A joint initiative of the academies of science acatech, Leopoldina and the Union of the German Academies of Sciences and Humanities, the Academies’ Project “Energy Systems of the Future” (ESYS) seeks to promote a secure, affordable and sustainable energy supply. In the discussion paper “The Impacts of the War in Ukraine on Energy Prices and Security of Supply in Europe”, an interdisciplinary ESYS working group comprising experts from science, industry and civil society explores the short and medium term implications of a partial or total suspension of Russian energy exports to Europe. The experts also discuss whether and how security of supply can be guaranteed without Russian energy imports and the implications for German and European energy policy. The paper is based on two scientific reports commissioned by ESYS.
The key findings are as follows:
- It will not be possible to fully meet demand for natural gas in the short term: If Russian gas imports are suspended in the next few months, Germany will be unable to meet up to 30% and Europe up to 25% of peak winter demand (based on 2021 demand figures). This shortfall is due to a lack of transmission capacity. Even if enough gas could be sourced, there are not enough LNG terminals and pipelines to bring it ashore and distribute it in Europe.
- The gas infrastructure must be expanded and modified: Europe’s gas infrastructure, including both LNG terminals and pipelines, should be expanded and modified as soon as possible. Modifying compressor stations to enable reverse flow in the pipelines is a highly effective measure that can be implemented relatively quickly. New LNG terminals are needed to bring more gas ashore in Europe and can also help to diversify the gas supply.
- Energy demand must be reduced: If Europe is to end its reliance on Russian imports, it must reduce its demand for natural gas. Over the next few years, residential and industrial gas demand must be reduced through energy efficiency measures (e.g. building insulation) and substitution measures such as the use of electric heat pumps. In the electricity sector, coal-fired power generation could also help to reduce gas demand in the medium term. The EU ETS will continue to limit the emissions associated with electricity generation at a European level.
- Renewable energy growth is key: As well as being vital to ending reliance on Russian energy imports, faster expansion of renewable energy will also help to keep energy prices in check. However, this growth calls for significant investment that will be even harder to deliver due to the economic impact of rising energy prices.
- Energy prices could remain above 2020 levels in the long term: Since energy prices in Europe are likely to remain high in the medium to long term, it will be necessary to ensure that the energy supply is socially equitable and take measures to safeguard industrial competitiveness. Ways of preventing plant closures must be explored, especially in the short term. A joint European gas procurement policy is also important in order to prevent intra-European competition.
- Close European cooperation is vital: To maintain security of supply in Europe, it will be necessary to adopt a pan-European strategy for expanding and operating the gas infrastructure. While Germany is heavily reliant on imports from other European countries, its role as an important transit country and the fact that it has the largest gas storage capacity in Europe mean that it is central to the entire continent’s gas supply.
The discussion paper is based on two reports commissioned by ESYS. Produced by the Institute of Energy Economics at the University of Cologne (EWI), the report “Szenarien für die Preisentwicklung von Energieträgern” (Scenarios for the Price Development of Energy Carriers) discusses different medium-term energy price trend scenarios. The second report was produced by a consortium of Fraunhofer IEG (Fraunhofer Research Institution for Energy Infrastructures and Geothermal Systems IEG), Fraunhofer SCAI (Fraunhofer Institute for Algorithms and Scientific Computing SCAI) and TU Berlin. It discusses whether and how, if Russian imports are suspended, security of supply for gas in Europe can be ensured by upgrading transmission infrastructure such as pipelines, compressors and LNG terminals. The report was published under the title “Europäische Gasversorgungssicherheit aus technischer und wirtschaftlicher Perspektive vor dem Hintergrund unterbrochener Versorgung aus Russland” (Technical and Economic Outlook for the Security of Europe’s Gas Supply if Russian Imports are Suspended).