Ukraine shows need to rebalance EU energy mix

The crisis unfolding in Ukraine is another illustration of the urgent need for Europe to rebalance its energy supply mix, according to the European Photovoltaic Industry Association (EPIA).

Frauke Thies, policy director for the European solar sector lobby group, said it is time the European Commission took note of its own recently published impact assessments on the effect of a rise in renewable energy across the political bloc.

"Certainly what is happening in the Ukraine should affect the European energy mix in future," Thies told pv magazine.

The policy director said in February the EC published an impact assessment which predicted a Europe drawing 30% of its energy from renewables in 2030 would require 26% less gas imports. When the renewables figure was expanded to 35% the scale of gas imports required fell 28%. "It is time the EC took more notice of its own impact assessments," added Thies.

Richard Chatterton, a gas and carbon associate at Bloomberg New Energy Finance, told pv magazine, although the threat of an interruption to European gas supplies piped through Ukraine by Russia could boost the cause of renewables in the long-term, any short-term gaps in supply could be bridged by alternative means.

"In terms of the EU’s energy security, the Ukraine crisis is likely to have a more profound impact in the long-term than in the immediate future," said Chatterton. "A disruption to gas supplies coming through Ukraine, similar to the outages during the 2009 Russia-Ukraine gas dispute, could be easily mitigated by channelling Russian imports via Belarus and Nordstream, and by running down storage volumes that are at multi-year highs following the unusually warm winter just gone."

‘Stage 3’ sanctions would have impact

And the Bloomberg analyst said any large scale switch-off by Russia is extremely unlikely, adding: "A further escalation of the conflict in Ukraine or the imposition of ‘stage 3’ sanctions by the EU on Russia’s energy sector would have a much greater impact, as would the threat of supply interruptions entering the winter months.

"It is important to remember, however, that stage sanctions on Russia’s energy sector are unlikely, based on historical precedent. Throughout the Cold War, Russia continued to export gas to Europe and European buyers continued to pay for it. This economic interdependence is even stronger today so it is difficult to envisage either Russia cutting off supplies or the EU slapping sanctions on Gazprom.

Renewables, shale, LNG and new gas supplies

Chatterton agreed the crisis will have a greater effect in the long-term, and told pv magazine: "The real impact is likely to be seen in the long-term, as the EU is galvanised to develop alternatives to Russian gas, and reduce overall gas consumption through increasing energy efficiency and fuel switching. The long-term trends are likely to be greater sourcing of gas from alternative sources – such as through the southern corridor, the Eastern Med [Mediterranean], U.S. LNG [ligquified natural gas] and domestic shale – and an increase in the share of renewables in power generation."

But the EPIA’s Thies said the modular nature of PV projects meant the technology could be rolled out relatively quickly as an alternative energy source now rather than deacdes into the future.

"It’s a question of political will," she said, "After the crisis started there were discussions about changing gas supply routes and creating storage for fuels, which would seem to be quick fixes but to really solve the problem we need long-term, durable solutions and renewables are clearly one of them. The modular nature of PV power means it can be installed relatively quickly."

The EPIA policy director said it was difficult to establish exactly what was happening in the Crimea region of Ukraine which has been effectively annexed by Russia but it was clear PV projects are being hit by the crisis.

"We do know that payments to solar projects in Crimea have stopped," added Thies, "we don’t know whether it is correct to say they have been revoked but they have certainly stopped."