- In Europe, the energy mix will decarbonize more swiftly. In 2024, gas consumption alone will be 9% lower as countries shift to renewables.
- In the years 2022-2030, Europe’s greenhouse gas emissions will be 580 million tonnes (or 2.3 percent) lower.
- By 2030, Europe will produce 12% more gas. Russian gas exports will decline as the Asian market is unable to compensate for the loss of the European market.
- The price of batteries will rise as a result of the commodity pressure, which will prolong high power costs.
According to a new study by DNV’s Energy Transition Research, non-fossil fuels will account for 34% of Europe’s energy mix in 2024, up two percentage points from the pre-war prediction. In 2024, overall gas consumption will be down 9% compared to DNV’s pre-war model run. Solar has the highest percentage rise, with a 20 percent increase by 2026. Filling the gap will also require the postponement of the retirement of several of the continent’s nuclear power reactors.
Although some coal is required to supply Europe’s energy demand in the medium term, postponed retirements and more nuclear usage will be required to overcome the natural gas gap by 2024. In Europe, energy-related emissions will be 2.3 percent lower in the period 2022-2030 compared to a scenario without the Ukraine conflict. This is due to a greater emphasis on low-carbon energy (renewables and nuclear), higher energy efficiency, and, in the short to medium term, slower economic development.
“Europe’s leaders have used clarity of thinking amid a crisis to speed the continent’s energy transformation, just as they did during the COVID-19 epidemic.” This time, Europe is enhancing energy security while lowering emissions,” stated DNV Group President and CEO Remi Eriksen.
Because of insufficient infrastructure, Russia’s turn to the east will not entirely compensate for lower gas supplies to Europe. DNV, on the other hand, predicts that Europe will generate 12% more gas in 2030, owing to the industry’s reaction to rising oil and gas prices in the short term, as well as the EU’s promise to supply additional gas. Regasification capacity limits the role of imported LNG, and further infrastructure is projected to take 2-5 years to complete. It will, however, be a part of Africa’s wider energy security policy.
As corporations seek to profit from high prices and a supply imbalance, there is a risk of overcapacity in the oil and gas sector by the end of the decade. Oil’s long-term trend remains negative, and the conflict’s implications of weaker GDP development and slower globalization are expected to weaken demand even more. Increased oil and gas capacity approaching 2030 will result in reduced prices, which would likely result in a minor rise in worldwide consumption in the 2030s.
“Energy markets have been rattled by the conflict in Ukraine, but decarbonization remains the fundamental subject.” “Energy firms will have to strike a careful balance between covering short-term oil and gas supply gaps while avoiding stranded assets in the long run,” said Sverre Alvik, Director of DNV’s Energy Transition Research.
The high electricity rates have no imminent end in sight for customers. In 2024, electricity costs in Europe will be 12% higher than they would be if the region did not shift away from Russian energy. As battery costs grow, rising commodity costs will have an impact on the adoption of electric vehicles. In Europe, this means that half of the new car sales will be electric in 2028 rather than 2027, however legislative incentives might mitigate this.
