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69. Escape from Russia: Rewiring Europe - Redefining Energy podcast

image credit: Credit: Redefining Energy
Laurent Segalen's picture
CEO Megawatt-X

Laurent is a Franco-British financier, founder of Megawatt-X, the London-based global platform for Renewable Energy Assets. For the past twenty years, Laurent has been trading and managing...

  • Member since 2019
  • 167 items added with 141,078 views
  • Mar 1, 2022

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Russian’s invasion of Ukraine is a total gamechanger. Beyond the personal drama and misery inflicted on millions of human beings, it triggers a tremor in the world of Energy of a magnitude not seen since the Oil shocks of the 70’s. As Energy Security becomes front and center, Gerard and Laurent try to understand the short-term implications of the Russian invasion on the Energy landscape. Are we moving away from the energy transition or are we going to align energy security with the energy transition?

Politicians, when they have not been corrupted by Gazprom, have a chance to rise and make radical decisions. We have the human and financial capital; we have the technologies. We can implement a deep decarbonization than will also benefit Energy Security.

It is about Rewiring Europe, electrifying heating and transports, building networks faster, full digitization, higher level of resilience. Rewiring Europe will require significant changes in mindset, thinking, regulation, and in investments. Rewiring Europe will bring bold ideas to fruition and require bravery in implementation. But let’s be clear, Rewiring Europe must be done in an economic environment where financial institutions want to invest, as the sole burden of the transition cannot be borne solely by the ratepayers or the taxpayers.

If we wean ourselves off oil and gas, we will be free!

Some of Laurent and Gerard proposals:

Short term

1.     Reduce demand for natural gas – Practically, Germany and Belgium may both have to delay closures of nuclear plants and the same may need to happen for coal plants across the continent. 

2.     Move any energy purchases away from Russia – Practically, we may need to rethink the closure of North Sea and NL gas wells but also be prepared to import energy at higher prices from other parts of the world.

3.     Fill up storage tanks – Europe needs to buy as much as it can in terms of uranium and fossil fuels to ensure we have enough energy to keep the lights on and our economies working.   

4.     Help energy sensitive customers –   Practically, governments will need to help people and companies through these difficult times.

Medium term

1.     Deeply electrify the energy system – The quickest way to decarbonise is to electrify as much as possible of the energy system. To that we need radical regulatory change to ensure a speedy and low cost transition. This starts with improving planning laws to allow quick build out of renewables and the necessary grid infrastructure.  

2.     Enable low cost electricity – In many European countries, electricity is the most expensive way to power your car and heat your home.  The recent surges in natural gas prices have now indirectly made electricity even more expensive. There is a whole pile of measures than can be put in place, such as a) grid regulatory reforms which force competition and b) cost efficiency improvements to wholesale power market reforms which move away from the marginal cost pricing. In addition, taxes and other charges should be removed to ensure that electricity becomes the cheapest form of energy.   

3.     Invest in clean energy and storage – self explanatory

4.     Embrace energy efficiency – self explanatory

5.     Cut demand for fossil fuels – Heat pumps and EVs. In addition, it may well be that Europe needs to bring in a border carbon adjustment tax to ensure that European jobs and emissions are simply exported to another part of the world. 

6.     Change how Europe does innovation – stop sprinkling funds around to please lobbyists and PR firms, focus research funding on zero-carbon and storage

7.     Bring together national security, decarbonization and industrial interests -   self explanatory

As Winston Churchill was working on the establishment of the United Nations after WW2, he famously said "Never let a good crisis go to waste." Let’s focus on Rewiring Europe.

Check Gerard’s blog on the Rewiring Europe


Laurent Segalen's picture
Thank Laurent for the Post!
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Matt Chester's picture
Matt Chester on Mar 1, 2022

What are your thoughts about the high impact Russia supplies of critical materials like aluminum and nickel have on the energy transition. Can we shift away from those supplies like people are talking about doing for oil and gas from Russia? 

Laurent Segalen's picture
Laurent Segalen on Mar 1, 2022

Well, we will have to go "cold turkey" and leave in a world with 10-20% less gas, oil, alu, nickel... Tough in the short term. Easier in the long term. The US should be fine. There are a lot of resources in Canada, Australia, LatAm, Africa that are begging to be developed!

Laurent Segalen's picture
Laurent Segalen on Mar 1, 2022

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