How did Europe arrive to the current energy crisis?

Key takeaways:

1. The war in Ukraine is not the sole reason behind Europe’s energy crisis. It has shed light on structural problems with EU energy policies that prioritised climate security at the expense of energy security, particularly as they sent mixed signals to investors.
2. The EU has been rather complacent with its dependence on Russian energy. Between 1990 and 2021, the EU was able to reduce its dependence on Russian gas from 75% to 41% – a figure that dropped to around 10% this year, clearly indicating that the EU could have taken greater action earlier.
3. However, we should take into consideration that gas markets have evolved significantly over the last few decades with the most notable development being a greater market integration thanks to Liquified Natural Gas (LNG).
4. The EU energy situation varies between countries. For instance, while France largely relies on nuclear energy for power generation, Italy does not use nuclear power and depends more on North African gas.
5. EU gas storage can provide a safety cushion in the winter for nearly 90 days; however, that varies by country.
6. Despite ongoing disagreements between members, the EU stance on energy is much better than say 10 years ago.
7. East Mediterranean is unlikely to play any significant role in solving Europe’s current energy crisis.