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A winter energy chaos that never was: renewables & efficiency avoid crisis

When rumors of a Russian invasion of Ukraine were turning into war logistics along the border in real-time, a friend of ours, a Paris-based independent photographer, had decided to go rogue and travel to Ukraine, convinced that the war was a fait accompli since 2014 that about to escalate soon.

I didn’t think so, but soon the war started, and he ended up selling one of his first images to Time magazine, which ran it on its cover a few days after.

About one year or so before the invasion, I had finally met Swiss-Italian journalist and political analyst Giuliano da Empoli. A former advisor of Matteo Renzi who happened to live in Paris as well, Da Empoli had not published another book yet. However, he appeared at events and signed articles in France and Italy, offering political advice on the side through Volta, a Milan-based think tank he leads.

We were meeting because I had become his translator for Spain after he published The Engineers of Chaos, an astute exploration of the convergence of populism and digital tools that seemed to emanate from places such as Italy (he had described his country as “the Silicon Valley of populism,” whereas the French newspaper Le Monde saw it as “Machiavel in Silicon Valley”). I recognized Da Empoli when I saw him sitting by the door of the Café de Flore, with his small, elegant demeanor and groomed curly hair of a young intellectual surprised by middle age.

Having a coffee with one of the finest political experts

Our conversation went in all directions. I remember asking Giuliano da Empoli about his projects, and he mentioned he was about to finish a reality-fiction manuscript for Gallimard. Then when the Ukrainian war was about to start, there it was, Da Empoli’s book, so timely it seemed surreal. Le mage du Kremlin (The Wizard of the Kremlin) was an enticing, disturbingly credible reality fiction account of Vladimir Putin’s inner circle and one of his most important fallen angels, the enigmatic Vladislav Surkov (Vadim Baranov in the book).

I read it early, though the book soon became a best-seller. I congratulated Da Empoli, and he replied elegantly. Reality fiction and geopolitics seem to go hand in hand regarding Russian affairs. Or, put by Da Empoli in Le mage du Kremlin,

“You see, the Soviet elite, basically, looked a lot like the old Tsarist nobility. A little less elegant, a little more educated, but with the same aristocratic contempt for money, the same sidereal distance from the people, the same propensity for arrogance and violence. We cannot escape our own destiny and that of the Russians is to be governed by the descendants of Ivan the Terrible. You can invent anything you want, proletarian revolution, unbridled liberalism, the result is always the same: at the top there are the oprichniki, the tsar’s watchdogs.”

But Putin and his circle would soon realize that they had underestimated Ukraine’s resilience and determination, as Volodymyr Zelensky would soon let the world know when he replied to a tweet by President Biden that he didn’t need a ride but as much ammunition as possible asap.

“Appear weak when you are strong, and strong when you are weak.”

This quote from Sun Tzu seems to apply to the apparently weakened, apparently chaotic European Union, especially when big problems materialize: the debt crisis of the early 2010s, the refugee crisis following Syria’s implosion, Brexit, or the toothless, uncoordinated action following Russia’s attack on Ukraine after annexing Crimea almost one decade ago.

Did Putin read War and Peace?

Game theory looked different from Berlin before Russia’s full-scale invasion of Ukraine in February 2022. Europe’s most populous county and biggest economy had finally leveraged its soft power in Central Europe after its reunification and the EU’s expansion to the East, pushing the bloc’s border all the way to Russia.

From Moscow, geopolitics looked differently, especially from Vladimir Putin’s perspective: encouraged by the potential influence of online misinformation upon the least adapted to globalization in the Western world, Vladimir Putin miscalculated about the country’s invasion of Ukraine and also about the reaction of both the Ukrainian government, State apparatus, and population. Lessons of history, from Napoleon’s Russian invasion to the Third Reich’s, had not weighed in Putin’s dismissal of the difficulty of invading a gigantic country whose population seems determined not to let itself be invaded.

Suddenly, Putin’s image among an eclectic group of fringe right-wing sympathizers internationally didn’t seem as strong as the narrative around illiberal democracies had suggested in the years prior. Few analysts expected that the EU’s perceived weakness and the illiberal drift of Eastern EU members such as Poland and Hungary would mean little to populations that had kept a vivid collective memory of Soviet “peaceful” occupation during the Cold War, especially after Prague’s Spring in the late 1960s.

Not only former members of the Warsaw Pact (the collective defense treaty of the former Communist bloc) had become a part of the EU, but the Baltic countries, former Soviet territories, had joined in, convinced that the EU and NATO were an opportunity for development and safety away from Russia’s orbit, but also a commitment to open democracy. Russia’s invasion convinced public opinions from former Eastern Bloc countries of the advantages of being a part of the EU, and also rekindled NATO’s weakened raison d’être.

When things get rough in Europe

The Russian invasion also proved the soft spots of the European construction: Josep Borrell, High Representative of the Union for Foreign Affairs and Security Policy, has played the same weak role during the crisis as Ursula von der Leyen, president of the European Commission, reminding the public that, when things get rough, European powers play high-stake cards on their own. Germany’s realpolitik in Mittel Europa had also included Russia, thinking that gas imports through the dedicated Nordstream pipeline could shield the country from potential trouble beyond UE’s Easternmost borders.

Germany’s bet on discontinuing nuclear power by ramping up renewables and keeping a legacy energy mix that maintains a bigger coal and gas dependence than any other EU big economy suffered its harshest test since World War II, as tensions with Russia and the sabotage of the Nordstream pipelines have forced the country to align with the rest of the EU powers in search for a more autonomous energy mix. As the reality in the front expressed itself, Germany finally followed other European countries in producing more ammunition and promising tank deliveries, avoiding direct involvement in the conflict to elude any unorthodox Russian escalation.

Russia might have miscalculated Ukraine’s resilience as an adversary. Yet, its economy resented less than Western analysts expected, aided by early energy price hikes and strong demand from countries such as Iran, India, and China that compensated for the market loss to sanctions. The US and the EU expected long, chaotic winter months across Europe in which countries would bid to overpay to import gas from other sources to avoid generalized blackouts and potential civil unrest.

Nothing like that happened and, more than descending into chaos, the EU realized during the last year that its energy dependence on fossil fuels in general and from Russian gas in particular is not as decisive as geopolitical experts from Brussels and especially Washington had thought. It was an oddly dry and mild winter across the European continent, though this fact on its own cannot explain the EU’s ability to both drastically cut its energy consumption this winter and the acceleration of renewable energy installed capacity and production.

When things go well

But was it luck, or rather a result of sound government planning? The Economist acknowledges that tightening gas taps hasn’t worked for Putin as a deterrent weapon against Europe’s and NATO’s support of Ukrainian war efforts.

Russia used to supply 40-50% of the EU’s natural gas imports, but neither the war nor inflation nor the fear of market shortages caused the expected tensions and disruptions across the continent. It was, at least in part, a consequence of good planning: the EU had set a target of reducing natural-gas consumption by 15% over the winter, and the measure will remain in place for one more year, and the bloc met its initial target as gas demand from the beginning of December 2023 to the end of February 2023 was 16% lower than average.

The weather also helped. This winter was warmer than in recent years. The Economist used a model to predict how much of the energy consumption reduction came from a milder-than-usual winter, showing that temperatures alone explain only around a third of the true reduction in gas demand this winter:

“After accounting for the weather, Europeans still reduced their gas use by around 12%. In absolute terms, the Netherlands, Britain and Germany cut back by the most: gas usage per person was 24% lower in the Netherlands, 18% lower in Britain and 7% lower in Germany, compared with predicted levels.”

Rising costs due to inflation and the public’s willingness to be more energy conscientious amid the current geopolitical changes may have accelerated a trend already in place across Europe. Direct and indirect incentives for the use of renewables, perceived as naïve by the United States Administration and energy experts, are beginning to pay off, as subsidies (to buy electric cars, replace old HVAC systems with gas pumps and other energy performance improvements in households, offices, and industrial operations) help in reducing the fossil fuel dependence beyond the current struggle.

Is UE’s energy policy naïve or actually realistic?

Another expert in international relations and energy geopolitics, the Economist Adam Tooze, argues in an article for Foreign Policy that the US’ dominant perception of the European Union as a dysfunctional multilateral organism unable to establish credible military and energy policies on its own is more a comfortable projection than reality.

The European “energy crisis that isn’t” consists of a caricature created in Washington that doesn’t conform to reality. It’s true that the EU has doubled down on green energy policy since 2020 and that the sources that have exploded in installed capacity, solar and wind, are intermittent by nature, though data shows are now a reliable source of electricity in most of the EU.

It’s time for the US doomsayers that were waiting for the energy chaos, Adam Tooze writes, to adapt their narrative to reality:

“Let us start with the simple fact that Europe’s lights have stayed on and no one has actually gone without power. Europe’s situation should not be confused with that of Texas in 2021. The story of 2022 European energy policy is one of stress, not of open crisis and blackouts.”

Also, the most important contributor to this success isn’t Europe going back to “reliable sources” like coal, but a reduction in demand, more renewables, and more efficiency in transportation, buildings, and factories:

“All told, European electricity consumption fell by 3.5 percent in 2022. Between August 2022 and January 2023, gas consumption in Europe was 19.3 percent lower than in the previous five years.”

Who’s leading who in energy policy?

Not even a drastic reduction in hydropower production due to a lack of rainfall, combined with the problems of France’s nuclear supply, affected the overall energy supply:

“Meanwhile, there is absolutely no sign of any retreat by investors from renewables, rather the reverse. Far from falling back in love with gas, oil, and coal, the world clearly realized in 2022 that fossil fuels are an expensive and fickle trap. Investment in solar in Europe is booming. The latest data from SolarPower Europe, an industry trade body, shows that nearly 32 gigawatts of solar capacity were installed across Europe in 2022, a growth of 33 percent from 2021. In terms of generation, 2022 will go down in history as the year in which solar and wind overtook every other form of electricity generation in Europe—gas, nuclear, or coal. And 2023 is likely to see the trend continued.”

And, as Adam Tooze suggests, this doubling down isn’t caused by excessive politicization of energy production due to climate change but because it also makes economic sense. Wind and solar “offer power at unbeatably low cost” that doesn’t depend on subsidies as critics allege:

“European wind power now operates on such a profitable basis that it returns revenue to European treasuries.”

More than showing an inability to look after itself and navigate complex geopolitical situations, the EU’s energy sector is showing the lead to the rest of the world. A growing number of US analysts agree with Adam Tooze and think that if one position seems entrenched and politically motivated, away from the economic and technological opportunities in one gigantic sector of the world’s economy, it seems to be held not by Brussels but by Washington.