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11. Separating electricity from gas prices through Green Power Pools: Design options and evolution

Author:
Michael Grubb and Drummond Pike
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper develops a detailed proposal for an efficient way to channel the value of large-scale renewables, which have become much cheaper than gas-driven wholesale electricity prices, to consumers at ‘cost-plus’ prices. This would reduce the fiscal pressure on governments for market- wide subsidies and offer more stable support for consumers most in need. We detail how this ‘green power pool’ approach could interact with the wholesale market to ensure firm power, also bringing transparency to the cost of balancing the variable renewables output, and maintaining incentives for efficient supply and demand responses. We illustrate the approach with reference to the cost and volume trajectories of UK renewables backed by government CfDs, targeted initially to particular consumer groups, as a first step in a wider transition towards direct consumer access to cheap renewables.
Topic:
Climate Change, Energy Policy, Green Technology, Renewable Energy, and Energy Crisis
Political Geography:
United Kingdom and Europe

12. The European Union’s uneasy journey through the energy crisis

Author:
Alekos Kritikos
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
The European Union revealed rapid reflexes when it came to imposing sanctions on Russia and supporting Ukraine, but has been extremely slow when it comes to taking measures to relieve its own citizens and businesses. At three fruitless summits in the first two months of the crisis, numerous member states’ repeated requests for a joint fiscal response mirroring that adopted vis-à-vis the pandemic were not even informally tabled. In May, the Commission presented the REPowerEU programme, which aims to transition to clean energy and end the EU’s dependence on Russian fossil fuels. The two European Councils in May and June agreed on new sanctions against Russia, further assistance for Ukraine, and joint EU supplies of defence equipment. However, no decision was made to impose a cap on the price of natural gas and the issue of a joint fiscal response to the crisis was not even discussed. Despite repeated requests, the Commission continued to not submit proposals to this effect. But pressure was mounting for decisions to be made. Fifteen countries signed a joint letter in September 2022 calling for a cap on gas prices. In a joint article, Commissioners Thierry Breton and Paolo Gentiloni have also called for a joint fiscal response. The two Councils of Energy ministers in September 2022 resolved on a series of measures, but these are national responses rather than a joint European initiative. The price cap was absent once again from the decisions made. The informal Prague summit did not reach any conclusions either, though it did table all the outstanding issues in question. Europe’s successes in dealing with the pandemic came with “collateral damages”, institutional and otherwise, and the bloc has continued to sustain further collateral damages during the current energy crisis.
Topic:
European Union, Crisis Management, Fossil Fuels, Energy Crisis, and Russia-Ukraine War
Political Geography:
Europe

13. Managing the energy and food crises: Exceptional times call for exceptional measures

Author:
Annika Hedberg
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
European Policy Centre (EPC)
Abstract:
The Russian war on Ukraine is an unprecedented test for the EU and its leaders. On top of the security, humanitarian and refugee crises, they must manage its impact on our economy and energy and food systems. With prices soaring and supply chains disrupted, they must respond to the cost-of-living crisis. Exceptional times call for exceptional measures, including in how we produce and consume energy and food. This Discussion Paper identifies priorities for action to prevent the energy and food crises from spiralling out of control and to enhance European resilience, sustainability and prosperity.
Topic:
European Union, Crisis Management, Energy Crisis, Food Crisis, and Russia-Ukraine War
Political Geography:
Europe

14. Exploring Short-term Solutions to the Global Gas Crisis

Author:
Jun Arima, Hiroshi Hashimoto, Hussein Moghaddam, Yudo Dwinanda Priadi, and Alloysius Joko Purwanto
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This brief explores short-term solutions for stabilising the global gas market so that the world can continue to recover amidst the Russia–Ukraine geopolitical crisis. The proposed solutions consist of (i) across-the-board ramping up of natural gas and liquefied natural gas (LNG) production; (ii) supporting countries with idle capacities or delayed gas projects in regaining their capacity to produce and export gas, especially to the regions most in need; (iii) an emergency plan initiated by the G20 group to ‘reroute’ LNG cargoes to the world’s regions most in need with low purchasing power; (iv) optimising LNG cargo destinations by taking advantage of specific contractual agreements; (v) issuing statements that can help stabilise the short-term gas market; (vi) intensifying discussions on formulating potential short-term measures to mitigate excessive volatility in prices; and (vii) urgently establishing a universally accessible, real-time information platform on natural gas trade.
Topic:
Energy Policy, Natural Resources, Gas, and Energy Crisis
Political Geography:
Global Focus

15. From the Russian Pact to the Green Deal?

Author:
Gilles Lepesant
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
Robert Schuman Foundation (RSF)
Abstract:
Russia's invasion of Ukraine has, among other things, caused an energy crisis comparable to the oil crisis of the 1970s, one that goes beyond oil however since Russia is also a major supplier of gas and coal. By 2021, it was the EU's largest supplier of all three fossil fuels. The military hostilities started in a context dominated by price pressures induced by global economic recovery and by an abnormally low level of storage sites in Europe. In this context a policy of diversification as part of RepowerEU was launched in view - as put forward by the European Commission - to do away with the supply of fossil fuels from Russia by 2030. Beyond the quest for new short-term suppliers, the question of a radical acceleration of the energy transition in Europe in favour of low-carbon energy sources and sobriety is now being asked. This paper highlights the opportunity for Europeans to break not only with their dependence on Russia but also, and above all, with fossil fuels. It outlines the challenges to be met by underlining the extent to which the current stage of energy decoupling from Russia marks a turning point and closes several decades of close interdependence between Russian deposits and the European economies.
Topic:
European Union, Fossil Fuels, Green Deal, Energy Crisis, and Russia-Ukraine War
Political Geography:
Russia and Europe

16. “The energy crisis shows the importance of European solidarity in the face of asymmetric shocks”

Author:
Nicolas Berghmans
Publication Date:
07-2022
Content Type:
Policy Brief
Institution:
Robert Schuman Foundation (RSF)
Abstract:
How has the current energy crisis arisen? To understand current developments, we need to go back a little: first of all, the global economic context with a fairly strong post-Covid recovery has contributed to the increase in prices of raw materials and energy. And then there has been the crisis with Russia. Even prior to the start of the invasion of Ukraine on 24 February 2022, Moscow had begun to reduce the gas storage levels held by Russian operators in EU Member States, including Gazprom, which controls significant capacity, particularly in Germany. The war in Ukraine has only made the situation worse. The availability of natural gas in Europe has fallen and the price on the markets has risen to an unprecedented level, sometimes reaching a price five times higher than previously. It should also be noted that Europe is emerging from a period of more than ten years in which the price of gas and, more generally, of energy has been relatively low, which makes the shock all the greater, and this upward trend is spreading beyond the gas to the electricity market; at certain times, the price has increased fourfold, or even fivefold, compared with the usual rate.
Topic:
Gas, Solidarity, European Commission, Energy Crisis, and Russia-Ukraine War
Political Geography:
Europe

17. The end of European dependence on Russian fossil fuels

Author:
Ramona Bloj
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
Robert Schuman Foundation (RSF)
Abstract:
The Russian war in Ukraine is entering its eighth month. As winter approaches, the question of energy and Europe's dependence on Russian hydrocarbons, which has dominated European debate since the invasion began on 24 February, is turning into a major challenge for the 27 Member States. The latter must strike a delicate balance between reducing consumption, relieving pressure on consumers and making a genuine transition to deal with climate change
Topic:
Climate Change, European Union, Fossil Fuels, Energy Crisis, and Russia-Ukraine War
Political Geography:
Russia and Europe

18. 70 years on, it's time to reinvent the ECSC

Author:
Thierry Lepercq
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
Robert Schuman Foundation (RSF)
Abstract:
Upset between Berlin, Brussels and La Coruña On 16 May 2022, in the Radialsystem conference centre in Berlin, a chair remained forlornly empty. The German Minister for Education and Research, Bettina Stark-Watzinger, inaugurated the conference "Green Hydrogen for a Sustainable European Future" promoted by the German government, before handing over to her Italian counterpart, Cristina Messa, and then to European Commissioner Mariya Gabriel. The empty chair was that of the French Presidency of the European Union which, despite strenuous effort on the part of the German government, did not wish to delegate a representative. In the Chancellery, the mood was one of great tension. Nearly 100 executives representing 31 gas transmission and storage operators (TSOs) from 28 European countries met with the European Commission on 7 June 2022 in Brussels. It was time to present the latest version of the European Hydrogen Backbone (EHB), an initiative launched two years ago by the German company OGE. On the agenda was the unveiling of an ambitious plan to build 28,000 km of hydrogen pipelines across the continent by 2030. One point of interest was a dotted line linking Barcelona to Livorno - to connect the Iberian Peninsula to the rest of Europe, bypassing France, whose opposition to cross-border green hydrogen infrastructure is no longer a mystery. A few months later, on 5 October 2022 in La Coruña, Pedro Sanchez, president of the Spanish government, hosted German Chancellor Olaf Scholz, together with some fifteen ministers. On the agenda of this summit: the European energy crisis and the measures that must be taken to strengthen the continent's supply security and European solidarity. One proposal stood out: to strengthen gas interconnections to allow liquefied natural gas (LNG) arriving in Spanish ports to relieve a German industry that is on the verge of suffocating - and to pave the way for the implementation of green hydrogen transport infrastructures (EHB).
Topic:
Energy Policy, Gas, Investment, Economic Crisis, European Commission, and Energy Crisis
Political Geography:
Europe, Germany, and Spain

19. Roadmap to Zero-Carbon Electrification of Africa by 2050: The Green Energy Transition and the Role of the Natural Resource Sector (Minerals, Fossil Fuels, and Land)

Author:
Jeffrey D. Sachs, Perrine Toledano, and Martin Dietrich Brauch
Publication Date:
01-2022
Content Type:
Special Report
Institution:
Columbia Center on Sustainable Investment
Abstract:
All Africans—whether living in urban or rural areas—need access to affordable, clean, efficient, reliable, climate- proof, and renewable energy for both residential and productive uses to achieve sustainable development objectives. This report sets out a comprehensive and actionable roadmap for Africa’s zero-carbon energy transformation by 2050, with most advances achieved by 2030. Natural resource management in minerals, fossil fuels, and land sits at the core of the strategy. The world is moving to decarbonization by 2050. This is the dominant geopolitical message of 2021, appearing, for example, in U.S. President Joe Biden’s online summit with world leaders in April 2021 and in the new IEA Report on Net Zero by 2050: A Roadmap for the Global Energy Sector. Africa will be part of this global trend. Prospective oil and gas projects in Africa will no longer be pursued as overseas markets and financing will shrink. At the same time, Africa’s vast renewable energy potential, in the solar and hydropower sectors especially, will engage increasingly bankable and highly attractive investments. In net terms, Africa has a huge amount to gain from a decisive build-up of renewable energy and the capacity to produce the minerals, hardware, and software of the new zero-carbon energy economy. Starting from a simple and transparent model of the annual investment volumes needed to provide continent-wide access to electricity based on renewable sources (Section 2), the report addresses various imperatives and challenges regarding Africa’s energy planning (Section 3) and financing (Section 4) and outlines recommendations for immediate implementation of the strategy from 2022 (Section 5).
Topic:
Climate Change, Development, Energy Policy, Environment, Sustainable Development Goals, Sustainability, Decarbonization, and Energy Crisis
Political Geography:
Africa

20. Not all political relation shocks are alike: Assessing the impacts of US-China tensions on the oil market

Author:
Yifei Cai, Valérie Mignon, and Jamel Saadaoui
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
This paper assesses the effects of US-China political tensions on the oil market. Relying on a quantitative measure of these relationships, we investigate how their dynamics impact oil demand, supply, and prices over various periods, starting from 1971 to 2019. To this end, we estimate a structural vector autoregressive model as well as local projections and show that political tensions between the two countries pull down oil demand and raise supply at medium- and long-run horizons. Overall, our findings show that conflicting relationships between these two major players in the oil market may have crucial impacts, such as the development of new strategic partnerships.
Topic:
Security, Oil, Conflict, Rivalry, and Energy Crisis
Political Geography:
China, Asia, North America, and United States of America