Diversifying import dependency and higher domestic renewable fuel share

Sep 05, 2022 by Energy Connects

Sigmar Gabriel, former German Minister for Foreign Affairs and Chairman of the Atlantik-Brücke non-profit, examines the energy security and transition debate for Europe and beyond.

image is Sigmar Gabriel Rechte Und Kostenfrei) LR
Sigmar Gabriel Rechte Und Kostenfrei) LR
Author Sigmar Gabriel German Minister for Foreign Affairs and Chairman Atlantik-Brücke

The current crisis has only emphasised the vital role gas and LNG plays, but as global supplies remain sparse is there a need for more investment in the sector?

In fact, the international demand for natural gas has continued to rise in recent years and, particularly in the economically emerging regions of Asia, the demand for gas continues to rise, especially after the pandemic has been overcome. And even where the trend towards the development of renewable energies continues, gas is an important bridging technology, because the energy generated by Erdags causes far fewer greenhouse gases than, for example, coal or oil-aired power plants. If then crises and wars put the world energy markets under stress and trigger regional shortages, then there are only two alternatives: massive price increases in the competition for existing sources, or the willingness to develop new sources.

Do you think gas and LNG will be key in the transition to a low-carbon economy?

The use of renewable energy sources for the production of electricity, heat and industrial process energy is certainly the best way to bring different goals together: to fight climate change effectively, to make our national or regional energy supply more resilient to external shocks, and also to create new value chains between the Global South and the Global North. Above all, the Global South has the opportunity not only to be an energy supplier but above all to generate value locally from the production of, for example, hydrogen or green fuels. But no matter how much the development of renewable energies will continue to accelerate, bridges into this new age are needed. And the most climate-friendly bridge is natural gas. How long and how wide this bridge is will be determined on the one hand by the technological leaps in the development of renewable energy technologies themselves, but on the other hand also by the speed of the associated hydrogen production and the infrastructure required for this. As far away as that seems to be from a market perspective, the past few years have shown how quickly such technologies develop once markets have emerged for them. And these markets exist and are growing rapidly.

Italy and much of Europe is embarking on the energy transition – what must governments take into consideration when trying to embark on this transition?

The big difference between developed industrialised countries like Italy or Germany and countries in southern Africa, for example, is of course that here in Europe they have to convert an existing energy system, whereas in other countries they can start ‘from the scratch on’, so to speak. The conversion is far more complicated and expensive than the new construction. In Italy and Germany it is about grid expansion, conflicts of use with nature conservation or agriculture and many details of the support systems, which should not become permanent state subsidies for renewable energies, but should create incentives for innovation and marketability.

How important is it to have Gastech taking place in Europe during this time of geopolitical uncertainty?

It is an excellent opportunity for experts to discuss the current situation and future developments and - that would be my hope - to actively advise European governments in solving the challenges ahead.

What must governments do to ensure energy security in the future?

As long as they depend on energy imports on a large scale, like we do in Germany, they need to diversify their import dependency. The lesson of the Russian crisis is: Russia is not the Soviet Union and is ready to use energy as a weapon in the conflict with the West. The old Soviet Union did not do this even in the most difficult times of the Cold War. It would be best if the European Union acted as a joint buyer in this search for diversification opportunities, because then it would have far greater market power. When it comes to the question of developing new natural gas fields, this can be decisive with regard to the refinancing costs of the investments. But in the medium term, energy security can best be achieved through the highest possible share of renewable energies in one’s own country. That still does not lead to self-sufficiency, as we quickly learn from the example of hydrogen. But to a far greater degree of political resilience.

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