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The Russian invasion of Ukraine is pushing energy prices higher - and to avoid social unrest, support is needed to help the vulnerable cope with a cost of living crisis
Sophie Davies is a Barcelona-based journalist and the editor of Gas Outlook, a website about the global energy transition.
With the Russian war in Ukraine threatening to push up energy bills to unprecedented levels, Europe’s poorest households urgently need a wartime solidarity fund to be introduced in time for next winter, to help fight what could be alarming rises in energy poverty.
Last year the European Commission said it would launch a new "social climate fund" by 2025 to shield the poorest from higher bills resulting from the shift to green energy. In January, a draft of the European Parliament's position on the proposal said the new fund should start a year earlier, in 2024 – but the Ukraine conflict and its sudden, critical impact on Europe’s energy landscape mean this will already be too late for the most vulnerable.
Moscow last week ordered the switching of billions of dollars of gas contract payments to roubles, threatening a supply squeeze and higher energy prices for Europeans, at the mercy of the will of Russian President Vladimir Putin.
Energy bills are expected to soar further still if Europe cuts off Russian gas – which it must do to stop inadvertently propping up Putin’s campaign. Around 45% of Europe’s gas imports come from Russia, and the sale of oil and gas provides a significant source of income for the Russian government.
And with U.S. President Joe Biden’s trip to Brussels last week to join NATO talks about Ukraine, pressure is growing yet further on Europe to end imports of Russian gas, as the United States already did – the only morally-correct response to Putin’s war but one that needs cushioning with support for the millions of unprotected households facing a cost-of-living crisis this coming winter.
In some countries, landmark energy transition decisions have already been made in response to the war including in the Netherlands, where the acceleration of offshore wind farm construction will bring an additional 10.7 GW by 2030, almost doubling its current target of 11 GW, and in Germany, which plans to boost solar and wind energy projects.
These are admirable aims. But Europe is grappling with a geopolitical crisis that is not only directly linked to climate policy but which also has considerable social repercussions.
European leaders must pull the plug on Russian fossil fuels to stop funding Moscow’s war machine while also urgently providing an EU-level solidarity instrument that would protect people from inflation and spiralling energy and food prices.
COST OF LIVING CRISIS
In the UK alone, the Resolution Foundation, a think-tank, warned last week that rising energy and fuels costs, along with high inflation, threaten a cost of living crisis for many. Lack of support for low-income families will see 1.3 million people pushed into poverty next year, it said.
In Europe, the cost-of-living crisis could be even starker, as some countries are considerably more dependent on Russian gas than the UK. Take Germany, for ínstance, one of Europe’s largest economies but absurdly dependent on imported energy - it gets more than half its gas imports from Russia.
Energy poverty is nothing new. There are 50 million households in the European Union already living in energy poverty, according to an Enerdata report, which noted that the COVID-19 pandemic probably aggravated this situation further due to more time spent at home.
What’s more, in 2019, more than 30 million Europeans were unable to keep their homes adequately warm, which represents 6.9% of the EU population as a whole, the report showed.
Eastern Europe is particularly vulnerable. In Bulgaria, which imports almost all its gas from Russia, nearly one-third of the population live in energy poverty already. This is a matter of grave concern as the war in Russia rages on and energy prices soar. Social unrest, like that seen in Spain in recent weeks, seems inevitable across Europe.
If one good thing has come out of the invasion of Ukraine, it’s that the war has unintentionally made us face up to a long-standing and deep-seated problem – that of ill-conceived and perilous energy dependence – which we have brushed under the carpet for decades.
Now we must address another fundamental issue that has been ignored for too long and is now glaringly obvious for all to see: the scourge that is energy poverty in some of the world’s richest countries and our reluctance to put an end to it by building up our own stable, national clean energy systems.
