Lorena Skiljan and Peter Gönitzer from the Austria-based consultancy Nobilegroup share their take on the consequences of the Russian invasion of Ukraine for the energy markets in Europe.
Observers have been predicting a Russian invasion of Ukraine for weeks. Kremlin chief Vladimir Putin has officially ordered a foreign deployment of the Russian military in the Luhansk and Donetsk regions of Ukraine, and beyond. Russian and Ukrainian soldiers are about to face each other for the first time in the conflict that has been going on for eight years.
In a joint statement, EU Commission President Ursula von der Leyen and EU Council President Charles Michel condemned Russia’s attack against Ukraine asking Russia to withdraw its troops and respect Ukraine’s territorial integrity. Following several sanctions already placed against Russia by Western powers, the EU announced it will immediately close new sanctions against Russia. “The EU stands by Ukraine,” said EU Commission President Ursula von der Leyen.
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Energy markets react to Russian aggression
In addition to sanctions intended to cut off Russia from the international financial market and trade, the federal government of Germany has decided to stop the certification of Nord Stream 2 “until further notice”. Nord Stream 2 is a pipeline through the Baltic Sea that is intended to deliver natural gas from the world’s largest reserves in Russia to meet growing consumer demand in Europe.
Given the fact that Russia’s majority state-owned energy corporation Gazprom is dominating Europe’s gas market, the conflict fuels fears that possible sanctions from the Kremlin could limit natural gas exports to Europe, potentially having a direct impact on electricity prices. Logically, if natural gas becomes more expensive due to a shortage in supply, generating electricity, in which natural gas has a price setting effect, will also become more expensive.
Read the full article on our sister publication Enlit.world
About the authors
Lorena Skiljan is Chief Operating Officer at Nobilegroup
Peter Gönitzer is founder and founder and CEO of Nobilegroup
Nobilegroup is a consulting company focussing on the development of renewable energy solutions
