Wind and solar growth save €12 billion since Russia invaded Ukraine
https://ember-climate.org/insights/research/wind-and-solar-growth-save-e12-billion-since-russia-invaded-ukraine/ – February 22, 2023
Wind and solar stepped up to cut gas costs by €12 billion
Russia’s invasion of Ukraine revealed the high cost of relying on fossil fuel imports—but renewables growth helped avoid a worse crisis
In the year following Russia’s invasion of Ukraine, the EU has faced enormous pressure to mitigate energy security risks and protect itself against the soaring costs of fossil fuel imports.
Gas prices skyrocketed to an unprecedented high of €313 / MWh as Russia cut pipeline exports to the EU. This caused the cost of producing power from gas to reach over €650 / MWh. With coal prices also surging, the increased cost of fossil fuels pushed up electricity prices and triggered escalating inflation and a cost of living crisis across Europe.
This volatility added new urgency to move away from fossil fuels for power generation in the EU. But even before the full impact of newly announced policies comes into effect, wind and solar have played a vital role in achieving the primary objective of cutting Russian gas dependence.
Record wind and solar
Boosted by growing capacity and favourable weather conditions, wind and solar produced a record level of EU electricity since the start of the war. Their combined generation was 546 TWh, an increase of 50 TWh (+10%) compared with the same period in 2021-22.
In total, wind and solar have accounted for 23% of total EU generation since the war began, for the first time overtaking the share of gas power, which provided 19%.
The record wind and solar generation helped the EU weather challenging conditions in the power sector. Alongside the rush to replace Russian gas, nuclear and hydro generation suffered significant shortfalls across the EU last year in the wake of drought impacts and plant closures. This created a large gap in generation, much of which was met by wind and solar and a fall in demand as fossil fuel prices spiked.
Savings from avoided gas imports
With over a fifth of EU electricity coming from wind and solar, progress towards a clean energy system helped avoid an even worse crisis.
The 50 TWh annual increase in wind and solar alone reduced the amount of gas required for electricity generation by 90 TWh (9 bcm) and avoided gas costs of €12 billion, based on the average TTF day ahead price for the period.
Without the total 546 TWh of wind and solar generation, the EU could have required an additional 993 TWh (94 bcm) of gas to meet electricity demand since the start of the war. This equates to gas costs of €135 billion.
The EU has imported 330 bcm of gas since the war began, with 54 bcm (16%) coming from Russia. While total gas imports have only decreased by 5% (19 bcm) compared to the same period in the previous year, Russian imports have plummeted by 60% (82 bcm). Prior to the invasion of Ukraine, the EU relied on Russia for around 40% of its imported gas. This has dropped substantially to 16%.
Moving faster towards energy independence
Russia’s war in Ukraine has fundamentally changed the EU’s attitude to using fossil fuels for electricity. In response to the war, EU governments identified fossil fuels as a threat to national security, energy affordability and climate goals. The solution to all three: build more clean power, faster.
European policy since the invasion reflects this new energy landscape. Most European countries increased their renewable electricity ambitions in response to the crisis, announcing higher targets, shorter project timelines and supportive policies. This is matched by increased urgency on the EU level as well. The European Commission’s REPowerEU proposal aims to double solar capacity by 2025 under its 45% renewable energy target for 2030, and expects 69% renewable electricity by that date.
However, as the devastating war continues, this is no time for complacency. Targeting higher wind and solar shares is critical but, more importantly, these increased capacities must be delivered. Only then can Europe displace fossil fuels in order to achieve lasting energy security and independence.