During the visit of US President Joe Biden to Europe, perhaps not the most high-profile, but very important event took place: the United States and the European Union agreed on large-scale supplies of liquefied gas.
Also, the EU countries (and Germany among the leaders of the process) are actively negotiating gas supplies from Arab countries. This is not yet giving up Russian oil and gas. But against the background of the published action plan from the European Commission on such a refusal, the prospect is emerging that Russia will completely lose the markets of European countries.. It won't happen quickly. Europe will need at least 2-3 years before completely abandoning energy imports from Russia. And as experience shows, if the Europeans take up something, they sometimes accelerate for a long time, but then move to the bitter end..
End of the era of Russian gas in Europe.
Europe's refusal of Russian oil and gas will knock out the financial basis for the existence of Russia itself in its current form. The invader has been paying pensions and salaries for many years at the expense of income from oil exports to Europe, and forms the military budget and the corruption component for the purchase of European politicians through the sale of gas. Another " Without this money, Russia is financially — especially in the context of sanctions — not at all wealthy: in 2021, oil and gas revenues accounted for 35% of all Russian budget revenues.
Until recently, Germany - Russia's key European accomplice - has successfully done its best to provide Putin with more and more finances by buying oil and gas.. The decommissioning of coal and nuclear power plants, the reduction in coal production not only in Germany, but throughout Europe - all this was a direct factor in the growth of gas exports from the Russian Federation. The less nuclear energy was used and the less coal generation remained, the more gas was required to ensure the production of electricity..
Successful investments by Gazprom in various “environmental initiatives” and active propaganda in Germany against nuclear energy over the years have borne fruit - an increase in gas consumption. Against the backdrop of the European Green Deal, which assumed further large-scale closure of coal and nuclear generation and its replacement, primarily with gas, as well as renewable, the prospects for Gazprom's business continued to look quite rosy. But the attack on Ukraine today has completely changed - yes, it has already changed, and this is final - the strategy for the development of European energy.
Trust in Russia is completely lost. The image of a “reliable supplier”, as Germans throughout Europe have been saying about Russians for many years, has been forgotten forever. including the Germans. The profile minister has declared and is carrying out a 180-degree turn of Germany in the energy sector, away from Russian gas. And although it is technically impossible to do this instantly, the course is set correctly. The vast majority of other European countries are not worth talking about.. The last session of the International Energy Agency in Paris should have been listened to if only for the sake of enjoying the plans of literally every country to withdraw Russian energy resources from use.
Nuclear energy returns to focus: decommissioning of plants is canceled (in particular in Belgium), new projects are announced (in France and Poland, and many more countries will follow). Renewable energy will continue to develop. But instead of gas, they will use industrial batteries and small modular reactors (SMRs). And here the United States will have its say: it is they who have been promoting the development model of nuclear energy for several years with the help of very safe and absolutely unsuitable for military use in any form of SMR.
Window of opportunity for Ukraine.
At the same time, a fantastically attractive tactical opportunity opened up for Ukraine.. On March 16, synchronization of the Ukrainian energy network with the European one was carried out, which, thanks to the constructive position of the Europeans and the incredible efforts of the technical specialists of Ukrenergo and the diplomatic team of the Ministry of Energy, was completed in two weeks instead of a year and a half according to the previous plan. The next step is to open the possibility of exporting electricity from Ukraine to Europe.
It's not an easy task. Ukraine needs to meet a set of technical and regulatory requirements, and Europeans must recognize them as opening up opportunities for exports (and imports). At the pre-war pace, they would have continued for at least another year and a half. But today, the time for this is a maximum of two to three months.. Why? Electricity consumption at home due to hostilities fell, according to cautious assumptions, by 30-35%. At the same time, obviously, people in the war zone do not have the ability to pay for electricity..
It is exports in this situation that can compensate for the losses of the electric power industry due to non-payment and a decline in consumption.. After all, at the same time, generation capacities were released for export. And the average European prices today are twice, and sometimes even more, higher than domestic Ukrainian ones.. Why? It is because of the use of large amounts of expensive gas to generate electricity.. In Ukraine, nuclear, coal and hydro generation allow minimizing the use of gas.
It is this situation that forms the EU's interest in opening up export opportunities for Ukraine as soon as possible.. After all, Ukrainian electricity can help European countries, instead of burning gas to generate electricity, pump it into storage facilities in the summer. And thus, simultaneously reduce the share of Russian gas in the balance (after all, gas in general will be needed by about 5 billion cubic meters less, because Ukrainian electricity will replace it) and save about 4 billion euros on the difference in the price of gas and electricity from Ukraine at current gas prices and.
This means that Europe and European consumers win - they will save money. In addition, they will receive moral satisfaction: they will reduce gas consumption from the country of murderers. But Ukraine will also benefit from the fact that it will earn on the export of electricity (about 1.7–1.9 billion euros per season), that it will help the EU reduce Russian gas consumption (which is nice in itself), and that.
Read more articles by Alexander Kharchenko at the link.