Europe has been struggling with an energy crisis for three years: NYT reports on the problems
Date: 2025-02-03 Author: Кирило Загоруйко Categories: ECONOMY
Three years after Russia's full-scale invasion of Ukraine, which caused an energy crisis in Europe, the region has changed the way it produces and stores energy. Gas from Russia, which has long been Europe's lifeline, has been replaced by other sources.
The New York Times writes that wind and solar energy production has increased by about 50% since 2021. New nuclear power plants are planned across the continent. However, Europe's energy security remains fragile.
The region produces far less natural gas than it consumes and remains heavily dependent on other countries. Natural gas, which determines the price of electricity, costs about four times more than in the United States. High energy prices are creating a strain and forcing factories to close, weakening Europe's economy.
Prices have soared in 2022, driven by concerns that Russia would cut off gas supplies to Europe entirely, among other factors. Countries have banded together to share fuel and other energy sources, and to build or modify infrastructure to transport it. The efforts are expected to reduce Europe’s reliance on Russian gas to 8% of supplies in 2025 from 35% in 2021, according to Anna Galtsova, an analyst at research firm S&P Global Commodity Insights.
Norway is currently the largest supplier of gas, mostly through a network of pipelines. But Russia has become a major supplier of liquefied natural gas, second only to the United States in 2024.
Europe has been building more renewable energy projects to fill the gaps. Before Russia’s intervention, about a third of Europe’s electricity came from renewables, helped by a surge in wind and solar power. Wind and solar power will generate more electricity than fossil fuels for the first time in 2024, according to S&P Global Commodity Insights.
But switching to renewables is expensive. While overall energy prices have fallen from their 2022 peak, gas and electricity prices remain high. Renewables have made significant progress, but still require significant investment to fill the gaps when the wind and sun are not shining.
The main alternative to Russian gas is liquefied natural gas, but it is a relatively expensive option. Because gas is vital for industry, heating, and power generation, giving up Russian supplies is difficult.
Europe is at the mercy of global markets, locked in a race for LNG with countries like China and South Korea. Prices recently soared to their highest in a year, hurting businesses and worsening Europe’s cost of living crisis.
The largest source of liquefied natural gas is the United States, mainly terminals on the Persian Gulf coast, which provide almost half of Europe's supplies. There has been a boom in the construction of LNG terminals in European countries, especially in Germany, which had none before the energy crisis.
While imports of Russian gas via pipelines have fallen sharply, Europe has increased purchases of Russian LNG that comes through the port. There has been little time to develop new resources to compensate for the loss of gas from Russia.
