Energy crisis spurs green power co-operation between EU and Middle East

Russia's invasion of Ukraine has created a challenging demand-supply gap in global markets, European energy official says

A solar power plant at Sharm El Sheikh, Egypt, developed by the UAE’s Masdar and Egypt’s Infinity.
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The world is going through an unprecedented energy crisis, but that is increasing co-operation in green energy between the Middle East and global powers, Ditte Juul Jorgensen, the European Commission's director general for energy, tells The National.

We caught up with Ms Juul Jorgensen at the bustling International Renewable Energy Agency conference in Abu Dhabi to discuss how Europe is adapting following Russia's invasion of Ukraine.

Europe is phasing out its reliance on Russian fossil fuels and Moscow is cutting back existing supplies.

“This is the first truly global energy crisis,” Ms Juul Jorgensen says.

The world has suffered energy shocks caused by conflict, particularly during upheaval in the Middle East in the 1970s, but this time the fallout has been particularly hard to contain.

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Renewables and green hydrogen are the most interesting prospects because they combine addressing the climate crisis, lowering our emissions, while also addressing the energy prices and adding energy supplies
Ditte Juul Jorgensen, director general for energy of the European Commission

At the same time, there are more options to produce power today, and at lower cost.

“It's a very different time, and the global energy markets and context are very, very different from the 70s,” Ms Juul Jorgensen says.

“Most notably, we have renewable energy as a significant resource. And what we see is that this energy crisis is really accelerating the energy transformation. And so our response to the energy crisis aligns with our response to the climate crisis.”

The 1973 energy crisis during the Arab-Israeli war caused oil prices to leap from about $3 a barrel to $11, or from about $20 to more than $70 in current prices.

The US and Europe at the time had very few means to respond, aside from fuel rationing and stockpiling supplies, which created transatlantic tensions.

One factor mitigating the crisis was that today's economic powerhouses such as China, South Korea and India were still developing and had very low oil and gas demand, a huge contrast to today, when global oil demand hovers at more than 100 million barrels a day.

Today, the world is grappling with the added problem of gas supply reduction and high oil demand, Ms Juul Jorgensen says.

“What has happened with the Russian invasion into Ukraine, with the Russian weaponisation of energy is that a significant amount of energy has simply been taken off the global market — the gas that Russia had supplied by pipeline to the European Union over the last decade and more.

“Russia has stopped supplying, or lowered those supplies, so that's about 70 billion cubic metres of natural gas that has simply been taken off the market. And because it was normally supplied by pipeline, it can't just go elsewhere. And so there's a gap. There's a supply-demand gap. There's a challenge in that context,” she says.

Radeland 2 compressor station on the European Gas Pipeline Link in Radeland, Germany. Energy costs have been a key driver of inflation in Europe. Bloomberg

According to the International Energy Agency, Europe depended on Russia for about 40 per cent of its gas demand, about 155 billion cubic metres, before the war.

The EU responded to the crisis quickly, Ms Juul Jorgensen says, reducing gas consumption by 20 per cent and sourcing supply from elsewhere. From the US, the EU doubled its gas imports — one of many rapid changes to the energy landscape.

By comparison, the two energy crises of the 1970s — a second in 1979 followed the revolution in Iran — left the West with limited options, including a US military doctrine of basing significant military power in the oil-rich Middle East, known as the Carter Doctrine.

The geopolitical landscape today is changing rapidly. The region and the wider world are increasing co-operation, not just on oil and gas but on renewables.

Ms Juul Jorgensen speaks of the huge potential for partnerships between the EU and the Middle East on these shared energy goals.

In May last year, the European Commission adopted a joint communication on a “strategic partnership with the Gulf” which described GCC countries as having “some of the best solar and wind resources in the world, whose development can be key in implementing mutual strategies to meet climate commitments as well as economic goals”.

Ms Juul Jorgensen envisions a growing, region-wide partnership, while highlighting the UAE’s role as one of the Middle East’s green energy pioneers, with its solar power plants in Dubai and Abu Dhabi among the largest in the world.

“The Emirates' approach to the energy transition is really an interesting case in point, the significant investment into renewables very early on, and a continued investment, a commitment to renewables,” she says.

“And I think that's a great basis for a closer partnership between the European Union and the Emirates, and the entire Mena region. It's clear that with the changing global energy landscape, there's a significant potential for at least North Africa, to increase energy supplies and to strengthen our partnership between the European Union and the Mena region.”

Boosting green energy investment

But it is not just the EU that has stepped up co-operation amid a rapidly changing global energy mix, which is the percentages of supply by source, whether nuclear, gas, oil or solar, for example.

In November, the US and the UAE signed the Partnership for Accelerating Clean Energy, a $100 billion plan to implement 100 gigawatts of power generation in the region and developing countries.

Dr Sultan Al Jaber, Cop28 President-designate, the UAE’s special envoy on climate change and Minister of Industry and Advanced Technology, said Pace will look at a broad range of clean energy innovations.

These include including nuclear power for “enhancing global energy security and affordability”, said Dr Al Jaber, who is also managing director and group chief executive of Adnoc and chairman of Masdar.

The deal is one aspect of the UAE’s energy policy that will be discussed in Dubai at Cop28, which begins at the end of November.

Ms Juul Jorgensen says that one of Europe’s co-operation initiatives with the UAE involves green hydrogen, which involves harnessing renewable energy to produce hydrogen through electrolysis: the hydrogen produced, when burning, produces only water.

If implemented at scale, green hydrogen technology would be a vital step for countries striving for net zero goals.

Last week, Masdar signed a deal with a number of Dutch companies to eventually export one million tonnes of green hydrogen to the Netherlands.

“Renewables and green hydrogen are the most interesting prospects because they combine addressing the climate crisis, lowering our emissions, while also addressing the energy prices and adding energy supplies and green energy supplies to the market. So, there's significant scope I think for a strengthened partnership,” Ms Juul Jorgensen says.

Updated: January 17, 2023, 6:17 PM