REPowerEU & Africa: Linking European and African Energy Interests

Written by | Monday, May 30th, 2022

The war in Ukraine has turned the European green deal into a cornerstone of the EU’s long-term security agenda. Europe is taking extraordinary measures to disconnect itself from Russian gas and to shield itself from the fallout of the conflict. It should think big, not small, and pursue more stable, secure, and ultimately strategic energy partnerships with its southern neighbors.

THE GREEN DEAL THROUGH A SECURITY LENS —- The war is changing European politics and decision-making. The European green deal, which was meant to be a testament to the bloc’s regulatory power and its aptitude for long-term planning, is now seen as one of the key drivers for the EU’s coveted strategic autonomy. At the start of the year, member states were busy approving new natural gas power plants, ready to stretch the ‘transition fuel’ expression to its absolute limits. Today, however, dependence on natural gas is seen as a threat to European security and stability, pushing Brussels and member states to reassess their painfully hesitant progress on renewables and energy efficiency of the past decade. Reframing the energy transition as a response to a security threat has a critical effect: it justifies extraordinary measures. Decisions that until recently were seen as too difficult, too expensive, or otherwise ‘politically unfeasible’ are now presented as unavoidable, even if they come at a great cost.

STREAMLINING PROCEDURES AND MOBILIZING FINANCE TO FAST-TRACK RENEWABLES —- The effects of this new ‘security status’ of renewable energy are already visible. Under the REPowerEU denomination, the EU is preparing to take a series of measures to wean itself off Russian pipeline supplies, not just by seeking alternative natural gas supplies, but also by front-loading investments in renewable energy generation, green hydrogen, energy efficiency, and heat pumps. This will be accompanied by measures set to empower the EU and member states to take control over European energy systems, from relaxing state aid rules to shield citizens from extreme prices to cutting down permitting times in order to accelerate solar and wind energy development. While Germany does not want to sanction Russian oil and gas just yet, in April it adopted plans to reach 100% renewable energy by 2035 and tripled the pace of renewable energy expansion. Like REPowerEU, Germany’s ‘Easter package’ seeks to accelerate renewable energy deployment, not just by speeding up new projects but also by removing persistent barriers such as planning delays and long permitting processes. Moreover, the European Investment Bank (EIB) and national promotional banks such as the German KfW are increasingly financing projects directly contributing to shareholders’ geo-strategic interests and are expected to play a key role in strengthening energy security by financing this accelerated energy transition across Europe.

THE SPILL-OVER EFFECTS OF AN ACCELERATED EUROPEAN TRANSITION — In the long run, a new surge in renewable energy developments in Europe will greatly benefit the green transition worldwide. It will boost the capacity of its wind and solar power sector, which can in turn help scale up future investments in renewable energy infrastructure abroad. However, the immediate-term effects will need to be carefully managed to ensure a sufficiently outward-looking approach and clear commitment to a just energy transition beyond EU borders. Front-loading investments alongside reducing planning and permitting times has the potential to considerably alter the domestic market for renewable energy development. Europe’s wind and solar industries welcome the EU’s new energy policy and see considerable opportunities in more renewable energy friendly European electricity markets. If the market conditions and lead times for wind and solar dramatically improve at home, European companies and investors may shift their attention towards domestic infrastructure, especially against the backdrop of growing economic distress. This can be further reinforced by rising supply chain constraints, for example in the wind power sector, which has seen steel, aluminium, and nickel prices skyrocket in recent weeks due to the war.

LINKING EUROPEAN AND AFRICAN ENERGY INTERESTS —- Europe’s energy security woes have led to a renewed interest in African gas reserves. Italy has recently signed new deals with Algeria and Angola to increase exports, while the EU and other member states are looking at Egypt and Nigeria. African countries are searching for external investments to rapidly fill infrastructure gaps for the export of natural gas, but also to shield themselves from price volatility. This may create short-term opportunities — despite Europe’s push to rapidly phase out overseas fossil fuel investments — and may make African countries reluctant to fully embrace greener alternatives. However, the EU’s long-term answer remains a clean energy future at home and abroad. For African economies, this rhetoric alone is far from a viable alternative to developing their fossil fuel reserves and strengthens the perception that Europe’s transition constrains Africa’s economic development instead of supporting it. For the EU’s climate and energy diplomacy to be credible, it will need to back its just transition narrative with more than a scattering of green energy projects, linking its green energy investment to the development and industrialization ambitions of African countries and societies.

MORE SECURE ENERGY PARTNERSHIP —- Even in full crisis mode, Europe must keep an outward-looking perspective on the green energy transition. External investment in overseas renewable energy infrastructure can benefit the EU’s energy security through interconnections and green hydrogen trade; however, this will only be the case if these investments are also seen to directly benefit African economies. This requires thinking beyond a ‘traditional’ extractive agenda, under which African countries would produce power for European consumption. It also entails ensuring that new infrastructure investments support the productive use of renewable energy locally, thus creating tangible economic benefits and bringing quality green jobs to the African continent. Sustainable industrialization and job creation are key priorities for African countries and can also be the key to a more secure form of interdependence between the two blocs. At the start of the year, the EU raised expectations with its just transition rhetoric and its pledge for a EUR 150 billion investment package for Africa. Today, the challenge is to ensure that the EU’s new push for domestic renewable energy combined with the search for alternative gas sources abroad do not deflate the momentum for external investment, but rather reinforce it embedding it in a wider, long-term vision for a shared — and greener — energy security.

‘The War in Ukraine is Pushing the EU Green Deal Ahead. Will This Affect Africa’s Own Transition?’ — Commentary by Alfonso Medinilla — Italian Institute for International Political Studies / ISPI.

The Commentary can be downloaded here

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