Marketplace Logo Donate

Daily business news and economic stories from Marketplace

War in Ukraine disrupts Europe’s green energy plans for the moment

Heard on:
KORBETHA, GERMANY - DECEMBER 15: Snow lies in a residential area while smoke rises from the chimneys of a coal-fired power plant in the background during a sub-zero day on December 15, 2022 in Korbetha near Halle, Germany. Germany's Federal Network Agency, faced with a December that is likely to be the coldest in the past decade, is appealing to citizens to nevertheless save energy. Germany, historically dependent on natural gas imports from Russia that have fallen to near zero over recent months, has managed to at least partially compensate for the shortfalls with natural gas imports via pipelines from Norway, the Netherlands and Belgium. Germany's first LNG terminals, which will allow it to import natural gas by ship, are due to begin operation later this month. The Heizkraftwerk Mitte plant, operated by Vattenfall, supplies both heat and electricity to residences and offices in the Berlin city center. (Photo by Jens Schlueter/Getty Images)

Snow lies in a residential area while smoke rises from the chimneys of a coal-fired power plant in the background during a sub-zero day on Dec. 15, 2022 in Korbetha near Halle, Germany. Photo by Jens Schlueter/Getty Images

get the podcast

Europe has been a leader in shifting its economy towards more green energy with a goal of reducing its emissions by 55% by 2030.  But, it’s in a tough spot.

Russia’s war in Ukraine has disrupted the supply of Russian natural gas, and so the continent has had to temporarily resort to something it was desperately trying to leave behind: Coal.

Demand for coal in Europe is up 6% this year, according to estimates from the International Energy Agency.

“What the Europeans are doing is scrambling to keep the lights on,” said David Victor, a professor of innovation and public policy at UC San Diego. The supply of Russian natural gas has been disrupted, and French nuclear power plants have had unexpected problems with corrosion, cutting the electricity supply even more. So, natural gas prices rose astronomically.

“And when the gas price has started going up, coal plants became more competitive.”

Germany also notably delayed the closure of coal plants that were supposed to shut down, keeping them online in reserve.  The continent may need them into next winter. But, the pivot to coal will be a short detour.

“Coal has no future,” said Marie Tamba, a senior analyst at Rhodium Group.

Gernot Wagner, a climate economist at Columbia Business School, said the reliance on coal is better than doubling down even further on natural gas.  Germany, for example, is building three new natural gas terminals.

“Well, they will stick around for quite a while, while the coal plants that happen to be running this winter are not,” he said.

This episode is accelerating Europe’s drive towards renewables. The E.U. has relaxed permitting requirements to speed up renewable projects, and Wagner said demand for renewable and energy saving appliances has skyrocketed.

What's Next

Latest Episodes From Our Shows

5:04 PM PDT
3:55 PM PDT
1:43 PM PDT
7:13 AM PDT
Jun 7, 2023
Jun 1, 2023
May 30, 2023
Exit mobile version