© Visoot Uthairam An engineer works on a computer next to a solar panelIncreases in solar and wind power generation have led to tight natural gas supplies and rising energy prices in Europe, but renewables have yet to fully replace the continent's appetite for fossil fuels.
Energy prices in Europe have been the main driver of inflation this year. Eurozone annual inflation hit 9.9% this week, with high energy prices exacerbated by the war in Ukraine and Russia, which has cut the flow of natural gas to Europe, which accounts for the bulk of 42% of inflation.
But energy prices may ease slightly this year thanks to record production from renewables, especially wind and solar.
Between March and September this year, wind and solar power were upgraded to provide 24% of the EU's electricity, up from 21% in the same period last year, the energy and climate policy think tank said in a report on Monday. Ember and E3G.
The study found that the increase in production provided massive imports of the equivalent of eight billion cubic meters of natural gas compared to the same period last year, worth about 11 billion euros ($10.8 billion). During this period, the total production of renewable energy in Europe is 99 billion euros of natural gas imports.
The study authors calculated the equivalent cost of natural gas based on the average Dutch FTT price, the European Union's natural gas standard. The fund of funds hit record highs in the summer when Russian energy companies began cutting natural gas supplies to Europe, and while prices have since fallen, they are still at their highest level for this time of year. .
Poland recorded the largest year-on-year increase in solar and wind power generation, at around 48%, while Spain recorded the largest absolute increase in electricity generated from exporters. If Spain used natural gas to generate electricity from solar and wind energy in the country, the imports would cost €1.7 billion.
19 of the 27 EU countries, including France, Italy and Spain, achieved combined solar and wind production records.
Solar power was particularly strong in Europe last summer, when it accounted for 12% of the European Union's electricity generation between May and August, according to a September Ember report. During those three months, solar energy alone allowed EU countries to avoid €29 billion in natural gas import costs, according to Ember.
Wind and solar energy are the cornerstones of the EU's groundbreaking REPowerEU plan to shift Russia's dependence on fossil fuels and a new focus on clean energy sources to combat climate change. But while the incursion into Ukraine and tight natural gas supplies have helped spur investment and renewable energy projects, the sector's boom this year may not be fast enough or big enough to stave off Europe's growing energy crisis.
When the war began, Europe depended on Russia for 40% of natural gas and 27% of imported oil. Europe has long relied on natural gas, and Russian gas in particular, as a key enabler in the transition from fossil fuels to renewables, and earlier this year some natural gas projects were classified as "green".
But Europe's renewable energy ambitions have limits. Its demand for clean energy technologies is outstripping supplies of key rare earth elements, including lithium and cobalt, which are used to make solar panels and batteries.
Moreover, the production of renewable energy in Europe this year is hampered by difficult weather conditions. Rising temperatures and extreme drought this summer have lowered river levels and paralyzed Europe's hydropower, the continent's second-largest source of renewable energy after wind.
The resilience and continued momentum of Europe's renewable energy industry will likely influence whether the continent's energy crisis continues next year, when natural gas flows become tighter and the EU's partial ban on Russian oil takes effect.
But as Europe's renewable energy industry faces challenges, persistently high prices for natural gas and its easily transportable liquid form, LNG, mean greener energy may be an easier option for governments around the world. The authors of the Ember/The E3G study wrote the next few years.
"With tight LNG markets and high gas prices, governments must support RePowerEU's clean energy ambitions in the next few years, making it a central component in the response to the energy price crisis," said Artur Batulia, E3G Energy System. Senior Assistant in Transitions. He said in his statement.
According to a recent analysis by the International Energy Agency, natural gas supplies are expected to remain tight for at least the next year due to additional restrictions from Russia and increased global competition for supplies.
"Wind and solar are already helping European citizens," said Chris Ruslau, senior analyst at Ember. "But the potential for the future is greater."
This story was originally published on Fortune.com
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