From Deep Crisis, Profound Change - RMIhttps://rmi.org/insight/from-deep-crisis-profound-changeBefore Putin’s War, Europe had sought to cut its fossil-fuel demand mainly to protect the climate, through policies and targets like Fit for 55. Despite prudence and profitability, those plans faced considerable internal opposition from a range of actors. Thus, Nordsteam 2 was built even after Russian bullying made clear the security risks of depending ever more on Russian gas.
Putin’s War changed all that. German policy shifted more in ten days than in the previous ten years. The German government swiftly brought forward its net-zero target for the electricity sector by a decade to 2035. The German utility E.ON and Fortescue Future Industries overnight created a partnership for the delivery of up to 5 million tons per year of green hydrogen from Australia to Germany. On March 8, 2022, the European Commission published an initial plan to cut Russian fossil fuels completely out of the European energy system well before 2030 — tightened two days later to 2027 — and, remarkably, to cut imported Russian gas by two-thirds in 2022. Meanwhile, in case Russian gas were cut off, the IEA published an emergency plan to show how Europe could cope, then another for an oil emergency — in effect, testing how Europe could not need oil and gas more than Putin needs their revenues (45 percent of Russia’s federal budget in January 2022).
The European Commission plan ramps up the key tools of greater efficiency, additional renewables, more electrification, and better policy. By 2030, it implies the installation of 900 gigawatts (GW, billion watts) of solar and wind as well as 30 million heat pumps and quadrupled green hydrogen. Policy includes faster permitting of solar and wind, new market structures, and more resiliency. As these plans come to fruition in a continent outraged by Putin’s War, Europe will keep enlarging the boundaries of its energy transition to encompass whatever the solution requires. The original green growth agenda is being rapidly refined in a loop of expanding, self-reinforcing, and trans-ideological ambition.
It is completely feasible to cut Russian fossil fuels out of European supply long before 2030 simply by growing solar and wind and increasing efficiency. In 2020, solar and wind provided 541 TWh of electricity to Europe, enough to displace 5 EJ of fossil fuels. At 15 percent annual growth rates (a little higher than the 2010–2020 13 percent European average), solar and wind would be able to displace an additional 12 EJ/year of fossil fuels. Meanwhile, European energy demand has been falling at 1 percent per year for a decade. Another decade of decline would cut demand by 5 EJ/year.