The ongoing humanitarian crisis in Ukraine is imprinting detrimental effects on the lives of millions and also creating a spur in the global economy. The territorial invasion by Russia managed to receive global economic sanctions, and since Russia is one of the largest exporters of fuel, these sanctions are also affecting the other nations as the global crude oil prices witnessed a sudden surge in recent months.
Global energy dependence on Russia
Russia has the world’s second-largest gas reserves after America and according to the International Energy Agency, Russia was the largest exporter of fossil fuels in 2021. Due to the recent sanctions from the European Union, this global supply chain of energy has been significantly disrupted.
The report from the IEA highlights that Russia is the world’s third-largest oil producer after the United States and Saudi Arabia. In January 2022, Russia’s total oil production was 11.3 million barrels per day (mb/d). While America’s total oil generation was 17.6 mb/d and the second largest oil producer Saudi Arabia yielded 12 mb/d.
Globally many countries are reliant on the energy supplies from Russia as many sectors such as power, manufacturing, transportation, residences, and other services are vulnerable and will get affected if the supply chain halts.
Impacts on global energy plans
The sanctions imposed by the international community on Russia have spiked fuel prices across the global market. Some energy experts and a Paris-based International Energy Agency, the industrialized world's energy watchdog are considering this price surge as good news and saying that this could possibly boost the demand for electric vehicles in the market and ultimately the shift to clean energy.
European Union has been most vocal on the humanitarian crisis and announced some stringent actions in recent months to be put in place to lessen the dependency on Russian energy supplies. The European Commission recently announced that they are aiming to cut two-thirds of gas imports from Russia by the end of this year. But, some individual nations like Germany are still resisting the full ban on Russian gas supplies. Since the beginning of the Russian invasion, Germany has paid about 220 million euros a day to Russia for gas.
The RePowerEU plan by the European Union proposes escalated imports of oil and gas from other countries that will reduce about 60% of supplies from Russia, and about 33% of energy generation would be done from renewable energy sources. The Commission President Ursula von der Leyen emphasized building the strategy to find alternatives to the current energy sources. She said, “ We need to act now to mitigate the impact of rising energy prices, diversify our gas supply for next winter and accelerate the clean energy transition. The quicker we switch to renewables and hydrogen, combined with more energy efficiency, the quicker we will be truly independent and master our energy system”.
EU countries such as Denmark and Germany have been boosting solar and wind energy projects in the past decade and have substantially developed climate mitigation and adaptation technologies. In 2020, 27 nations in the EU were generating one-fifth of their total energy from renewable sources. These nations had intended to increase energy generation from renewable sources to 40% by 2030, but the Russia-Ukraine war has pushed this target to 45%.
Germany which is currently reliant on Russian oil and natural gas supplies has put forward its renewable energy goals and announced to achieve 100% renewable power capacity by 2035. The experts claim that the ongoing crisis has made EU policymakers more determined to strengthen the Green Deal which is the flagship climate policy that possesses a number of regulations to achieve the target of net-zero emission by 2050.
But on the other hand, a report published by Reuters argues that the high prices of crude oil usually lead to fossil fuel companies drilling more for oil & gas to cash in this favourable situation. However, the past facts & records have shown this will ultimately create a surplus of oil and make it affordable again. This pattern has been witnessed in the oil age and this unpredictable tendency to meet high prices with increased supply acts as a hindrance to the clean energy transition.
India has been active in achieving its renewable energy targets and as per the Ministry of New and Renewable Energy, India has installed 175 GW renewable energy projects till 2022. Recently India’s Power and Renewable Energy Minister, Raj Kumar Singh highlighted that the current energy crisis in the global market is escalating the transition to renewable sources and diminishing the dependency on fossil fuels. While addressing the Sydney Energy Forum, he highlighted that due to the current sanctions on Russian energy supplies, the energy generated from coal has become expensive, and the generation of energy from renewable sources has become a cheaper option for energy generation. While addressing the impacts of the Russia-Ukraine war on renewable energy targets, he stated that “this will actually hasten the energy transition”. The proper investment and policies together in the renewable energy sector could help in making the renewable energy source a viable alternative and then the dependency on fossil fuels. Considering the current climate change situation there is a need of the hour to employ efficient policies which must back the global climate action targets. The countries should focus on the long-term objectives and must look out for energy stability by opting for renewable energy over importing fossil fuels from foreign countries that may help in combating the impacts of climate change.