‘This is wartime and wartime requires war economy measures’


The ongoing war in Ukraine has not yet disrupted gas supply from Russia to Europe, yet an energy crisis is looming. A leading renewable energy expert has warned that if the current negotiations between the two countries end up being a dead-end, the conflict may change the energy landscape of Europe and possibly of the world for long into the future.

“This is wartime and wartime requires war economy measures,” LUT professor of solar economy, Christian Breyer, told pv magazine. “Preparation for the worst case is mandatory in such a situation, as rational decision making on the Russian side cannot be expected anymore. As long as the energy is still delivered the case is severe, but not yet the worst-case scenario. Whenever the Russian side would stop the energy exports, then they may never come back.”

Breyer stressed that there are few reference points for the current situation, which is a core characteristic of a wartime economy – where stability lies at the core of decision making. He said that at a minimum, high energy costs should be expected, with fossil gas prices higher than €100/MWh and crude oil of higher than $100/barrel.

“For a short period of time some higher coal-based electricity generation may have to be accepted for balancing some lack of fossil gas,” Breyer said. “On the full value chain greenhouse gas emissions including methane emissions of natural gas the overall effect may be not that strong, as the direct methane leakage is often neglected, while the higher overall air pollution of coal with heavy metal emissions is an additional price to be paid.”

Breyer added that the scheduled phase-out of the remaining nuclear power plants in Germany should not be on the table since massive investments for the prolongation of their operation due to security issues would have to be considered. In contrast, he advised investing in options such as rapidly adding wind electricity, more heat pumps, more solar PV, and more battery-electric vehicles. “All these options substitute gas and oil imports which may be at risk in the worst-case scenario.”

The crisis, according to the professor's first estimates, may last for years, if there is no change on the side of the aggressor. “With a return to peace the most severe threats of the crisis may be removed as well, however, the present situation may lead to preparation for the worst-case. In such a scenario, the distortion would remain for several years, and the only real solution for the short-, mid-, and long-term would be a massive emergency ramping of renewables,” said Breyer. “The biomass-based waste, residues and by-products shall be checked for biogas and biomethane conversion, as this can substitute fossil gas directly, using the existing infrastructure. Some extra fossil LNG imports may be not avoided right now, however, newly build capacity shall be constructed in a way that they could be easily switched to e-ammonia, e-methanol, or e-kerosene, as these are the bulk fuels and chemicals which will be required for the long term.”

According to Breyer, measures to address the looming energy crisis should be taken for the entire European Union. “There would be the chance to deploy between 50 and 100 GW of wind and between 75 and 150 GW of solar in a very short time,” he stated. “This requires full capacity utilization of all value chain elements, and massive further manufacturing expansion. It will also require capital inflow, and guarantees for several years that the output is taken up by respective projects, driven by energy security policies.” The impact of additional wind electricity, solar PV and in combination with heat pumps will be the substitution of fossil gas-based electricity generation but also a direct substitution of fossil gas for space heating with such additional electricity to be used for heat pumps, not in all but many European countries.

Extremely fast ramping would be required for an effort of such a scale and would also require turbo speed wartime permissions for projects. “We know that many projects are in the project development since many years, thus they could be well accelerated,” Breyer went on to say, noting that emergency permits are now known from the pandemic and may be used currently for avoiding cold buildings in the upcoming winters. “The ramped annually newly built capacities are required for several years on such high levels, so that extra imports of fossil LNG can be reduced again,” he added. “We are talking about wartime measures.”

Grid expansion should also be accelerated and hybrid tenders for wind and solar plus storage should be implemented, so that grid congestions can be further reduced with batteries. Developers should be helped minimize risk through project financing, clear income steams with clear premium fees, contracts for differences, feed-in tariffs, tenders, so that the income risk can be minimized. “Massive political backing is required to get the permitting, manufacturing and financing ramped,” Breyer emphasized. “We also need battery manufacturing, chips, and faster manufacturing for EV batteries, and in particular a massive expansion of heat pumps manufacturing, with the exchange of gas and oil boilers not only in individual buildings but also in district heating.”

Heat pumps may be the real game-changing factor, according to Breyer. “We need huge amounts of heat pumps across Europe,” he highlighted. “There may be adaptations required, as in older buildings higher temperature levels are required as in new buildings. This may be not fully possible by heat pumps, so heat pumps and electric boilers in combination may be required. For demand flexibility, a combination with thermal energy storage may be required, as we learned from oil and wood boilers. However, a ramping up of the heat pump industry on a much larger scale will be required.”

Yesterday, the German government announced dedicated actions to accelerate renewable energy ramping, and a 100% renewable electricity target by 2035, based on a broad set of measures addressing all energy demand. “This implies a mid-decade target of at least 10 GW per year of new wind onshore, 20 GW per year of new solar PV, plus wind offshore, and the legal upgrade of renewables as important for the public interests and security,” Breyer concluded. “Let’s hope that many countries draw comparable conclusions.”



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