Splitting the Atom or Harvesting the Elements: REPowerEU and the Future of the European Union.
At the start of the decade before Covid, war, and inflation became household headlines, energy policy in Europe was on a diverging path. On the one hand, Germany and Italy had committed to a fully renewable future and on the other side of camp, France and most of Eastern Europe doubled down on nuclear – either delaying phase-outs or ruling them out altogether.
Since the Russian invasion of Ukraine, trade sanctions that have impacted Russia’s ability to export liquefied natural gas (LNG) and a partial oil embargo confirmed by the European Union have created a tumultuous energy crisis in Europe and the world. Indeed, the price of LNG futures on the Nasdaq have risen from $3.815 on January 3 2022 to $8.523 on June 3 2022. Brent crude oil has seen a 52.46 per-cent increase in value in the same time period. Additionally, Eurostat reported an inflation rate of 8.10 per-cent on May 31 2022. Therefore, the climate crisis, the war in the Ukraine, and inflation in the European Union have thrown up an array of challenges for the energy strategies of European Union Member States.
The implications of such challenges for European and international stakeholders are dependent on the response of the European Union, set out by the REPowerEU Plan published on May 18 2022. The Plan was drawn up to aid the transition to clean energy, as well as to create an adequate supply of energy replacing the LNG currently imported from Russia by the European Union. REPowerEU Plan has five ways of doing so: (i) reducing energy and gas usage in the short-term, (ii) diversifying the European Union’s energy imports, (iii) increasing the use of renewables by the end of the decade, (iv) increasing spending to establish the Fit for 55 Framework (the European Union’s framework for achieving carbon-neutrality), and (v) increased investment in the infrastructure required to transition to a renewables-powered energy grid. The goals of the REPowerEU Plan are, on aggregate, in line with achieving the goals of Fit for 55, and increasing the target for the Renewable Energy Directive from 40 to 45 per-cent of energy being derived from renewables by the end of the decade. In all this, nuclear energy is seen more as an auxiliary actor rather than a driving force, in line with the recent trends of denuclearisation of the more influential Member States of the European Union.
As a consequence, the diverse energy strategies at the supranational and national level of European Union Member States and non-European Union states make up a sort of policy petri dish with opportunities and risks for a diverse range of stakeholders.
Consumers are likely to face reduced energy costs and a healthier environment in the long-run, but in the meantime the REPowerEU Plan invites large risks for lower-income consumers, especially in less established economies as Fitch Ratings anticipate that the phasing-out of Russian oil and gas could push the Eurozone into recession. This is problematic because of the significant number of countries with low trust in government in the European Union. Thus, if the short-term goals of the REPowerEU Plan do not succeed in delivering quality cost-effective solutions in what appears to be a pre-recession economy, the potential for economic and political risks emerging in the near future is quite high. If the Eurozone crisis and the rise in Euroscepticism of the 2010s are the benchmark for the after-effects of a Eurozone recession, then the REPowerEU Plan can very well become a watershed moment for the political legitimacy of the European Union.
It is precisely for that reason, then, that the comparison of energy prices, efficiency and emissions between the nuclear-powered and the non-nuclear-powered Member States of the European Union will be a significant comparison to make in the coming years. If the atom can yield sufficient energy at comparable costs as renewables, whilst delivering on environmental goals, then perhaps the two sectors can compete to bring about cost-effective and environmentally-conscious sources of energy. But, perhaps more importantly, if REPowerEU is successful the European Union could very well solidify internal legitimacy as a competent supranational organisation, whilst becoming a benchmark standard for overcoming and living with climate change. Likewise, if the REPowerEU Plan cannot deliver on its political, economic, and environmental goals, that failure would not only be a shortcoming of the European Union, but potentially a shortcoming for the world on the fight against climate change.