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