profits of energy traders became public knowledge, and it was clear that trading companies in the electricity market were getting unreasonable profits due to the volatile nature of the electricity market. The European Union demonstrated its strength during this period, and remarkably, this strength went somewhat unno- ticed by the public eye. The absence of chaos diverted media attention as the EU made rapid and decisive decisions to win the “battle of energy.” By sticking to the existing framework and only implementing new measures collectively designed to navigate the energy crisis, the EU countries stood together and found true “renewed energy in unity.” As Ursala Von der Leyern said and repeated by statesmen and women around the member countries. So, do we have a plan? The RePowerEU plan sets the direction towards energy inde- pendence in the EU. The measures in the REPowerEU Plan re- spond to this ambition through energy savings, diversification of energy supplies, and accelerated roll-out of renewable energy to replace fossil fuels in homes, industry, and power generation. One of the goals is to integrate geothermal and solar thermal en- ergy in the modernised district and communal heating systems. DH systems proved to be a significant mitigating factor against inflation during the energy crisis in countries like Denmark and Sweden. DH consumers fared better through the energy crisis and inflation because DH prices remained stable throughout the winter of 2022-23. DH’s energy production is composed of various energy sources, and with long-term delivery agree- ments, smaller price increases only began to take effect in the winter of 2023-24. DH demonstrated its resilience and, most importantly, its en- ergy security. DH consumers and their households acted as a direct counterbalance to inflation. The extent of DH adoption in individual member countries became a crucial factor in de- termining the level of inflation. Gas is important but should not be used in house- holds. The natural gas sector has historically been very influential and has significant economic interests in maintaining natural gas demand in the EU. However, overall natural gas consumption is declining, and as a result, the share of biogas is expected to increase. Nevertheless, reaching a 10% biogas share in Euro- pean gas networks is a long journey. Natural gas consumption must continue to decrease significantly, which the recently
with flashy advertisements displayed at all European stadiums. The sponsorship of the Champions League was the symbolic pinnacle of how Russian natural gas deliveries equated to an advancing power position in European energy supply. How- ever, we should remember that several prominent figures on the political stage, especially in Germany, continuously issued sharp warnings about the critical levels of dependence on Rus- sian natural gas. The end of the story and aftermath With the Russian invasion of Ukraine, the question of energy se- curity quickly became a top political priority. When late sum- mer 2022 arrived, and other sources of electricity production in Europe faced challenges, the natural gas market panicked! Suddenly, natural gas became a cornerstone in electricity pro- duction, and prices soared to unreasonable levels. A natural gas market with an immediate shortage of imports and declining electricity production had transformed into an all-encompassing energy crisis as electricity prices rose in proportion to natural gas prices. The price mechanisms in Eu- ropean natural gas and electricity markets are based on the principle that the most expensive produced electricity sets the bar for the day’s spot market. And with the soaring natural gas prices, electricity produced on natural gas hit the price roof of electricity and set the prices. During the winter of 2022-23, all households, businesses, in- dustries, and public local and state authorities felt the impact on their annual budgets. Inflation started to surge shortly after as the dependency on energy prices in other markets influ- enced pricing. European consumers felt the decrease in pur- chasing power, and a crisis loomed that could have profound and transformative effects on EU cohesion. The Kremlin may have factored in the potential consequences of missing natural gas deliveries, but they were mistaken. Putin may have anticipated the possibility of the EU being en- gulfed in protests against energy poverty, breakdowns in the power grid, conflicts between countries over resources, and the shutting of interconnection. In the autumn of 2022, some member states briefly had a political demand for price differ- entiation and suggestions of protectionist decisions regarding interruptions in energy connections between nations within the common market. Ideas emerged because system analyses revealed that indi- vidual countries’ electricity production costs were much lower than the market prices. The situation didn’t improve when the
10 HOTCOOL no.2 2024
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