Renewable Realignment: Europe’s Shift to Renewable Energy and its Implications on US Global Strategy
Background
The Russian invasion of Ukraine in 2022 exposed Europe’s energy vulnerability and functioned as a catalyst, accelerating the shift toward the use of renewable energy. In 2011, Germany resolved to phase out its nuclear energy program. The consequence was more reliance on Russian oil and gas for electricity generation. It was abundant and affordable. After sanctions were levied against Russia by the international community, European nations abruptly cut their ties to Russian energy imports out of necessity. This transition alters global markets and presents challenges and opportunities for the United States. In the interim, countries like Germany rely heavily on Liquified Natural Gas (LNG), imported primarily from the United States, to bridge the gap until renewables can be increased.
While this stopgap measure is a boon for the American export market, the United States should begin to plan for a future where Europe reduces its consumption of American LNG as it scales up renewable energy. President Obama signed the Consolidated Appropriations Act into law on December 18, 2015 which lifted the longstanding ban on United States LNG exports starting in 2016. This overturned the ban that was in place since 1975, quickly leading to the United States becoming the largest exporter of Liquified Natural Gas globally. Europe’s transition toward renewable energy represents a turning point in global energy dynamics and presents significant strategic implications for the United States.
European Dependance on Russian Oil and Gas
The geopolitical landscape of the European Union is complex. The Russian invasion of Ukraine exposed the vulnerability of the energy supply chain to regional conflict. In the years prior, Russia worked to lock Europe into a dependent relationship. Austria, Latvia, Germany, and Italy were the European nations most dependent upon the supply of Russian gas. The Nord Stream 1 and 2 projects aimed to bypass Ukrainian delivery fees. In the ramp-up to the invasion of Ukraine, Russia demanded that the European Union (EU) members pay for its gas in Russian Rubles and open accounts in Russian banks to prop up the Russian economy and provide a hedge against international sanctions.
This strategy faltered, however, and the EU began a hard transition away from Russian fossil fuels. Natural gas imports from Russia fell from 40% (as much as 80% in the cases of Austria and Latvia) of total gas imported before the invasion of Ukraine to around 10% in 2024 due to international sanctions. The subsequent result was a significant spike in energy prices in Europe. This price spike, while it has subsided and is projected to trend lower due to an oversupply of American LNG through 2030, is driving European Union nations to move to secure their energy independence and expand the use of renewables.
Challenges to Renewable Energy Implementation
While cooperation between nation-states allows for more diverse ways to fulfill the energy needs of a nation, moving toward energy independence provides for greater national security by eliminating dependence on potentially hostile states and reducing supply chain vulnerabilities. The sabotage of the Nord Stream Pipeline in 2022 drew a circle around the vulnerability of Europe’s oil and gas supply chain. While attribution for the sabotage of this infrastructure is unclear, the Russian Federation is highly suspected by NATO due to the coordination and timing of the demolition. This act of sabotage highlights the tenuous relationship Europe has with its energy producing partnerships. Complete energy independence is unobtainable for Europe due to a lack of fossil fuel deposits and critical minerals used in the production of batteries. Thus, European nations must always foster codependent relationships with potential adversaries to provide for their energy needs. Even if the EU could develop a 100% renewable energy infrastructure, the materials and batteries needed to construct the grid would have to be sourced externally.
The European Commission Green Deal has made net zero emissions by 2050 a goal. However, the speed of adopting renewable energy projects has been disparate between EU nations. Onerous regulatory burdens and permitting processes play a part in the slow rollout. Additionally, variations in regulation across the 27 member states of the European Union have caused a discrepancy in adoption. For example, wind projects can face a nine-year delay in getting permitting approval for grid connection. Challenges to the proliferation of solar energy exist as well. Bottlenecks created by outdated grids have caused solar energy growth to slow to a crawl on the continent.
Germany has been an early adopter of renewable energy, and their planned transition to 80% renewable energy by 2030, known as the “Energiewende,” is well underway. However, Germany is the EU’s largest energy consumer and still relies heavily on coal, oil, and natural gas. Denmark is another nation that began its transition away from fossil fuels early. Due to the rising cost of oil in the 1970s, they began to explore wind options to supply their energy needs. Today, they continue to expand their use of wind and geothermal technologies to provide energy to their citizens.
Germany’s Energiewende has highlighted key infrastructure challenges that should be addressed by the United States and other European nations as we expand our use of renewables. A primary issue is grid congestion, particularly in northern Germany, where wind energy exceeds transmission capacity. Grid congestion can occur due to intermittent energy spikes from renewable sources like wind and solar. This causes an excess of electricity that cannot be distributed effectively. These distribution bottlenecks have necessitated costly investments in grid expansion and optimization. This includes integrating smart-grid technology and demand-response systems. This allows consumers to grant permission for utility companies to make adjustments to thermostats and other Wi-Fi enabled appliances in exchange for financial incentives. Additionally, energy storage remains a challenge, as intermittent energy sources like wind and solar require scalable battery solutions to ensure a stable energy delivery. Countries scaling up their renewable energy systems should prioritize grid modernization and invest in energy storage to maximize renewable efficiency. Without an expansion in energy storage capacity, reliance on fossil fuels will persist, undermining emissions reduction goals. The United States is a hub for technological development and can play a key role in bringing cutting-edge energy storage innovations to the European market.
Economic Competition and Strengthening Alliances
The Trump administration’s confrontational stance towards NATO, Ukraine, and Europe may drive the EU to take steps to distance itself from dependence on the United States of America as both a trading partner and a military ally. The United States can position itself as a reliable trading partner by supporting the European transition to renewable energy. Europe’s use of Russian oil and gas was a marriage of convenience, geographic location, and economic expediency. It allowed for a reliable and affordable flow of fuels until war exposed the vulnerability of its supply.
China has attempted to make inroads in Europe’s infrastructure investments, including in the renewable energy sphere. Chinese investment in European electrical grids has raised national security concerns. Chinese investment in Germany’s renewable projects spiked in 2013 but has since fallen as national security concerns over Chinese control of the grid were highlighted. If the United States cedes its position as a partner in Europe, China will undoubtedly attempt to position itself as a viable alternative source of critical components.
Despite the national security concerns, if the United States continues implementing erratic and unpredictable trade policies, i.e., tariffs, the EU may be forced to source grid materials from our adversaries. In the arena of global competition, Russia and China will move to ingratiate themselves with our trading partners if we are deemed to be an untrustworthy and unstable partner.
Conclusions and Recommendations
A European transition to renewable energy represents a global shift in energy dependence. As a key stakeholder in international energy market dominance, it poses challenges and opportunities for the United States. To maintain a position as a global leader in energy, the United States must make aggressive investments in the renewable market. The United States has always been a driver of science and innovation, and aggressive investment into the research and development of battery technology, grid resilience, and energy distribution should be a national priority.
While mining is energy-intensive, the United States should invest in critical mineral exploration and extraction to compete with China in the global battery market. The United States has Lithium deposits in Nevada that are currently undergoing regulatory approval for extraction. Deep sea mining is another emerging area that the United States can move to exploit. China dominates the market in critical mineral extraction and battery manufacturing capacity. The European Union will exponentially increase the need for batteries and essential imports of minerals as they ramp up renewable energy supply across all sectors, from transportation to electricity generation. The United States will lose its status as an economic leader if it cannot compete in this critical market.
The United States must take steps to support the European Union’s transition to renewable energy. By supplying intellectual capital and raw materials, the United States benefits strategically and economically. Russia and China are actively trying to expand their influence in the European energy market. This geopolitical realignment will weaken the transatlantic alliance if the United States does not present itself as a stable and reliable partner. By proving ourselves to be a steadfast and dependable ally to Europe, the United States can maintain dominance over the creeping soft power of both China and Russia in the European energy markets. Forging immutable bonds with Europe will guarantee an energy-resilient future for both continents.
