How do recent events in Europe affect the opportunities in transitional energy? – Investing in clean energy: Given this backdrop, European Commission has already commented that European governments are under pressure to increase “terminating our dangerous overdependence on fossil the use of clean energy and accelerate the delivery fuels from Russia can be achieved well before 2030”. of green technologies. They are also assessing where But getting there may involve acting on several fronts. nuclear power stands in the long-term energy mix, – Reclassifying nuclear as “green”. Nuclear power’s and they are looking to invest in carbon capture contribution to Europe’s energy mix has risen only technologies to compensate for slow progress in marginally in the last 30 years, to 12.5% in 2019. The reducing carbon emissions. European Commission had already approved draft How Europe plans to speed up the transition rules for classifying nuclear (along with gas) as to clean energy “green” in the EU taxonomy – a classification system Rising energy costs are making the already politically for environmentally sustainable economic activities. charged topic of energy even more political. However, the greater acceptance of nuclear as a possible Policymakers must find a balance between making core clean energy source (albeit with waste disposal energy affordable in the near term and investing in issues) was put to the test with the shelling of Ukraine’s alternative energy sources over the long term. The Zaporizhzhia nuclear plant by Russian armed forces. Exhibit 1: Fossil fuels are still a major source of the global energy supply World total energy supply by source versus real GDP (1990-2019) 900 250 800 GDP USD (indexed) (millions) 700 200 600 500 150 400 100 Exajoules (EJ) 300 200 50 100 0 0 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Coal Oil Natural gas Nuclear Hydro Biofuels and waste Other Real GDP Note: The exajoule (EJ) is equal to 1018 (one quintillion) joules. Source: IEA, World Bank. Data as at 2019. Exhibit 2: Europe is more dependent on natural gas than 30 years ago, while the overall energy supply has fallen Europe total energy supply by source versus real GDP (1990-2019) 160 1.8 140 1.6 GDP USD (indexed) (millions) 120 1.4 100 1.2 1.0 80 0.8 Exajoules (EJ)60 0.6 40 0.4 20 0.2 0 0 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Coal Natural gas Oil Nuclear Renewables Real GDP Note: The exajoule (EJ) is equal to 1018 (one quintillion) joules. Source: IEA, World Bank. Data as at 2019. 2