The war in Ukraine has brought into relief the euro zone’s energy vulnerability. How will Europe respond to its energy vulnerability? According to economists at Natixis, the desire to reduce energy vulnerability and dependence will lead to the diversification of fossil fuel suppliers, faster development of nuclear and renewable energies and a drive to ensure that the equipment needed for renewable energies is produced in Europe and does not create a new external dependence.
Europe will reduce its energy vulnerability
“In the short-term, increased support from governments to low-income households to offset the rise in energy prices.”
“In the short to medium-term, diversification of Europe’s natural gas suppliers. Europe will naturally try to diversify its natural gas supplies towards suppliers other than Russia. Europe could obtain more supplies in the future from the US, Canada, Qatar, Australia, possibly one day Iran, and Saudi Arabia if it develops its production.”
“In the long-term, European countries are likely to accelerate their investment in renewable energies (which already account for 39% of electricity and 17% of energy); and, in the cases of some countries, accelerate or begin nuclear programmes (today nuclear accounts for 25% of electricity and 14% of energy).”
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