The impact of the Russo-Ukraine war on the European new energy industry
Norway-based DNV classification society pointed out in the latest analysis report that the war in Ukraine will not affect the progress of Europe's energy transition. On the contrary, countries will accelerate the development of renewable energy, which will accelerate the energy transition and decarbonization process, as they hope to get rid of their dependence on Russian natural resources more quickly.
Remi Eriksen, President and CEO of DNV Group, said: "During the new crown epidemic, European leaders had clear thinking; in the face of this energy crisis, European leaders once again applied clear thinking to accelerate Europe's energy transition. This time, Europe is reducing It also improves energy security.”
Furthermore, the analysis points out that energy emissions in Europe would fall by 2.3% in the period 2022-2030, or 580 tonnes, compared to a path without the Russo-Ukrainian war. DNV said this is due to the growing prominence of low-carbon energy sources such as renewables and nuclear power, as well as improvements in energy efficiency, while economic growth will slow in the short to medium term.
Sverre Alvik, Research Director for Energy Transitions at DNV, commented: “The war in Ukraine has shaken energy markets, but decarbonisation remains a theme. Energy companies will have to grapple with meeting short-term oil and gas supply shortfalls and avoiding stranded assets in the longer term.”
DNV further pointed out that as energy companies try to take advantage of the market opportunity of high energy prices and supply gaps, there is a risk of overcapacity in the oil and gas industry before 2030, and the conflict between Russia and Ukraine will cause problems such as a slowdown in GDP growth and a slowdown in the globalization process , which could further dampen demand. Therefore, DNV is long-term bearish on the oil market.
As the major country in Europe most dependent on Russian energy: Germany, on the one hand, the German government has repeatedly emphasized that Germany does not plan to completely ban the import of Russian fossil energy in the short term, but on the other hand, Germany’s long-term decoupling actions are also responsive. The Ukraine war forced Germany to fundamentally rethink its energy policy. In a first reaction, Germany suspended the controversial Nord Stream 2 pipeline project, announced the creation of strategic coal and gas reserves, pledged to build a liquefied natural gas (LNG) import terminal and agreed to support the expulsion of Russian banks from the SWIFT payment system. Russia's attack on Ukraine has added a new dimension to Germany's ambitious goal of increasing the share of renewable energy in its energy system. The notion that Germany needed to swiftly eliminate fossil fuel imports shifted almost overnight from a moral obligation and long-term environmental protection measure to a matter of national security and short-term economic stability. Renewable energy sources such as wind power, solar photovoltaics, bioenergy, hydropower have since become "free energy" which could allow the country to significantly reduce energy dependence and lay the foundation for economic decarbonization.
In addition, as the cost of batteries increases to push up the cost of electric vehicles, the promotion of electric vehicles will also be affected. As a result, the target of 50% of new car sales in Europe being electric will be delayed from 2027 to 2028. The Russia-Ukraine war indirectly accelerated the development of new energy industries such as electric vehicles, solar photovoltaics, wind power, and energy storage in Europe. As a global leader in the field of switching and metering, IVY has recently launched a series of EV&PV new energy accessories, such as leakage monitoring sensors, single/bistable relays, power modules, current transformers, DC meters, etc. Favored by manufacturers in the energy industry, it has become popular in the market. If you want to know more about IVY new energy accessories, please visit https://www.ivy-metering.com/
