One of the great success stories of modern Danish business is renewable energy.
With hugely ambitious projects underway such as ‘Energy Island’ in the North Sea (which will supply electricity to 800,000 homes), the role of renewable energy will increase significantly.
Energy crisis for Germany?
These projects are hugely beneficial from an environmental point of view. And now events in Ukraine have shown how urgent it is to switch over.
Denmark’s neighbor Germany, Europe’s largest economy, has made significant progress in the production of renewable energy, but natural gas still accounts for only a quarter of all energy consumption – and 55 percent of this comes from Russia.
Oil is also central, with Russia supplying about a third of its oil.
This places Germany in an obvious bind given Russia’s invasion of a sovereign country and the fact that its majority of state-owned oil and gas companies are crucial to its finances.
It is difficult to turn quickly to alternative suppliers, especially of natural gas. British and Dutch waters are becoming more and more depleted. Norway is one of the few European countries with significant reserves, but it already operates at full capacity.
Nuclear way out?
While renewable energy production has increased, Germany remains dependent on Russia because of its desire to move away from environmentally harmful coal.
Less understandable is its phasing out of nuclear energy, in part due to long-standing security concerns that began in earnest following the 2011 Fukushima disaster.
Now it may be time to reconsider. New, interesting and potentially safer nuclear technology is constantly being tested, and nuclear power could be a way to provide alternatives to fossil fuels and dependence on Russia.
No quick fixes
So what should Germany do in its current energy problems? Well, there is no magic bullet, but it should take this crisis as an opportunity to finally get used to it depending on a worrying regime.
Secondly, double down on renewable energy, with huge projects like the one Denmark is planning.
And third, the debate over whether nuclear power should be part of the energy supply reopens.
None of this will happen overnight, but the imperatives (both environmental and geopolitical) require nothing else.
Neil is a Scottish trained lawyer with 18 years of experience in corporate structuring and general commercial matters. Based in Copenhagen, he primarily advises on international agreements. Out of the office, his interests include sports and politics. His column explores current international financial and economic issues from a Danish perspective.
Source: The Nordic Page