One year after Russia's war in Ukraine began, the global energy crisis has worsened, and renewables have emerged as a viable solution to energy security, with unprecedented growth predicted over the next five years.
Russia's war in Ukraine, which began on February 24 of last year, further placed global energy markets into turmoil.
"The war exacerbated the energy crisis that had been developing since mid-2021, when Russia first began curtailing gas flows into Europe," Sarah Brown, a senior energy and climate analyst at independent energy think tank Ember, told Anadolu.
According to the Energy Information Administration, Russia began to limit gas flow to European customers with long-term contracts and ended spot-market sales. Its gas flow decreased by 12% in 2021 compared to the previous month.
Coupled with growing demand as economies started to recover from the impacts of COVID-19, the supply-demand imbalance has been reflected in gas and electricity prices.
According to data from the European Network of Transmission System Operators for Electricity (ENTSO-E), the maximum EU electricity price stood at an average of €78 per megawatt-hour in June 2021, with the lowest at €45.8 per megawatt-hour.
In parallel with skyrocketing natural gas prices, the maximum EU electricity price reached an average of €211.7 per megawatt-hour in February last year, reaching the highest ever level in August at €543.5 per megawatt-hour.
As Russian gas imports were significantly reduced last August, Dutch TTF day ahead contracts reached more than €310 per megawatt-hour.
In January of this year, the EU's maximum and minimum electricity prices per megawatt-hour were €191 and €69.5, respectively, which are still quite high in comparison to pre-war levels.
- Wind and solar record highest share of growth in Europe's power generation
Wind and solar had the highest growth in the EU's electricity generation, up from 19.1% the previous year, and surpassed gas for the first time, with a 22.3% share compared to 20% for gas. Nuclear came in just short of wind and solar, accounting for 22% of the total, while hydropower accounted for 10%.
"Wind and solar steadied the ship, despite huge falls in nuclear and hydro generation," she said.
Brown contended that fossil fuels do not provide energy security and that renewables do.
"Gas is no longer viewed as a viable transition fuel in Europe, and diversification of gas supplies away from Russia simply replaces one extremely risky import dependency with another," she said, adding that 2022 saw the largest ever absolute growth in solar electricity generation.
Solar energy increased by 39 terawatt-hours, or 24%, last year, which was almost double the rise of any previous year, Brown said.
The resurgence of coal generation amid the energy crisis failed to materialize, she said.
The share of coal in the EU's electricity generation increased by 1.5% in 2022 to 16%, according to Ember's European Electricity Review, even though a number of countries like Germany, Austria and Denmark agreed to keep their coal units ready for use.
"Coal prices also surged. And these huge increases in fossil fuel costs sent electricity prices and inflation sky high across Europe, and globally," Brown said.
- World to almost double renewable capacity in 5 years
In a previous interview with Anadolu, Fatih Birol, the chief of the International Energy Agency (IEA), said that supply security concerns and lower renewable energy costs would become the main drivers of the anticipated, unprecedented growth in renewables over the next five years.
Global renewable energy capacity is set to almost double, increasing by 2,400 gigawatts to reach 5,650 gigawatts by 2027, the IEA said.
"The expected increase of 2,400 gigawatts in global renewable capacity is as much as the capacity added in the past 20 years and equivalent to China's current total installed power capacity," Birol noted.
According to the IEA, the forecast increase in renewables is now 30% higher than the growth volumes anticipated one year ago.
Renewables are forecast to account for over 90% of global electricity expansion over the next five years, overtaking coal to become the largest source of electricity by early 2025.
According to the IEA, China, India, Europe, and the US will drive the majority of growth in renewables over the forecast period,
"The war and energy crisis have acted as catalysts for the accelerated deployment of wind and solar across the EU and UK. We also saw solidarity as countries strived to reduce gas consumption and, therefore, dependence on Russian imports," Brown said.
She asserted that the question is no longer whether the deployment of wind and solar should happen but rather how it can happen much faster and at a greater scale with the removal of existing barriers.
Brown warned of Europe's complacency in filling gas storage with a potential 30 billion cubic meters of supply-demand gap next winter, citing the IEA's determination of a lack of Russian gas and a possible recovery of Chinese LNG imports.
"Everything must be done to enable the urgently required wind and solar growth to permanently reduce electricity bills and achieve energy security and independence," she urged.
By Nuran Erkul Kaya in London
Anadolu Agency
energy@aa.com.tr
