The Energy Crisis Taking an Ugly Turn
The energy crisis in Europe is getting worse as Russia reduced gas deliveries and the continent’s winter reserves would not be sufficient to meet its needs. The demand for liquefied natural gas (LNG) from Europe reached levels previously unheard of, as the continent weans itself off Russian energy as a result of the sanctions placed on Russia. This comes after years of a gradual reduction in the use of fossil fuels by countries in Europe to meet climate goals. However, the trend reversed as Moscow took control of the tap.
Can the US Save Europe From Energy Crisis?
Despite being the largest exporter of natural gas in the world, the US is unable to fully save Europe due to political, economic, and technical barriers. The supply to Europe and the rest of the world is constrained despite the expansion of the industry. Nevertheless, according to GlobalData, the exports of mining and fuels by the US are predicted to reach $230 billion in 2022, indicating an increase of more than 4%. The UK and the EU obtained the majority of those exports by paying premiums, replacing Asia as the biggest importers of US LNG. Thus, at the current cargo prices, less developed countries such as Bangladesh or Brazil are unable to compete with Europe. As a result, exporters are leaning towards breaking contracts with poor countries to reroute fuel to Europe, getting higher profits despite penalties. After Russia cut gas supplies to Europe, Germany unveiled measures to conserve natural gas by planning to restart coal-fired power plants and providing incentives to companies for reducing their consumption of natural gas.
A Threat to Green Energy Transition
The energy crisis in Europe is worsening due to a scorching heatwave, lack of hydropower, corrosion issues at French nuclear reactors, and other factors. Plans for green energy in Europe are being put on hold as efforts are made to address the effects of the Russia-Ukraine conflict, high inflation, and supply chain problems following the COVID-19 pandemic-induced lockdown. Countries in Europe are beginning to implement policies to assist the adoption of renewable energy sources, and investments started to follow. For example, Germany passed a renewables bill in July that included increased wind-power ambitions and better permitting.
Don’t wait - discover a universe of connected data & insights with your next search. Browse over 28M data points across 22 industries.
Access more premium companies when you subscribe to Explorer
Contact the team or request a demo to find out how our data can drive your business forward