Europe should take a pragmatic approach to the issue of energy independence, combining the expansion of domestic oil and gas production with the accelerated electrification of the economy. This approach will reduce external dependence, strengthen energy stability and create a more reliable basis for long-term economic and strategic stability.
Michael Liebreich, an honorary member of the Energy Institute and a visiting professor at Imperial College London, said this in an interview with GuildHall.
– What steps can Europe take to achieve energy independence?
– The key to increasing Europe’s energy autonomy lies in electrification. Europe will never be able to produce enough oil and gas to meet the needs of its advanced, energy-intensive economy. We can produce significantly more electricity from renewables and nuclear power (although new nuclear plants are likely to remain very expensive), but high electricity prices are a barrier to electrification, leaving us dependent on gas.
It is important to understand that the increase in demand for electricity does not increase its cost, but reduces it. The reason is that fixed network costs account for an increasing part of the bills; increased demand spreads these fixed costs over a larger volume. And the growth of flexible demand makes it possible to use the system’s unused capacity at no additional cost. Therefore, it is necessary to do everything possible to stimulate electricity demand: create data centers for AI, electrify heating and industrial heat, and, above all, electrify transport — which also reduces oil demand.
– What changes in energy policy priorities should the EU implement to strengthen energy independence in the coming years?
– Europe is doing the right thing by focusing on climate policy, but it should act much more pragmatically. The electricity system can be decarbonized by 90%, and all land transport, heating and low-temperature industrial heat can be electrified at an affordable cost, while increasing Europe’s energy autonomy. This is what should become the focus of policy instead of unrealistic requirements for 100% decarbonization of electricity, the lack of a realistic plan for the electrification of heat, heating and transport, as well as unrealistic ideas about industrial strategy.
Europe needs to stop wasting time and political capital on solutions such as hydrogen pipelines, e-fuel mandates, green ammonia, aviation and zero-emission shipping — which have already proven to be expensive and inefficient. The cost of batteries connected to the grid has fallen by half over the past two years, and their potential to significantly increase the share of wind and solar energy replacing large volumes of gas is still underestimated.
– How do you assess the idea of increasing domestic oil and gas production in Western countries, especially in terms of its potential impact on defense capabilities?
– The idea promoted by opportunist politicians that Europe has huge, foolishly unused oil and gas reserves is nonsense. The reality is that Western European countries can increase domestic oil and gas production to a certain extent, and they should certainly do so. It is hypocritical to demonize domestic oil and gas development while importing them from regions with far worse environmental standards. And, as we see again, this is also a sign of economic shortsightedness.
We must also significantly increase biomethane production, which could increase at least fivefold across Europe. Once we expand renewable and nuclear power generation capacities, biogas can play a key role either in decarbonizing shipping or in providing backup power generation using sustainable local resources.
Exclusively for Guildhall.
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