The conflict in Ukraine is having a perverse impact on the global energy market, exposing the vulnerability of nations who depend on others for their energy needs. With sanctions limiting the export of Russian coal and gas, prices and demand for coal and liquified gas have gone through the roof, highlighting how energy systems which rely on fossil fuels are volatile and insecure, and how access to abundant, reliable, affordable, sustainable energy is crucial to economic and social progress.
The current geopolitical instability can create momentum for greater commitment to decarbonization around the globe, particularly in Europe, which previously relied on Russia for 40% of its total gas consumption.
For instance, Germany has recently committed 200 billion euros to fund industrial transformation between now and 2026, including climate protection, hydrogen technology and expansion of its electric vehicle charging network.
“Many of the strategies to lower dependency on Russia are the same as the policy measures you want to take to lower emissions,” Thijs Van de Graaf, a professor of international politics at Ghent University in Belgium, told The Financial Times. “At the moments where we have these crises, the [energy] transition can be supercharged.”
But the energy crisis can also trigger bringing back coal as a quick fix: France has temporarily allowed power plants to burn more coal, Italy has raised the possibility of reviving decommissioned coal plants, and Germany has announced plans to build its coal reserves and signalled its coal phase-out date may have to be delayed.
But it’s not good news for coal in the longer term. While coal may be a quick fix, what is being highlighted at a global scale is the need to transition to renewable energy which is not vulnerable to conflicts and instability. The European Commission President Ursula von der Leyen told a security conference the Commission is “doubling down on renewables” in response to the Russia-Ukraine conflict. “This will increase Europe’s strategic independence on energy.”
Australia is fortunate to have abundant sun and wind, combined with a relatively low population, providing the ideal criteria for future energy independence through renewable energy sources. Our land is also richly endowed with the mineral and metal resources required for renewable energy technology. Our country is well placed to reduce vulnerability to global energy price volatility, bolster independence and security, protect the environment and build economic prosperity through a well-managed transition to renewable energy.
The lesson for the Australian energy market is clear. In a climate of instability and national security concerns, renewable energy is the leading solution. It is here that Australia has a natural advantage. Renewable energy is the cheapest form of energy, and we are one of the windiest and sunniest continents on earth. This gives us boundless opportunities to power our nation with cheap, clean renewables, and export energy to the world.
Renewable energy offers a huge opportunity for the Australian economy to transform from a global “quarry” to a technologically sophisticated leader in manufacturing. Conservatives who support market-based solutions would be wise to look to the long-term future with renewable energy, rather than a short lived “sugar hit” from increasing fossil fuels production. We need to invest in value-adding industries and manufacturing to ensure good jobs, prosperity and a strong economy.
Conservatives are also driven by a deep concern for national security. Demand for fossil fuels has long been a factor in global instability and conflict, as with the current conflict in Europe. Energy independence is key to our national security and renewable energy can provide that independence. With a renewable powered grid and electrification of industry and transport, Australia would be resilient to fluctuations in the global energy market and any conflicts these fluctuations may cause.
Conservatives must continue to support investment in new solar facilities, offshore wind and storage solutions to deliver clean, secure and cheap energy. We must not be tricked into short-term thinking that would extend reliance on polluting and expensive coal and gas into the future. Let’s look forward with a plan, so we don’t look backwards with regret.