We live in difficult times, which today bring multiple political, economic and social challenges, both locally and especially globally. We have gone through a pandemic that has put social and health systems to the test, to an energy crisis that has caused significant economic stagnation, and now we are dealing with an unprecedented security crisis on the borders of the European Union. All this calls for indisputable evidence of local, regional and global leadership, which will give confidence in the ways forward to increase resistance and resilience to ongoing shocks.

Before the outbreak of the conflict in Ukraine, the European Union and its Member States set themselves a series of ambitious targets for reducing carbon emissions and supporting the green transition in the Green Deal – also included in the European Climate Act adopted in 2021. This has been extremely intense over the last year, bringing all the Member States in the same boat. But this European approach, which seemed to be unstoppable in reaching its ambitious targets (which we have also heard enough rebuttals), is facing a real black swan, endangering the security of the entire continent, in the traditional sense, but also in the broader sense which includes energy security.

The EU is committed to achieving climate neutrality by 2050 and a net reduction in emissions by at least 55%, % compared to 1990, which means, among other things, phasing-out coal or building new green energy production capacity. In this regard, the European Commission is helping the EU Member States to design and implement reforms that support the green transition and help achieve the objectives of the Deal. Moreover, these targets seemed unchanged until recently, even if they involve difficulties for some Member States in the East, rather than those in Western Europe, due to their greater dependence on fossil fuels (gas, coal – see the case of Poland). For these states, Romania included, there are more specific needs to comply with the green transition proposed by the EU because they are more dependent on an energy infrastructure built and inherited from the communist era, which now requires major investment to modernize.

In response to the difficulties reported by the Member States concerning the green transition, the Commission approved earlier this year the Complementary Delegated Climate Act to accelerate decarbonization, which was well received by the Member States, including Romania. The Commission has thus decided that natural gas and nuclear energy will play a transitional role from coal to green energy, in the coming years, to help Member States implement reforms that support the green transition in the best possible way for their specific needs. In the context of rising energy prices and public pressure, European decision-makers have well realized that they cannot ignore the political and electoral dimensions of the issue.

THE FUTURE OF THE TRANSITION IS BECOMING INCREASINGLY UNCERTAIN

At the EU level, it will be more difficult to rely on a stable source of gas. Germany has suspended the authorization of the Nord Stream 2 gas pipeline, and the company that owns the project, controlled by Gazprom, has gone into bankruptcy following sanctions imposed on Russia. Although Russian gas, which accounts for 40% of what we need in Europe now, continues to be delivered under contracts with energy companies in the Member States, uncertainty about future supply jeopardizes the entire European project. These days, there is intense talk at the European level about limiting energy dependence on Moscow, a potential target being a two-thirds reduction this year. Thus, suddenly the abandonment of coal seems to be delayed for a while, due to the lack of gas needed in the short term and because of the time needed to develop new green production capacity, including nuclear. Recently, Frans Timmermans announced that the EU is adapting to the energy crisis exacerbated by Russia’s invasion of Ukraine and allowing a return to coal-fired power generation. But how can the Member States adapt their policies immediately, especially those that have already embarked on an ambitious path to change and modernize the whole sector?

The energy sector, both in Romania and at the European level, is in the process of transitioning to green energy, currently reaching this crossroads: on the one hand, we face the challenge of “decarbonizing” our energy systems, and on the other hand, we need to ensure the security of energy supply at an affordable cost to the final consumer. Along with rising natural gas prices, the accelerated drop in coal has also been one of the reasons why Europeans have paid a higher price for energy in the last year, which has also brought important political challenges. Some Member States, such as Poland and Romania, were already preparing for the management, including communication, of the socio-economic effects that could be felt by the communities built around such production facilities – such as those in Valea Jiului, where coal is extracted for the Complexul Energetic Oltenia.

Even under these temporary conditions, we need to take seriously the issue of a sustainable and equitable green transition and medium- and long-term energy independence. The construction of several liquefied natural gas terminals in Europe – recently announced by some Western states – and more investment in green energy is needed across the continent, but it must be carefully communicated on how these new projects will be developed and supported, as they can bring, in the medium term, financial costs even higher than those for the natural gas brought from Russia, which in turn entails a significant political cost. The political and security stakes of these movements need to be better explained, because now security, in the classical sense, is even more important than the economy.

It is, therefore, necessary for the leaders who support this direction of accelerated transition to rely on strong narratives, targeting many concerns. For example, a conflict on our borders is a reason for us to look more closely at energy independence, but given the economic costs we have to bear in the aftermath of the war, will we be also able to bear the extra costs of rapidly gaining energy independence as markets break new records every day?

THE ROMANIAN NARRATIVE: WE HAVE THE CHANCE TO REDUCE THE GAPS

Romania has the chance to be among the countries least dependent on Russian gas, therefore a major change in the direction of the green transition is not necessary, as it would more easily manage to ensure its energy independence. While there are many signs that some Western states could slow down the decarbonization rate – at least in the short term, to ensure that they need gas from other sources or to restart coal-fired units to cover their energy needs -, Romania must continue its investment plans in green projects, together with the private sector.

We have seen how COVID-19 has made us in 2020 more aware of our needs and the health of those around us, as well as the rules of society that we must follow, for the benefit of all. This was followed by an alarming rise in commodity prices in 2021 – whether we are talking about oil, fuel, natural gas or electricity – which made us pay more attention to our behaviour towards energy consumption. Russia’s armed conflict in Ukraine can deepen, in a relatively short time, the economic problems that Europe has as an entity, but also the individual concerns. Above all, the energy transition needs to be accompanied by strong messages: the promise of security in the foreseeable future, the opportunity to regain our confidence in ourselves and our abilities, the possibility of assuming a regional leadership role in this area, the need for solidarity in the context of the war in Ukraine.

Realistically, the role that Romania will assume in addressing the energy transition and overcoming the current crisis will determine whether we will be able to benefit from this change or whether we will rather bear their costs. It is Romania’s chance to stand out by maintaining a stable course of green transition projects. We have the opportunity to develop new industries, especially in the field of renewable resources and the Black Sea gas, to create new jobs and generate added value in the economy, and at the same time to be a model at the EU level and to help neighbouring countries to overcome the current crises more easily (I am thinking primarily of the Republic of Moldova). The next decade will be for Romania, truly, one of change, with lucrative opportunities for which political leaders and the private sector must work together in the public interest. We need to set a destination, a national goal and, why not, a new regional and European profile.

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This article first appeared in the printed edition of Energynomics Magazine, issued in March 2022.

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