Europe turns energy crisis into green energy sprint

According to a recent article in The New York Times, the European Union has not only avoided the energy crisis but has also turbocharged the green revolution. Caliber.Az reprints the article.

This was supposed to be a winter of energy crisis in Europe. Beginning last spring, not long after the Russian invasion of Ukraine, the fear of gas shortages spread across the continent, along with fears of what might follow. The coming winter crunch was compared to wartime, with energy experts less focused on whether it would bring rationing than how much. Others suggested that spectacular price spikes would mean suspensions of energy markets and that the continent as a whole would experience not a “cost of living crisis” but a crisis of “molecules” — in which there wasn’t enough energy to be had, no matter the price. A recession was simply taken for granted among the commentariat — almost like a badge of honor demonstrating the moral valor of standing up to Vladimir Putin.

Europe as a whole has indeed endured a lot through the cold months: dramatic spikes in energy prices, with wholesale prices for electricity and gas growing as much as 15-fold, often accompanied by similar spikes in government relief. Countries from Germany to Denmark and Italy spent more than 5 per cent of GDP to shield citizens from the crunch, enacting public conservation measures that darkened city streets and limited power use in other ways. In Britain, average bills were expected to grow by 80 percent before the government artificially lowered the average annual household energy bill to about $3,000. Across the continent, people turned their thermostats down and snuggled with hot water bottles at night. Industry was dialed back in places but also often found alternative power supplies.

All told, though, the worst has not come to pass. There were no blackouts, as experts were warning as recently as December. There was no significant mortality from the cold. Industrial production took some hits but didn’t disappear, and indeed, economic forecasters who were six months ago almost unanimously predicting a continentwide recession are now almost unanimously predicting ongoing, if limited, economic growth. There are still worries about whether next winter will prove as manageable as this one, but natural gas storage levels have remained high for months, and gas prices have now fallen back to where they were in September of 2021, several months before the invasion.

What is perhaps most remarkable is that the European Union has not just managed to avert a crisis but has actually “turbocharged the green transition,” as The Economist recently put it, potentially enough to knock a full decade off the continent’s decarbonization timeline.

In 2022, for the first time, wind and solar generated more electricity in Europe than did gas and coal, according to a comprehensive review by the European think tank Ember published in January. For all the talk of a coal rebound in Europe, by the fall the continent as a whole was generating less power from coal than it had the previous fall, before the invasion — and the 26 coal plants which were reactivated to deal with the crisis have been operating at only 18 percent capacity on average.

Next year, Ember forecasts, Europe will cut its fossil fuel use by 20 percent. That would be a record-setting single-year drop, one that puts to shame America’s ambition to get to 80 percent clean electricity by 2030. It also suggests at least one obvious lesson for climate: Energy transitions can move pretty quickly when there is genuine political commitment and social buy-in. (Perhaps also that, at least for well-resourced countries, when you’re moving fast, the transition doesn’t need to be all that bumpy.)

How did it happen? Partly, it was weather luck: A warm fall and a relatively mild winter meant both that it was easier to stockpile more gas before the cold hit and that less was needed than expected through the harshest months. Last year, drought across the continent had also played a significant role in exacerbating the energy crisis, damaging hydropower and cutting into nuclear production so much that, this past summer and fall, electricity supply was reduced much more than gas was. When the drought ended, so did those effects.

Also, there was willing conservation by the public. In the summer, when I heard European politicians lamenting that, despite how much gas could be conserved simply by turning down home thermostats by a couple of degrees, little could be done to effectuate that change, I thought: Why not? As it turns out, strict mandates and limits weren’t necessary; sky-high prices and the fear of even higher ones did the trick, for both consumers and industry, ultimately reducing demand for gas by as much as 24 percent.

When climate advocates raise the prospect of voluntary conservation measures — the Intergovernmental Panel on Climate Change devoted a whole section of its recent report to “demand-side measures,” which it proposed could alone reduce global emissions by between 40 and 70 percent — they are often dismissed as naïve about human behavior. But while the project of decarbonization may not look the same to everyday citizens as an imminent energy crisis precipitated by an imperial war of conquest, I think European energy conservation nevertheless offers an encouraging lesson there, too: We shouldn’t assume that patterns of consumption must continue untransformed into the future, or that efforts to remodel them will all produce armies of gilets jaunes, or Yellow Vests.

Europe doesn’t exactly offer a universal model — it’s rich, by global standards, and energy-conscious to begin with, and, thanks in part to some binding climate targets, there was an energy transition already underway that could be nudged usefully along. More than 800 billion euros were spent to manage the crisis and limit the effects of price spikes, and there was also an intense mobilization to import liquid natural gas, of course, much of it from the United States — overall more than doubling the amount of LNG unloaded at European terminals. And the bull market in LNG also squeezed many of its erstwhile customers, with European markets sucking up as much available inventory as they could and leaving the rest of the world thirsty for power. Which means that the consequences of that successful scramble look much bleaker in poorer countries, where price spikes have gone unaccompanied by government subsidies but have coincided with rolling national blackouts. (In Pakistan, because of the prices, they’ve recently suspended plans to expand natural gas capacity and instead to build out coal power as much as fourfold.)

But for all its limitations, the European experience of the last year is nevertheless a sort of astonishing success story — a rapid-response energy shift that imposed significant costs at home and abroad but still delivered a pretty smooth landing from what looked, not that long ago, like a terrifying precipice. No one individual, governing body or policy is responsible; managing the crisis was an all-society effort, directed and guided by politicians but also enacted by homeowners and entrepreneurs. And that scary vantage helped, too. Above all the other explanations for the continent’s conservation mobilization hangs another: that describing what might be coming helped mobilize politicians and businesspeople and everyday citizens to avoid it. The data scientist Erica Thompson, author of the new, dizzyingly bright “Escape From Model Land,” calls this phenomenon “counter performativity”: that successfully modeling some scary possible outcomes can actually make those outcomes much less likely. Sometimes, when the boy cries wolf, it pays to listen.