The Russian invasion of Ukraine could provide the 'jolt' that gives renewables the scale needed to deliver the EU’s climate policies
History may look back on Russia's invasion of Ukraine as a watershed moment in the fight against climate change as EU countries rush to adopt greener power motivated by energy security.
That shift in policy could spur a flurry of private renewables deals in the short term, and more public share sales once markets stabilise.
The war has underscored how geopolitics is inextricably linked to energy policy and climate outcomes.
In March, the European Commission unveiled its 'REPowerEU' plan to reduce the bloc's energy dependencies over concerns that Russia could turn off gas supplies in retaliation to sanctions from the EU and US as well as to avoid indirectly funding the invasion by buying Russian fossil fuels.
Building on the EU Green Deal targeting climate neutrality by 2050 announced in 2019 and the subsequent 'Fit for 55' interim 2030 climate plan last year, REPowerEU measures include quicker deployment of wind and solar, further developing a hydrogen market and streamlining authorisations to fast-track new power projects.
In May, the Commission is due to publish a detailed recommendation on how fast permitting for renewable energy projects would operate in practice. It is already considering revising up its ambitions by targeting a 45% share of renewable energy by 2030 up from 40%.
In 2021, the EU imported around 140 billion cubic metres (bcm) of gas by pipeline from Russia and 15 bcm of liquefied natural gas. The total 155 bcm of imports accounted for almost 40% of the EU's total gas consumption, according to the International Energy Agency (IEA).
To quantify the scale of the challenge, the EU's Green deal will cost €1 trillion ($1.1 trillion) until 2030 to put the continent on the path to climate neutrality, €279 billion of which will come from the private sector.
The full version of this article was first published by Environmental Finance on May 1, 2022. You can read it here
Managing Director, Co-Head of Greentech Industrials and Infrastructure in EMEA
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