European natural gas prices have soared so high that hundreds of millions of people could be facing cold homes or inflated energy bills over winter. There’s also fears of a knock-on impact as carbon dioxide used in food production — a by-product of fertilizer made with natural gas — also gets more expensive. Politicians are blaming the surge in prices on an increase in natural gas demand as the world wakes up from the pandemic, supply disruption caused by maintenance, and a less-windy-than-usual summer that saw a drop in wind-generated power.
But really, Europe’s crisis is in its renewables sector. The region has invested heavily in renewables, such as wind and solar, but it can’t get enough of this green power to the people who need it. After the UN published its state-of-the-science climate report in August, warning the world must make deep and sustained cuts to greenhouse gas emissions this decade, there has been a growing understanding among political leaders that the transition away from fossil fuels needs to happen more quickly than planned. The gas shortages are being felt more sharply in the United Kingdom, where prices have more than quadrupled and some small energy companies are going bust. The current energy crisis — exacerbated by a lack of wind in the North Sea this summer — underscores the need for Europe to build more renewable infrastructure in more places, and to diversify its sources. Smart grids are another big part of the solution, Fischer said. Smart grids are digital electricity networks that can intelligently assess the behavior of its consumers, then respond with the right amount and type of energy required. While Europe has strong mandates for smart grid developments, the bloc and the United Kingdom lag behind countries like the United States and China, which are leading investment in this technology.