduce this dependence on fossil fuel imports, we'll be at a structural disadvantage compared to our global competitors,” Adel El Gammal, secretary general of the European Energy Research Alliance (EERA), told The Parliament.
A quarter of Europe’s energy imports come in the form of gas. Although gas is recognised as one of the greener so-called transition fuels, new deals suggest a continued reliance rather than a move towards phasing it out. In 2022, the EU signed a deal with Azerbaijan to double gas imports to at least 16 billion cubic meters (bcm) annually by 2027. Meanwhile, Shell in the Netherlands and TotalEnergies in France each agreed to 27-year contracts with QatarEnergy for new gas supplies.
“One can only hope that the lessons learned from Russia’s war of aggression against Ukraine will form the basis for future EU action,” Beata Szydło, a Polish MEP in the European Conservatives and Reformists group told The Parliament. The MEP is currently penning a report on the security of energy supply in the EU.
Kira Marie Peter-Hansen, a Danish MEP in the Greens/European Free Alliance group also criticised the deals as short-termist. “We need to have the political capacity to look further than just the next winter, but also to look five years into the future,” she told The Parliament.
Challenges to an EU energy union
The fragmentation between member states and their differing approaches has complicated Europe’s ability to synchronise its energy market. Dependency on imported energy varies significantly across the bloc, ranging from 98% in Malta to just 3% in Estonia.
“Energy is not a union competency, which makes it extremely difficult, and that's the reason why we see that the member states have very different approaches to energy and, as a consequence, also to the transition,” said El Gammal.
Other elements of energy policy contribute to the issue of dependency. France, for example, has continued to call for increased investment in nuclear energy, a stance opposed by countries like Germany and Austria.
These differences must be respected for an energy union to succeed, according to Szydło: “The implementation of this project is possible if it does not take place at the expense of national sovereignty and the interests of individual countries.”
Countries also differ widely in their energy needs and their ability to produce energy at home, she added. She wants to see an approach “which considers the diversity of national potentials and the available capacity for developing energy resources.”
“The strategy should take into account the energy sources available for a given region: It can be biogas, hydropower, ocean energy, geothermal energy, nuclear energy, natural gas but also coal. We can't afford to waste the potential we already have,” said Szydło.
And competitiveness must remain at the forefront of any plan, the Polish MEP said. “Europe cannot impose costs on itself while other global powers such as the US, China and India continue to use cheaper energy sources.”
European energy indpendence?
For Peter-Hansen, the essence of energy independence is producing enough within the EU. “Europe does not produce enough energy on its own and that production requires investment,” the Danish MEP said.
Unlike Szydło, however, Peter-Hansen thinks the development of new energy sources must prioritise the mission of decarbonising. “The criteria we should set up when it comes to EU funding and EU money is that it needs to be aligned with the EU taxonomy and the ‘do no significant harm’ principle and the [bloc's] climate ambitions,” she said.
Calls are growing for the EU to halt support for investment in projects promoting fossil fuels. The European Central Bank is still financing fossil fuels, Reclaim Finance found, despite previous promises to fund the transition to carbon neutrality.
With Europe’s lack of fossil fuel resources, any long-term energy independence strategy would need to include a large clean energy component, even if it’s not entirely fossil-free. This will require investment but will eventually bring rewards, said El Gammal. “We're in a position where probably we'll be the most advanced continent in terms of renewable penetration.”
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