Copernicus Institute of

Sustainable Development

Energy Security &

Geo-Politics
Ernst Worrell

Utrecht, September 14th, 2022

Copernicus Institute of Sustainable Development

 Ernst Worrell

• Professor “Energy, Resources &

Technological Change”
• Background: Chemistry
• PhD from Utrecht University
• International & Diverse Career:
• Princeton University
• Lawrence Berkeley Laboratory, Berkeley,
California
• Consulting
• Research interests: Efficient use of energy
and resources

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 European gas shortages likely to
last several winters, says Shell
chief

Warning raises prospect of continued

rationing, as Total boss says Europe has to
plan for future without Russian supplies
August 30th, 2022

Selection of headlines on Reuters Energy (August 29th, 2022):

Nord Stream turbine tension puts focus on gas pipeline parts

How the Ukraine-Russia war rattled global financial markets

Germany's efforts to tackle energy crisis

EU gas storage tracker

How much extra oil can Saudi Arabia pump?

Europe's energy alternatives if Russian gas flows stop

Switzerland's engineering sector urges country to start energy saving now

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 EU Import of selected energy carriers
(Mtoe)
The quantity of imported
natural gas more than
doubled over the period
1990-2019, reaching
360 Mtoe (see Figure).
This makes natural gas
the second largest
imported energy product,
360 Mtoe
= 15.07 EJ with record import levels
= 396 bcm in 2019, 19.3 % higher
than in 2009.

Crude oil again ranked

first in terms of quantities
imported, with 513 Mtoe
in 2019, only 1.2 % less
than 10 years ago.

Source: https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Energy_statistics_-_an_overview#Primary_energy_production
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Energy dependency
rate, EU, 2010-2020
- EU dependency on energy
imports did not substantially
change over the last decade,
from 55.8 % of gross available
energy in 2010 to 57.5 % in
2020.

- Between 2010 and 2020,

Denmark and the Netherlands
became increasingly dependent
upon energy imports to satisfy
their gross available energy
(largely due to a downturn in
primary energy production).

Source: https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=Energy_production_and_i
mports#More_than_half_of_EU_energy_needs_are_
covered_by_imports

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 From where do we import energy?

‘Russia is the main EU supplier of crude oil, natural gas and solid fossil fuels’

In 2019, the dependency rate of the EU

was equal to about 61%, which means
that more than half of the EU’s energy
needs were met by net imports.
This rate ranges from over 90% in
Malta, Luxembourg and Cyprus to 5%
in Estonia.

Source: https://ec.europa.eu/eurostat/cache/infographs/energy/bloc-2c.html Copernicus Institute of Sustainable Development

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 We were Warned: 2009 Gas Crisis
(Price conflict between Russia and Ukraine)
% of missing gas supply
from 6 to 20 January 2009
(- 300 million m3/day for 14 days)

> 75 %

50 - 75 %

25 – 50 %

< 25%

0%

The January 2009 gas crisis showed the lack of physical interconnections and the
poor functioning of the EU internal market, with several Member States facing severe
energy shortages for several days.
Source: European Commission

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 (June 2014)
The Netherlands – A Love story of (Russian) gas
(1) Gas policy of The Netherlands has been focusing on cooperation
with Russia since the end of 1990 (e.g.: storage Russian gas in
Gas Storage Sites in the Netherlands; participation in North
Stream pipeline).
(2) Shell is collaborating with Gazprom in Sakhalin-II oil and gas
extraction project in North-East Russia.
(3) Rotterdam is an important transit port for the export of fuel oil from
Russia to Asia.
(4) The Netherlands wants to be a gas hub for North-Western
Europe; 8 bln. euros have already been invested in this.
(5) Trade relationship with Russia important; import in 2012 from
Russia 20.3 billion euros, export to Russia 8.3 billion euros.
(6) Significant investment relationship between NL and Russia.

Source: AIV, ‘EU Dependence of gas from Russia’, June 2014

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 Pre-2022: European Energy Security

• Europe’s dependence on imported oil and gas

supplies will grow over the next 10-20 years

• Much of the oil and gas which Europe will have to

import will need to come from the Middle East (oil)
and Russia (gas)

• This gives rise to two concerns:

– over-dependence leading to the potential for
commercial/political blackmail
– political instability/conflict within or between these
countries leading to supply disruption

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 Pre-2022: To ensure energy security,
the European Union proposes:

• Promote energy efficiency

• Diversify energy supply sources (expanding the range of

foreign suppliers, using renewable energy sources);

• Develop cooperation with traditional energy suppliers, primarily

with Russia

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 2022 – A New World: EU is revisiting its Energy
Policy
Short Term Action:
• Reduce gas demand by 15% this year
• Gas storage facilities 80% full by November 1st, 2022
• Run coal-fired power stations to offset gas-fired power generation
• Shift away from importing Russian gas
• Increase (LNG) imports from other regions
• Build new LNG terminals

Strategic:
• Strengthen energy efficiency actions
• Improve LNG and gas infrastructure in EU
• Diversify natural gas, oil and coal supplies
• Shift to renewables

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 LNG terminals in Europe (June 2014)

Source:
Gas LNG Europe,
17 Sept. 2014

Status 2018:
- Existing: 29 LNG Terminals (227 bcm/year)
- Committed / under construction: 6 LNG Terminals,
including 4 small-scale LNG

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 Infrastructure priorities by 2020

Gas
Baltic
Energy Market Electricity
Interconnection
Plan Electricity and Gas
Electricity & Gas Oil and Gas
North Seas Smart Grids for
Offshore Grid Electricity
in the EU

Central / South Eastern

Electricity Connections

North-South Gas Corridor

in Western Europe North-South Gas
Interconnections
& Oil Supply

Southern
Gas Corridor

South Western
Electricity Interconnections

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 Definition Energy Security

“Uninterrupted physical availability on the

market of energy products at a price
which is affordable for all consumers”

European Commission (2000)

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Perspectives
Three distinct perspectives on energy security:
• Robustness
▪ Sufficiency of resources, reliability of infrastructure,
and stable and affordable prices
• Sovereignty
▪ Protection from potential threats from external agents
• Resilience
▪ The ability to withstand diverse disruptions

How did the EU/Netherlands do, given these three criteria?

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 Other Aspects of Security of Supply
Reliability of the electricity grid

Materials for the energy transition

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 Electrification is key in
energy transition
Electrification of heat demand in buildings and industry

Growing demand while changing to high reliance on VREs

Build in resilience in energy and power system:

• Distributed generation
• Energy Storage (short-term, seasonal)
• Energy efficiency
• Demand response & flexibility
• Interconnection

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Electric Grid Reliability

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A day in the life of the Power Grid

24
hours

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 Characteristics Dispatchable
Power Generation Technologies

Source: Freris and Infield, 2008 Copernicus Institute of Sustainable Development

 Power Generation Mix EU (2018)

Source:
EURACOAL, 2018

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 Towards more VRE: Demand
for more Flexibility

Source: European Union 2020-Energy Policy Review, 2020 Copernicus Institute of Sustainable Development
EU interconnection levels in
2020 assuming completion of
Potential solutions-
current on-going projects
Transmission planning and
development

Source: IEA, 2017

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Shifting Resource Extraction:

Mineral Dimension of the
Energy Transition
U

• Uranium ore for nuclear power

• Increased use of uncommon elemental
minerals in energy systems, e.g., Te

▪ Platinum catalyst in PEM fuel cells

▪ Lithium in batteries
▪ Neodymium in electric motors
Li
▪ Cadmium, Tellurium, Indium and other
elements in solar PV cells
▪ Silver used for PV electrodes
Pt
• Concerns raised about supply
(stocks, access), environment, toxicity

In

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Criticality & Scarcity

• Criticality
▪ Supply chain cannot respond rapidly
enough to demand or supply shocks
▪ Short Term

▪ Risk to economy

• Scarcity
▪ Absolute geological scarcity

▪ Structural scarcity

▪ Short to long-term

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 Reasons for Criticality& Scarcity
• High investments in new mining technology may
be limited by low prices of the materials;
• Access to resources may be limited by natural
occurrence in ore bodies of mined minerals
(“hitch hiker elements”);
• Slow response of the mining sector to price
dynamics of materials;
• Environmental impacts of new mining and
production may restrict access or the production
of the materials;
• Producing countries may limit or tax exports as
part of domestic economic strategies;
• Depletion of existing reserves.
Source: Worrell & Reuter, 2014
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Materials critical to EU Economy

Source: European Commission, 2010

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 Origin of Critical Materials to EU Economy

Source: European Commission, 2020

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A Special Group: Rare Earths

Source: Oeko-Institut, 2012

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Supplies of Rare Earths

RE reserves

1%
12% 0% United States
Australia
36%
Brazil
China
India
48% Malaysia
0% Other countries
3%

RE production 2012
3% 0%
6%
4% 0%

United States
Australia
Brazil
China
India
Malaysia
87%

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Rare Earths: Critical Supply

Not Critical Near-Critical Critical

Cerium Erbium Dysprosium

Gadolinium Lanthanum Europium

Samarium Praseodymium Neodymium

Terbium

Yttrium

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 In Conclusion
• Reliability and security of energy
services are essential in modern society
• EU is and will be dependent on import
• Energy transition will shift energy
carriers, and hence types of imports and
potential dependencies
• Various response strategies:
• Diversification of supply
• Integration of infrastructure
• Demand reduction
• Circularity of energy technologies

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Wim Turkenburg
Wen Liu

For borrowing some of your slides

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 Thank you for your attention!
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