The war in Ukraine has forced Spain to look for new gas suppliers, speed up the use of renewables or get used to high electricity prices after a year of upheaval
From warfare to energy conflict. The geographic location of Ukraine, an important epicenter in the distribution of gas from Russia to all of Europe, has had an earthquake effect on the Old Continent, accustomed to receive raw materials from the almighty Russian power with hardly any trouble or inconvenience. This week, the Ukrainian gas company has been forced to stop supplying a third of the gas due to “force majeure”. Before the war. But the signs have been there since Russian President Valdimir Putin warned last summer that a military intervention in Ukraine was approaching. When he applied the measure on February 24, not only military installations, civilian buildings and human lives exploded. This also applied to an energy market that was already under pressure and that has turned 180 degrees in just two months in economic, structural and geostrategic context.
The first effects were felt just hours after on the night of February 24, Russian troops invaded part of eastern and northern Ukraine to approach Kiev. The price thermometer shot up: the cost of gas on the international market rose by 60% in just a few hours. The revival of this commodity had already come a long way, almost a year, although it broke all its records as a result of the invasion. The effect was immediate on the price of electricity generation: in the middle of winter, given the need to use combined cycles on gas, the cost of electricity also skyrocketed. And oil, the third element in discord, was not far behind, with historic gains. In the background, the relevant role of Russia, where 40% of the gas that supplies Europe and half of the oil that Europeans consume comes from.
As soon as the war started, the Western powers began to apply sanctions to try to choke Russia’s finances. However, two months later, it still did not work. The ban on banks from working with the international information system SWIFT was followed by the US or UK veto against Russian oil, the preservation of the tycoons’ luxury goods… As the war progressed, tensions in the markets mounted , until another key date: March 7. That day was to be forgotten. The price of gas reached its historical maximum (210 euros/MWh), also that of electricity (544 euros/MWh) and oil, just like 14 years ago, came close to 130 dollars per barrel of Brent.
The sanctions against Russia triggered an initial ‘boomerang’ effect, the main impact of which was Europe. Putin warned day in and day out about a possible cut in gas and oil reaching the EU. It would be the worst possible scenario. And there, in the face of the threat, a beginning germinated in the strategic change of the whole continent in general and of Spain in particular. Until last summer it was comfortable with the supply from Algeria (directly via Mezgas with Almería) or via Morocco. However, the rift in relations between Algerians and Moroccans caused the closure of the gas pipeline through the Strait of Gibraltar, key to ensuring supplies for the entire peninsula. However, the Iberian Peninsula is a real bottleneck. No matter how much gas it receives, it cannot export it to the EU except through two gas pipelines in the Basque Country and Navarra, whose capacity is much lower than that of imported gas. Although they are now working at full capacity due to requests for this raw material from other neighboring countries.
The peninsula became the epicenter of all eyes: Spain has six regasification plants, 25% of all operating in Europe. Gas can arrive at these ports from anywhere in the world, without depending on Russia, to be unloaded and distributed among the countries. In just two months, Spanish gas imports have completely changed: until last year Algeria was the main supplier (with more than 40% of the total), now it is the United States (with more than 30%). And, above all, Spain continues to negotiate with other minority countries (Egypt, Nigeria, Qatar, etc.) to supply the gas that no longer comes from Algeria, or may be missing from Russia next winter.
Until April, 75% of the gas received by Spain came from methane tankers. The other 25% via the Algerian gas pipeline. The arrival of these floating vessels to the six ports with active regasification plants (Barcelona, Sagunto, Cartagena, Huelva, Mugardos and Bilbao) has been relentless in recent weeks. In reality, the movement of these ships represents real marketing, moving them loaded with gas through the oceans depending on the highest bidder. From the country that offers them the most money to unload that resource. With this solution, more expensive than gas from gas pipelines, Spain guarantees its supply.
In the long term, the new Spanish and European energy order will undergo the implementation of renewable technologies. These factories will succeed in cutting the umbilical cord that all of Europe has with Russia, although the change will not be visible overnight. Energy sovereignty will come with more wind power plants (they will represent 33% of installed power) and solar power plants (24%). Although there is still a long time before that electrical independence.
In this context, Europe insists on cutting the umbilical cord that unites it with Russia, on which it depends almost exclusively to sustain its economic growth. Without gas or oil from that great power, Europeans languish. That is why they continue to look for alternatives. There are, beyond the Atlantic Ocean, the Mediterranean or the Persian Gulf. But it will be more expensive. Energy has become the Achilles heel of an old continent accustomed to living peacefully energetically, without fear. With the invasion of Ukraine, reality has blown up. The European powers are aiming to be more independent in the long term with renewables and look for suppliers they can trust without becoming a hindrance to their economies after the shocks Vladimir Putin has become accustomed to across Europe.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
