An Electricity Crisis Complicates the Climate Crisis in Europe
BERLIN — The soaring price of electricity represents a Rorschach test for Europe’s politicians. Depending on their leanings, it is either a reason to wean the continent from fossil fuels more swiftly — or more slowly.
The timing is crucial. European Union leaders have cast themselves as the vanguard of a global green transition at the international climate talks that kick off this weekend in Glasgow.
The repercussions are vast. How Europe emerges from the current energy crisis will bear on how the world addresses the climate crisis. Europe accounts for a very large share of global emissions produced since the start of the industrial age, and its ability to pivot away from fossil fuels is key to averting ruinous rates of global warming.
At the heart of the surge in electricity prices is Europe’s reliance on natural gas to turn on the lights, heat homes, and power industry. Even though most countries in the bloc are moving away from coal faster than other parts of the world, like Asia, they have continued to lean on gas while building out their renewable energy infrastructure.
Under European energy rules, the price of gas drives the price of electricity. Gas accounts for a fifth of Europe’s energy consumption, and most of it is imported from Russia.
But while natural gas is less polluting than coal, it is still a fossil fuel that produces carbon dioxide emissions that are warming up the planet. And without a gas exit plan, there is no way for Europe to meet its own climate target, which is to reduce its emissions by 55 percent by 2030 compared with 1990 levels.
The power crisis, in other words, is accelerating a reckoning over gas — and foreshadowing what other parts of the world will face as they make their energy transitions.
“It’s bringing to the fore the question, ‘What do we do about gas?’” said Lucie Mattera, the Europe analyst for E3G, a climate research group.
It is also undermining unity about how to transition to renewables. While policies designed to address climate change are not the main driver of rising electricity prices, some European leaders are claiming that is the case. The cause is basically that demand for gas has soared — sending prices skyward — as the industrialized world has bounced back from the depths of the pandemic and started returning to its normal working rhythm.
But some governments across the continent now fear that higher heating bills this winter could bolster populists in upcoming national elections in several countries, or trigger social unrest like the “Yellow Vests” protests from 2018 in France.
Those fears have caused several European countries to question the ambitious E.U. target of cutting emissions of planet-warming gases by at least 55 percent within a decade.
Hungary has claimed that rising gas prices are linked to the European Union’s climate ambitions, which its prime minister, Viktor Orban, decried as “utopian fantasy.” Poland, a major coal producer that has never been a fan of the European Commission’s emissions-reductions targets, has pressed Brussels to change or delay some of its proposed measures.
Spain, on the other hand, has pressed for a faster transition to renewable energy, precisely so that the continent isn’t forever subjected to the ups and downs of the gas market. “The present and the future belong to renewable energies and we cannot solve a crisis caused precisely by dependence on fossil fuels by looking to the past,” Teresa Ribera, its deputy prime minister and a longtime climate advocate, said in an email. “The Spanish government believes that the transition must be accelerated, not slowed down.”
Tim Gore at the Brussels-based Institute for European Environmental Policy, a research group, called the price jumps for electricity a “perfect storm.” Global demand for gas rose sharply just as winds in Northern Europe (where there is significant wind power) dropped off and gas reserves ran low during a long, lockdown winter. Added to the mix was the closing of coal-burning power plants, largely in Western Europe.
“The fact that the E.U. has succeeded in getting a lot of coal off the energy grid actually makes things worse,” Mr. Gore pointed out. “That’s a good thing, but it’s unfortunate that it happened to coincide with everything else.”
The human consequences play out in the 7th floor apartment of Ascención García López in a working class suburb of Madrid, where electricity prices have risen sharply, sparking some protests on the streets.
Ms. López’s power bills have nearly doubled since last year, forcing her to change habits. She keeps her blinds open until sundown, so the last rays of sun can light the rooms. She cooks her stews in a pressure cooker, instead of simmering for better flavor. She does the laundry in the middle of the afternoon, when the electricity rates are cheaper, but she fears her neighbors will complain because the middle of the afternoon in Madrid is siesta time.
Ms. López, 56, who is currently unemployed and in charge of caring for two young grandchildren and her elderly mother, hasn’t yet had to turn on the heater. Winter worries her. “I will use it only on the coldest days, not every day,” she said.
One evening this week, her youngest grandson wandered around the apartment as dusk descended. Only when it’s completely dark will she turn on a light.
Everyone on a tight budget has come up with their own hacks. Some say they’ve resorted to unscrewing some of their light bulbs from light fixtures. Others report skipping daily hot showers or cooking big batches of food to save on bills.
Problems like these among voters represent risks to the left-of-center government, for which Ms. Ribera, the deputy prime minister, is also the minister for the ecological transition. Spain has redirected more than 2.6 billion euros in profits from energy companies to consumers, slashed electricity taxes and imposed a cap on how much natural-gas prices are allowed to increase. The energy crisis, Ms. Ribera argued, should not punish the poor.
She compared this moment to the oil crisis of the 1970s. “It is important to share both the risks and the benefits, so the consequences of market behavior are not always paid by the same people,” Ms. Ribera said.
Spain is also pushing the European Union to organize a centralized platform for buying natural gas, similar to how its members banded together to negotiate the price of coronavirus vaccines. That approach raises questions relating to the bloc’s competition laws, and many members remain skeptical.
The European Commission recently proposed some possible measures that individual members could take, largely focused on protecting the most vulnerable members of society and small businesses, similar to the action taken in Spain, and said it would begin exploring the possibility of shared natural gas reserves. It stressed that speeding up the transition to green energy remained the best solution.
In many ways, all across the continent, the Achilles’ heel of Europe’s green transition is gas.
Britain, by contrast, has been doubling down on its domestic gas reserves in the North Sea, despite protests by climate campaigners. Norway, which does not belong to the European Union but has set ambitious climate targets modeled after the European Union’s, is in the throes of a robust domestic political debate about how much longer it can exploit its North Sea oil and gas resources.
The European Commission’s climate package aims to reduce gas consumption by a third by 2030, compared with 2015 levels, and virtually eliminate it by 2050. Exactly how to do that is still unclear, and the surge in gas prices is likely to complicate those efforts.
The gas question complicates domestic politics. Hungary and France have elections next year. In Germany, higher gas prices could create tension in the future government between the Greens, who are hoping to push for a swift exit from coal, and the Social Democrats, who ran on a strong social justice platform.
“Any politician who says this will be simplistic is unrealistic,” said Bas Eickhout, a Green Party politician from the Netherlands and member of the European Parliament. “We are rebuilding our economy. That is a huge transition. The phasing of that transition is tricky and has vulnerable moments.”
José Bautista contributed reporting from Madrid.