Energy Security for Europe

No, the Crimea crisis does not mean Germany needs a national gas reserve of the kind called for by the Foreign Trade Association for Petroleum and Energy in Germany in its recent statement. Even though we import two-and-a-half times as much natural gas as we can store from Russia each year, we will be far less easy to blackmail than would appear to be the case at first sight, as long as we act in a consistent fashion.

For almost 40 years, a large share of the natural gas market in Germany has been supplied from Russia. Shortly before the fall of the Berlin Wall, almost half of every cubic metre of gas used in Germany came from the then Soviet Union. At the same time, the Federal Republic of Germany has built up gas storage facilities capable of holding about 20bn cubic metres.

Dependent on Russian natural gas? Over the short term, we will be acting from a position of strength

But dependence is not a straightforward issue. When it comes to energy supplies, it is usually a factor for both sides. The Russian economy is firmly in the grip of the country's fossil energy monopolies. The trade in natural gas is dominated by long-term contracts that cannot easily be called into question unless Russia wishes to permanently gamble away the trust it enjoys as an energy supplier on the world markets. It is difficult to imagine that Russia would be able to build new pipelines to the Asia-Pacific region within a short period of time while simultaneously abandoning its penetration of the well developed network of gas pipelines in Europe.

And quite irrespective of these considerations: The permanent loss of Germany as a purchaser would hit Russia noticeably harder than Germany over the medium term. In the end, it would not be desirable for us, but something we could cope with. According to estimates from the Federation of German Wholesale and Foreign Trade (BGA), Russia would lose revenues of US$100m a day if the EU stopped importing Russian energy products. We should therefore be aware that we are definitely acting from a position of strength. Our gas storage facilities are currently 60% full, and our import structure can be modified. With Norway and the Netherlands, there are gas producers close at hand that could help us out in the medium term, at least.

The resource revolution as a locational advantage

What will be much more decisive, however, is the massive potential Germany and the EU have to reduce their dependence on imports of fossil resources generally. The EU Heads of State acknowledged this strategic challenge at their last summit: 'The plan should reflect the fact that the EU needs to accelerate further diversification of its energy supply, increase its bargaining power and energy efficiency, continue to develop renewable and other indigenous energy sources and coordinate the development of the infrastructure to support this diversification in a sustainable manner, including through the development of interconnections.'

However, the diversification of energy supplies can at best be a medium-term strategy because the potential sources of supply are limited, particularly in Germany's immediate European neighbours. It is hardly to be expected that new terminals for liquefied natural gas (LNG) will be constructed rapidly now, especially as, according to the most recent calculations from the International Energy Agency (IEA), the hype about fracking in the USA has proven to be a short-lived phenomenon. By contrast, in view of the known limits on the biosphere's ability to absorb emissions, any expansion of coal production would be so disastrous from the perspective of climate policy that it would not be an acceptable option.

For Europe, energy security will involve becoming independent of fossil imports

The future will lie with the consistent pursuit of a comprehensive resource revolution. Its economic and technological potential could permanently strengthen our industries' competitiveness. After all, we should be aware that we are living on a continent that has almost completely exhausted its fossil reserves in the last few decades. However, this fact is not a burden, but an opportunity.

As far as Europe is concerned, enduring prosperity will involve drastically reducing our dependence on fossil imports. The Crimea crisis is just one warning sign, but a sign that must not go unheeded. Germany and Europe's economic and energy policies must be systematically designed to insulate us from the volatility of the international raw materials markets. In order to make the flows of money and webs of relationships between the states that purchase raw materials and the countries that produce them transparent, it would be desirable for Germany and other European states to join the Extractive Industries Transparency Initiative (EITI).

It is a long time since zero-emissions scenarios were utopian fantasies

In the context of our dependence on foreign resources, some of the discussions about the costs of transforming Germany's energy system appear truly petty. In the EU, we spend €1bn on the import of fossil resources every day. This is money that is not available to accelerate the expansion of Europe's interconnected power grids or systematically refurbish our building stock. In the power sector, as a consequence of technological developments driven by the Renewable Energy Resources Act (EEG), photovoltaics and wind power are available in the short term as cost-effective energy carriers whose use incurs practically zero marginal costs for fuel inputs.

We would be capable of making the transition more quickly if we merely had the will to do so. After all, the facts have been on the table for a long time now: For instance, older buildings are responsible for 95% of the energy consumed in the buildings sector today. The potential energy savings are gigantic. A programme of tax incentives to promote the energy-efficient refurbishment of buildings with the goal of tripling the refurbishment rate to 3% instead of the current 1%, could drastically cut our demand for heating in the medium term. It is a long time since the zero-emissions city was a utopian fantasy, rather than a real scenario, one that has been examined by various studies from the Fraunhofer-Gesellschaft, Siemens and the Wuppertal Institute over the last few years.

Apart from the modernisation of our building stock, a structural transformation in mobility, particularly in our urban areas, is leading us in this direction. 'We have to turn car-cities back into people-cities that are tranquil, have a minimum of traffic, and are largely free of emissions,' as Professor Hans-Jörg Bullinger from the Fraunhofer's City of the Future project says, talking about a future mobility system that will see the networking of a range of climate-friendly transport modes. The Fraunhofer-Gesellschaft is advocating the adoption of a roadmap for e-mobility in our cities.

The European way: increasing energy productivity and the fossil-fuel phase-out

If such scenarios are to become feasible, however, we need policymakers to create appropriate parameters: The EU should not only aspire to increase its energy productivity by 2.1% a year, but actually take action to achieve this target at last. And if we negotiate a free trade agreement with the USA, it should provide for a 'fossil-fuel phase-out' that puts an end to the dramatically high subsidies for the extraction and protection of fossil energy carriers. Around the world, these subsidies currently amount to US$523bn a year. After many years of state-supported, discounted gas imports from Russia and the dramatic consequences that are apparent today, Ukraine can serve as a cautionary example. Within the EU, by contrast, 70% of new investments in power plants and the development of energy carriers were spent on renewable energies in 2013. We are therefore on the right path, we just have to carry on following it consistently as part of a common overall strategy. Incidentally, other actors are not sitting on their hands either: China now produces more power from wind than from nuclear power plants and will install markedly more photovoltaic capacities than the whole of the EU in 2014. In a recent statement, the Chinese Premiere, Li Keqiang, literally declared 'war' on the wastage of resources. We in Europe do not have to strike such a belligerent tone. It will be quite enough for us to respond confidently to the signs of the times.

This article was originally published in German by www.green.wiwo.de and in English athttp://www.dieterjanecek.de.