Rebuilding Europe's Energy Security

A former senior executive at Areva and former president of La Fabrique de la Cité, Cécile Maisonneuve is currently an advisor to the Energy and Climate Center at the French Institute of International Relations and an associate expert at the Institut Montaigne. On February 28, 2024, she spoke at the symposium “ The Energy Transition: Challenges for Society and Innovation ,” organized at the Collège de France by Professor Marc Fontecave. In particular, she suggested several approaches that could help rebuild the lost foundations of European energy security.

[This article is an edited version of her presentation. The full presentation is available on YouTube .]

Just a few months ago, on the website of the European Commission’s Directorate-General for Energy, you could find this quote:

“How secure is our energy supply? There is currently no threat to energy security. The European energy system has demonstrated its resilience. Electricity, gas, and oil are reaching the places where they are needed—and especially where we need them most.”

This text dates from April 2020. Two years later, the reality was somewhat different. We are now in the midst of the energy crisis, in the spring of 2022. The two photos shown here illustrate quite well, in my view, a number of problems with European energy policy. On the left is German Environment Minister Robert Habeck, who in the spring of 2022 was touring Middle Eastern countries, notably to secure a number of gas supplies for his country. On the right is one of German Chancellor Olaf Scholz’s first major trips after his election. He is touring African countries, which is not the most typical move for a German chancellor.

I see several things when I look at these two images side by side. On the one hand, when we talk about European energy policy, individual countries are always very much in the picture. It’s worth noting that under the treaties—even though, as we’ll see, they’re drafted with remarkable ambiguities—member states retain control over their energy mix. And ultimately, what Robert Habeck or Olaf Scholz are doing is entirely normal during a crisis: reaching out to potential suppliers. That’s the first lesson.

Second lesson: Mario Draghi was the one who emphasized this—particularly to his German colleagues at the time—while accompanied by the prime ministers of Greece, Portugal, and Spain. Can a crisis of this magnitude be resolved without a certain principle of solidarity? He made some remarks then that I invite you to reread because they were quite clear.

And the third lesson: we’ve had a crisis—one that I don’t think is over yet—but are we ready for the next one? The quote I read to you earlier raises a major question: that of resilience, a term used by Jean-Paul Bouttes . And when I see Olaf Scholz with Cyril Ramaphosa, the South African president, I see what could be the next crisis: the crisis of strategic metals. Indeed, it is on the African continent that these metals are found in large quantities, and these are precisely the materials we will need for the transition. However, in Cyril Ramaphosa’s country, there is the port of Durban. And 90% of the cobalt mined in the Democratic Republic of the Congo, for example, passes through this port. This is a major concern for our future energy security, given that these strategic materials are generally shipped from this port to China for processing. In short, have we experienced a classic energy security crisis, or is this the first crisis of the energy transition? This is a question that historians will be eager to settle.

When German industry catches a cold, the European economy starts to cough

You may have heard the views—which I’d be tempted to call revisionist—that attribute the entire crisis to the outbreak of war in Ukraine. According to this view, the crisis began on February 24, 2022, with the Russian invasion. That’s not quite how it played out. As early as 2021, just as we were emerging from the health crisis, we first faced an oil crisis—a fairly typical supply-demand imbalance in the oil markets following the collapse in demand caused by the health crisis. This is fairly quickly followed by a gas crisis, and by the summer of 2021, we see Russian gas deliveries decline, but also—for cyclical reasons—U.S. and Norwegian gas deliveries decrease. And then there is this crisis within the crisis: the electricity system crisis, caused in part by the failure of France’s nuclear power plants in 2022, but also by the failure of Europe’s hydroelectric system due to drought. Even Norway is affected—and, in fact, had already been affected in the preceding months.

We can clearly see that, as is always the case when analyzing a crisis—when we look back a bit at history—we must examine the immediate, cyclical causes, but it is also worthwhile to consider the structural causes. These structural causes are reflected today, on the one hand, in a striking price differential between Europe and its American competitor. Gas prices are up to five times higher in Europe, and electricity prices are twice as high. However, while gas prices are returning to normal on the markets, electricity prices are collapsing on wholesale markets, raising concerns about the profitability of existing assets, not to mention the financing of future investments. Europe is being drained by this structural crisis in its energy competitiveness—and particularly in its industrial system. The problem with this collapse in gas demand is that it is in fact largely due to massive industrial problems and the onset of deindustrialization. “But,” you might say, “we’re used to that in France—we’ve been dealing with it for over twenty years.” The problem is what’s happening across the Rhine.

German industry is in very bad shape. One of the most striking examples is the recent news that investments by German companies in the United States in 2023 reached a historic high. I still have fresh in my mind the words of Olaf Scholz’s economic advisor, who said, “But you know, the Inflation Reduction Act is perfect for German companies, which will do great business in the United States.” However, here is the result. Another telling example is that of the Swiss manufacturer Meyer Burger, which is closing its German solar panel factory to invest in the United States—an investment of 262 million euros and, in return, a tax credit of 1.4 billion euros. The Inflation Reduction Act is very concrete, very fast; that’s the point. Europe will lose 10% of its solar panel production capacity because of this relocation.

The Green Deal—the European Green Deal adopted in 2019—isn’t up to the task. Let’s hear from the president of Meyer Burger: “The goal is to make us independent of political decisions made in Europe.”

The Illusions of European Energy Strategy

The European energy order was built on three pillars that have turned out to be three myths. And I use the term “energy order” to draw a parallel with the concept of “security order” in the military sphere. Whether it’s NATO or European defense, the issue of military and strategic security has been debated for decades. In contrast, the very idea of European energy security has never really been debated collectively. The fact is, however, that it has developed over time, based on three more or less explicit pillars.

The first is Russian gas. Its importance in our energy mix actually increased after 2014, once Russia began to operate outside the framework of international law (annexation of Crimea). We accelerated our dependence following the events of 2014—and we’re talking here about violations of international law! I would also like to recall the statements made by the secretary-general of Germany’s SPD literally on the eve of the Russian attack on Ukraine, in which he argued that the Nord Stream issue needed to be “decoupled” from the Ukrainian issue—even though it was already known that war was about to break out. This illustrates just how completely disconnected the energy issue was from geopolitical realities.

Second, there is this view that Europe’s entire energy security will very soon rest on a single energy source: renewable energy. To summarize: renewable energy equals peace, democracy, and the antithesis of fossil fuels—and, if you read between the lines, the antithesis of nuclear energy, since renewables, we’re told, cannot be diverted for military purposes. There is this idea that, finally, we have found an energy source that will bring peace. A particularly idealistic vision, which in no way corresponds to the reality on the ground: let me remind you of that.

And then, the final pillar: the idea that nuclear energy was a thing of the past, which has led us to prioritize denuclearization over decarbonization.

It doesn’t matter that nuclear energy is the leading source of electricity generation in Europe and that, as Jean-Paul Bouttes explained, we control every link in the reactor fuel cycle chain on the European continent. It doesn’t matter that a number of countries rely on this energy source, albeit to varying degrees. We have truly erased the reality of nuclear power—a sort of “cancel culture” surrounding nuclear energy that has been elevated to the status of European policy.

The reality is that all these myths were false.

No, Russian gas will not flow forever. That’s what people used to say. “There will always be Russian gas. Look, even during the Cold War, the Soviets kept delivering.” The reality, as we’ve seen, is somewhat different.

Second topic. No, renewable energy does not in and of itself mean peace, independence, or sovereignty. Today, renewables mean China. And it’s increasingly China. In offshore wind power, the Asian giant is taking over the industry with costs that are unmatched. I’d like to echo a statement by China expert David Baverez, who says that China has, de facto, become our systemic rival for a very simple reason: it has no choice. Its policy of increasing domestic consumption has failed. The real estate crisis and the domestic situation in China mean that we’re going to face a rival that’s more aggressive than ever, at the very moment when we’ve been touting a number of measures that effectively put us at the mercy of Chinese technologies.

And then, as far as nuclear power is concerned, I don’t know if it’s just a passing trend, but today we’re seeing a reversal of course. I was recently in Estonia, a country with a dreadful energy mix based on the shale oil it possesses in abundance. They need to replace it. One might think that, given its proximity to Finland and the existence of transmission networks with that neighbor—which has abundant electricity generation capacity—Estonia could build its new energy strategy around these exchanges. Why build a SMR (“Small Modular Reactor”)? Estonia’s answer is interesting because it echoes a vision shared by all Eastern European countries: any grid infrastructure—whether a gas pipeline or a transmission grid—is a source of vulnerability, particularly when you’re in the Baltic region, close to Russia.

In this context, what opportunities lie ahead for us?

Let’s look at what’s happening in Europe. There are some interesting examples, such as Scandinavia. The Swedish government is preparing to launch an industrial revolution, investing—over the next 20 years—enormous sums (by Swedish standards) in the northern part of the country to develop a region that is already industrial and mining-based, where there are abundant mineral resources of interest to the green industry and where many low-carbon industries will set up operations.

The first lesson to be drawn from the Scandinavian example is this: at a time when Sweden and Finland, breaking with historical tradition, are joining NATO, we must understand that, in the current geopolitical landscape, we can no longer separate energy security from military security and economic security. Today, all of these go hand in hand. I don’t know if I would go so far as to say, like David Baverez whom I quoted earlier, that, ultimately, ESG today stands for “energy, security, war” (instead of environment, social, and governance). But this is now the geopolitical context within which we must frame European energy policy.

I’d like to remind you that Ursula von der Leyen said in 2019 that this Commission would be geopolitical or it wouldn’t be at all. It’s time to take that statement seriously—and perhaps to read Raymond Aron in Brussels.

Second topic: as I was saying, we’re going to have to produce much, much, much more electricity. Not for us as individuals, but for industry. Just to decarbonize the Fos-sur-Mer area, for example, we’ll need several nuclear reactors—not half a reactor, not one, but several. The same will be true for the chemical industry cluster in the Rhône Valley. I won’t even get into digital issues. In a telling move, Microsoft has hired a chief nuclear officer, along with an entire nuclear engineering team.

Third, to borrow NATO’s rhetoric, we’ll need to “share the burden” when it comes to the energy transition, just as we must do in the military sphere. We have to do our part. And doing our part means stopping the mindset that, just because an activity is polluting, it has to be done somewhere other than in Europe. We need to look at what’s right under our feet. The BRGM ( Bureau of Geological and Mining Research ) has done just that. Sweden, for example, announced the day before yesterday that it was resuming uranium mining. Europe—including France—must return to mining.

And then, finally, we need to engage in diplomacy. We have an ally—a good ally. It’s right next door. And its name is Norway. It’s getting the job done. It’s on track to break a record in terms of oil and gas exploration this year. No European government takes offense at this, because we Europeans are very happy to have one of the architects of our energy security right on our doorstep.

In conclusion, a united Europe on energy is, in fact, not a choice. It is a necessity.