Clean Energy Now?: The Future of European Energy After Ukraine

Clean Energy Now?: The Future of European Energy After Ukraine

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Good afternoon, everyone. Thank you so much  for joining us today at this lunchtime for   today's edition of Hopkins at Home. The  session that we're going to have today is   called Clean Energy Now: The Future  of European Energy After Ukraine.   I'm thrilled to be here with professor Jonas  Nahm from SAIS to have this conversation.   Professor Nahm is an assistant professor of  Energy Resources Environment at the Johns Hopkins   School for Advanced International Studies,  at SAIS. His research interest focuses on the  

intersection of economic and industrial policy,  energy policy and environmental politics.   He studies the role of the state and processes  of industrial restructuring that a company policy   responses to climate change and clean energy  transitions more broadly. He is the author of the   2021 book titled Collaborative Advantage: Forging  Green Industries in the New Global Economy. And in   the book, he uses the development of renewable  energy sectors to investigate the political   economy of innovation and industrial development  in highly globalized industries. Jonas completed   his post-doctoral fellowship at the Watson  Institute for International and Public Affairs   at Brown, and holds a PhD in political science  from MIT and speaks both German and Mandarin.   So again, we're thrilled to be here today. I'm  going to speak just for the first few minutes  

about the newly founded Ralph O'Connor Sustainable  Energy Institute. And then we will transition into   the conversation about the impacts on the energy  transition as a result of the Russian conflict. So   Jonas, if you wouldn't mind just  advancing to the first slide.   ROSEI, the Ralph O'Connor Sustainable Energy  Institute, just celebrated its first birthday   last Friday on Earth Day. Essentially, the mission  of the Institute is to pull together faculty  

from across Johns Hopkins University to work on  these challenging technical policy and systems   issues surrounding climate change. Next slide. I'm going to take just truly only two or three   minutes to walk through a couple of important  data points that will set the context for   what Jonas will then speak about. So the first  slide here is just to show why is it that ROSEI is   focused on the energy transition. And the reason  for that is that if we think about emissions  

in their totality, far and away the largest source  of emissions are power generation, so electricity   and heat. And then the second one is another area  that we're focused on, which is transportation.   Next slide. Another important data point,  since we're going to be speaking about Europe   today, is just to look really quickly at the  per capita emissions that result from different   countries. So what you can see here is that  the US is far and away the largest per capita   emissions producer and Europe is quite  a ways down the list. Next slide.   So just to give a really quick snapshot  of five launch initiatives that we   have at ROSEI to get ourselves started, these  really signal the focus areas that we're most   interested in. We've got one initiative that's  focused on negative carbon. How do we actually   pull down carbon and reduce emissions? We have  one that's focused on really materials production   around solar technology, so new materials for  solar. We have an initiative that's focused on  

creating the world's new power systems that  are going to be zero carbon power systems.   We have an initiative that's focused on wind  farm flows, and we have a fifth initiative that's   focused on the education side of the university's  mandate and mission. So how do we inculcate these   important issues, important lessons, really around  climate and energy into curricula? Next slide.   So going along with those five initiatives, there  are three main buckets of work that we are engaged   in. The first one is around sustainable  chemical transformations. There's some  

really basic chemistry that we're working on in  order to achieve the zero carbon goals that the US   and other countries have. The second one is around  sustainable energy generation that work really   focuses on large scale solar and wind production.  And then the final one, which came up in our five   initiatives again, is what does a sustainable  society look like? This is the non-technical   part of our work around systems, markets and  policy. And then the final slide that I have   is just to show you what our future headquarters  will likely look like, or at least some very close   iteration of what you see in front of you. So  we'll be thrilled to welcome you all to our  

zero carbon office of the future. So with  that, I'm going to turn the floor over to Jonas   again to share his thoughts and research  on this question of the energy transition   impacts from the Russian conflict in Ukraine. Thank you, Ben, for this kind introduction.   I'm excited to share my thoughts on the clean  energy implications of this ongoing crisis in   Europe, which of course is a humanitarian  crisis and it's a geopolitical crisis,   but it's also an energy crisis. I think it's one  whose implications are not quite clear. So I won't   have any predictions for the sure yet, but I will  highlight a few different, I think, takeaways that   hopefully will guide our thinking about how to  approach this and what to take away from it.   I'm saying this is an energy crisis and not just  a geopolitical and humanitarian crisis because   Russia is by far the largest energy supplier  to Europe. And of course, Europe is now   questioning these ties, and that particularly  Germany has built up over decades really.  

Russia by far is the largest  supplier of natural gas to Europe,   primarily through pipelines that have been built  over time. It's also the largest export of crude   oil to the European union, much, much larger than  any other of these countries as you can see here.   It's also supplying a large proportion of coal  to the European Union. So if you think about   the fossil fuels that exist in our energy system  today, Russia is at the center of all of them in   supplying Europe with energy from these sources.  And Europe itself, doesn't actually have a lot of  

domestic resources that it could draw on. So  Russia has historically filled that role. So this   relationship, this interdependence and dependence  on Russia for energy imports has of course been   questioned, not just since the beginning of the  conflict in Ukraine, but Americans have admonished   Europe, and particularly Germany for a long  time for supporting this dependence on Russia.   Now of course, the urgency of this situation  has led people to question the relationship   with Russia and its energy ties. In that context,  I want to make three points today that I'll go   through relatively quickly and then hope we can  have some time for our conversation afterwards.   The first point really is that Russia and Russia  natural gas is a really central part of European's   clean energy transition and has been for  a while. So we can't really think about   the current plans to advance non-fossil  fuels in the European Union without really   also thinking about Russian gas as one  of the bridge fuels that enable that   transition. The second point I want  to make is that Europe is currently  

basically using this crisis to double down on  its goals, to move away from fossil fuels, but   its goals have already been so aggressive before  this crisis that I don't think there's a lot   of wiggle room to drastically accelerate them. And then finally, even if these plans are actually   successful and if Europe successfully meets  its targets, particularly by 2030 to transition   away from fossil fuels, this transition will not  actually solve geopolitical tensions and global   interdependencies might trade some in the European  Union. Some dependence on Russia for natural gas,   for a dependence on other parts of the world for  raw earths and then minerals to actually make   the technologies we now then need for non-carbon  sources of energy. So if you look at the European   clean energy and climate goals, they actually are  quite ambitious and they were ambitious before   the beginning of the Ukraine war. The  European Union has set out to reduce  

greenhouse gas emissions by 55% by 2030.  It has plans to be climate neutral by 2050   in line with its commitments under the Paris  agreement. And in order to achieve these targets,   it wants to double essentially its share of  renewable electricity production by 2030 and   it wants to drastically improve and increase  its share renewables and heating and cooling.  

Currently, most of Europeans or a big chunk of  European residential heating is from natural   gas. It also has plans to increase the  share of renewables and transportation   by 2030 from 6% to 24%. That's both biofuels,  hydrogen, but also vehicle electrification and   then using renewable energy to make that  electricity. Part of that basically means  

reducing coal consumption quite drastically over  current levels, reducing oil and gas consumption,   somewhat less than coal consumption and increasing  renewable energy quite drastically over that time   period. And natural gas is central to  that transition. Natural gas is a key   fuel for household heating. One third of  household energy consumption is gas for   heating in the European Union. The industrial  use of gas has declined slightly, but instead   we've used more gas for power generation. Gas is incredibly helpful there because it can be   scaled up and down very quickly. So it's a  good compliment to the variable renewable   energy sources that are on the grid,  so wind solar. It's also been a very  

popular fuel in that sense because it has much  lower greenhouse gas emissions, even though   it still has them than coal power plants that  it's currently replacing. So in that sense, gas   has filled this medium term gap in climate  strategies, as you're moving away from these high   carbon intensive fuels like coal and you  are introducing greater and greater shares   of renewables while storage technologies are not  fully scaled, gas has been playing this in-between   fuel that helps pull this all together.  The problem for the European Union is   that domestic gas production is declining very  quickly. So Europe for a long time has relied   on big gas resorts in the Netherlands, those are  basically used up and the Netherlands also has had   problems with earthquakes caused by this. So  they've actually shut down gas production in  

parts of the country as a result of this. Gas has been this bridge fuel in the sense   for this broader clean energy transition,  but it's one that can no longer really be   sourced domestically. So as a result, there's been  increasing investment in natural gas supplies from   Russia, which is the closest provider. There's  been an increasing pipeline network, including   a couple of pipelines that were built in recent  decades that directly connect Russia to Germany,   to the Baltic Sea and the latest one Nord Stream  two has been a controversial one that basically   the US has been warning against since the Reagan  administration. The pipeline's now completed,   but it never went into production or into use  because of the onset of the Ukraine conflict.  

There is a huge dependence on Russian natural  gas in this transition in Europe, but it's not   equally spread across European countries. So it's  primarily Eastern and central Europe, Germany,   Italy, and some of the Eastern European  countries that use Russian natural gas,   Spain and Portugal, for instance, primarily use  LNG that's imported from elsewhere in the world.   So this dependence on Russian natural gas has  been controversial, as I said, even before   this conflict. There was large opposition to  Nord Stream two project in the United States,  

also in the UK and also in the Eastern European  countries that were transit economies where gas   was previously being piped through. So  the German position on this for a long   time was that in order to secure peaceful  relations, Germany would have to engage   Russia economically and buying fossil  fuels from Russia was one way to do that.   That's a tradition in German foreign policy  going back to the 1960s, really. So this   argument essentially has now been disapproved  and has failed as a foreign policy strategy,   but the infrastructure essentially, and the  repercussions of this decades of foreign policy   doctrine there is one that we now have to deal  with. The big problem here is essentially that  

there's not really a clear alternative to  Russian gas for Europe. In the short run,   oil and coal can be replaced more easily.  And so, that's where the European Union is   already discussing sanctions, but attempts to  find alternatives to Russian gas are much harder   in part because their infrastructure issues for  LNG. So for instance, a lot of the European LNG,  

so LNG is short for liquid natural gas. It's essentially a process by which you take   natural gas, you cool it down so far that it  becomes a liquid, and you put it on a tanker.   You can ship it around the world and then you  have these terminals that essentially warm it   up again, and then gasify it and put it into a  pipeline. These terminals exist for instance,   with spare capacity in Spain, but Spain has  only very, very few connections to the rest   of the European gas grid. So you could use  those LNG terminals to import LNG, but then it   would be difficult to spread it internally. More  importantly though, there are very limited spare   LNG capacities in global markets. So Europe is  now pushing into these markets and trying to buy  

more LNG to get away from Russian natural gas, but  that's displacing other economies like Thailand,   Bangladesh, that are being basically outbid  in this bidding war for liquid natural gas.   It might lead to increased coal consumption  elsewhere in the world. Essentially,   there's a supply constraint here. So the European  Union trying to shuffle things around isn't really   yielding any more natural gas supply. It just  means that other people will be able to buy less  

if Europe offers more money in the short run that  is. So we have this dependence on natural gas   in this transition as the fuel that was supposed  to get us to the other side, as we scale up the   use of non-fossil fuel energy sources, but in the  short run, there are few alternatives. So this is   the central constraint that the European Union is  now dealing with as a result of this conflict.  

One public response to this has been basically to  double down on the goal to move away from fossil   fuels and to see this dependence on imported  fossil fuels as a reason to increase the use of   non-fossil sources of energy. So renewable energy,  winds, solar, to invest in storage so that this   energy can be stored, upgrade the grid, electrify  transportation. So you don't need to import oil to   run your cars essentially, and so on. That's been  one public response basically. We need to double  

down on this in order to reduce dependence on  Russian imports and all of these different areas.   Essentially, one big plan here has already been  on the books before the crisis and this REPowerEU   Initiative essentially wanted to  accelerate the European energy transition.   And the idea is that it could lower European gas  consumption by 100 billion cubic meters by 2030.   The European Union is currently importing  about 150 ECM a year from Russia. So  

these existing transition plans could essentially  take care of this two thirds of that energy   that's coming from Russia. And then the remainder  could be sourced through LNG on global markets.   In order to get there on the books already  before the crisis where these plans have triple   current installed with the PV capacity, and some  of them have been scaled up now in response to the   crisis, there's been talk about additional scale  up of methane, bio methane as a source of energy   green hydrogen, and so on. There's new funding  to roll out heat pumps for residential heating   to European households that are currently  using natural gas. So these are essentially   goals that were already on the books in some  form that have now been [inaudible 00:19:29],   accelerated and scaled up in response to  the crisis at the European Union level.   Individual member countries have also, of  course, looked at their energy strategies   and have decided to be more ambitious. One big country that's also been criticized   a lot for its dependence on the Russian gas has  been Germany. Germany has increased its renewable  

energy target for electricity generation to 80%  by 2030, it's increased its goals for offshore   and onshore wind and solar. It's increased  its incentives for residential solar that   were supposed to be phased out. And they now are  basically staying on the books for a while. And   their new program's hydrogen, particularly for the  industrial sector, which has heat needs that you   currently can't really meet with electricity. So  you need some fuel like hydrogen or natural gas to  

meet those needs. There are attempts to do this,  but you can tell from the slide that these are   attempts to fix this by 2030. So this is nothing  that's going to be in place by next winter.   Other countries have done similar things.  The Netherlands have announced they are   doubling offshore wind capacity. France  has increased subsidies for heat pumps,  

scrap subsidies that were in place for gas  heaters, efficient gas heaters, it's extending the   lifespan of nuclear reactors. Italy's permitting  new wind parts. There's a discussion in Belgium to   extend the lifespan of nuclear reactors that were  supposed to be shut down. That's also one of the   big critiques that Germany has been dealing with.  Germany decided to shut down its nuclear power  

sector after the Fukushima accident in Japan.  And that of course, has made it more reliant   for base load on fossil fuels, including coal and  gas, and so increased this dependence on Russia.   They've said that the processes advanced so  far that they can't really change track at   this point because the last reactors were  supposed to be shut down later this year.   So this fits into a broader European strategy.  One of the research projects we've been working   on at Hopkins since the beginning of the pandemic  was to look at how countries are investing their   recovery funds and whether they're using economic  recovery funds during the pandemic to invest in   essentially climate related industries.  So you can see here that the  

European Union spent almost half of its money  on climate related industries, including   building a domestic battery supply chain,  but also increasing the installation of   renewable energy technologies and so on. Other countries like Germany have done the   same thing. So this is not new. Countries  were investing in these things before   the crisis, but it's become more urgent  as a result. For instance, this is   a map showing investments in battery production  plans in the European Union as part of this   broader European battery alliance. Again, this  has geopolitical reasons. I think there's a need   or a perceived need to become more self-sufficient  in this space and basically have domestic battery   supply chain for electric vehicles, but also  for on-grid storage. And then there's of course,  

this climate aspect to use these batteries  to reduce the use of fossil fuels.   Now, the broader problem is that in the short run,  this reliance on Russian gas is very difficult   to avoid. So if you look at projections by  the international energy agency and others,   you can see that even with this scale up of  the use of heat pumps of energy efficiency,   of basically controlling temperatures and  lowering heating needs and increasing LNG   imports from elsewhere in the world within a year,  you still have by the substantial reliance on   gas imports from Russia. This is something that  we can fix in the short run without also changing  

overall consumption quite drastically,  particularly in the industrial sector.   The last point I want to make is that for all  these difficulties that I've outlined. So the   fact that gas has been central to this energy  transition strategy that it's very difficult   to replace in the short run, even as the  European Union is collectively doubling down   on its goals to become a more climate trendy  economic block. Even if all of those things   are successful, the transition itself will not  really solve these broader geopolitical tensions   and global interdependencies. And it might be  trading dependence on Russia for gas imports  

for dependence on China, for instance.  For key ingredients, you need to make   solar panels and batteries and all these other  things, magnets for wind turbines and so on.   Currently, the world really, not just the  European Union, is quite highly dependent on   China for the technologies you would need to move  away from dependence on Russian imported energy.  

China makes two thirds of the world solar  panels. It's by far the largest manufacture   of wind turbines and components that go into wind  turbines. It's one of the largest suppliers and   markets for electric vehicles. Although actually  the European Union has recently caught up.   It makes at least two thirds in this figure,  I have to update all the time, but it makes   at least two thirds of the world's lithium iron  batteries. So there's just a key dependency here   off the world and the European Union on another  big economy with difficult relations currently   for key technologies. So you see this not  just in the products, but also in the key   ingredients. So polycrylic [inaudible 00:25:27] is  the core raw material used to make solar panels.  

China is by far the largest producer of polycrylic  in the world. Currently there isn't really a   sufficient supply chain outside of China to meet  the needs of the world to make all the solar   panels, to meet all of these climate targets that  we have on the books. That can be changed over   time, but again, it's not something that we have  ready to go at the end of this year. China is also   the world's biggest refiner of lithium. It's  not the biggest lithium minor necessary, but   it has most of the refining capacity and lithium  is of course, the key ingredient for lithium iron   batteries. We often talk about this energy  transition as a way to become essentially  

independent and have fewer of these problematic  relationships with other countries with whom we   may not get along so well. I just wanted to put  that in here as a word of caution that we are   moving away maybe from dependence on Russia. The question is how quickly? But that doesn't   mean that the European Union is then completely  self-sufficient. It may entail new and other  

difficult relationships with other countries for  some of the raw materials, at least that Europe   will need to meet these goals. Just to reiterate  here, as I wrap up, Russian gas is a central   part of this clean energy transition for now, and  Europe is doubling down on its clean energy goals   to move away from this dependency and from  Russia natural gas. But because it has been   so intricately built into this transition  strategy, it's difficult to do that quickly.  

And then even if all of these goals are  met, the transition will not necessarily   solve geopolitical tensions. It will just change  them and shift them to other parts of the world.   I think there's a couple of takeaways and I'm  happy to elaborate on all of them. But one   for sure is that the European energy transition  was ambitious in its plans before the Ukraine war   and they've become even more ambitious now. But  because of these strict goals that were already  

on the books before the war, there isn't that  much room for maneuver, it was already a pretty   rapid and ambitious timeline to get to these  schools by 2030. The transition also was   always going to have a very disrupt effect on  fossil fuel markets. Part of the problem here   is that you have these very strong signals. The key economies are moving away from fossil   fuels, at the same time, you still need them  in the short run. So the investment incentives   for fossil fuel companies to increase supply in  the short run are not there. So you get these  

shortages that you have at the moment where no  one wants to drill more because it's not clear   that these welds are going to be needed in the  long run. But in the short run, you still need   the fuel as you move from one fossil fuel based  energy system to this new clean energy system.   That is a chaos that we always anticipated, but  is now happening more quickly than we thought.  

And then finally, I think the geopolitics  of energy were always complex. And if you   go back in time, we've had major global conflict  over oil supplies. The middle east has featured   prominently here for at least 100 years at this  point, but these geopolitical tensions will   continue to exist in a clean energy future. And  I think what we need to be aware of is that we're   also entering new kinds of interdependencies.  And then I think we need to be politically   very conscious of what they are and what choices  we make in this space. So with that, I think I'll  

wrap up my formal a presentation. I look forward  to a conversation with Ben and all of you.   Thank you very much, Jonas, for that  excellent and thought provoking talk.   I think I was meant to share at the top of  the hour, that we're going to ask people to   put questions that they have into the chat  box, and those will then be shared with us.   Okay, I do already have some questions coming in.  I'll read out the questions so that Jonas and I   can respond to them. Before I do that though, I  want to put an exclamation point, I think, on one  

point that Jonas was making several times  throughout the talk. The remarks were largely   focused on this acute crisis that's unfolding  in Ukraine and is having major ripple effects   in Europe, but really around the world.  But when you back out at a broader level,   what we've been seeing for the past one to up  to two decades really is the move away from   globalization, which was the dominant model  from the end of the Second World War onward.   When you had the creation of all of these multi  lateral agencies and infused into them was the   idea that if we really all get ourselves so  tangled up in terms of business and trade,   and we become reliant on one another for energy  needs and for raw materials, that it would be   a huge disincentive to go to war and to have  conflicts. Clearly, there were many cracks that   were showing in that, as I said, in over the last  couple of decades. But what we are seeing now,  

and again, this is a different conversation, but  is the reemergence of much more nationalist type   politics and much more nationalist type  functioning of the geopolitical system.   This particular example that we're seeing is  a very acute one and one that's making people   question a lot of the assumptions, but we were  seeing this is... It's not a complete surprise.   Jonas was sharing some of the really difficult  negotiations and some of the difficult dynamics   that are going to arise from our dependence on  China. And those will play themselves out in   the decades ahead. So the first question that  we have, which I'll ask Jonas to reflect on,   the question is, what are Russia's energy goals  and how are they affecting Europe's goals?   Russia is hugely dependent on energy as the  key ingredient to its domestic economy. And   these exports are basically all there is  to Russia's economy. If you think about it,  

Russia has five times the population of Canada,  and it has a smaller economy than Canada.   And the energy basically is that economy. So  that's, I think, why there've been such widespread   calls for Europe to put sanctions on Russian  energy imports. Because that is a key source   of revenue. That's essentially funding this war  at the same time as there's support for Ukraine   in the situation. So you're funding both sides of  this conflict. I think Russia has been over time   trying to sell more of its energy to China and  has built, I think by now, pipeline capacity   to support China. But Russia itself doesn't  have, to my knowledge, I'm not a Russia expert  

per se, but I think I've not read anything  about clean energy goals in the Russian economy,   primarily because it is such a key economy  essentially dependent on fossil fuels.   That is the magic sauce that makes Russia take at  the moment. I think if the European Union were to   somehow move away from Russian energy imports,  these exports would go somewhere else on the world   most likely. The question is whether they would  be able to yield the same prices elsewhere in the   world, but you already see India, basically  cautiously tip toeing around this conflict   and then buying oil at below world market prices  because Russia can't really sell it to anybody   else. China, I think, is probably using this also  huge economy, hugely dependent on energy imports,  

would probably benefit from this  essentially and get more access to Russian   oil and gas resources. So I think there  might be a geographical shift to other   export markets for Russia, but I don't  really see a wholesale chain of this   economic strategy in part, because  there are very few other options.   Thanks, Jonas. I'm going to tackle the second  question. It has to do with earthquakes.   Jonas did mention earthquakes that  were caused by drilling for oil.   The question is they've had earthquakes  caused by drilling for oil? I didn't know   that could happen. How does that work?  The short version of that, it would be   helpful to have a geologist with us. But hydro  fracturing technology, also known as fracking,  

while it was initially developed to  extract gas, is also used to extract oil.   So it is the hydro fracking process,  specifically the vertical drilling that's done   that causes seismic activity. I don't know, Jonas,  if you have anything that you want to add to that?   But that's my understanding of how drilling for  both oil and gas have resulted in earthquakes.   Yeah. I think a quick Google will give you lots of  examples in the US as well. This is not a European  

problem only, but I think it's become less  publicly acceptable. In the Netherlands, there   are lots of pictures online of houses with cracked  walls and so on, as a result of essentially gas   exploration and extraction. I think that  essentially caused a political decision to shut   down a lot of the production that Europe had been  relying on to fuel its domestic gas consumption.   But in addition to that, the gas supplies also had  its end. I mean, we nearing its end. So there are  

capacity limits essentially how  much you can get out of the ground.   And on that note, in the US, it's also  been something that's really held back.   Really second generation geothermal technologies,  which are called enhanced geothermal technologies,   where you actually, you do the drilling and then  you introduce moisture into the ground to create   this steam. There were a whole series of pilots  in the state of Nevada in particular, where they   triggered some earthquakes while they were  trying to drill those wells. So, similar concept.   The next one, Jonas, next question asks whether  the electricity transmission network is robust   enough for electricity to flow to those areas  that have been gas reliant in the past, really   up to the present? In other words, is electricity  generation capacity sufficient across the EU?   There are big investments in the electricity  grid across the European Union. In many ways,   they're not moving fast enough because a lot of  the sources of renewable energy are not where   the big demand centers are. You could build  fossil fuel based power generation next to the  

cities where you need the power. But now you're  basically, for instance, bringing in offshore wind   power from the North Sea, and that has to  somehow get to the middle of Europe. So you need   new transmission capacity to get it there. I think  that that's something that they're working on   and it's not going fast enough. I think this might  be another motivation to actually get it done now   more quickly, and so might help these efforts. But  I don't think that actually electricity generation  

and transmission is the key bottleneck here. The much bigger problem that we haven't really   solved is what to do about industrial uses of  natural gas and home heating as well. So there's   a lot of conversations about heat pumps and how  you can use heat pumps that essentially are super   efficient at heating homes using electricity.  But European electricity prices are many times  

what they are in the United States and have been  historically also in order to disincentivize the   use of electricity in residential settings.  There are projections about energy poverty,   what it would cost to use electricity to heat  these homes even if you had the heat pumps at   place. And then there are questions about  whether heat pumps are really viable in all   of those settings technologically, because you  have very old buildings that have some radiators   that heat them. Some of these radiators need water  temperatures flowing through them that heat pumps  

can and principle reach, but do so inefficiently. So then, again, you're at this energy poverty   question, how much does it cost to actually use  electricity instead of gas to heat these homes?   In the industrial sector, there are just lots  of applications where we haven't really figured   out an alternative. Germany is one of the  largest chemical industries in the world,   for instance, that makes key inputs for the  automotive sector, but also for pharmaceuticals,   things like fertilizer. So it has huge impact  on agriculture. So if we were to shut down gas   imports tomorrow and didn't have an alternative  in place for where they could come from,   the ripple effects of this would really hit the  global economy and probably make supply chain   issues that we're currently facing, and that  are causing all of this inflationary pressure   that we're talking about, look quite benign.  So there are lots of places where we're using  

these fuels that are not really obvious to many. I think actually the electricity sector is one of   the places where we have a pretty good handle on  the technology that we need in order to replace   fossil fuels and where we can also manage when  people use energy and when we need to store it,   and give incentives to people to basically do  things that use a lot of energy when there's   a lot of renewables available. It's these other  applications where we haven't really figured out   either a technological alternative or an  alternative that is affordable and that   works for people. Those are big open questions  beyond electricity that are yet to be resolved.   It's also, I think, Jonas, it's a really good  example of where there's dimensions of that   that are really quite geopolitical. So the reason  why, just to come back to the slide that I showed   that was showing, what are the largest sources of  emissions, it's a while before the world really   turns its attention to chemicals production, just  because the emissions aren't on the same scale.  

However, if you are trying to wean yourself  off of Russian natural gas, Russian methane,   then all of a sudden chemicals become a  really big issue, but that is for geopolitical   reasons first and foremost. Again, I didn't  understand this until fairly recently   because I typically, when I was thinking about  the emissions from industrial applications, I was   still thinking about the heating aspect to it. But what Jonas is referring to, just to put a fine   point on this, is actually using gas as the feed  stock for the plastics production. So it is the   main ingredient that is used to produce plastics.  Similarly, in the agricultural space, gas is the  

main ingredient that is used for fertilizer. So  while we've done, I think, a good, certainly not   a great job, but while we've certainly developed  the technologies, as Jonas is talking about, for   ACE load energy generation needs with wind and  solar in some cases like Iceland geothermal,   much less energy has been focused  on those difficult to abate sectors   like industrial chemicals. You hear a  lot about aviation, but in any event.   Something like half of German electricity already  comes from renewables. So if you think about 80%   of electricity from renewables by 2030,  sounds like a crazy target, but actually   they're pretty close already. They've been doing  this despite having fairly terrible weather for   solar generation. So you've just have to  install a lot of solar to get enough power  

and pretty aggressive investments and offshore  wind now in the North Sea. So there's been a lot   of movement in this space. It's these other areas  where I think there's a lot less experience and   a lot more open questions that we have yet  to resolve. I think one additional point here   is also that there's less wiggle room in a sense.  You mentioned initially that Europe has about half   the per capita emissions of the United States.  Energy in Europe has historically been very  

expensive, and that's been in part a result of  this dependence on Russia for energy imports.   Going back to the 1950s, there were very  high taxes on oil and gas and electricity,   charging a lot for energy essentially was also  a strategy to minimize energy consumption in   residential settings. And a lot of this imported  fossil fuels was sent to in industry. That also   means that you now have very little room to  maneuver because people already are using   a lot less energy and it's already very expensive.  So if you're making it more expensive and you're  

trying to get people to use even less, you're  really pushing up against what people's   disposable incomes are able to deliver. There's just less room for a maneuver.   A gallon of gas is frequently $10 in European  settings. So these are prices that I think are   far beyond what we would be willing to tolerate  currently in the United States. So if you add   another five bucks, you have $15 a gallon. At  some point, people have already cut out all of  

the unnecessary driving. So the stuff that's left  is really stuff that is essential for the economy.   I think these are some of the considerations  that people are going through at the moment.   We still have plenty of time for questions.  I just want to thank everyone who's tuned   in though. These are really fantastic questions  that you're asking and super exciting, I think,  

for me and Jonas to see these discussions, these  conversations, and these topics becoming ever more   prominent at John's Hopkins. I'm just super jazzed  about that. I think the next question actually,   you just answered it, Jonas, but  I'll just read it. The question was,   how much of a difference will the European  efforts make on their own? I think Jonas   just gave a pretty compelling answer to that. He was pretty kind about the way that he said it.   I will say, Europeans are really already  doing their part. And I think it's really   up to some of the other very large global  emitters to catch up to Europe and to   incentivize the right sorts of activities  and disincentivize those economically.   Question here on, what are other Eastern European  nations outside of the EU doing to change   energy use? How is their proximity to  the conflict affecting their efforts?   I think a big change there is size,   or a big differentiator across economies  is size. The Baltic nations, which also  

are worried about Russia coming after them next,  very quickly announced that they would move away   from Russian oil and gas imports and are doing  that very quickly. The problem is that their   population is so small that their impact on, or  it's not a problem, it's good for them. Their   impact on global natural gas markets is minimal  because they're not big. For places like Germany  

or France or Italy to do the same thing would  have a completely different impact on the global   market situation. I think a lot of the smaller  countries are actually quite nimble and are   moving away from Russian oil and gas imports. The problem is that's not really an example that   everyone can follow just because of sheer volume  of imports into some of these other places.   Estonia, Libya, Lithuania, I think are shifting  to LNG, liquid natural gas, currently in order to   source from elsewhere. But they're very small  countries with a small population and relatively   minimal energy needs on a global scale. There are  other countries like Hungary that are openly pro   Russia at the moment and have signed new deals  with Russia, long-term delivery agreements,   doubling down on this relationship with Russia.  But I think the rest of Eastern Europe is  

basically also looking for options to move away  from this relationship with Russia. It's just that   the size of their domestic economy determines what  their possibilities are for doing so quickly.   Thanks, Jonas. The next question, I recently  listened to a really good podcast on this next   question, and I'll be happy to find a way to   circulate that. But the question is what are the  potential downsides of other new energy sources?   How degradable are electric car batteries?  Jonas talked about some of the dependencies   that are being created on the supply chains and  the manufacturing in China. It's pretty well known   that for electric vehicle batteries,  the raw materials are similarly   not necessarily in the places we would  like them to be, but that's not our choice.  

The four metals that are used in electric vehicle  batteries are lithium, which is very well known,   nickel, cobalt, and copper. And it just so happens  that Russia is the second largest producer of   nickel in the world. As is widely reported, most  of the world's cobalt, a huge percentage of it   comes from the democratic Republic of Congo. While that's unfortunate and while it is   fundamentally extractive to produce the electric  vehicle batteries, there's a very strong sense   that the electric vehicle battery market  will give rise to a true circular economy,   not in the super near term. It will take probably  one generation for there actually to be enough   metals out there in order to simply recycle the  metals from the old batteries into new ones. But  

there's a lot of hope that that circular economy  will take place. One other thought that I want   to share on that question is, I guess a uniquely  American perspective, which I think is important,   and that is building electric vehicles takes a  lot of resources and a lot of energy. And I do   think that we can't lose the thread about making  our cities actually more pedestrian friendly   and more bike friendly. Because it'll actually  be much easier for us to accomplish our goals   through more public transportation, safer walkways  than it will be through electric vehicles.   I will add, there's a lot of research going  into new battery technologies that for instance,   don't use nickel and cobalt. So Tesla already, I  think, is using, half of its cars have no nickel  

and cobalt in them. I think the US actually is  uniquely equipped to be at the forefront given   this incredible R&P infrastructure that exists in  this country to be a big player here. So there are   lots of efforts out there to try to figure this  out and also be realistic about what it would take   to scale up global battery usage as we electrify  everything. So, do we actually have enough supply   of these different ingredients you need to  make these batteries to meet these targets?   I think there's a lot of promising  research out there. The question is,   how quickly can you do this? And where is not  just the mining capacity for this stuff currently.   Where is it being refined? How does this entire  supply chain flow? The European Union has long   before this crisis really pushed this idea that  climate policy isn't just out the environment,   but it's also an economic strategy and it wants to  position itself as a key player in this globally.  

So they've been investing in a European supply  chain that's supposed to be completely independent   from mining through refining to battery  production, to the electric cars. A big   part of that was essentially concerns  about the future competitiveness of this   European automotive sector that there's  big employer in many European economies.   I think there's lots out there. The question is,  how quickly can you get this stuff to scale? The   urgency of this current situation, I think has  led all of us to look at these targets and say,   where can you accelerate things? There aren't  always great options to do this tomorrow. A lot   of this is long-term stuff. Even just building  a new mind for... We have lithium in the US,  

we could start mining this stuff domestically. But  the permitting process, the actual building off   the mine, these are five, 10 year investments.  This is not something that could yield   production tomorrow. That's a mismatch of the  time scale of some of these broader industrial  

investments and the need that we see right now  to shift away from Russian energy in this space.   I think we're going to probably take three more  questions and then we'll wrap. I'm going to pose   this next one to Jonas. What does the future  of nuclear power look like now in Europe?  

That's a good question and I think  there is no one answer in Europe.   A number of countries, and I think Germany  is the most prominent example after the   Fukushima incident basically decided to shut  down its domestic nuclear industry in part   over concerns over the long-term storage of  spend fuel. And like the United States and   many other places, Germany hadn't developed  really a final strategy for where to put all   of this stuff and then keep it there safely for  hundreds and hundreds of years. So all of that,   essentially after Fukushima culminated in this  fairly rapid policy move to have an accelerated   timeline to shut down existing nuclear. Part of that also was a very emotional reaction.  

Central Europe got a big chunk of the nuclear  fallout from the Chernobyl disaster in the   1980s. I was a child there then. We didn't have  recess in school for a year because of radiation.   So I think people had a very emotional reaction  to the Fukushima incident and then decided that   this wasn't the viable technology anymore. I think  there are places like Germany that are pretty set   on this. There are other places like Belgium  that are equally set, I think, but are now   negotiating at the margins and maybe letting  some of the reactors run a little bit longer.  

There are places like France that have a  very proud tradition of nuclear power and are   not shifting their strategy at all. And then  you have places like the United Kingdom,   which has basically announced that they would now  invest in additional nuclear capacity in part as   a result of this to have low carbon sources  of energy available. These are very different   strategy in different places. And I think they  reflect different domestic politics and different   tolerance levels in the population. I don't think  there's one European answer to this question.   I think this will probably be our last question.  We'll see if we have time for one more,   but this is a little bit of a longer question.  Jonas, let me share this one with you. There's  

been resistance to new land-based wind in  the UK and to new transmission in Germany,   in part due to concern over landscape impacts  and local control. Is public resistance to   industrialization of the rural landscape a  significant obstacle to Europe's renewable goals?   That's a really good question. I think there are  a number of aspects to this. One thing you can do,   for instance, is to basically put these  transmission lines underground. I think   that's the solution that Germany has picked  in places where there's very vocal opposition   to above ground transmission lines before that  reason. You also have to think about the fact that  

a lot of... I mean, Europe already has so much  renewables. So I think actually a lot of the sites   that you can use for onshore wind  are already being used. And if you   talk about these acceleration of goals, what's  really happening is you're taking turbines,   smaller turbines from the 1990s and early 2000s  and you're replacing them with larger ones that   generate more power and have better technology. That's not really changing the impact on   landscape. It's basically the same siding. It's  just different technology in the same space. I  

guess you probably would also have less opposition  to that there. I think a real key new source of   renewable energy has been offshore and Europe has  developed that quite successfully. It's expanding   and pretty rapidly. The UK is now a major offshore  power. Germany is pushing offshore and its North   Sea waters quite aggressively. I think that's in  part because this is a great resource. There's a   lot of wind out there, and so you have very  reliable supply of energy. But it's also a  

attempt to, I think, avoid some of these  conflicts and move to energy sources that are not   ruining the landscape around you. And then solar, I think a lot of it   is residential, it's on roofs. There's lots  of supermarkets and industrial facilities   and parking lots and residential homes that have  a roof space available that can be used. That also  

has very minimal impacts. I think it's important  to take this public resistance seriously and to   make sure that people are involved,  but I think there are also options to   mitigate some of this or get around it in a way. Lastly, I will say, I think a big chunk at least   in the German case of litigation efforts has  been to actually have people involved and also   the benefits from renewables. So if you are  a village that has a big wind park next door,   and some of that revenue actually funds the local  roads and schools and people feel like there's a   real benefit to having this there, then the  opposition also is a lot less. That's about   how you structure the revenues from this and make  sure that people that are going to look at this   wind installation every day actually feel like  they are benefiting from it in a real sense.  

Thank you so much, Jonas. Thank you for your  expertise and your passion on this subject.   Really grateful for that. I also want to just  give our thanks to Will Quinn and Aaron Keating,   who are the wizards behind the curtain  that make Hopkins at Home possible,   and that make it look so good. So thanks very  much to both of you for all the work that you do.   I'll just let you know really quickly.,  The podcast that I referenced is called   Catalyst. Shayle Kann is the host of it.  He covers a lot of the topics that have  

come up in this. I highly recommend it. And  lastly, please come visit the ROSEI website.   We have regular seminars and events. Love to  hear from you all. So thank you for joining the   conversation today and look forward to continuing  this as a community. Take care, everyone.

2022-08-20 15:28

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