Economists Kemfert, Stagl: It can also be done without Russian oil and gas

by Martin Auer

"Europe can secure the energy supply even without Russian energy supplies", explained Professor Claudia Kemfert, Head of the Department for Energy, Transport and Environment at the German Institute for Economic Research at a press conference on Thursday. “This can be achieved with a triad: diversification of imports, energy saving and forced expansion of renewable energies. The current crisis must be the starting signal for an accelerated Green Deal towards more renewable energies.”

economist Professor Sigrid Stagl, Head of the Competence Center Sustainability Transformation and Responsibility (STaR) at WU Vienna, confirmed: “The accelerated energy transition is a collaborative effort that will prove economically beneficial in the long term. Switching to renewables is economically worthwhile”

The Ukraine war shows how urgent the energy transition is

The press conference was organized by Scientists for Future Austria and Diskurs-Das Wissenschaftsnetzwerk. While Russia's invasion of Ukraine has exposed our dependence on and vulnerability to fossil fuels, there has long been a need for a real energy transition. Climate protection requires not only the exit from Russian oil and gas, but the farewell to oil and gas altogether. And as quickly as possible.

Security of supply plans need to be developed

Kemfert, who is also a professor of energy economics at Leuphana University in Lüneburg and is involved with Scientists for Future, continues: “With the coal embargo and the oil embargo currently being negotiated, the European Union is increasing the pressure on Russia. However, since Russian natural gas deliveries are also threatened, plans for security of supply must be developed. Also because Russia could cut the supply at any time.

Phasing out coal and phasing out nuclear power remains achievable

When it comes to electricity, Germany shows that in the coming year 2023 a secure power supply is possible even without Russian energy supplies. The shutdown of the last three nuclear power plants can and should take place as planned in December 2022, and the goal of the coalition agreement of an early phase-out of coal by 2030 also remains achievable.

Out by 2030: Scholven coal-fired power plant
Photo: Sebastian Schlueter via Wikimedia, CC BY-SA

There is savings potential for natural gas

In the case of natural gas (which has many other areas of application in addition to electricity production), deliveries from other natural gas exporting countries, e.g. B. Holland, compensate part of the Russian exports. Pipeline and storage infrastructure can be used more efficiently. On the demand side, there is a short-term savings potential of 19 to 26 percent. In the medium term, a push towards renewable heat supply and higher energy efficiency is necessary. If potential savings are used to the maximum and at the same time deliveries from other natural gas supplying countries are expanded as far as technically possible, the German supply of natural gas is secured even without Russian imports in the current year and in the coming winter of 2022/23.

Manage infrastructure more efficiently and adjust demand

For the whole of the European Union, natural gas supply has so far relied to a large extent on deliveries from Russia. This dependency was particularly high in Germany, Italy, Austria and most of the countries in Eastern and Central Europe. However, natural gas does not play an equally important role in all of these economies. Model calculations show that the European Union can compensate for a large part in the event of a complete failure of Russian natural gas supplies. In the short term, the focus is on the efficient management of existing infrastructure, the diversification of procurement contracts and measures to adjust demand. Fixed LNG terminals would be counterproductive because they would create a lock-in. Floating terminals, on the other hand, can be helpful.

It is also important to ensure social balance. Capping gas prices would be counterproductive as it would not reduce energy consumption. Instead, there must be an income increase for low-income people that offsets the increased costs.

Accelerate the expansion of renewables

In the medium term, the expansion of renewable energies should be accelerated in the context of the EU Green Deal, including a timely phasing out of the use of fossil natural gas, which would further strengthen European energy security.

Stagl: Austria has been resting for too long

Prof. Sigrid Stagl, who is also a member of the specialist board of Scientists for Future Austria, continues with criticism of Austria's waiting too long:

“Austria rested for too long on the high share of renewables in electricity generation and did too little to (1) further increase the share of renewables in electricity and (2) get rid of fossil energy sources for heating and mobility. In order to keep the economic costs low, one should have planned ahead, announced measures in good time and implemented them according to the agreed long-term plan. Instead, Austrian decision-makers chose to push the big levers backwards again and again in the hope that later governments and future generations will tackle them. Timely long-term planning would have reduced the economic costs, since both industry and private individuals could have planned changes in good time. The long refusal to do the right thing has brought us into the current dilemma.

The numbers are missing

There are currently no publicly available studies or figures that would allow a precise estimate to be made of how quickly and at what cost Austria could exit Russian oil and gas. Therefore, exact, well-founded statements are impossible, which of course leaves a lot of room for speculation.

Use existing energy more efficiently

What is certain is that the exit from fossil energy sources is also necessary in Austria for climate protection and is currently urgently needed in solidarity. A comprehensive mobilization is necessary. Panic is not necessary, but reassurance is harmful. Unfortunately, production capacities and heating systems cannot be changed over from one day to the next. Comprehensive energy efficiency measures in companies, thermal insulation of buildings and changes in behavior have a short-term effect and have significant reduction potential. However, there remains a residual demand that must come from other sources in the short term in order to become independent of Russian energy supplies in the near future. In any case, a comprehensive mobilization is necessary.

Speed ​​limits and reductions in individual traffic save oil

The substitution of oil is much easier in Austria than in Germany. So far, we have only obtained a good 7% of our consumption from Russia. The infrastructure does not pose a particular challenge when it comes to oil either and allows rapid substitution from other sources. For reasons of climate protection, the potential for savings (e.g. speed limits, measures to reduce private transport) should first and foremost be exploited. According to Energy Minister Gewessler, Austria stopped purchasing Russian oil in March.

picture of Felix Mueller on Pixabay 

Investments in liquid gas infrastructure would tie us to fossil energy for even longer

The situation for gas is much more complex, which requires a differentiated view of the various areas of use of gas in Austria. In addition to space heating, areas of application include cooking, industrial processes and power generation. Here, gas can be replaced easily and quickly in different ways.

Expensive liquid gas is also often brought into play as an interim solution to replace Russian natural gas. However, this requires new fossil infrastructure (liquefied gas terminals) outside of Austria. However, such a substitution would not only drive up energy prices, which can hit poorer households particularly hard and pose challenges for the competitiveness of Austrian industry, but it is also to be feared that investments in this area will delay the energy transition. It is therefore important not to build any new infrastructure for gas and oil, if possible, in order to prevent new fossil path dependencies.

The best measure is energy saving

However, expensive interim solutions such as liquid gas are also being replaced particularly quickly by industry. Any delays in emissions reductions due to the phase-out of Russian oil and gas should therefore be compensated for by the accelerated switch to renewables. The best measure is and remains energy saving.

Green electricity for industry, mobility, cooking and heating

In the medium term, 100 percent of the power supply will come from renewable energy sources. At the same time, industrial production, mobility, cooking and heating are being switched to electricity-based technologies. Economically, this changeover has been desirable for decades. Renewable technologies are now so cheap that they are also economically preferable. More research is needed, such as how solar energy can be stored not only in batteries and hydrogen. At the same time, we need social structures and economic incentives that make sustainable action easy and attractive. What is needed is a rapid reduction in total energy consumption by 25 percent and a reduction in gas consumption by 25 percent as well. This must be possible by around 2027 or, with great effort, by 2025. A training offensive is also necessary to increase the number of competent technicians.

You also have to communicate where the journey is going: After a phase of great effort, we would have low electricity prices, the added value would remain in the country and we would be less dependent.

Cover photo: pxher CC 0