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Today Bloomberg News reports that Russia's national monopoly, Gazprom, has shut down all natural gas shipments to the Ukraine as part of an escalating price war that has created an energy crisis in Europe. Immediate concern about access to natural gas from countries in the former Soviet Union highlights worries about the future of energy supplies, and adds greater force to the argument for shifting Europe's energy portfolio toward renewable technologies like solar thermal power from the North African desert.

Solar radiation in Europe and North AfricaThe current predicament threatens more than just Ukraine. With the looming threat of global climate change, Europe has become increasingly reliant on natural gas as a lower-carbon alternative to coal and oil. It imports 25 percent of its gas from Russia, 80 percent of which passes through Ukraine, according to the Associated Press. The cutoff has suspended all Russian gas supplies through Ukraine to Bulgaria, Hungary, Greece, Turkey, Romania, Serbia, Bosnia and Macedonia. The government of Slovakia has declared a national emergency; declines of 90 percent are reported in Austria and Italy, and 70 percent in France.
Reflecting European leaders' deep worry, European Commission President Jose Manuel Barosso has been quoted by AFP as stating that it is "unacceptable" for Europe's supplies to be taken "hostage" by the Russia-Ukraine dispute. Ongoing disputes with former Soviet-bloc countries and frayed relations with the West have sharpened concerns about Russia's reliability as an energy supplier, prompting the EU to consider further diversification of its energy portfolio.
To help them along, CGD's Kevin Ummel and senior fellow David Wheeler have just published an analysis of large-scale solar thermal power expansion in North Africa (see Desert Power: The Economics of Solar Thermal Electricity for Europe, North Africa, and the Middle East). They find that solar thermal production could meet the power needs of 35 million Europeans by 2020, at a total subsidy cost of about $20 billion. The proposed program would bring North African solar thermal to cost parity with European coal and gas power generation, as well as directly averting about 2.7 billion tons of carbon dioxide emissions during the lifetime of the new facilities. The program would indirectly avert another 2.6 billion tons by driving cost reductions for solar thermal investments outside the program. After completion of the program, cost parity with coal and gas would accelerate the shift to this nearly-limitless source of renewable power.
The EU has seriously considered solar energy from North Africa since 2007 and has noted that such a program would reap many economic and environmental benefits. Moreover, the Union of the Mediterranean, created in July of 2008, was formed expressly to forge stronger relations between Europe and Africa on issues like the environment.
In tough economic times, it is not surprising to see some resistance to the short-run cost of switching to low-carbon energy. But with Russia flipping the switch on Europe's heat this winter, far-sighted policymakers should seize this opportunity to promote North African desert power as a viable, cost-effective renewable energy option for the EU. And the Obama administration would profit from their example, as it considers national installation of a "smart grid" to bring American's own Southwest desert power to our metropolitan energy markets.
01/09/09 UPDATE: The New York Times reports a tentative deal has been struck to renew Russian gas deliveries to Ukraine, though negotiations on a final deal are ongoing. The news comes as a Reuters analysis points out the dispute has exposed Europe’s "Achilles heel" on energy security and "the urgent need to tackle long-neglected problems" like outdated infrastructure and renewable energy access. This couldn't be a better time for Europe to move towards a 21st century approach to renewable energy, but will European leaders seize the opportunity?

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CGD blog posts reflect the views of the authors drawing on prior research and experience in their areas of expertise. CGD does not take institutional positions.