Left out cold in a winter of discontent: Gas price crisis highlights the need for urgent transition to renewables
As the winter season was beginning to unfold, households in many European countries were wondering whether they could afford to turn on the heating. In countries such as Spain, Italy, the United Kingdom, the Netherlands, Belgium and others, citizens are facing soaring energy bills. Given the volatility of the fossil fuel energy market, this situation is unlikely to change in the near future. An urgent phase-out of fossil gas in favour of renewable energies, however, would benefit both people and the planet.
European gas markets experienced record-high prices after a number of concurring factors hit gas supplies to Europe over the past twelve months. The gas price crisis had a knock-on effect on electricity prices, which, in turn, were passed onto consumers by energy companies. Households are faced with rising energy bills as they are going into the winter.
This situation highlights Europe’s vulnerability to volatile fossil fuel prices. Fossil fuels are not only unsustainable for damaging living conditions on earth. They are also no longer a reliable and secure energy source to keep homes warm, provide electricity, and power the economy.
Countries all over Europe have been impacted, especially in Northern Europe which operates a large number of gas-fired power plants and is most dependent on gas imports. However, given the close links between European power markets, the price rises will be felt across the continent. Extreme price peaks are likely to become even more common if Europe stays dependent on volatile fossil fuels.
Today’s soaring gas prices could be a tipping point. Although the current gas price crisis is due to market volatility with a lack of supply yet with high demand, an ongoing or increasing dependence on gas will only exacerbate the problem.
The solution to the crisis is a structural shift: We must end burning harmful fossil fuels and transition to modern, clean energy instead. The European Union’s Green Deal plans show that Europe is ready to lead the world by cutting fossil gas use by a third by 2030 and delivering an unprecedented rollout of wind and solar power. Citizens in Europe have long embraced this transition: Recent surveys show overwhelming public support for new, clean sources of energy.
Governments carry the responsibility of protecting their citizens. Citizens today are not only exposed to the volatility of the fossil-fuel energy market, but also to the damage to people’s and our planet’s health that is caused by burning fossil fuel. It will be up to governments to harness the power and resources of the European Union’s Green Deal in the interest of current and future generations. This means renovating buildings, upgrading homes to clean heating and ensuring the provision of new wind and solar power needed for the energy transition.
The European Green Deal is the framework for ensuring Europe’s energy future. A modern energy system, which is powered by wind and solar and backed by reliable storage and demand management, can ensure the security of supply unaffected by geopolitics, market manipulation and, of course, the limitations of finite resources.
More than half of the G7 nations have now committed to clean electricity by 2035. Europe can now step up to match this commitment, which will mean phasing out fossil gas over the next decade. European leaders should seize the opportunity to break free from unreliable and polluting fossil energy.
The ECF network
The ECF has been working closely with grantee organisations across Europe to understand people’s concerns and public sentiment on energy, and to advance the green transition that ends the dependence on volatile fossil fuel markets. The results of such projects include:
- Polling by YouGov shows that Europeans support new wind and solar projects in their local area. 86% of people in Europe are in favour of the construction of new wind and solar projects near where they live.
- An in-depth study by Ember, which ascertained that the increase in gas prices is a result of a combination of factors. Among these are:
- the depletion of gas storage levels due to cold weather conditions in the northern hemisphere;
- the increase of demand and, subsequently, of prices in Asia and Latin America which led to liquefied natural gas (LNG) shipments being delivered there rather than to Europe;
- rising global energy demand following the lifting of Covid-19 restrictions;
- lower fossil gas supplies from Russia, which exacerbated with rising European demand.
- A call-to-action by the European Consumer Organisation (BEUC), which was prompted by research results underscoring the need to accelerate the transition to a renewables-based energy system to guarantee affordable energy for European consumers and the reduction of polluting carbon emissions.
- An op-ed by the think tank E3G, which called for three urgent steps to be taken by Europe to increase energy security and affordability: a clear focus on reducing gas demand, investment in clean infrastructure that supports renewables, and ensuring that markets share out costs and benefits fairly in this new system.
A look into the future
The volatility of gas prices, which has been ongoing for almost a year, is likely to continue in the short term as different parts of the global economy ramp up at different speeds. Moreover, extreme weather patterns, such as sudden cold snaps and hurricanes, will invariably impact supply and demand throughout this winter.
Yet the solution is at hand. What it requires is, above all, political will: Building up renewables and investing in the infrastructure that is needed for a low carbon world will reduce the dependence on volatile fossil fuels and offer nations and citizens with more energy security. It will also be a huge step toward greener and healthier future that could start today.