The implications of the European energy crisis

The intensifying European energy crisis has brought three inspirations to China, which is in the same period of energy transition: energy supply should seek independence; Energy substitution should be deployed scientifically; Energy transformation should be based on national conditions.

The bitter effects of energy shortages are still being felt in Europe. European gas prices have surged again in the winter, with figures showing prices rose by more than 70% in December 2021 alone. European gas prices have risen more than 600% since 2021. Electricity prices in Europe are also skyrocketing, with the average price of electricity in major European countries exceeding 300 euros per megawatt hour (MWH). Many countries, including Germany, the UK Spain, are at historic highs, while the price remained below 50 euros per MWH during the same period of 2019.

With gas prices soaring electricity prices in Europe skyrocketing, the negative impact of the "energy crisis" on business production household life is widening. The southern European region of Kosovo began rolling power cuts to nearly 2 million customers in an effort to maximize energy savings. Serbia was forced to cut off electricity to some customers; Household energy bills are expected to rise by more than 50% in the New Year. On the production side, due to the shortage of natural gas, some countries have seen the shutdown of power plants, bankruptcy of small energy enterprises, a sharp rise in production costs, production suspension of production in energy-intensive industries, which have greatly affected the process of economic recovery.

The imbalance between global energy supply demand combined with extreme weather shows no sign of easing Europe's energy problems in the short term. The intensifying Energy crisis in Europe brings three inspirations to China, which is also in the energy transition period:

Inspiration one, energy supply to seek independence. The energy crisis in Europe is mainly caused by a combination of factors such as declining natural gas production in Europe lower-than-expected Russian gas supply. As a flexible fossil energy source with low carbon emissions, natural gas has become a growing share of Europe's energy mix in recent years. But Europe is a weak fossil energy source, importing about 90 percent of its natural gas, most of it Russia. Due to geopolitical factors, the Nord Stream 2 natural gas pipeline project connecting Germany Russia cannot be put into operation, Russia's low gas transmission to Europe has exacerbated the "gas shortage" in Europe.

 For China, the contradiction of energy security is also prominently reflected in oil gas security. China's dependence on foreign oil natural gas is as high as 70% 43% respectively. As China's industrialization urbanization advance, the "rice bowl" of energy must be in China's own hands. In the future, we will continue to improve energy supply capacity, strengthen weak links in oil gas production, fully promote the increase of domestic oil gas reserves production. Make full use of market-oriented means to mobilize the enthusiasm of upstream oil gas investment, increase domestic oil gas exploration development, actively develop shale gas, coalbed methane, strengthen the construction of oil gas reserve capacity. At the same time, we should give priority to the development of renewable energy create conditions to increase the installed capacity of renewable energy the strategic height of the "dual carbon" goal energy security.

 Inspiration two, energy substitute should be deployed scientifically. Another factor contributing to the European energy crisis is the over-aggressive energy transition. Looking at the world, Europe's energy transformation is taking place early fast. The installed capacity of intermittent new energy such as wind solar energy has increased significantly. By 2020, the energy generation of renewable energy in EU countries has surpassed fossil energy. But since the summer of 2021, the supply of wind power in Europe has been significantly reduced due to climate change, greatly increasing the demand for fossil fuels. In the process of replacing new energy, if the flexible adjustment ability of energy system cannot be guaranteed, it will drag down the process of energy transformation.

 China's energy transformation should adhere to the principle of "establishing before breaking", the gradual withdrawal of traditional energy should be based on the safe reliable replacement of new energy. Despite the rapid increase in installed capacity, the future value of new energy technologies cannot simply be considered, it will be many years before we can definitively judge their long-term reliability economics. In the initial stage of energy transformation, scientific technological innovation infrastructure investment should be intensified, power transmission channels peak-modulating power supply construction should be increased, renewable energy consumption power grid security should be guaranteed to lay a solid foundation for the construction of a new power system with new energy as the main body.

Third, energy transformation should be based on national conditions. Too single energy transition path also threatens the energy security of major European countries. In order to speed up the progress of energy transformation, many European countries led by Germany turned to new energy "one-sided", shutting down a large number of thermal power, then giving up a large number of nuclear power due to potential nuclear pollution. Z finally swallowed the bitter fruit in this round of energy crisis. On the other hand, after the outbreak of the oil crisis in Z, France began to vigorously develop nuclear energy in order to achieve energy independence gradually became a huge net exporter of nuclear power in Europe, effectively guaranteeing energy security.

 For China, it is difficult to change the energy structure which is rich in coal, little gas poor in oil. While giving full play to the role of coal as the "anchor stone" in the energy system, we should "eat coarse grain do fine work", vigorously promote the clean efficient utilization of coal, develop modern coal chemical industry optimize the layout of coal production capacity. In accordance with the needs of development, advanced coal power generation should be rationally constructed, backward coal power generation should be phased out in an orderly manner, the adverse impact of coal resource development on the ecological environment should be greatly reduced.

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Source: Economic Daily

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